One Public or Two: Environmental Resource Management along the US-Canada Border
John Belec, University of the Fraser Valley, Abbotsford BC, Canada
Patrick Buckley, Western Washington University, Belligham WA, USA
Paper prepared for
Association for Canadian Studies in the United States
Twentieth Biennial Conference
San Diego, CA 18-22 November 2009
Abstract:
The concept of the protection of public interest as a balance of economic, environmental, and social benefits with costs rather seamlessly extends across the US-Canada border, the issue ofgeographic extent of such protection in the NAFTA era is not clear especially in a shared confined cross-border eco-region like the Fraser Lowland. How national and state/provincial agencies, many with much longer histories then NAFTA, should spatially define the territory of the general public that they are mandated to protect remains unclear at best. Based on a review of public documents this study compares and contrasts the different manner in which two regulatory agencies Washington State’s Energy Facility Site Evaluation Council [EFSEC] and the National Energy Board [NEB] of Canada determined the geography of the public interest region when evaluating requests for construction permits within their respective nations to support facilities of a proposed power plant to be located within a kilometer of the border on the American side. After discussing each agency’s mandate and historical context, it explores how each defined the geography of public interest along the Sumas, WA – Abbottsford, BC border in a highly confined air shed and the striking consequences. In fact this lead to similar decisions on the impact of the power plant at one stage of the process and quite different ones at the end. This raised important policy and regional cross-border environmental resource management issues with EFSEC claiming to erase the border to protect a single cross-border public while the NEB affirmed the border creating effectively two publics and choosing to focus only on the Canadian public, a decision which was upheld when challenged in the Canadian Federal Court of Appeal. However, rather than settling the situation the outcome points out the frailty of the current state of affairs and the need of much greater study and in part a better understanding of the agendas and constituencies of different public agencies at different spatial scales and geographies. Finally, it suggests that agencies more invested in Borderland issues have a greater need to address potential cross-border constituents than more remote national agenciespotentially further strengthening the drive for viable Cross Border Regions.
Border studies have experienced resurgence of late. Academics from multiple disciplines have been drawn to study borders, as the concept and role of this object of study has taken on new significance in the post-modern era. Discourse has spanned the spectrum. On the one hand, according to many, we live in a “borderless” age witness to the movement of people and goods at an unprecedented scale. At the other, borders have grown “stickier” as a result of increased measures of state surveillance.
Although these trends are global in scale, their impact on day-to-day experience is felt most by those who reside onthe border ie, within cross-border regions (CBRs). The study of CBRs has also experienced an upsurge (Laresche and Saez, 2002, Perkman and Sum, 2002, Scott, 2002). Interest has especially focused on the emergence of CBRs as a new level of public administration, especially in the European Union. Euroregions represent an explicit attempt at CBR creation, and stand in sharp contrast to the Canada-United States border. Here, with few exceptions, CBRs rarely enjoy anything remotely close to self-governing authority. Rather, they are vague and amorphous entities, with shifting boundaries, depending on the eye or intent of the beholder. It is our contention that, with little or no power of their own, and little incentive on the part of national or state/provincial governments to devolve authority, CBRs on the U.S.-Canada border inevitably come to be defined collaterally [indirectly], as the indirect result of decisions made by remote judicial and quasi-judicial bodies in response to trade and related issues.
The purpose of this paper is to use the lower Fraser Valley region of southwest British Columbia, northwest Washington, as a case in point. For a decade, beginning in the latter half of the 1990s, a protractedlegal battle over the construction of a power plant [SE2] on the Washington side of the border forced regulatory agencies in the U.S. and Canada to define a regional “public” vis-à-vis energy provision and its impacts. Their decisions were surprising and unprecedented. Taken together with the implicit pursuit by the North American Free Trade Agreement of a borderless trade in energy, we explore three candidate border “spaces” that came to be applied to this CBR.
This paper is divided into four sections. A brief overview of the SE2 saga is presented in the following section as background. Following this, we introduce the regulatory bodies that played a central role: Washington State’s Energy Facility Site Evaluation Council (EFSEC) and Canada’s National Energy Board (NEB). We also review NAFTA’s perspective on North American energy movement, as it provided an implicit context for the issue. Section three will explore the regional definitions employed by both EFSEC and NEB ie, the “space of energy flows”. Finally, section four will present a discussion on the implications of these decisions on the emergence of a CBR in the Fraser Lowland.
1. Overview
The geographical setting of this study, the Fraser Lowland, is a bi-national bioregion and thus a natural cross-border region. It has relatively flat terrain, measuring approximately 3,500 kilometres2 (1,350 miles2) in area. It is delimited by the Coast Mountains to the north, Cascades to the south and east, and the Strait of Georgia shoreline to the west. This geographical setting has resulted in a confined air shed. The rich soil and mild climate make this prime agricultural land. The dominant physical feature of the region is the Fraser River whereas the dominant human feature is the United States – Canada international boundary and the Vancouver metropolis1. The boundary divides the Lowland approximately into two halves that represent extremes of location in their respective nations. At a more macro scale, the Fraser Lowland lies at the geographic epicenter of the larger cross-border region known as “Cascadia”.
In January 1999, Sumas Energy 2 Inc (hereafter called SE2), a wholly owned subsidiary of National Energy Systems Co. (NESCO) of Kirkland, Washington filed a proposal with EFSEC to construct a 660 megawatt natural-gas powered electric generation plant in Sumas WA. SE2 proposed to use Canadian natural gas, water, and wastewater treatment and access the regional power grid by constructing an international power line north across the border. The Canadian portion of the 230 kilovolt transmission line extended 8.5 kilometres from the border to BC Hydro’s Clayburn substation in Abbotsford, BC. As a “merchant plant”, i.e., one that exists primarily to sell power to the highest bidder rather than to meet local needs, access to a large potential market was essential to SE2’s business plan. From its connection point in Abbotsford, SE2 had access to a power grid that provides power to BC, Alberta and eleven US states. [NEB, 2004] Simultaneously SE2 filed with the US Environmental Protection Agency for an Environmental Impact Assessment [EIA]and the Canadian National Energy Board for permits to build the Canadian portion of the power line.
The unprecedented “fight” that quickly ensued over SE2’s proposal was fueled by two concerns. First, initial proposals to construct associated high tension power lines in Whatcom County mobilized a lobby that ultimately led to creation of County by-laws prohibiting such lines. Second, sparked by this opposition and the proposed size and design of SE2, especially its diesel backup generators, concerns over emissions quickly overflowed the border in the already stressed and confined air-shed. In spite of the fact that the plant was relatively clean in that it met all relevant emission thresholds, nevertheless it would have added three tons of “criteria and toxic pollutants to the [confined] air shed [of the Fraser Lowland].” [EFSEC, 2001]. The vociferous public debate on the proposal, and the focus of the regulatory agency reviews [WA’s EFSEC and Canada’s NEB] all evaluated the balance between the environmental costs and energy benefits of SE2’s power.
Given the size of the new power plant, Washington State level approval was required. This is a two step procedure that starts with a recommendation to the Governor from EFSEC, following hearings. The Governor makes the final decision. Thus NESCO applied to EFSEC for permits in 1999. As part of this process NESCO was required to file an Environmental Impact Assessment with Region 10 of the US EPA. This proposalincluded back-up diesel generators and was unanimously rejected [0-11] in February 2001 and withdrawn by NESCO, short circuiting a decision by the Governor. In June, SE2 submitted a revised design, that removed the diesel back-up provision and offered a program for creating offsets for NOx and PM10 in Canada. In a surprising reversal, the revised proposal was unanimously approved by EFSEC . Governor Gary Locke formally approved the proposal in August of 2002.
Following State approval, the forum on SE2 shifted north, to Canada’s National Energy Board. The role of NEB was to issue the permit for connection into the power grid. Traditionally NEB limited its review to the direct impacts of power lines themselves. However, in the case of SE2, at the urging of the Province of British Columbia, Abbotsford and others, NEB agreed in late 2002 to look at both the impact of the power line and the power plant to supply it, even though the power plant was located in the US. This proved to be a crucial decision. After concluding in December of 2003 that the power line itself had an acceptable impact, in March 2004 the NEB rejected NESCO's application on the grounds that the power plant would have adverse environmental impacts on the local region in Canada [NEB, 2004].
Parallel to this move in Canada, legislation was moving through the Whatcom County Council to control the size and location of high voltage power lines. These regulations, approved in late July 2004, are seen as crucial to preventing a supplier from manipulating existing permits to ship large quantities of power in multiple, parallel lower voltage lines. Although these regulations were a result of long standing opposition to new high voltage lines in Whatcom County including a successful 1990 referendum issue, they essentially forced SE2 to link to the Canadian grid in Abbotsford or not at all.
In a last ditch effort NESCO appealed to the Canadian Federal Court of Appeal. The company based its appeal on “errors of law”, and argued that the NEB ruling exceeded its jurisdiction. It was further argued, with an implicit reference to the “spirit” of NAFTA, that the NEB decision was “parochial because it put local opposition ahead of national interest…” [Hortegas, 2004]. In fall of 2005, the courts sided with the NEB, and in early spring 2006 NESCO choose not to appeal to the Canadian Supreme Court and instead formerly withdrew its proposal.
2. The regulators
In this section we provide a brief description of the regulatory authorities that played a central role in determining the outcome of the SE2 application: Washington State’s Energy Facility Site Evaluation Council (EFSEC) and Canada’s National Energy Board (NEB). We also describe the context provided by the North American Free Trade Agreement.
EFSEC, a Washington State agency, was created in 1970 “to provide "one stop" licensing for large energy projects.” ( , accessed Nov 02, 2009).The agency’s responsibilities “include siting large natural gas and oil pipelines, thermal electric power plants that are 350 megawatts or greater and their dedicated transmission lines, new oil refineries or large expansions of existing facilities, and underground natural gas storage fields.”(Ibid) EFSEC is chaired by a Governor appointee and includes representatives from five state agencies. Additional agencies have the option of adding representatives and city governments are also usually invited to participate.
As a creature of the Canadian federal government, the NEB enjoys wider prominence within it’s respective jurisdiction, than does EFSEC. The Chair and members of the NEB are appointed by Federal Cabinet and hearings held in response to energy applications are typically decided upon by panels consisting of three NEB memberswho are drawn from both the public and private sectors. Hearings follow rigid guidelines reflecting the “quasi-judicial” nature of the Board, which is “bound by the principles of natural justice and procedural fairness”.(National Energy Board, Hearing EH-1-2000)
EFSEC identifies its mandate to be one of “’balancing’ demand for new energy facilities with the broad interests of the public. As part of the balancing process, protection of environmental quality, safety of energy facilities, and concern for energy availability are all to be taken into account by the Council.”( accessed Nov 3, 2009) The mandate of the National Energy Board is much wider than EFSEC ie, “to promote safety and security, environmental protection and efficient energy infrastructure and markets in the Canadian public interest…” ( accessed Nov 3, 2009). Thus, whereas EFSEC’s domain is exclusively on the sitting of power infrastructure in Washington State, the NEB is more widely charged with all aspects of energy production throughout Canada. Nevertheless both are essentially concerned with the need to balance the need for energy with the public interest, although the NEB attaches a border to it’s “public” at the outset: “As a federal tribunal, the Board must focus on the overall Canadian, or national, public interest.” (National Energy Board, Hearing EH-1-2000)
In their respective findings of fact related to SE2, both agencies stress that their role extends beyond perfunctory approval of applications that do not exceed environmental impact limits, clearly anticipating an objection from the applicant on their decisions:
Compliance with promulgated numerical air quality standards is a minimum requirement for allowing a power generating facility to be constructed in [Washington]…A power plant may satisfy the numerical standards for the amount of air pollutants that it emits without the requested site being an appropriate location. (Energy Facility Site Evaluation Council, Council Order 754, p. 22)
Inherent in the concept of balancing benefits and burdens is the recognition that something more is required than simply reviewing the evidence to determine if a project would meet the minimum regulatory requirements, standards, objectives or guidelines. (National Energy Board, Hearing EH-1-2000)
To the extent that the NEB is charged with “giving effect” (section 120.1) to the North American Free Trade Agreement, the latter establishes a context for the SE2 application. Indeed in its submission to the Federal Court of Appeal, SE2 argued that the NEB decision failed to meet its obligation in this regard. As a principle, NAFTA promotes the “liberalization” of “trade in energy and basic petrochemical goods”(NAFTA, Article 601), as directed by Chapter 6 provisions (“Energy and Basic Petrochemicals”). According to Michael Holden, in a brief prepared for the Parliamentary Information and Research Service, Library of Parliament (PRB 06-33E), “[f]rom the Canadian perspective, NAFTA Chapter 6 prohibits government intervention in the normal operation of North American energy markets, whether in the form of price discrimination…or the disruption of supply channels.” Holden concludes that “[t]he only significant limitation NAFTA places on Canada is that it prevents the Canadian government from implementing policies that interfere with the normal functioning of energy markets in North America.”
The Canadian Court of Appeal based its dismissal of SE2’s charge regarding NAFTA on two points. First, it concluded that the NEB’s original decision did not violate NAFTA Chapter 6 energy provisions ie, it was not discriminatory nor did it disrupt supply. The Appeal Court also noted that SE2 was playing the NAFTA card late in the game. SE2 did not make the NAFTA provisions on energy a key part of its original submission and therefore it was never fully explored. Therefore, the role of NAFTA in future border disputes involving energy facility siting remains something of an open book.
3. The Space of Energy Flows
The SE2 saga resulted in unprecedented decisions made by quasi-public bodies that will ultimately come to define the shape of a cross-border region in the Fraser Lowland. Both regulatory agencies alternately found unprecedented ways to erase the international boundary and also to reaffirm it. These decisions, and related deliberations, thus reveal various understandings of border “space” in the Fraser Lowland. This is exposed in the course of defining a geography of public interest. Is it one or two?
Washington’s EFSEC, in its response to SE2’s original application in 2001(Council Order no. 754), presents the strongest case for a single public: “[t]he state has the responsibility to protect all people from undue adverse environmental impacts, whether or not they live in Washington State.” (Council Order no. 754, p. 2). Further evidence was provided in EFSEC’s decision to grant intervener status to two Canadian public bodies: the City of Abbotsford and the Abbotsford Chamber of Commerce. Providing such status to Canadian entities was unprecedented2 . In the end, EFSEC sided with cross-border sentiment: