08/23/2017 13:42 EDT | Updated 08/23/2017 14:42 EDT

Energy East Pipeline review topics to include upstream, downstream GHG emissions

CALGARY — Canada's national energy regulator says it will for the first time consider the impact of upstream and downstream emissions from potential increased consumption of oil at hearings into the Energy East Pipeline.

The National Energy Board said Wednesday its decision is based in part on 820 submissions it received since requesting public input in May.

It said it will also for the first time consider the effect of meeting government greenhouse gas emission targets on the financial viability and need for the 4,500-kilometre pipeline.

Previously, the NEB only considered GHG emissions directly associated with construction and operation of the pipeline.

A spokesman for proponent TransCanada (TSX:TRP) said the company will review the issues list in the NEB announcement before commenting on its potential impact on the $15.7-billion project.

Energy East is designed to carry 1.1 million barrels of crude per day from Alberta and Saskatchewan to refineries in Eastern Canada and an export marine terminal in New Brunswick.

Ecojustice lawyer Charles Hatt said in a statement the NEB's decision is "both lawful and sensible." 

"Surely it is now self-evident that a pipeline review must consider all potential greenhouse gas emissions and the risk that the pipeline will become a stranded asset in tomorrow's economy," he said.

But Dirk Lever, an oil and gas infrastructure analyst for Calgary-based AltaCorp Capital, said Wednesday widening the scope puts an unfair burden on Canadian projects.

"It is not like any pipeline company can control the emissions on either side of their pipe, all they can do is operate safely and efficiently," he said.

"It should never be the pipeline's responsibility to monitor the emissions of the crude going in or ... how that crude is used going out."

Greenpeace Canada energy strategist Keith Stewart cautioned that details on how the ruling will affect the pipeline's approval or denial are still to be determined. 

The wider GHG review was opposed by the Alberta government but supported by Ontario in submissions to the NEB.

The NEB list of topics is used during hearings to restrict submissions to those considered to be within the board's mandate.

The regulator said it will now invite public comment on the completeness of TransCanada's applications before issuing a hearing schedule.

The original Energy East review was derailed in September 2016 after members of the regulatory panel overseeing the hearings resigned amid questions about a potential conflict of interest.

In January, the NEB invalidated nearly two years of decisions made by the previous panel and a new panel was appointed.

The Energy East review is taking place at the same time that the government considers a sweeping overhaul of the NEB following a report in May that said the system is broken and the NEB should be split into two agencies.

In granting approval to Kinder Morgan's Trans Mountain pipeline expansion in May 2016, the NEB ordered an unprecedented requirement to account for and offset greenhouse gas emissions related to pipeline construction.


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