Pipelines, Public Interest, and Regulatory Change: The Public Interest Implications of Including Indirect Greenhouse Gas Emissions in Federal Environmental Assessments
Creators: name: Edwards, Braeden
Publisher: name: Faculty of Graduate Studies
Year: 2018

description: Decisions government bodies make are made in the name of public interest. These decisions are made in the hope that, on average, policy made will make those in a country better off, or at least not worse off. Ensuring that the citizens of a country are not made worse off by government action can be challenging. Energy regulators, such as the National Energy Board (NEB) have a public interest mandate they follow when granting approvals of projects. A key tool the NEB uses in determining the public interest is environmental assessments or impact assessments. Public interest in terms of energy regulation has different definitions depending on who is evaluating the project. One definition of public interest could be economic efficiency, a society maximizing its scarce resources, while another definition could be minimizing environmental effects, and another could be maximizing votes for a political party. With different, competing definitions it is difficult to truly know what public interest is without a codified definition. This capstone evaluates the public interest implications of including indirect greenhouse gas (GHG) emissions on federal pipeline environmental assessments. Environmental assessments have long been a tool that energy regulators use in the evaluation of projects and to determine if the benefits of projects outweigh its costs. Under current Canadian federal legislation, only the direct GHG emissions associated with the construction and operation of a project are evaluated in an environmental assessment. Under the proposed legislation Bill C-69, and other policy announcements made by the federal government this could change. It was announced in August of 2017 that TransCanada’s Energy East pipeline project (Energy East) would be subject to an environmental assessment that included an accounting of indirect GHG emissions. This never occurred due to the application being pulled shortly thereafter. This capstone is developed to assess what would have changed in the assessment had TransCanada not pulled the application. This capstone uses a multiple account benefit cost analysis to determine if the viability of the Energy East project would change, had a policy of indirect emissions accounting been implemented. Because there is no Canadian policy currently in place to evaluate indirect emissions as part of pipeline assessments, this capstone uses the assessment conducted on TransCanada’ Keystone XL pipeline (Keystone XL) as a yardstick of analysis. This capstone uses the methodology used by the State Department regarding Keystone XL to determine the indirect emissions associated with the Energy East pipeline. It is not surprising that Energy East would be shown to have a larger emissions impact if these emissions types were included; however, it may not be efficient carbon policy to add this type of regulation to pipeline companies. The last aspect of this capstone is to evaluate other policies that are at the disposal of the federal government to curb carbon emissions. The significant policy option that the federal government has in curbing emissions is through the utilization of carbon pricing. Carbon pricing is an efficient way of reducing emissions and allows firms to implement their own best practices to reduce emissions. There are three provinces that currently price carbon, and the federal government is working on ensuring all provinces have a carbon price implemented within 2018. Carbon pricing will regulate the same emissions that a policy used to curb indirect pipeline emissions are trying to mitigate. The public interest will be maintained in the absence of a policy to curb indirect pipeline emissions. There is carbon policy in place and being implemented to ensure emissions are appropriately mitigated. There is no need for additional legislation and regulatory burden on pipeline companies when the emissions are already being monitored and regulated by the appropriate jurisdictional authority. Carbon policy is in the public interest, just not policies aimed at regulating a small subset of overall emissions.