Energy East pipeline team can learn from Enbridge mistakes
TransCanada CEO Russ Girling. Photo: Courtesy of MSNBC.
TransCanada’s announcement that it plans to build the Energy East pipeline from Alberta to New Brunswick begs a question: Will Eastern Canadians grant social licence for the project?
Social licence is pretty simple, really. Does the community in which a natural resource project, such as a pipeline, support it? Social licence is an issue because of the fierce opposition faced by TransCanada’s own Keystone XL pipeline (Alberta to the Gulf Coast of Texas) and Enbridge’s Northern Gateway (Alberta to Kitimat, BC).
Keystone XL is still awaiting approval from President Barack Obama, who keeps giving speeches in which he questions the economic benefits of the pipeline and chastises Canada for not doing more to reduce greenhouse gas emissions. Proponents are worried Obama is cozying up to the environmentalists in the Democratic Party and will nix Keystone XL as a sop to the eco-warriors and Hollywood celebrities who noisily oppose the project.
Keystone XL has faced some grassroots opposition, but nothing like Northern Gateway.
In British Columbia, that opposition includes many First Nations, which are in a unique position to stop the pipeline because of constitutional guarantees of consultation and participation in resource development, and many recent legal precedents that support aboriginal interests in development. Enbridge claims to have over 40 aboriginal groups signed on to equity participation in Northern Gateway, but refuses to identify them.
The combination of environmental groups organizing public opposition and First Nations providing political support and potentially the legal backstop to court challenges is a powerful weapon to wield against energy companies, which are struggling to come to grips with the new political reality.
Dr. Roger Gibbins’ column reflects mainstream confusion about social licence and how Energy East pipeline must earn it.
The confusion is illustrated by a recent Troy Media column by Dr. Roger Gibbins about social licence. Gibbins is the former head of The Canada West Foundation and a well-known conservative commentator. Gibbins compares social licence to a restaurant’s business licence and finds it wanting:
By contrast, social license in the resource sector is not so cut and dried. There is no parchment for the wall, no consensus on what the operating conditions should be or by whom those conditions should be set. There is no regulatory authority analogous to a food inspector or fire marshal, and no agreement on how disputes should be resolved.
If the messy, amorphous nature of social licence doesn’t sit well with industry supporters like Gibbins, imagine how it affects oil company executives, who generally tend to be engineers, professionals notorious for structure, process and certainty. The oil industry is accustomed to receiving its licence from governments and regulators. The notion of “earning” it from the general public or special interest groups must be disconcerting.
Gibbins’ column reflects the oil industry’s unease:
…it becomes less and less clear where decisions on social license should be made. Should it be the responsibility of regulatory agencies? Should an essentially political decision be made behind the closed doors of cabinet? Should the courts be involved? What recourse should local communities have if their perception of community benefit fails to align with the larger provincial or national community?
Good questions, all.
But also mostly unnecessary. The general principles and processes for assessing energy projects like pipelines are well developed and have a long history. Both Ottawa and provincial governments, especially BC and Alberta, have recently put a fair amount of energy into streamlining the regulatory approval process. No need to revisit that nest of snakes.
Instead, let’s draw a couple of lessons from Keystone XL and Northern Gateway, simple things TransCanada can do smooth the path to approval.
Communications and the Energy East pipeline
Northern Gateway will go down in public relations history as a classic case of how not to manage communications around a resource project. Enbridge was slow to provide information to the public. Its announcement of a $5 million advertising campaign late in the game was so derided it probably caused more harm than benefit. Greenpeace and its allies, as well as BC First Nations have completely dominated media stories about the project.
Worse yet, Enbridge allowed the Vancouver media to be completely co-opted by its opponents. Young reporters with green sensibilities routinely accept the “facts” and arguments uttered by eco-warriors without checking their accuracy. And those facts are often wrong or incorrectly interpreted; I could make a career of correcting Vancouver media stories about the energy industry and I’m certain the same will be true of Toronto and Quebec media.
I have conducted dozens of interviews with environmental organizations, which are generally manned by lawyers and young activists who are keen and well-intentioned, but not technical experts. Then there are politicians, like Green Party co-deputy leader Adrienne Carr, who twist facts to their own liking and are generally impervious to the science and engineering, but still get plenty of play in the media.
To win social licence for the Energy East pipeline, TransCanada must win the information war. Simple as that. It cannot take the position, as one oil executive explained to me, that industry’s role is to make information available and if people want it they will find it. TransCanada must be proactive and be ready to counter “facts” with facts.
Keystone XL was a rehearsal. Energy East is likely to be more ferocious and nasty.
First Nations, communities and the Energy East pipeline
Most Canadians aren’t aware, but First Nations have spent the last 30 years asserting their treaty and aboriginal rights vis a vis resource development, as well as developing the political, organizational and business capacity to participate. They want to be partners in development.
And they’re not asking.
Again, Enbridge’s experience with Northern Gateway is instructive. The company claims to have had 17,000 plus meetings with aboriginal groups. But I’ve interviewed some of the First Nations people who participated in those meetings. They talk about a corporate culture not built on listening and building relationships, but flying into town on a private plane with a cheque in the morning and hightailing it out in the afternoon.
If TransCanada makes that mistake with Eastern First Nations and communities, Energy East is in for a rough ride. Building grassroots relationships is tough and time-consuming, but ultimately the key ingredient in earning social licence.
So, while Dr. Gibbins and the C-suite executives in downtown Calgary may fret about Eastern Canada’s reception of the Energy East pipeline, the outline of a winning strategy is clear: Effective communication in the media and on the ground, and solid partnerships with First Nations and communities, particularly along the pipeline route.
It won’t be easy, but I don’t believe for a moment TransCanada CEO Russ Girling and his team every thought it would be.
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