Explosive neighbours and disgruntled municipalities

The dispute over siting of compressed gas facilities did not begin with the Sunrise Propane explosion of August 2008. The Quebec Court of Appeal recently put an end to a prolonged attempt by the tiny village of Beaumont to prevent the construction of the Rabaska project – an $800 million deepwater LNG import terminal — next door in Lévis, just south of Québec City. Financing permitting, LNG received at the terminal is to be regasified for injection into the Quebec and Ontario natural gas pipeline network. The terminal was predicted to cut natural gas prices in that area by 5%.

The planned LNG terminal, which has federal and provincial environmental assessments and approvals, will be less than 1 kilometer from the Beaumont boundary, in a long-standing industrial zone. In the fall of 2005, Beaumont  elected a new Council strongly opposed to the terminal, and promptly adopted a bylaw to prohibit its construction. At the time, the Quebec Municipal Code allowed municipalities to regulate certain activities, involving toxic substances, that took place outside but within 1 kilometer of their border, subject to approval by the Minister of the Environment.

Beaumont quickly requested the Minister’s approval of its bylaw. The Minister delayed responding to the request until the relevant  part of the Code had been repealed, and then claimed to be unable to approve the bylaw. Beaumont then tried to enforce its bylaw without the Minister’s approval. The Quebec Court of Appeal has now determined that it could not do so. Thus, the bylaw never came into force, and the compressed gas facility in Levis can be built, if  it still makes financial sense.

This particular fact situation is not likely to recur. But it’s a good illustration of the obstacles that bedevil any large scale energy project, and of the tensions between levels of government over decision-making on such projects.

Numerous LNG facilities were proposed across Canada when natural gas prices were high. LNG terminals should help reduce Canada’s carbon footprint, by making natural gas cheaper and more convenient to use  than other fossil fuels. Most of these proposals have faced prolonged opposition on safety and environmental grounds, as reflected in the Beaumont bylaw.  Only one, the CanAccord LNG terminal in St. John, NB, has opened.