By: Jason Gillespie, M.A., E.P., Manager of Environment and Regulatory, Energy | EXP
Jon Schmidt, Ph.D., Vice President, Environment and Regulatory Services | EXP
Jeff Raun, M.S., M.B.A, Senior Environmental Project Manager | EXP
Originally presented at the 2024 14th International Pipeline Conference
Abstract
In the past ten years, many pipeline and other linear energy projects have been cancelled in North America for economic, regulatory, or social license reasons. This trend is continuing today for energy transition-related pipelines and other linear projects. While the reasons for project cancellation are complex, key themes have been identified including a changing regulatory environment; political influence; increased opposition from affected and unaffected stakeholders; and market forces. Numerous project examples exist to support the analysis of oil and gas pipeline project execution risk. The paper explores how these examples illustrate future projects integral to enabling the transportation of carbon dioxide, hydrogen, biofuels, power or other products relevant to energy transition in Canada and the US. Traditional pipeline projects are compared to energy transition-related projects, testing the question of whether project differentiation and product type matter. Finally, the analysis identifies opportunities for reducing risk in pipeline project execution during the planning and regulatory phases. Energy transition faces significant new challenges requiring projects to manage an evolving regulatory, stakeholder and political landscape. Understanding these challenges helps proponents better position their projects with stakeholders who are similarly learning how modern technologies and products will be planned within existing pipeline development frameworks.
Introduction
Permitting and building linear energy infrastructure is becoming increasingly difficult in the US and Canada. This is true of both traditional oil and gas pipelines and energy transition projects, like CO2 sequestration and power transmission associated with green energy projects [1]. While there are several reasons for this difficulty, including the shifting global energy market and supply chain issues, regulatory and stakeholder roadblocks are often the primary impediment.
During the mid-2000’s the climate change lobby made a strategic decision to focus on a “keep it in the ground” approach to influence climate change policy. They decided they needed to show they had the political power to stop a major pipeline project from getting built [2]. This led to a broad-based coalition between climate change activists, Indigenous communities and landowners who turned their attention to projects like Keystone XL, Energy East, and the Dakota Access Pipelines. This coalition developed a battle-tested playbook of regulatory, political, and direct-action strategies to block linear energy infrastructure.
This playbook is now being adopted by some of the same coalition, to stop energy transition projects like the Navigator Heartland Greenway and Summit CO2 pipelines [3]. Similar strategies are being employed to stop other projects like hydrogen-blending in natural gas pipelines, solar and wind projects, offshore wind development, and power transmission related to hydropower or solar/wind generation.
A brief history of the development of this coalition will be presented, followed by some of the recent regulatory and stakeholder responses by governments in the US and Canada. Finally, some of the key lessons will be presented along with suggestions on how proponents need to adapt the traditional regulatory strategies and stakeholder outreach model when designing and permitting energy transition projects. Tactics such as forming an internal integrated project development team that amplify collaboration between engineering, land/ROW, environmental, regulatory, socio-cultural, legal, and stakeholder relations can have an appreciable benefit to managing project risks. Coupled with a “team permitting” approach to the external stakeholders (public, regulatory, political, and social) allows the proponent to manage input and control the processes instead of letting opposing parties control the process and dialogue.
Methods
The paper examines the history of the pipeline opposition movement over the past 20 years from a qualitative perspective, using a historical and policy lens. Primary sources include historic and polling syntheses, news reports, direct project involvement, and regulatory documents.
The paper focuses on the US and Canada as these two countries are where the opposition coalition developed [2]. While the two nations have quite different regulatory regimes, both have similar regulatory triggers for large linear energy projects, especially when they cross international borders [4]. As the CAPP report also details, regulatory hurdles and stakeholder resistance are significant factors in the difficulty in developing new linear energy infrastructure on both sides of the border. Further supporting this claim is the fact that both countries have had large projects cancelled and denied in the past 5 years.
The goal of this paper is to take lessons learned from previous projects to suggest how future projects can adapt their regulatory and stakeholder strategies. This necessitates prediction which is always a perilous exercise. While history shows us the folly of prediction, especially when dealing with complex human responses, there is enough historical analysis, polling, and recent project history to be able to make suggestions on how the resistance to future linear energy projects may play out.
Results and Discussion
History
There are several syntheses that document the history and current functioning of the climate change movement, including pipeline opposition [5,6] Hoberg [2] traces it to a 2006 decision within the Canadian Upstream Strategy Working Group to adopt a “full stop” strategy with respect to pipeline opposition. The Working Group decided they needed to show they had the political influence to fully stop a major pipeline project.
This strategy shift was supported by the developing idea of a “carbon budget” and “carbon bubble” to oppose oil and gas infrastructure [7,8]. The concept of a carbon bubble argued that to meet climate change goals, fossil fuels had to remain in the ground. At first, this idea was focused on large-scale climate change policy, but activists adapted it and began focusing on stopping the transportation of oil and gas as an indirect way to stop future extraction.
This philosophical and strategic approach was further supported by the idea of the “atmospheric tragedy of the commons” [2,9] which is the phenomena that it is much easier to get the public to care about immediate locally specific issues, like a pipeline, than it is to get them to care about large, global and complex issues like climate change, with effects predicted decades in the future. At the same time, this phenomenon was being documented by psychologists who were developing ways to leverage it for environmental protection [10].
With a newly developed strategy, underpinned by global policy ideas and emerging psychological research, the pipeline opposition set its sights on the Keystone XL project. To stop the project, a coalition formed between three groups with partially aligned goals: climate change activists, Indigenous communities, and landowners.
While the history of Indigenous consultation with major pipeline projects dates to the 1970’s, the previous 20 years involved a significant increase in Indigenous involvement in the approvals process and, in some case, opposition from Indigenous groups [11]. In Canada, the legal and regulatory system recognizes and codifies significant Indigenous involvement in the development and approval of linear energy projects. The US does not have the same constitutional mechanism that necessitate Indigenous consultation, however, there are several federal statutes and policies that require meaningful government-to-government consultation during federal permitting processes. Nonetheless, recent projects like the Dakota Access Pipeline demonstrate that Indigenous opposition is playing a significant role in approval or denial of a project [12].
The pipeline opposition coalition was joined by landowners, whose land the various projects would traverse. Their concerns tend to focus on hyper-local issues such as safety, annexation, and compensation [13].
As has been widely documented, the pipeline opposition coalition, coupled with changing administrations and their political use of projects for climate change policy stances, succeeded in blocking the approval of the Keystone XL project when more than a decade of regulatory, political and direct action led the US to officially cancel the approval in 2019. While the cancellation of Keystone XL was the most public success of the pipeline opposition coalition that formed some 13 years earlier, other projects were also cancelled due to regulatory burden and stakeholder opposition, like Energy East in Canada and the Atlantic Coast Pipeline in the US.
This rise in “pipeline populism” that resulted from these early strategies has transformed the modern environmental movement [1]. The shift from a focus on global climate change implications to local issues has created a narrower place-based focus that opposes the immediate local effects of liner energy development. It has also created a global network of activist groups focused on opposing energy infrastructure projects of all types [14].
These groups often target all stages of the project including the review stage (application intervention as statements of concern or intervenors), regulatory approval stage (exerting political pressure to deny approvals), post permitting legal stage (judicial review), and on-the-ground stage (construction blockages) [2].
While this history has created the regulatory and political framework in which modern traditional linear energy projects must operate, it has also done so for energy transition projects. Similar coalitions have been opposing these projects using some of the same strategies developed by traditional pipeline opposition groups.
Current Trends
The success of the opposition lobby cannot be understated. Data shows the legacy of this opposition has partly resulted in the lowest ever volume of US interstate natural gas pipeline capacity coming online in 2022 [15]. Reports suggest the value of cancelled energy projects in Canada has been significant [16] leading to equally significant reductions in future energy investment [17].
From a public perception perspective, it appears energy transition projects, like CCUS, is mirroring traditional oil and gas pipeline opposition concerns with a lack of awareness, poor stakeholder engagement, environment and safety concerns figuring prominently [18]. Polling in Canada shows a large surge in concern over the environment starting in 2019 [2]. In 2022, most Canadians wanted to meet climate targets but also thought the government was doing an average to poor job of providing a regulatory environment for investment in energy projects. Interestingly, most also agree that Canada should be expanding oil and gas exports as it would reduce global greenhouse gas [19].
Regulatory Responses to the Opposition
Governments and policy makers in Canada and the US have responded in many ways to the increased opposition to linear energy projects which has occurred alongside increasing pressure to streamline the regulatory process for these projects. This has, in some cases, created tension with opposing forces acting on regulators. There have been several attempts by both governments to address these opposing goals.
In Canada, the introduction of the Impact Assessment Act in 2019 was, in part, designed to significantly increase the level of stakeholder and Indigenous input into the approval process. However, in 2023 the Supreme Court ruled most of the Act was unconstitutional due to jurisdictional overreach [20].
In the US, similar streamlining has been attempted including the Fixing America’s Surface Transportation Act, specifically title 41 (FAST-41) which enabled the establishment of the Federal Permitting Improvement Steering Council [21]. Additional streamlining efforts included the One Federal Decision [22] (revoked by Executive Order in 2021), the Building American Energy Security Act of 2023 [23], the Inflation Reduction Act [24] and the Fiscal Responsibility Act of 2023 [25].
These measures have been largely ineffective. Agencies, when pressured by politicians and NGOs, have latitude to stretch out the regulatory reviews and require numerous additional requests for information to keep project regulatory review and timelines in limbo. Additionally, focused regulatory reforms continue to be called for by industry associations, developers, and other stakeholder groups cognizant of the unique issues presented by long linear infrastructure projects [26].
The Social Science of Opposition
Researchers and pollsters have identified various key traits that directly affect linear energy opposition. Hoberg [2] summarizes them as 1) the salience of place-based risk and benefits 2) whether opposition groups have a veto 3) whether the project can take advantage of existing infrastructure, and 4) the geographic separation of risks and benefits.
One of the key lessons from the early pipeline coalition was that the salience of place-based concerns will always create the largest political pressure. This led the opposition to focus on things like local water crossings and immediate safety concerns more than the climate change impacts of projects. This focus strengthened the Indigenous and landowner parts of the coalition.
Similarly, a regulatory and political push focused on increasing the veto power of stakeholders and local governments. This was most acute in the self-governance movement among Indigenous nations in Canada but can also been seen in things like regional opposition to pipelines like Energy East where provincial governments withheld approvals.
Finally, a unique feature of large linear projects is that the benefits are often separated by significant geographic distance from the local risks. For example, a local landowner or Indigenous community may receive little compensation for a project traversing their lands but are faced with the real or perceived risks of the project. Most of the economic benefits generally focus on the origin and destination. This separation often leads to significant opposition. This is especially problematic for energy transitions projects like CCUS and power transmission for solar or wind as both require long distance transportation across large areas that will not easily recognize the local benefits.
These social and psychological tendencies have led researchers to examine why place-based opposition has been so successful. For example, Hyland and Bertsch [27], in a paper containing polling in Ireland about wind and power projects, showed people have a strong cultural and emotional attachment to local places but that many factors can play a role in how strong this attachment is felt, especially with respect to compensation.
Most researchers conclude that successful consultation must show local economic benefits and meaningful planning stage involvement from local communities as a way to counter these place-based concerns [2].
Impacts to the Energy Transition
Many researchers have pointed out the similarity in philosophy and tactics used to oppose current energy transition projects to those developed in the mid-aughts to oppose traditional energy projects [2, 6-7].
Donnellan [28] summarized the localized opposition to CCUS projects in the US which resulted in the cancellation of the Navigator Heartland Greenway and the Summit Carbon CO2 pipelines in late 2023. Opposition to these projects centered around similar place-based concerns used to stop projects like Keystone XL, including safety and eminent domain, that resulted in delayed state approval processes in North Dakota and South Dakota. Climate activists tended to focus on carbon budget issues arguing that sequestration is not going to do enough to slow climate change.
Susskind et al. [29] looked at large wind, solar and geothermal projects to demonstrate that local opposition to energy transition projects is often value-based more than fiscally based and that the concerns of landowners and Indigenous groups do not always align. They found seven main sources of opposition which look remarkably familiar to earlier traditional pipeline opposition; 1) environmental concerns, 2) financial concerns, 3) lack of public consultation, 4) Indigenous rights, 5) health and safety concerns, 6) jurisdictional concerns, and 7) property value concerns.
Even proposals to blend hydrogen into existing pipelines are facing opposition from climate change activists and landowners [30]. Concerns center around social-justice issues, carbon budget concerns and concerns related to new and emerging technology.
Opposition to energy transition projects is using the same playbook developed a decade earlier to oppose projects like Keystone XL. The focus on local place-based issues has allowed the same coalitions to form which are showing similar success given the recent denial of the Navigator and Summit pipelines. Another recent example is the New England Clean Energy Connect Project, a transmission line linking hydroelectric dams in Canada to rate payers in the Northeastern U.S. initially proposed in 2017 is still not complete while facing significant opposition from landowners and permitting challenges.
Notwithstanding these recent cancelations, there are avenues for future research and ways in which proponents can design their projects to leverage these strategies.
For new energy transitions projects to succeed they are going to have to overcome an increasingly organized and vocal opposition that has adopted the battle-tested strategies of pipeline activists.
While the cancellation of recent CCS projects can make it seem like the ability to develop new projects is bleak, there are signs of hope. For example, as noted earlier, recent polling in Canada indicates people recognize the need for energy transition infrastructure and feel the government is not doing enough to facilitate it given their stated climate goals [19].
Another positive trend in Canada has been for traditional linear energy projects and energy transition projects to be at least partly Indigenous owned as a way to advance national reconciliation efforts and to overcome some of the place-based resistance. Examples include the 2023 announcement that the Government of Canada is looking to sell the Trans Mountain Pipeline projects to an Indigenous collective [31] and the proposed Wáwátéwák Corridor which would include a hydrogen pipeline [32].
Most researchers argue for some version of increased collaboration and consultation to alleviate opposition, but it is clear that the precise way this is done is important. The timing and type of consultation matters, whereby local stakeholders are most likely to support a project if they feel meaningfully engaged in the early project development phase. It is no longer sufficient to develop a linear right-of-way that is then presented to local stakeholders. It is much better to involve all stakeholders in these early project design decisions. This is most likely to overcome hyper-localized issues that proponents may not even be aware of while overcoming the psychological tendency for opposition to build when people feel their voice is not being heard.
Integrated internal team approaches and external “team permitting” have the potential to offer an organizational and project delivery model that best manages the risks inherent in more traditional, transactional, and siloed interactions with stakeholders. The role of integration in building construction project success has been studied, suggesting that effective inter-organizational teaming can directly and indirectly result in better cost, schedule, and quality performance in project delivery [33]. Within the landscape of energy transition projects, integrating the various stakeholders (internal and external) into cohesively managed teams can enable more transparent and timely interactions with project stakeholders and create space for conversations that build trust.
It is also becoming more important for project economics to account for real stakeholder inclusion in the benefits of the project. Examples include equity inclusion with Indigenous nations, co-development of public spaces when solar farms are designed, financial investment by the proponent in local social programs and political support for landowner tax incentives similar to those provided to the proponent.
In a large meta-narrative review of the CCUS literature on opposition, Neilsen and Marrison [34] argue for three main improvements to stakeholder consultation that could help address some of the opposition. These include 1) providing transparency, 2) acknowledging uncertainty, and 3) encouraging collaboration. The need to provide early-stage collaboration with local stakeholders has already been discussed. However, the need for transparency and to acknowledge uncertainty are newer ideas in the literature.
The process for designing and obtaining permits for a large linear energy project is complex and technical. This complexity, and a desire to protect competitive information, has often led proponents to design their consultation programs to provide only that information that they deem relevant. However, in an age where information is so abundant people will seek it out from other, often less reliable sources, if the proponent does not provide it. This can lead to misinformation becoming rooted in local opposition that is often hard to counter. Proponents are likely best served by providing as much information about a project, as early as possible, to help combat this tendency.
One of the least studied aspects to the resistance of energy transition projects is the uncertainty stakeholders often feel and the modern technologies. This is one area that differs from traditional linear projects where many stakeholders have extensive experience with oil and gas infrastructure, including the risks. The same is not true of CO2 sequestration and pipelines, wind, solar, hydrogen and biofuels, for example. These technologies have much less history, therefore, local and regulatory stakeholders are likely to be less knowledgeable and more risk averse. Proponents need to recognize this and build it into their consultation strategy by allowing for more time and effort to educate stakeholders. Additionally, proponents need to be more willing to acknowledge this uncertainty as it shows stakeholders that proponents can be trusted to be honest and that they recognize that these modern technologies are less well tested or integrated into their risk programs.
Conclusion
Proponents of new linear energy transition projects are forced to develop their projects within a complex historical framework of battle-tested opposition. While this can mean the opposition is very well-organized it can also provide opportunities if proponents are willing to look at the lessons learned over the previous 20 years. Successful permitting and construction of energy transition projects is not going to be likely if old traditional models of consultation are used. Stakeholder, Indigenous and other regulatory consultation for these types of projects require much earlier and more robust collaboration, via integrated teaming approaches, a willingness to be more transparent and open about uncertainties than ever before and an economic model that allows for meaningful participation by Indigenous and local communities.
All references available on request