Cases Considered: Imperial Oil Resources Ventures Limited v. Pembina Institute for Appropriate Development et al, 2008 FC 598,
My initial post on the Kearl project (see Just a Bump on the Road to Socio-Ecological Ruin) was accurate after all. Madame Justice Tremblay-Lamer’s decision in Pembina Institute for Appropriate Development v. Canada (Attorney General), 2008 FC 302, that held the Kearl joint panel breached section 34 of the Canadian Environmental Assessment Act, S.C. 1992, c. 37, was simply a brief foray into environmental bliss. On June 6, 2008, the Department of Fisheries and Oceans re-issued the requisite authorization under the Fisheries Act, R.S.C. 1985, c. F-14, to Imperial Oil, reportedly on identical terms and conditions as set out in the original authorization (see my previous post Federal Court upholds nullification of Kearl oil sands authorization for more discussion on the nullification of the initial authorization).
The regulatory battle over Kearl was lost by its opponents in February 2007 when Alberta’s Energy Resources Conservation Board (ERCB) licensed the project under the Oil Sands Conservation Act, R.S.A. 2000. c. O-7, and the Energy Resources Conservation Act, R.S.A. 2000, c. E-10. Recall that during the hearing, the Regional Municipality of Wood Buffalo had requested the ERCB to deny the Kearl license to allow time for the Municipality to alleviate its public infrastructure and municipal services deficit caused by rapid oil sands development in the region. Alternatively, the Municipality requested the ERCB to condition its Kearl license to require Imperial Oil to contribute towards alleviating the deficit. The ERCB denied both requests, and in doing so the ERCB failed to exercise its obligation to have regard to the social and economic effects of the Kearl project in the Wood Buffalo region, as set out in section 3 of the Energy Resources Conservation Act (for more discussion of the ERCB’s legal obligation imposed by this legislation, see Shaun Fluker, “The jurisdiction of Alberta’s Energy and Utilities Board to consider broad socio-ecological concerns associated with energy projects” (2005) 42 Alta. L. Rev. 1085).
At the hearing, the Municipality informed the ERCB of its futile efforts to invoke action by the Alberta government to address the growing social problems in the region in years leading up to the Kearl hearing. Having received this submission, I find it very difficult to determine how exactly the ERCB had regard to the social effects of the Kearl project when its response in the license decision was simply to recommend the Alberta government take action in the near future (see Kearl Oil Sands Project (February 27, 2007), EUB Decision 2007-013 at 29, online: ERCB http://www.ercb.ca/docs/documents/decisions/2007/2007-013.pdf).The ERCB’s obligation under section 3 of the Energy Resources Conservation Act has to require more than simply making recommendations if this legislation is to have any meaning at all.
Consider for a moment how events may have unfolded if the ERCB had denied the Kearl license as requested by the Municipality AND the Alberta Court of Appeal had upheld such decision in the event of an Imperial Oil appeal. I believe the ERCB denial would have triggered significant and immediate Alberta government initiatives in the Wood Buffalo region to address some of the socio-ecological concerns of oil sands opponents as well as clear some of the uncertainty of oil sands proponents over the future land-use direction in the region. Eventually, the Kearl project would have proceeded anyways, but in a much different socio-ecological environment.
RE: Energy Resources Conservation Act. Section 3 of the act, in the consideration of public interest, “it may or must” consider the social and economic impacts of a project. What needs to be clarified here is that the project yeilds products for which royalties are charged. This fee represents the monies which can be allocated to mitigate/ease the substantial burdens faced by the Regional Municipality of Wood Buffalo. It is then the province’s responsibility to redistribute this revenue accordingly. It clearly has not. Mayor Melissa Blake’s comments (as intervenor at the public hearings which decided the fate of the Kearl project) are certainly fair, but the finger has clearly been pointed at the government. Most operating companies in the area also make extenuating financial contributions to the area beyond their stipulated obligations. They in fact fund many essential municipal operations and infrastructural projects because of the shortfall left by the province. Private industry has even paid to have schools built in residential areas because the province of Alberta has lacked the initiative to provide the funding for such services.
Section 3 of the ERCA states: “Where by any other enactment the Board is charged with the conduct of a hearing, inquiry or other investigation in respect of a proposed energy resource project, it shall, in addition to any other matters it may or must consider in conducting the hearing, inquiry or investigation, give consideration to whether the project is in the public interest, having regard to the social and economic effects of the project and the effects of the project on the environment.”
Monetary benefits of these projects are widely acknowledged, and my concern is not with how the Alberta government decides to allocate royalty revenue. In my view ERCA section 3 positions the ERCB as a key land-use decision maker in Alberta with a legal obligation to consider the socio-ecological effects of energy projects. The ERCB interprets its section 3 obligation as requiring a cost/benefit analysis. Not all land-use decisions should be made using a cost/benefit approach. For one thing, this utilitarian approach devalues non-quantifiable interests (such as many social and environmental concerns). Mitigation is an appropriate consideration, but not always an appropriate result. The ERCB has been making decisions this way for decades – even prior to the enactment of section 3 in 1993. Back then, the Board held that the enactment of section 3 simply codified existing practice. I strongly disagree with this. The Alberta Court of Appeal rarely hears this matter (and has dodged the issue in my view in those cases it has heard). Of note, the Court of Appeal recently granted leave in a case where the Board’s section 3 obligation is in question (ATCO Midstream Ltd. v. Alberta (ERCB), 2008 ABCA 231).
In a case such as this where everyone agrees the Alberta government is dragging its feet on socio-ecological issues associated with energy projects, the ERCB’s section 3 obligation has to be more than simply recommend the government stop dragging its feet.