Canadian Cities Becoming New Battleground for Kinder Morgan

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By James Munson

Shifting voter expectations are putting pressure on the mayors of Canadian cities to stand up against big energy projects such as pipelines, even as federal authorities continue to weaken the mayors’ role in decision-making.

Burnaby, a city of nearly 233,000 immediately east of Vancouver, lost its most recent battle Dec. 7 to stop or slow down Kinder Morgan Canada’s Trans Mountain Expansion Project, a C$7.4 billion ($5.8 billion) pipeline-twinning proposal that will bring a steep rise in oil tanker traffic to nearby Westridge Marine Terminal.

Kinder Morgan Canada, whose parent company is based in Houston, can ignore Burnaby’s permitting and tree-cutting bylaws, according to the National Energy Board (NEB), a federal regulator with quasi-judicial powers.

Burnaby called the decision an “abuse of federal powers” in a news release.

“The constitutional case law says there’s room for operation of provincial, federal and municipal law in appropriate circumstances, and by making this simple order, the NEB says, in effect, there are no appropriate circumstances,” city lawyer Greg McDade told the Burnaby Now newspaper.

Nationwide Struggles

Across Canada, mayors are being called upon to defend local environmental interests during major project approvals while, as the recent National Energy Board decision attests, they remain bit players in Canada’s constitutional makeup, barely a force against the federal and provincial branches of government in the eyes of the courts.

Vancouver Mayor Gregor Robertson penned an open letter to Prime Minister Justin Trudeau last year calling on the federal government to block the Trans Mountain project because of concerns over oil spill risks.

Calgary Mayor Naheed Nenshi, who oversees the country’s hub of oil and gas companies, called Robertson’s letter “really overblown” and a way of trying to do an “end-run” around the federal board. (Trudeau never responded, Vancouver officials said.)

Before pipeline builder TransCanada Corp. canceled the sprawling C$15.7 billion ($12.2 billion) Energy East proposal in October, former Montreal Mayor Denis Coderre was the biggest thorn in the project’s side, galvanizing environmental opposition to the pipeline in Quebec.

Protests in Montreal during hearings for Energy East delayed permitting for the project for more than half a year.

In Ontario, the province’s clean energy program has been hurt by local backlash toward wind turbines, while opposition to a nuclear waste facility has forced the federal government to delay construction as other possible sites are evaluated.

The Muskrat Falls hydro dam in Labrador has been repeatedly delayed by protests and local concerns.

Federal Intentions Unclear

Amid the skirmishes, mayors are asking the Trudeau government to give them more powers. Trudeau himself has said major projects need a greater “social license” to operate on top of their regulatory approvals.

The Federation of Canadian Municipalities, Canada’s national cities organization, has been lobbying Ottawa during the past year to give municipalities “consent” over oil pipeline routes.

The group also wants local environmental impacts of major industrial projects regulated by the federal government, including mines, transmission lines, hydropower facilities, bridges, waste facilities, fertilizer plants, and other infrastructure, to become part of the “public-interest determination” that regulators use to approve or deny a project.

In the case of Kinder Morgan’s Trans Mountain, a cause celebre among environmentalists in British Columbia, the Federation of Canadian Municipalities has pushed to make Kinder Morgan’s emergency response plans public and has asked that first responder costs for potential spills don’t fall on cities.

Kinder Morgan Canada didn’t respond to Bloomberg Environment’s request for comment.

National Interest

Meanwhile, Ottawa’s intentions remain uncertain.

Trudeau vowed to drastically restructure the complicated network of laws that regulate industrial projects such as pipelines.

His predecessor, Stephen Harper, revamped the regulatory process for those projects in 2012, much to the frustration of environmentalists, indigenous groups, and even the mining sector.

“We’re looking at working constructively and collaboratively with jurisdictions across the country on projects in the national interest in a way that understands that even though governments grant permits, ultimately only communities grant permission,” Trudeau said in a news conference in Vancouver in March 2016.

Legislation amending the National Energy Board Act, Canadian Environmental Assessment Act of 2012, Fisheries Act, and Navigation Protection Act—which, despite their specific purposes, must work together for the regulatory process to be smooth—is expected in early 2018, the office of federal Natural Resources Minister Jim Carr told Bloomberg Environment in an email.

The federal government didn’t mention new powers for cities when it floated some ideas for the upcoming legislation in a discussion paper published in June.

The paper did mention a longer consultation period for projects, however, as well as fewer restrictions on who can voice concerns, the use of regional environmental impact studies, and greater transparency in decision-making.

“The input received through this engagement, including input from municipalities, will inform the development of new legislation,” said Carr spokesman Alexandre Deslongchamps in the email.

Little Faith

The time is ripe to clarify the roles of cities, because clashes with major projects are bound to intensify, said Monica Gattinger, a University of Ottawa academic studying the changing dynamics of public attitudes toward energy.

As Canada builds new energy projects designed to lower emissions such as wind farms, there is little consensus over what the overarching goal of national energy policy should be, leaving a vacuum for disagreements to grow, Gattinger said.

Debates around energy tend to be about values—like whether it’s right or wrong to develop fossil fuels in an era of transition—rather than tangible interests than be negotiated or traded upon by power brokers, she said.

Recent polling confirmed that Canadians have little faith in the federally led system for approving big projects.

Only 17 percent of Canadians said they have good or very good confidence in Canada’s energy decision-making, according to an October poll that Gattinger commissioned and Ottawa-based pollster Nanos carried out. Around 50 percent of respondents said they have poor or very poor confidence in national energy decision-making.

When it comes to municipal clout, only 18.1 percent said Canada does a good or very job of balancing local interests against national ones when making energy decisions. Just under 40 percent said the country does a poor or very poor job.

“We were really surprised to see that level of pessimism,” said Gattinger.

Burnaby’s fight with Kinder Morgan Canada, meanwhile, isn’t over. The National Energy Board has yet to unveil a method for handling routine complaints about the pipeline’s construction, which has already been delayed because of the drawn-out permitting process.

Burnaby also has another lawsuit against the company in the Federal Court of Appeal. Its mayor of 15 years, Derek Corrigan, has said he’s fine with getting arrested for civil disobedience if the legal challenges fail.

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