On January 27 2016, the Liberal Government announced that oil and gas projects under federal jurisdiction will now involve an assessment of upstream greenhouse gas emissions and this information will be made public.  “Upstream” effects refer to GHG emissions from oil and gas exploration and production.

For projects currently under review, including Trans Mountain Expansion Project and Energy East Pipeline, the federal government will complete an assessment of upstream GHG emissions after, and apart from, the National Energy Board’s review process. Under the existing legislative regime, the federal government has the final say on whether to approve or deny a proposed pipeline project, taking into account the recommendation of the NEB.

The Liberal Government also announced its intent to conduct a comprehensive review and revision of the NEB Act and the federal environmental assessment process. This is expected to take several years to complete.

The government’s decision to assess upstream GHG emissions in the pipeline review process has been welcomed by many as a significant step forward, but it is not without its shortcomings.

First, downstream GHG emissions—that is, emission from the burning of oil and gas by end-users—will not be part of the assessment. This omission is significant because downstream emissions account for the vast majority of emissions arising from pipelines.

In addition, little has been said about the mechanics of the climate test—it is unclear how much weight would be given to emissions and what level of emissions would not be considered acceptable. As stated by NDP Member of Parliament Nathan Cullen, “a [climate] test only matters if you know how you are being graded.”

Environmental advocates maintain that the only acceptable climate test is one that examines a project’s total climate impact in light of the global average temperature target of 1.5 degree Celsius set out in the Paris climate change agreement. Canada’s Environment Minister, Catherine McKenna, was a vocal advocate of this target during the Paris talks. A climate test that purports to reflect this commitment must consider direct, upstream and downstream emissions.

York University Professor Mark Winfield, thinks that the federal government’s separate review process is not “a process for the real review of how these projects affect sustainability…[and] climate change.” The legal basis for a rejecting a proposed pipeline project based on evidence gathered outside the formal NEB review process is weak, says Winfield.

In addition, attention to GHG emissions so late into the review process, and after the NEB undertakes environmental assessment, creates the risk that climate change impacts will be discounted given the time and expense put into the project and review process. Environmental effects ought to be incorporated as early as possible—ideally in the planning process, argues Robert B. Gibson.

The most appropriate body to assess climate change impacts is an independent regulatory authority with the decision-making power to approve or reject pipelines.

Such body should have an explicit mandate to consider upstream and downstream effects of a pipeline and the final decision over the proposed project. According to Ecojustice, “approval and regulation of pipelines should not vary based on the whims of the current government.”

Intense debate exists over whether the costs of upstream and downstream activities should be considered when reviewing pipelines.

The NEB continues to exclude climate change impacts on the grounds that there is no necessary connection between the projects seeking approval and upstream or downstream activities—as required by s. 52(2) of the NEB Act—because they are not part of the proposed project or undertakings carried out the by project proponent.

Project opponents, however, point to the obvious connection between increased oil pipeline infrastructure and additional oil sands production.

Although the NEB insists that upstream and downstream activities have no direct connection to pipelines, as Michael Wenig and Patricia Sutherland point out, considerations of the benefits upstream and downstream activities are inherent in NEB pipeline reviews and approval decisions.

Concerns have also been raised that mandating the NEB to assess climate change considerations is outside the constitutional jurisdiction of the federal government over the environmental assessment process because it intrudes into provincial jurisdiction over industrial regulation and natural resources.

However, the Supreme Court’s reasoning in Friends of the Oldman River Society v Canada suggests the opposite: “where both levels of government have legislative power…in relation to the same project…then they may validly consider the full range of potential environmental effects when considering whether to their respective legislative powers…it defies reasons to assert that Parliament is constitutionally barred from weighing the broad environmental repercussions.”

Federal jurisdiction over pipelines stems from its constitutional power over “interprovincial works and undertakings” under section 92(10) of the Constitution Act, 1867. Climate change, as a matter of nation-wide concern, falls squarely within federal government’s power over peace, order and good government under section 91 of the Constitution.

Admittedly, including climate change impacts into the environmental assessment and review process of pipelines is not a simple task—there are considerable difficulties in predicting the full range of upstream and downstream activities, and there is the practical question of how to measure and evaluate the costs of these activities once identified.  A comprehensive Canadian energy policy that can guide the regulatory review of projects is desperately needed if pipelines are to be assessed in light of their climate change impacts.