Transcript A Case Study of the Energy East Pipeline

Navigating Political Risk: The Case of
the Energy East Pipeline
George Hoberg
UBC
Prepared for ONSEP April 21, 2016
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Harper government:
“The regulatory system is broken”
environmental and other
radical groups
funding from foreign
special interest groups
threaten to hijack our regulatory
system to achieve their radical
ideological agenda
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outline
Analytical framework
The project
Institutions, actors
Distribution of risks and benefits
Issue salience
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Analytical Framework
• Veto points
– Any institution with authority
to block project
• Problem structure –
distribution of costs and
benefits
– Are impacts concentrated or
diffuse
• Concentrated: oil spills,
industry profits
• Diffuse: climate impacts, tax
revenues
– Are environmental risks and
economic benefits separated
across veto points
George Hoberg, “The Battle Over Oil Sands Access to Tidewater: A Political Risk Analysis of Pipeline
Alternatives,” Canadian Public Policy, Volume 39, No. 3, September 2013, pp. 371-391.
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Balance of power
The relative power of project opponents is a
function of four variables:
1. whether opposition groups have access to
institutional veto points
2. whether the project can take advantage of
existing infrastructure
3. the salience of place-based, concentrated
environmental risks
4. the jurisdictional separation of risks and benefits
George Hoberg, “The Battle Over Oil Sands Access to Tidewater: A Political Risk Analysis of Pipeline
Alternatives,” Canadian Public Policy, Volume 39, No. 3, September 2013, pp. 371-391.
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The Four Major Projects
Project
Company
Capacity
(bpd)
Location
Status
Keystone XL
TransCanada
830,000
Alberta to US Gulf
Coast
Rejected by
President
Northern
Gateway
Enbridge
525,000
Alberta to BC
Coast
Approved with
conditions
TransMountain
Expansion
Kinder
Morgan
590,000
Alberta to BC
Coast
Hearing concluded,
awaiting new
analysis and
recommendation
Energy East
TransCanada
1,100,000 Alberta to Atlantic Hearings underway
Canada
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Institutions
Projects assessed by NEB under the NEBAct and CEEA
Cabinet decides on NEB recommendation
Oral hearings include “directly affected”
Municipalities participate as interveners
Provincial does not have legal authority to block a pipeline, but may be
able to attach conditions
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Trudeau government changes
“to restore faith in EA process”
1.
No project proponent will be asked to
return to the starting line
2.
Decisions will be based on science,
traditional knowledge of Indigenous
peoples and other relevant evidence;
3.
The views of the public and affected
communities will be sought and
considered;
4.
Indigenous peoples will be
meaningfully consulted, and where
appropriate, impacts on their rights
and interests will be accommodated;
and
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Direct and upstream greenhouse gas
emissions linked to the projects under
review will be assessed.
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Strategic Actors
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Pipeline companies
Oil sands companies
Refineries
Environmentalists
• Federal government
• Provincial governments
• Municipal governments
– Spill risks
– climate
• Landowners
Aboriginal groups
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Pipeline capacity vs oil sands growth
http://www.capp.ca/getdoc.aspx?DocId=247759
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Revenue foregone
https://ycharts.com/indicators/brent_wti_spre
ad
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“Blockadia”
Roving transnational conflict zone
Provoked by “extreme
extractivism”
Local resistance movements
demanding local control
Tied to carbon budget – “Keep it in
the Ground”
Strategic advantage: avoids (some)
climate mobilization challenges
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Distribution of Risks and Benefits
From Environmental Defence
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“We are against it because it still represents significant
environmental threats and too few economic benefits for
greater Montreal”
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OEB conclusion
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Ontario’s position
“We appreciate that there is
a need for a way to get
Canadian oil, that is allowed
under Alberta’s new
emission cap, to overseas
markets. And the people of
Ontario care a great deal
about the national economy
and the potential jobs that
this proposed pipeline
project could create in our
province and across the
country,” said Wynne.
http://business.financialpost.com/news/economy/kathleen-wynne-gives-tentative-backing-toenergy-east-pipeline-as-rachel-notley-faces-criticism-over-project
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Energy East jobs
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Energy East – Construction Jobs
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Energy East – Operations Jobs
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National Public Opinion
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Quebec public opinion
http://angusreid.org/wp-content/uploads/2016/03/2016.02.03Pipelines.pdf
Nov. 5 -16 by the polling firm SOM shows that 57
per cent opposed
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Relative priority of local vs diffuse issues
Issue mentions by pipeline 2012-15
60%
50%
40%
climate + GHG
Job
30%
accident + spill
First Nations
20%
10%
0%
Northern Gateway
Kinder Morgan
Canadian Newstand
Energy East
Keystone XL
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Conclusion:
Can Energy East Navigate the Risks?
Confronting significant challenges on distribution of risk
and benefits
High salience of jobs, lower salience of spills and First
Nations indicate lower risk
So much hinges of Ontario and Quebec positions
If either are opposed, could Trudeau approve the pipeline
and survive?
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Conclusion –
Strategic Perils of Blockadia
• What happens when place-based risks don’t
galvanize resistance?
• Energy system transformation requires rapid,
massive building of new infrastructure
• Institutions (and norms) that give locals
authority to block dirty energy give them
authority to block clean energy
• Can we create processes that minimize
placed-based resistance?
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The New Politics of Energy in Canada: From Pipeline
Resistance to the Sustainable Energy Transformation
Part I the sustainable energy challenge
Chapter 1: Analytical framework
Part II The oil sands governance regime
Chapter 2: Harper government efforts to facilitate oil sands expansion especially market access to
tidewater
Part III Pipeline Resistance
Chapter 3: Keystone XL
Chapter 4: Northern Gateway Pipeline
Chapter 5: Trans Mountain Expansion
Chapter 6: Energy East
Part IV: The strategic risks of blockadia to the clean energy transformation
Chapter 7: Site C Dam
Chapter 8: Wind farm expansion in Ontario
Chapter 9: High voltage transmission lines (BC, California)
Part V Can innovative processes avoid paralysis?
Chapter 10: Innovative processes
Chapter 11: Conclusions
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