Major Project Appraisal: Evaluation of Impact Assessment Methodologies in the Regulatory Review Process for the Northern Gateway Project

In Canada, there are six major oil pipeline projects either proposed or approved with an in-service date before 2020. The federal government has a regulatory process to evaluate the environmental, economic, and social impacts of proposed pipeline projects. This dissertation examines existing methods that project applicants use to evaluate pipeline impacts in the review process and recommends how current methodologies could be improved. The study uses the Northern Gateway Project as a case study. Decision-makers reviewing proposed pipeline projects must determine whether projects satisfy legislative criteria under the National Energy Board Act and the Canadian Environmental Assessment Act in order to approve the application. Therefore an evaluative framework is necessary to assess the degree to which information in a regulatory application satisfies legislative criteria. A framework consisting of three criteria, namely significant effects, project need, and public interest, is developed. The evaluation determines that there are many major weaknesses in the regulatory application for the Northern Gateway Project concerning the quality of information, which suggests that decision-makers do not have the best available information to adequately assess the project as required under the National Energy Board Act and the Canadian Environmental Assessment Act. A multiple account benefit-cost analysis of the Northern Gateway Project is undertaken to evaluate the capability of the method to provide decision-makers with requisite information to address legislative criteria. The analysis concludes that the Northern Gateway Project represents a net cost to society. The evaluation of multiple account benefit-cost analysis with legislative criteria for project approval under the National Energy Board Act and the Canadian Environmental Assessment Act suggests that the method is suitable for evaluating major pipeline projects and is certainly an improvement relative to existing methods in the federal review process. There are six recommendations to improve the current approach to evaluating project impacts in the federal review process. Recommendations include requiring multiple account benefit-cost analysis in the regulatory application, developing explicit methodological guidelines for applicants, appointing independent experts to prepare impact assessments, developing specific decision-making criteria, evaluating alternative pipeline projects jointly, and improving stakeholder participation in the decision-making process.