​Canadian Business Update: Energy Infrastructure

​Canadian Business Update: Energy Infrastructure  
 
Recent news in Canada’s energy infrastructure sector has given cause for concern for many. From the overhaul of the National Energy Board, the many delays facing the Trans Mountain Pipeline expansion, to the lack of a Northern Gateway or Energy East pipeline, the future of Canadian energy transport seems bleak. Add on to that the moratorium on tanker traffic in Norther B.C., and the cancellation of several massive Liquefied Natural Gas Terminal projects in B.C., and we see an even worse outlook. With Canada’s massive reserves of hydrocarbons selling at a huge discount, largely due to transportation problems, it is time for action. There are a few key areas listed below where Canada can start to take action.
Trans Mountain
            The federal government approval of the Trans Mountain Expansion happened over a year ago, and continuing legal challenges mean that the project still faces an uphill battle. Opposition from the municipal and provincial level in B.C. continues to put obstacles in the way of the expansion. Municipal by-laws and provincial freezes on bitumen importation have meant that the legal system has gotten heavily involved in the project, even after it received federal government approval. Outages on the Keystone pipeline showed how vulnerable the Canadian energy transportation system is. Producers were forced to rely on rail transportation during that outage, and expanding the Trans Mountain pipe will only help to alleviate the reliance on railway’s marginal ability to transport crude.
LNG Projects
            While a few major LNG projects in B.C. were cancelled, one still remains on the table. A joint venture between Royal Dutch Shell, PetroChina, KOGAS, and Mitsubishi, is nearing a final investment decision. The near $40 Billion project would help to get Canada’s massive natural gas reserves to the lucrative Asian markets. The proposed project in Kitimat, B.C. would mean many constructions jobs, not only for the facility, but for expanded pipeline capacity to feed it as well.
Tanker Ban Challenge
            Canada’s Bill C-48, the Oil Tanker Moratorium Act proposed to impose a crude tanker moratorium on B.C.’s norther coast. The Bill was introduced in 2017, and aims to improve Canada’s marine safety. On March 22, 2018, the Lax Kw’alaams Indian Band launched a legal challenge to the moratorium. The Law Kw’alaams are launching the claim based on Aboriginal Rights and a Title Infringement Claim. If successful, it could mean that the tanker ban would not apply to traditional Lax Kw’alaams territory creating a potential gap in the legislation and allowing tanker traffic to in fact travel through some of B.C.’s norther coast. It is an important development to keep an eye on as Canada is in need for energy transportation solutions.
Conclusion
            While Canada is becoming a leader in carbon output reduction, it has also begun to suffocate one of its most valuable resources. The task of finding solutions to Canada’s energy transportation problems that are not only efficient, but that are in line with Canada’s carbon goals will be challenging. It is important to note that the time for transportation solutions is now. As foreign investment continues to flee Canada, we are fighting against the clock to keep Canada competitive and attractive to the global markets. 

Emerson Frostad is a 3rd year student at the University of Calgary's Faculty of Law.