Varcoe: Demise of Canadian Energy Pipeline Association ‘really short-sighted,’ warns Alberta energy minister


Does Canada need an organization to advocate for oil and natural gas pipelines if no new significant project proposals are coming down the road?

Aside from the owners, who will speak up for projects now underway or existing ones facing fierce opposition — such as Enbridge’s Line 5, where a new twist unfolded Monday — if the group that represents the sector disappears?

These are questions for the industry to ponder after the Canadian Energy Pipeline Association (CEPA) said Friday it will stop operating at the end of 2021.

It’s clear that leaders of large pipeline companies, including Enbridge, TC Energy and Pembina Pipeline, can speak up for their individual businesses to regulators, policymakers and the public — and they will.

However, that leaves CEPA headed for extinction.

The decision to close comes after Enbridge decided to leave the 28-year-old industry association last fall, with TC Energy and Pembina Pipelines serving notice they would depart by the end of this year.

Alberta Energy Minister Sonya Savage, who previously worked at CEPA and Enbridge before entering politics, was blunt Monday when asked about the decision.

“It’s really short-sighted for these companies to have let the industry association fold because you know we’re going to need it again,” Savage said in an interview.

“You see the attacks and the opposition to major new pipeline projects. Well, that opposition is now targeting existing pipelines … Who is going to be advocating for the industry-wide perspective on that?”

CEPA president Chris Bloomer said the loss of the three large pipeline companies as members created a budget hole that couldn’t easily be filled.

It led to the board’s decision to stop operations by year’s end and the pipeline companies will soon be left to speak on their own behalf.

“My indication from the companies is they want to do it on their own,” Bloomer said Monday.

“And companies like TC and Enbridge, they have the capacity to do that … but the larger companies are changing, too, and their focus is different and that needs to be recognized.”

The companies certainly have the ability to hire lobbyists and experts to ensure their voices are heard in Ottawa.

In a statement, TC Energy said it is a member of various trade associations across North America and, after careful review, decided to not renew its CEPA membership.

The decision also reflects a changing period for the country’s pipeline sector. The era of massive oil pipeline projects being pitched in Canada is winding down with the demise of Keystone XL earlier this year.

Miles of unused pipe for the Keystone XL pipeline in 2014.
Miles of unused pipe for the Keystone XL pipeline in 2014. Photo by Andrew Burton/Getty Images files

While opposition to Enbridge’s Line 3 replacement project continues, the pipeline began to fill up with oil on Friday. Construction on the Trans Mountain expansion is now more than 30 per cent complete.

CEPA started as a technically focused organization that shared information and collaborated on best practices, Bloomer said. With the pipeline battles of the past decade, it shifted into an advocacy role.

But legislative hurdles, low commodity prices, the push to decarbonize, along with ongoing legal and regulatory struggles, have all made it difficult to build new energy infrastructure in North America.

“It’s a sign of the times,” said former TransCanada executive Dennis McConaghy, who has written books about the pipeline sector.

“It’s another voice lost in Ottawa.”

Former TransCanada Corp. CEO Hal Kvisle, who is chair of the Business Council of Alberta, said CEPA played a strong role over the years on technical issues, such as dealing with pipe corrosion and integrity issues.

The pipeline battles in North America today are a different matter.

“The problems are so political and so difficult and of such national interest, I think an organization like (CEPA) would have a very tough time having an impact,” Kvisle said.

The battle over Line 5, an existing pipeline operated by Enbridge, highlights the presence of politics in such matters.

The pipeline ships 540,000 barrels of oil and natural gas liquids per day from Western Canada to Ontario, with the route running under the Straits of Mackinac, moving product through Michigan to Sarnia.

A tank farm at the Enbridge pipelines terminal in Sarnia.
A tank farm at the Enbridge pipelines terminal in Sarnia. Photo by Paul Morden/The Observer/Postmedia Network files

Michigan Gov. Gretchen Whitmer, citing safety concerns, wants to shut it down and revoke an easement granted in 1953 for the line to pass under the straits. The dispute is before the U.S. courts.

Enbridge and the Canadian government are working together, along with the provinces, to ensure the flow of energy to the area isn’t disrupted.

On Monday, lawyers for the federal government officially invoked a dispute settlement provision in a 44-year-old pipeline treaty signed by Canada and the U.S. to prevent authorities from blocking the transmission of oil or gas in transit between the countries.

News of the treaty being invoked came after mediation discussions between Michigan and Enbridge stopped. “Enbridge has continued to participate in the mediation process in good faith and still is hopeful that a negotiated resolution” can keep energy flowing, the company said in a statement.

Savage called Monday’s announcement good news, as discussions were at a standstill and invoking the treaty “needed to happen.” It will take the dispute out of the legal system while the treaty is discussed by the two countries.

As for the end of CEPA, Savage called it a disappointment, noting an industry group can speak with a much broader voice to governments than a single company on key matters such as building or operating existing pipelines.

“The opposition isn’t going to stop just because new crude oil pipelines have been completed and built. It’s going to find something else to oppose and they won’t have that strong voice of the industry association representing the industry as a whole,” she said.

“That is going to be problematic.”

Chris Varcoe is a Calgary Herald columnist.


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