What Happens in Quebec This Year May Foreshadow the Future of Canada’s Oil and Gas Industry

Despite oil and natural gas prices hitting rock bottom, the fossil fuels industry still has big plans for Quebec.

By Simon Van Vliet

Vice News January 19, 2015, 2:01pm

If the oil and gas industry has its way, Quebec will soon be turned into a hub for tar sands oil transit. With US President Barack Obama reiterating his opposition to TransCanada’s $5.4-billion Keystone XL pipeline and now falling oil prices and continued public opposition keeping Enbrige’s Northern Gateway and Kinder Morgan’s Trans Mountain pipeline projects stalled in British Columbia, Quebec might be the industry’s best bet in the near future.

TransCanada’s Energy East project has yet to be approved by Canada’s National Energy Board (NEB), but Quebec’s provincial energy board has already rubber-stamped it. If approved, the project will have the capacity to move 1.1 million barrels every day. That’s roughly half the current production of the Alberta tar sands.

The Régie de l’énergie’s review, released by Quebec’s Energy and Natural Resources Minister on January 7, focuses on the positive impact the project would have on Quebec’s natural gas supplies but does not take into account either the environmental impacts or safety hazards, which are the main concerns of opponents to the projected pipeline.

« The risks and consequences are far too high, » the traditional council of the Huron-Wendat First Nation wrote in a letter on January 6, voicing what critics have long been saying about such projects.

Indeed, TransCanada’s safety record is far from flawless. CBC reported last year that an NEB audit « found TransCanada to be non-compliant in four of nine areas it examined: hazard identification, risk assessment and control; operational control in upset or abnormal operating condition; inspection, measurement and monitoring, and management review. »

On January 2 of this year, Suncor—an early partner of TransCanada’s controversial deep-water port projectexperienced a massive leak from a gasoline terminal in Rimouski, QB, which was first detected by local residents.

This is only one of the latest events that highlight fossil fuels safety issues and flaws in industry control processes. Last fall a Hydro-Quebec pipeline leaked over 100,000 litres of diesel in the Magdalen Islands, only a small fraction of which was recovered. On January 14, a leak in a diesel tank at the city of Longueuil’s water treatment facility on the south shore of Montreal caused a 28,000-litre spill in the St-Lawrence River, contaminating the drinking water of close to 300,000 residents.

The diesel is leak was the equivalent of just about 350 barrels of crude oil, based on American Petroleum Institute conversion standards. TransCanada’s Energy East pipeline is expected to carry 130 times this quantity every hour.

Nontheless, the Energy East project review is expected to go forward in the next few weeks, despite the fact that the NEB has recently refused a request for the project documentation to be translated into French. The board agreed with TransCanada’s argument that documents « specifically pertaining to the project in Quebec and in New Brunswick, as well as a few other over-arching aspects of the project » have already been translated and posted on the company’s website.

If what’s happening with the Kinder Morgan pipeline review in British Columbia is any indication of what’s going to happen in Quebec, TransCanada’s dubious safety credentials might not get in the way of its project being approved by the NEB.

« This so-called public hearing process has become a farce, and this Board a truly industry-captured regulator, » former BC Hydro CEO Marc Eliesen said as he pulled out of the Trans Mountain project NEB hearings.

But no matter what the NEB says, TransCanada will still have to convince the population of Quebec that its $12-billion project is worth the risks. For that, the company will have to find other tactics than the aggressive « Win Ugly or Lose Pretty » communication strategy proposed by PR firm Elderman, officially abandoned after it was leaked to Greenpeace last November.

In the end, if public opposition does not convince TransCanada to back out of its Energy East project, maybe the impact of dropping oil prices will.

Still, on another front, shale oil and gas exploration and, eventually, extraction projects might get on the way in Quebec even if a report released last month by Quebec’s environmental review board raised serious questions about the safety of hydraulic fracturing. The idea of an all-out fracking ban has already been put aside and some advocates are trying to get Quebec’s shale gas industry up and running.

After a long fight against the municipality and local activists, Quebec-based junior exploration company Pétrolia announced that it had completed its horizontal drilling in Gaspé and might soon be ready to try extracting oil from the Haldimand 4 well.

The fact that all these developments are happening while Quebec starts work on the renewal of its energy strategy and before the Strategic Environmental Assessment on fossil fuels development in the province has been concluded raises questions as to how much control the provincial government exerts over the oil industry. An analyst from the Common Sense Canadian notes that Quebec’s Liberal government might actually just be « preparing the terrain with inadequate or smoke screen environmental analyses to facilitate full-tilt fossil fuel and natural resource development in the province. »

Environmental groups, which have gathered momentum throughout the last year, held a day of visibility against fossil fuels on January 17. Environmentalists demanded the province « immediately halt oil exploitation in the context of the global ecological crisis, » an urgent message that echoes a recent Nature study which found two thirds of currently exploitable fossil fuels—and up to 85 percent of the Alberta tar sands—need to remain in the soil.

One way or another, 2015 will be a decisive year for the development of Canada’s oil and gas industry. And what happens in Quebec over the coming weeks and months will be a good indication of which way things are going.

VICE asked the Quebec Oil and Gas Association for comment, but did not receive a response by the time of this story’s publication.