Considering the Upstream/Downstream Effects of the Mackenzie Pipeline: Rough Paddling for the National Energy Board

Abstract

This paper addresses the extent to which the National Energy Board, in deciding whether to grant a “certificate of public convenience and necessity” for the proposed Mackenzie Valley pipeline, should consider the adverse effects of activities that are upstream and downstream of the pipeline. The NEB faces a dilemma in deciding whether and how to consider upstream/downstream effects. On the one hand, that exercise poses considerable methodological problems and it appears unfair to the pipeline proponents, because it suggests that the Board will hold the proponents responsible for numerous effects beyond the proponents’ control. On the other hand, there is a compelling argument for considering adverse upstream/downstream effects. This argument is rooted in the Board’s “public interest” project review standard, which inherently requires considerations of public costs and benefits at comparable scales. Thus, where upstream/downstream benefits are considered—as typically the case for pipelines—the corresponding costs must be considered as well. This paper critiques the Board’s approach to considering upstream/downstream effects and then offers several, largely policy-based, alternatives for solving the upstream/downstream dilemma.