The National Energy Board asked for comments on possible changes to environmental assessment for Energy East. I wrote this letter to urge them to widen their scope of climate impact assessment of the Energy East pipeline. They are considering including the changes in emissions in Canada, upstream from increase in production in the tar sands, and downstream from refinement and consumption within Canada. I argue further that they need to consider the global impacts of the pipeline in order to have a full and accurate description of the climate impacts of a pipeline of this nature.

Ms. Sheri Young

Secretary of the Board

National Energy Board

Suite 210, 517 Tenth Avenue SW

Calgary, AB T2R 0A8

Dear Ms. Young and other concerned members of the Board,

I am writing to comment on the possible reforms to the regulatory process currently under consideration, specifically those pertaining to the consideration of greenhouse gas emissions linked to the Energy East pipeline, referred to as the Project under consideration. I offer insights and recommendations regarding the scope of emissions that should be included in the environmental assessment of these and any future pipelines for the transport of combustible liquid fuels under consideration. These points refer to Appendix 1.C.1, where the Board is considering including in its review of Energy East the “potential impacts of the Project on Canada’s greenhouse gas (GHG) emissions.”

1. The environment under consideration is global in nature and is tied to the economy, which is also global in nature.

Canada is responsible for GHG emissions outside of its territory when the generation of those emissions is driven by decisions in domestic energy policy. Greenhouse gas accounting principles outlined by the United Nations Framework Convention on Climate Change (UNFCCC) imply a nation’s obligation for monitoring their territorial emissions, but should not be conflated with responsibility for emissions that a nation contributes to producing outside its borders. For example, alternative accounting metrics include measures of how much emissions are embodied in trade and can be used to assess the emissions produced abroad linked to the consumption of imported goods and services. In this instance, the imperative to consider these emissions outside a nation’s territory are based on the contribution to the factors that produce these emissions caused by the drive by consumer demand. Conversely, producers also have a role in driving emissions as they benefit economically from the export of their products, and influence global market dynamics by introducing products onto a global market. The dynamics of the latter will be briefly discussed here in the context of fossil fuel production for export, and as this pertains to much of Canada’s crude production, its implications for Canadian energy and climate policy.

As stipulated in Appendix 2.1, the Board must satisfy the requirements of the Canadian Environmental Assessment Act, 2012 (CEAA 2012), which requires the Board act “in a manner that protects the environment and human health and applies the precautionary

principle.” Furthermore, the Board acknowledges its compliance with CEAA 2012 by use of the definition of the “environment” to consist of “the components of the Earth, and includes “(a) land, water and air, including all layers of the atmosphere; (b) all organic and inorganic matter and living organisms; and (c) the interacting natural systems that include components referred to in paragraphs (a) and (b).” By considering impacts on the environment, one must consider the impacts on the climate, which falls under category (c) of the CEAA 2012 definition of the “environment”. The climate is by nature a global system and impacts to it may be rendered by sources of greenhouse gases irrelevant of their origin of emission. Therefore the evaluation of climate impacts of greenhouse gas emissions linked to the Project must consider emissions globally, i.e. it must include emissions generated outside national boundaries that are linked to the market dynamics affected by the Project’s introduction into the global energy system. A simple, transparent and satisfactory way of describing these dynamics and assessing the related climate impact of any particular pipeline is rooted in the microeconomic theory of supply and demand. In brief, any additional pipeline will facilitate expansion of production, consequently incentivizing consumption by suppressing global crude prices when the increase in marginal product enters the global market. This model has been applied in the past to estimate the global climate impacts of bitumen-transporting pipelines (Erickson & Lazarus, 2014).

Climate impacts driven by a change in emissions from production and consumption of crude or any fuel are equally parts of the effect of a pipeline on the global market which Canada, as a major exporter of crude and other resources, is inextricably connected to, and therefore we must consider the global climate impacts of the Project and any other pipeline for the transport of combustible fuels under consideration. In other words, upstream emissions, and downstream emissions located only within Canada’s borders, are insufficient in scope to evaluate the environmental impact of any given pipeline, and one must consider both upstream and downstream emissions both territorially and outside of Canada to satisfactorily assess the global impacts of pipelines.

2. Increases in upstream emissions must be taken into consideration in order to inform decisions so that Canada and its provinces can successfully carry out their emissions reduction strategies.

The Board explicitly states that it will consider the Project in the context of “Canadian and provincial energy and greenhouse gas strategies, policies, laws, or regulations.” Despite the fact that domestic strategies for mitigating GHG emissions are insufficient to fulfill our international obligations, the increase in upstream emissions in oil sands production facilitated by the Project’s additional pipeline capacity will make achieving the federal target of reducing national emissions by 30% below 2005 levels in 2030, and Albertan target of staying below 100 Megatonnes carbon dioxide equivalents from oil sands production, both virtually impossible (Hughes, 2016) [i]. Updated analysis will undoubtedly corroborate these independent analyses. On this basis alone, additional pipelines, including the Project, must not be approved. Additional pipelines of any capacity highly jeopardize our ability to make even the modest reductions needed to achieve our domestic policy goals. It can be further argued that Canadian commitments to cooperation in international climate action must dictate domestic strategies, and likewise “Canadian” policy is tantamount to our international policy commitments. How these two frameworks and definitions align is a matter for the Ministry of Environment and Climate Change to resolve yet it is crucial that the Board consider these definitions in their contextualization of the Project in international, national, and provincial strategies, policies, laws, or regulations.

3. The global impacts of oil sands pipelines must be considered in order to inform decisions in a way that allows Canada to align its energy policy with its international climate policy commitments.

Canada must align its energy policy with its international climate commitments. Minister of Environment and Climate Change, Catherine McKenna has recently reaffirmed these commitments at the Petersburg Climate Dialogue in Berlin, Germany on May 23, 2017. In order to accomplish this, Canada must make decisions that do not act against efforts to limit global mean warming to 2 degrees Celsius and pursue efforts in line with keeping warming to 1.5 degrees Celsius above preindustrial levels, as stipulated in the Paris Agreement (UNFCCC, 2015). During proceedings at the twenty-first Conference of the Parties, Canada advocated strongly for these targets and has now signed and ratified the Paris Agreement. As discussed, the Project will facilitate expansion of production and incentivize consumption by contributing to price suppression when our crude enters the global market as a marginal oil product. As a developed nation with significant fossil fuels reserves who has committed to ambitious international climate efforts, Canada is responsible for making energy infrastructure decisions that account for their global climate impacts. It is in keeping with these international agreements that the Board must also consider the downstream emissions linked to changes in refinement and consumption of fuels beyond Canadian borders. My sentiments echo those of a number of respected Canadian scientists and economists (Palen, Sisk, Ryan, Árvai, & Jaccard, 2014)[ii].

In summary, I implore the Board to consider the change in emissions territorially, both upstream in the production of fuels facilitated by the increase in transport capacity, and downstream by the refinement and consumption of fuels within Canada. This would be a major improvement on the current climate assessment criteria, which only accounts for emissions generated during the construction and operation of a pipeline and hence neglects these important climate impact considerations. I strengthen my request to the Board by asserting that the global climate impacts of pipelines must be considered. The decisions Canada makes has direct consequences for the global climate, by limiting our sphere of consideration to emissions generated within our territory, we neglect our economic influence in the global oil market and its wider climate impacts.

Thank you for your consideration. I look forward to learning your decision, and please do not hesitate to contact me if you have any questions or concerns.

Sincerely,

Daniel Horen Greenford

PhD student, MSc

Department of Geography, Planning and Environment, Concordia University

Economics for the Anthropocene, McGill University

References:

Erickson, P., & Lazarus, M. (2014). Impact of the Keystone XL pipeline on global oil markets and greenhouse gas emissions. Nature Climate Change. http://doi.org/10.1038/nclimate2335

Hughes, D. (2016). Can Canada Expand Oil and Gas Production, Build Pipelines and Keep Its Climate Change Commitments? Parkland Institute.

Palen, W. J., Sisk, T. D., Ryan, M. E., Árvai, J. L., & Jaccard, M. (2014). Consider the global impacts of oil pipelines. Nature, 510.

UNFCCC, “Paris Agreement, FCCC/CP/2015/L.9/Rev.1” (2015). UNFCCC secretariat. Retrieved from: http://unfccc.int/resource/docs/2015/cop21/eng/l09r01.pdf

[i] See also:

Climate Action Tracker: Canada Assessment. Retrieved from: http://climateactiontracker.org/countries/canada.html

Muttitt, G., McKinnon, H., Stockman, L., Kretzmann, S., Scott, A., & Turnbull, D. (2016). The Sky’s Limit: Why the Paris Climate Goals Require a Managed Decline of Fossil Fuel Production. (C. Rees, Ed.). Oil Change International. Retrieved from http://priceofoil.org/content/uploads/2016/09/OCI_the_skys_limit_2016_FINAL_2.pdf

Scott, A., & Muttitt, G. (2016). Reconsidering the need for new oil pipeline capacity in Canada. Oil Change International. Retrieved from http://priceofoil.org/content/uploads/2016/10/cappmath-briefing-final.pdf

Scott, A., & Muttitt, G. (2017). Climate on the Line: Why New Tar Sands Pipelines are Incompatible with the Paris Goals. Oil Change International. Retrieved from http://priceofoil.org/content/uploads/2017/01/climate_on_the_line_FINAL-OCI.pdf

[ii] See also:

Scientists Call for a Moratorium on Oil Sands Development. Retrieved from:

http://www.oilsandsmoratorium.org/wp-content/uploads/2015/06/Oil-Sands-Moratorium-Message.pdf