Energy east pipeline: Quebec has had enough and takes control of the process

November 21, 2014

After months of very public wrangling culminating on November 8 with a full page ad taken by Quebec’s gas utility in the Globe and Mail opposing the Energy East Pipeline, followed a week later with the embarrassing leakage of TransCanada’s 2014 Quebec communication strategy, Quebec’s government has had enough and has taken control of the process in the province. The purpose is to dial down the rhetoric and provide a calmer and more structured environment within which to evaluate the pipeline.

On November 18, Quebec’s environmental minister wrote to TransCanada’s CEO and set out 7 conditions precedent before Quebec can approve TransCanada’s oil terminal in Cacouna on the St. Lawrence River:

  1. Local communities must be consulted so as to ensure local acceptability;
  2. Quebec’s portion of the pipeline (all 700 km) must be subject to a comprehensive environmental assessment. This assesment must take into account greenhouse gases;
  3. The pipeline must meet the highest technical standards and be continuously monitored;
  4. First Nations must be consulted and participate to the fullest extent of the law;
  5. The pipeline must generate economic and tax benefits in every region it crosses;
  6. TransCanada must put in place safety measures of the highest standard, assume full responsibility for all damages, create an indemnification fund and provide proof of its financial capacity to discharge such obligations; and
  7. Natural gas transport capacity to Quebec must be sufficient to meet Quebec’s needs. Quebec’s energy regulator, La Régie de l’énergie, was tasked a few months ago with quantifying such needs.

The leakage of the letter to the press (Radio Canada in this case) means that the “guidance” offered by Quebec is crystallized and cannot be negotiated away. Environmental organizations were very quick to endorse Quebec’s position and stiffen government’s resolve. The letter also comes a few days before an Ontario-Quebec joint cabinet meeting at which the pipeline will be discussed in the hope of coming up with a common policy.

It is evident that in the thinking of the Québec government the proceedings before the National Energy Board, replete with 30,000 pages of unilingual English text, are now very secondary.

The silver lining here, and it’s a very big one, is that the Quebec government is not against pipelines. On the contrary, Quebec would like to re-industrialize and hydrocarbons and petrochemicals is one avenue being encouraged.

What Quebec wants is a win-win scenario that it can defend before the National Energy Board and, more importantly, before the Quebec electorate

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