Our biggest challenge: Building trust and confidence in resource development

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Stewart Muir of Resource Works joins other Environmental Non-Government Organizations (ENGOs) at a breakthrough ministerial panel in Burnaby.

The following is a presentation by Resource Works executive director Stewart Muir to the TransMountain Pipeline Expansion Ministerial Panel at its Burnaby, BC session on August 9, 2016. 

download.jpgResource Works communicates with British Columbians about the importance of the province's resource sectors to their personal well-being. It demonstrates how responsible development of British Columbia's resources creates jobs and incomes throughout the province, both directly and indirectly, while maintaining a clean and healthy environment.

And Resource Works explores the long-term economic future of British Columbia as a place that depends on the responsible development, extraction and transportation of the province's resources.

Since starting Resource Works in 2014, I’ve watched as government, environmental groups, and industry have worked together to achieve collaborative wins that create benefits for Canadian society. 

Today I am asking: How can we ensure that we are saying yes to projects for the right reasons, and challenging projects that do not meet our standards? I would like to share some information and observations that I believe could aid the Panel in achieving a successful outcome through this process.

 

Transition to the And-More Era

We as British Columbians have an extraordinary opportunity to lead and shape the conversation around the transition to a lower-carbon economy.  We have numerous examples not just in the petroleum industry but also in other resource sectors such as renewable energy, forestry and mining. British Columbia companies have also been true innovators, at the forefront of developing renewable energy such as large and small scale hydro, biofuels and co-generation biomass energy.

There is no simple or quick fix to the energy transition. It means being more efficient and using less over the longer-term. It means examining and reinvesting in our energy infrastructure, and it means leaving the old “and-or” energy equation in the past. Instead, for those committed to sustainable prosperity, we must seek the “and-more”, win-win solutions that can help develop our resources and bring them to market, create new technology and knowhow that we can export, and create prosperity and jobs in our all communities and territories.

According a report from the National Energy Board, Canada’s Energy Future 2016: Energy Supply and Demand Projections to 2040, if no new oil pipelines are built the amount of oil produced in Canada will be eight per cent lower than if pipelines are built as needed (page 5). Oil products will be shipped by rail, a more expensive shipping mode that is less safe than pipelines and has the additional disadvantage of reducing the price received by Canadian producers.

The National Energy Board’s approval of the Kinder Morgan Pipeline Expansion is the result of a process ordained by Parliament. The fundamental legitimacy of this process is an expression of the will of the Canadian people. Most citizens do have confidence in the energy regulation process and recognize that their freedoms flow from respect for the law.

 

Initiatives to Build Public Trust and Confidence

 

National leadership from Energy and Mines Ministers

In June 2016, approximately 90 participants from federal, provincial and territorial governments, industry associations, indigenous organizations, academia, research bodies and environmental non-governmental organizations gathered in Winnipeg for a national workshop on public confidence.

The workshop, which Resource Works participated in, recognized the importance of strengthening public trust in energy and mining development. The workshop discussed how, in a democracy, public confidence is essential to energy and mining development. I will quote at length from the foundational paper we used to inform the discussion:

For the most part, democracies have a competitive advantage when it comes to business investment. Societies gain the benefits of private capital investments to develop natural resources, to provide secure energy sources, and to improve national GDP and balance of trade. To enable investments, companies can count on the rule of law, stable political regimes and strong regulatory institutions in democratic societies. On the flip side, though, there are multiple veto points in democracies when it comes to resource development, whether with respect to social opposition to policy and regulation for an entire industry sector, or public decision-making for an individual project.

While fossil fuel development is often the flashpoint for conflict over resource development, it would be wrong to think this is solely a challenge for hydrocarbons. Renewable energy and mining face these challenges as well. Widespread opposition can generate costly delays, uncertainty, and unpredictability in the business environment. The term ‘democratic risk’ is even beginning to emerge in business circles.[1]

There is so much at stake: not only could strengthening public confidence help to preserve and unlock the economic contribution of Canada’s substantial energy and mineral reserves, there is also an opportunity for Canada to take a leadership position on this issue. We are not alone in facing these challenges. With the right attitude and approach, Canada could become an innovator in the public confidence space. As the workshop recognized, getting resource governance right could also help the country transition to a lower carbon energy future. 

 A report from the June workshop will be used later this month at the annual Energy and Mines Ministers’ Conference (EMMC).

There is no question that processes like this are the direct result of public pressure to better understand the risks and benefits of resource development.

The Panel may find it worthwhile to request resulting materials from EMCC in draft form as soon as they are available in late August.

 

A Model for Regulatory Excellence

I would like to share some recent research that could help to strengthen your work. Published in April 2016, The Alberta Model for Regulatory Excellence started with "Listening, Learning, and Leading: A Framework for Regulatory Excellence”. The model is based on three pillars of excellence—stellar competence, utmost integrity, and empathic engagement—and provides a performance model for regulators. To quote from the report:

“We must do more than contribute to social, environmental, and
economic outcomes; we must be able to demonstrate that
our work is directly related to those outcomes.”

 

May I suggest to the Panel that it consider the new findings from the Alberta model. They may provide a method for groundtruthing your findings through this process.

 

The Oil Sands in Perspective

Recognizing the existence of risk and responsibilities is a step toward building public trust in growth of the oil sands. The validity of this aim was validated by the endorsement of environmental groups ForestEthics, Environmental Defense, Equiterre and the Pembina Institute of Alberta’s Green Oil Sands Declaration of November 2015.

Hailed as a “major victory” by Greenpeace, the declaration allows for expansion of the oil sands within a hard cap on GHG emissions. For industry, environmental groups, and government, the challenge today is how to make good on the commitments contained in that declaration. 

Perspective on the Oil Sands

  • Oil sands contributed about 6.5% of Canada’s total GHG emissions in 2009 – this is equal to 0.1% of global emissions.
  • By comparison, GHG emissions from European electricity generation were nearly 30 times greater.
  • A Nature article shows that coal is a much worse threat than the oil sands – burning all commercially viable oil sands could increase global temperatures by 0.03C compared with 15C for coal
  • An Environment Canada researcher, using a NASA satellite, recently found that air pollution from the entire oil sands area was comparable to a large power plant or a medium-sized city

 

Responsible Oil Sands Development and Consumption

Canada is the world’s third largest producer of clean hydro power and it possesses vast renewable and clean energy potential. Oil is the most important energy source for Canadian consumers ahead of natural gas and electricity.

Oil sands development carries risks and responsibilities on a number of issues:

  1. Tailings management (dewatering/ settling and land reclamation)
  2. Water conservation (use, reuse and recycling)
  3. Bitumen recovery using non-aqueous fluids/ developing technologies to recover bitumen in other rock formations (carbonates, etc).
  4. Bitumen upgrading (processes with low energy intensity/ GHG emissions, chemistry/ compatibility, removal of contaminants)
  5. Safe pipeline transportation of diluted bitumen
  6. Safe maritime transportation of diluted bitumen 

A presentation by Gilles Mercier, Assistant Program Director Office of Energy Research and Development at Natural Resources Canada documented some advances in technology that are reducing impacts created by the Canadian oil sands.

Some examples:

  1. Paraffinic Froth Treatment (PFT)
  • Resulted in reduced water consumption and energy demand by 10% each, thereby reducing GHG emissions
  1. Air Emission and Fuel Quality
  • Research and development on future fuels and emissions is directed towards reducing the impact of both light and heavy oil production and use on air quality.
  • The long-term goal is to identify the relationships between fuel chemistry and advanced combustion technologies so that industry can provide transportation options based on internal combustion engines with minimum GHG and CAC emissions and maximum efficiency.

 

Canadians are likely to accept decisions that solve rather than create conflict. Solutions based on innovation and collaboration are the way forward. Much work remains to be done to engagingly tell the story what is happening in the lively space that is the Canadian energy sector.

 

Conclusions

Public confidence in nation-building projects such as the TransMountain Pipeline Expansion cannot be secured by unilateral action. Closing policy gaps on climate/environmental performance and reconciliation with indigenous communities requires action across government. It does not end there. Other issues related to responsible resource development include (and I am indebted to Professor Gattinger’s analysis and summary for this list):

  • Policy gaps related to cumulative effect;
  • Strengthening resource policy and regulation, including environmental assessment and protection;
  • Transparency, engagement and inclusiveness;
  • Monitoring and enforcement;
  • Supporting regulators’ public confidence efforts;
  • Actions on climate and on reconciliation should be attended to in intergovernmental forums, ideally in a coordinated fashion with other efforts to strengthen public confidence.
  • More attention to and by municipal governments when it comes to public confidence is warranted. Local governments are emerging as important players in this space.

 

We are told that something like 1.5 million jobs in Canada depend on natural resources. That's almost one job in 10 across our country. That's 1.5 million families whose livings come from natural resources.

We can preserve and increase those numbers, and we can do so in ways that are safe and respectful of the environment that is so important to Canadians. It is a question of balance, a question of the win-win that I spoke of. And it is the question for this Ministerial Panel. 

 

 



[1] PUBLIC CONFIDENCE IN ENERGY AND MINING DEVELOPMENT:

CONTEXT, OPPORTUNITIES/CHALLENGES AND ISSUES FOR DISCUSSION, PAPER PREPARED FOR THE JUNE 8-9 2016 NATIONAL WORKSHOP ON PUBLIC CONFIDENCEIN ENERGY AND MINING DEVELOPMENT FOR EMMC 2016. PREPARED BYPROFESSOR MONICA GATTINGERCHAIR, POSITIVE ENERGY, UNIVERSITY OF OTTAWA, MAY 2016 


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