Proceedings of the 2012 9th International Pipeline Conference IPC2012 September 24-28, 2012, Calgary, Alberta, Canada

IPC2012-90599
Conservation Offsets and Pipeline Construction: A Case Study of the TMX Anchor Loop Project
David W. Poulton Environmental Strategies Consultant, Calgary, Alberta, Canada ABSTRACT When Terasen Pipelines (later Kinder Morgan Canada) sought to loop its Trans Mountain pipeline through Canadas Jasper National Park and British Columbias Mount Robson Provincial Park, both being components of the Canadian Rocky Mountain Parks UNESCO World Heritage site, the company faced formidable regulatory and public interest obstacles. However, the company and several environmental groups agreed not to test the strength of their respective uncertain legal positions, but to work co-operatively with each other and with park managers. The motivating goal was to design into the looping project some aspect of environmental improvement that would result in a net benefit to the ecological conditions of the two parks, more than compensating for the residual disturbance which would be caused by the looping after mitigation. The central concept was that of a conservation offset (also known as biodiversity offset), which has been defined as : conservation actions intended to compensate for the residual, unavoidable harm to biodiversity caused by development projects, so as to ensure no net loss of biodiversity. This paper reviews the history of the discussions and planning which took place, considers the adequacy of the outcomes, and suggest lessons for using conservation offsets as a means to align proponent and stakeholder interests and improve environmental outcomes for linear projects beyond the prospects offered by mitigation alone. INTRODUCTION When Terasen Pipelines Inc. proposed to loop the Trans Mountain pipeline through Jasper National Park and British Columbias Mount Robson Provincial Park it faced formidable regulatory and public interest obstacles. Industrial infrastructure such as pipelines would not normally be considered acceptable in such parks. These concerns motivated discussions aimed at designing a corresponding ecological improvement project which would more than offset the habitat disturbance created by the development. While the parties were

unaware of the academic literature on conservation offsets for much of their deliberations, the experience turned out to be a good working example of the potential and challenges of the concept of conservation offsets. The author represented the Canadian Parks and Wilderness Society through the process. This article draws on academic literature, on project documents, and on the authors own experiences and observations as the project has proceeded. CONSERVATION OFFSETS "Conservation offset" is a broad concept that refers to any scheme whereby the construction, rehabilitation, or protection of an ecosystem is undertaken in compensation for the residual, unavoidable negative environmental impact of a development project, with the objective of producing no net loss to the larger ecosystem, or a positive benefit to that ecosystem.[1, p. 13] Biodiversity offset is an equivalent term. The concept is becoming increasingly popular as resource extraction and development industries seek to improve their environmental performance and reputation, and as governments seek to recruit private effort and resources for the public goal of environmental protection. It has been given positive consideration, directly or through cross-sectoral organizations, by a wide diversity of companies and conservation organizations, including BP[2], Chevron Texaco[2], Conservation International[2], Forest Trends[3], the International Council on Mining and Minerals[4], Insight Investment[1], the International Union for the Conservation of Nature[1,5], The Nature Conservancy[2], Rio Tinto[5], Shell[2], the Smithsonian Institution[2], Statoil[2], and the Wildlife Conservation Society[3]. In Canada the idea of conservation offsets has been reviewed positively by the Canadian Boreal Institute and the Pembina Institute for Appropriate Development, in conjunction with the Alberta Research Council[6]. Despite this widespread interest, it is the authors impression that the concept is not widely-known or well-understood by most companies nor most conservationists.

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An offset generally operates by counterbalancing environmental change on at least two separate, but usually proximate sites. The ecological degradation of the first site the development site is compensated by an equivalent or greater environmental improvement at a second site the offset site. The basic notion is easily, if simplistically, represented by Figure 1. (A similar chart is found in [4, p. 3].)
DEVELOPMENT PROJECT OFFSET PROJECT No net loss Net benefit

OFFSET

Basic devment

Less avoided Less impact mitigation

Figure 1: Conservation offsets in the hierarchy of mitigation The graph illustrates a couple of principles which underlie the concept, and also some of the challenges which have commonly been encountered in applying it. First, it is important to note that offsets fall toward the upper end of a hierarchy of mitigation. This means that they should only be applied after full implementation of several other measures, including 1) the design of the development project to minimize its baseline environmental impact, and 2) the design and implementation of the best mitigations possible to reduce the residual impact. Only after those steps have been taken should offsets be invoked to reduce the residual negative impact to zero, or to seek a positive impact. Put another way, the prospect of an offset opportunity ought not to be used as a justification of taking less than full care in design and mitigation fundamentals for the development project. In the absence of this principle an offset project might be seen to be a means of avoiding a proponent's responsibility to mitigate. Indeed, where this rule is not followed some critics of conservation offsets have referred to them as a "license to trash[1, p.19] It goes without saying, as well, that all of this assumes that the development project meets the condition of being appropriate to the environment and to land use objectives in the first place. The second principle is that of additionality. This means that the offset has to add something of ecological value which would not occur otherwise [1, pp.68-69]. Typically, this might involve rehabilitating a degraded ecosystem, or instituting protection of one which is endangered for some reason unconnected to the development project. There is no set list of activities which might count as offsets (partial lists can be found

at [1, p.68-71; 3, under Biodiversity Offsets tab]), though each one raises its own set of questions. With this basic description of the concept, the potential appeal of the offset concept may be obvious. From a theoretical perspective, it provides a means of reconciling the social needs for economic development and environmental protection. The frequent adversarial nature of economy vs. environment might be replaced, at least in some circumstances, with the two progressing simultaneously and interdependently. Put another way, rather than seeing the social and economic benefits of development pursued at the expense of the environment, all three of these legs of sustainability are pursued in an integrated manner. As Kerry ten Kate and co-authors have stated after interviewing 37 stakeholder representatives with experience in conservation offsets, our interviewees suggest . . . companies increasingly believe that a development project should deliver both environmental and development benefits, rather than trading one off against the other.[1, p. 71] Seen as this reconciling of interests, it is not surprising that almost all voluntary conservation offset programs proceed in an atmosphere of close consultation, and often open collaboration, between the proponent industry and government, environmental stakeholders, and other community stakeholders. This is necessary if the desired interests and expertise are to be involved, and the necessary trust and good will developed.[1, pp.72-73; 4, pp.5-6] For government, offsets provide a means to avoid political divisiveness and pursue multiple policy goals in an integrated way. For industry, they are a means to avoid environmental conflict and controversy, enhance the social license to operate, and perhaps ease the way through the regulatory process or the path to access to capital.[1, pp.38-45; 4, pp.5859] For environmental interests, they offer the means to bring new private resources and perhaps public attention to priority environmental concerns. The attractiveness of the concept of conservation offsets, however, does not mean that they are free of complication and controversy. These generally arrive where lofty principles meet the complex and uneven real world. The most pervasive challenge in the field is that of assessment and measurement so as to allow for the comparability of negative and positive impacts. Biodiversity, unlike carbon, is not a fixed commodity, nor is there an easy and generally-accepted means to measure it. Rather, each piece of a terrestrial or aquatic ecosystem is unique. While the environmental assessment of a development may describe the impacts at and surrounding the development site, it generally does not do so in terms which allow for comparison to another (offset) site, and may not be able to do so. The most comparable sites may not be close to each other, there may be differences based on location, such as the presence of a wildlife movement corridor, or it may be advisable in particular situations to create the offset on a site dissimilar from the development site due to specific conservation priorities.

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These difficulties greatly complicate the job of all involved to decide which environmental improvement, and how much of it, is sufficient to offset the residual impact of the development. While a great deal of research is underway on this subject, the fact is that in most situations judgment is still largely subjective at the end of the day, and thus a matter to be discussed and negotiated by the various stakeholders involved.[1, p. 60] Perhaps in part because of these complexities, ten Kates study found that while many companies have policy commitments to no net loss of biodiversity, many of those who do so see the commitment as merely aspirational rather than one to which progress is designed and measured.[1, pp. 50-52] As a starting point, however, ten Kate has suggested that this is best facilitated by aiming to have sites as similar as possible (like for like), and as close as possible, whenever possible.[1, pp. 58-59] He and his co-authors also suggest that the uncertainties of measurement, and of success of the offset, be accounted for by increasing the offset as activity by some negotiated multiple of the development site, as appropriate to the particular circumstances.[1, pp. 58-59] With this framing of the concept, let us turn to the case study. THE TMX ANCHOR LOOP PROJECT AND THE QUEST FOR NET BENEFITS a. The Development Project The Trans Mountain Pipeline is a 1,146 km oil pipeline running from Edmonton, Alberta, to Burnaby, British Columbia. Its route proceeds westward from Edmonton, joining the Athabasca River corridor at Hinton, Alberta. Thereafter it enters Jasper National Park (JNP), following the Athabasca and then Miette Rivers. Thereupon it crosses the continental divide at Yellowhead Pass into British Columbias Mount Robson Provincial Park (MRPP), following the headwaters of the Fraser River, then the North Thompson and, ultimately, the lower Fraser River systems westward and south. Highway 16 (Yellowhead), the Canadian National Railways (CNR) mainline and other current and abandoned utility facilities follow the same corridor through the parks. (See Figure 2) The Trans Mountain Pipeline was constructed in 1952 and 1953 by Trans Mountain Oil Pipeline Company pursuant to Orders in Council of the federal and British Columbia governments.[7, p.3] The original line was 24 inch (610 mm) outside diameter, and, after some expansion in 1957, had maximum capacity flow capacity of 375,000 barrels per day (bpd) (59,620 m3/day) of refined petroleum and petroleum products, with reported actual deliveries of more than 400,000 bpd (63,594 m3/day).[8] Reductions in pumping power for a variety of reasons in the 1970s and 80s resulted in a stated capacity of 225,000 bpd (35,772 m3/day) by the early years of the 21st century.[8] The Trans Mountain line has been the only

petroleum pipeline ever running from Alberta to Canadas west coast.[7, p. 3]

Figure 2: Route of Trans Mountain Pipelines through Jasper National Park and Mount Robson Provincial Park Terasen Pipelines (Trans Mountain) Inc., a subsidiary of Terasen Inc., wholly acquired the pipeline in 1995, having had a majority interest for several years prior. Terasen Inc. was a well-known company, operating mainly in British Columbia, with interests in consumer gas, utilities and water works, in addition to the pipeline interest. At the turn of the 21st century, in response to rising production in Alberta, particularly from the Athabasca tarsands/oilsands, and world energy demand, Terasen Pipelines made the decision to expand the capacity of the Trans Mountain line, which by then had become routinely referred to as TMX. The first part of the expansion plan consisted of two phases, with a total capital cost of $760 million.[9] The first phase was the construction of a series of new pump stations, which would increase flow by 35,000 bpd (5,564 m3/day) to a total capacity of 260,000 bpd (41,336 m3/day).[10] That work was carried out in 2006 and 2007, with little public attention or controversy. Phase 2 of the expansion posed some more formidable obstacles. The plan called for looping of the TMX line for 158 kilometres from a pump station eight kilometres west of Hinton, Alberta, to Rearguard, British Columbia, just west of the west MRPP boundary. (Looping is a term common in the industry referring to the installation of an additional segment of pipeline parallel to and interconnected with an existing pipeline system with the intention of adding capacity and operational flexibility.[7, p. 3; 11]) Specifically the objective was to add an additional 30 inch (762 mm) or 36 inch (914 mm) line to the existing system, which would bring the total system flow

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capacity to 300,000 bpd (47,696 m3/day).[10,11] This phase of the expansion was referred to as the Anchor Loop project. Of the 158 kilometres to be looped, 140 fell within the national and provincial park (80 in JNP, 60 in MRPP). This posed a substantial obstacle in term of regulation, environmental management challenges, and public perception and concern. As the region has been the subject of First Nations land claims, those too complicated the picture. The presence of the two parks represented a strong public value competing with that proposed by the Anchor Loop. Both parks and the larger region in which they are located embodied a strong regional, national, and international commitment to the preservation of an intact and functioning natural ecosystem. Jasper National Park, established in 1907, is one of Canadas oldest and largest national parks. Attracting 1.8 to 2 million visitors per year,[12] it is well-known and well-loved. Such famous vistas as Mount Edith Cavell and Maligne Lake grace calendars and photo albums world-wide, and draw international attention and affection to Jasper. Like its southern neighbor, Banff, (though to a lesser extent), the appropriate mix of development and ecosystem conservation in the park has been the subject of concerted debate for decades. Much of that debate has focused on the facilities and activities found in the transportation and utility corridor within which the TMX line is located and where the Anchor Loop was intended. Mount Robson Provincial Park is focused on its namesake, the highest peak in the Canadian Rockies, and one of the most majestic and well-known. Established in 1913, it covers an area of 2248 km2 of the western slopes of the Rockies. Mount Robson itself is a popular destination for climbers, while the trail network at its base is popular with casual backcountry recreationalists. Mount Robson and Jasper are both encompassed within the larger Canadian Rocky Mountain Parks World Heritage Site, established by the United Nations Educational, Scientific and Cultural Organization (UNESCO) in 1984, and expanded in 1990.[13] To understand the significance of this landscape, American readers may consider it to be equivalent in legal status and public perception to Yellowstone National Park. The designation of these areas as parks and a World Heritage Site is of far more than ceremonial or honorific importance. They confer legal and regulatory regimes which were of direct relevance to the Anchor Loop project. Under normal circumstances (i.e., in the absence of the original pipeline) construction of pipelines or other industrial infrststructure would not be permitted or tolerated in the either of the two parks. The Canada National Parks Act, subs. 8(2) provides the following: [m]aintenance or restoration of ecological integrity, through the protection of natural resources and natural processes, shall be the first priority of the Minister when considering all aspects of the management of parks.[14] A management plan in each national park, and a wide set of regulations and policies, provide for a special management regime, quite distinct from other federal or provincial Crown lands.

Mount Robson is a Class A park pursuant to British Columbias Park Act [15]and Protected Areas of British Columbia Act.[16] This means that in law it is dedicated to the preservation of their natural environments for the inspiration, use and enjoyment of the public[15, subs. 5(3)]. Again, a variety of special policies and regulations apply. The World Heritage Site designation empowers the International Union of the Conservation of Nature to review and comment (in an international arena) on the adequacy of management of such sites for natural heritage values. Because the project also involved several river and stream crossings, and some work on railways lands, regulatory approval was needed from the National Energy Board, the federal Department of Fisheries and Oceans, Transport Canada, the Canadian Transportation Agency, the British Columbia Ministry of Environment (BC Parks), and Parks Canada. Environment Canada, Health Canada, and Indian and Northern Affairs Canada were also to be involved. (The full extent of the necessary permitting, and the approach the proponent took, are outlined in [7].) In addition to the project's high level of regulatory oversight, the location of the Anchor Loop placed it in a focal point of interest from environmental stakeholders (environmental non-governmental organizations: ENGOs). Local groups such as the Jasper Environmental Association and the Fraser Headwaters Alliance, and national groups such as the Canadian Parks and Wilderness Society have long taken an interest in the issues of development and ecological integrity in the two parks. This concern was not simply based upon the conditions found in the two parks. It also drew on larger issues and larger landscapes. For decades these groups had worked to limit the amount of development in national and provincial parks in order to protect their ecological integrity. To a large extent development in one park was seen to set a precedent for other developments in other parks. The Anchor Loop project therefore was seen not only according to its own merits, but also for the precedent it would set for the national and British Columbia parks systems. The Canadian Rocky Mountain Parks, including the national parks, and provincial parks in Alberta and British Columbia, form a core conglomeration of protected areas which lies at the heart of the Rocky Mountain ecosystem. For several years ENGOs in Canada and the United States had been working cooperatively to maintain the conductivity of the landscape, that effort bearing the name of the Yellowstone to Yukon Conservation Initiative[17]. Transportation and utility corridor had been one focus of that shared effort, an effort which had borne beneficial results in the construction of wildlife crossings on the Trans-Canada Highway in Banff National Park. As a result, at the time that Terasen was preparing the groundwork for the Anchor Loop project the ENGOs were well networked and conversant with the ecological, logistical, and legal issues arising from linear transportation and utility corridors. Prima facie, they were well-equipped and on

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apparent sound footing to oppose a major industrial linear installation in the two parks. b.Stakeholder Consultations and the Concept of Net Benefits Using the services of a third-party stakeholder relations consultant, Terasen began to contact stakeholders in the summer and fall of 2004 so as to advise them of the nature of the project, invite feedback, and gauge the degree of receptiveness or opposition the project might face. While skeptical of the merits of the project, ENGOs did credit the company with communicating with them in advance of any regulatory application being filed. A significant factor mitigating in Terasen's favour, from the NGOs perspective, was the fact that it was looping an existing line following an existing right-of-way. This was in contrast to the plan of Enbridge to develop the Northern Gateway pipeline which would follow a greenfield route and which was even then was starting to become well-known. Some felt that if a petroleum pipeline was to run to the west coast (a proposition on which there was not then, and is, still no consensus) then it was better it follow an already-disturbed route, even if through the two parks, than create a new corridor of disturbance. Further, Terasen claimed that the federal and provincial legal instruments for the original Trans Mountain right of way provided for the right of the company to loop or otherwise increase its capacity. The company provided copies of the easement documents to the ENGOs, so they could seek their own legal opinion. Against this background, some environmental stakeholders in the fall of 2005 informally indicated to Terasen that they may be willing to temporarily forebear from actively opposing the project if Terasen was willing to commit to carrying out other activities, over and above mitigation, which would result in a net ecological benefit to Jasper National Park and Mount Robson Provincial Park. This was felt to be the minimum necessary to comply with the statutory direction to maintain or restore ecological integrity. Terasen informally expressed an interest in this approach. In December 2004 Terasen convened a two-day meeting of environmental and community stakeholders, First Nations, regulators, government departments, and others who may have an interest in the Anchor Loop project. The two days consisted of a disclosure of Terasen's plans, discussion of outstanding issues, explanation of the regulatory processes, and the mapping of the company's intended way forward. At the end of the session those present were asked to give their reaction to the whole package. To that point in the session no reference had been made to any net environmental benefit. The ENGOs pointed this out and indicated that a commitment to such a net benefit was essential if their cooperation was to be sought further. Somewhat to thesurprise of the ENGOs, Terasen committed to such a net benefits approach and invited the environmental stakeholders to work with it to design effective

and desirable components. It was clear to all involved that this would go beyond mitigation of the pipeline project to include off-site work to improve the environment of the two parks. c. Seeking Net Benefits Following the December 2004 meeting a working group was formed to flesh out the notion of a net benefits project. It included representatives from each of the two parks administrations, ENGOs, and Terasen itself. Without reference to any of the academic literature referred to above, the working group confirmed a common notion of net ecological benefit similar to that described above as a "conservation offset" or "biodiversity offset." Fleshing out the notion into a specific project or projects, however, proved to be challenging. Early in the net benefits discussion the ENGOs pointed out that they had no surplus time or resources to dedicate to this work. Terasen agreed to provide a fixed amount of funding to allow the ENGOs to hire a part-time co-ordinator for the project, and to retain independent expert advice. (It is important to note, however, that this was intended to cover extra expenses specific to the ENGOs involvement in this project. At no point was there any discussion of the possibility of Terasen donating to any of the ENGOs as part of the offset concept. In the authors view this would have been unacceptable to all, and drawn the entire project into disrepute as it would have carried the appearance of a pay off.) Terasen also provided the services of a skilled third-party facilitator and scientific advisor to the process, both of whom were actively engaged and added real value to discussions. An early meeting of the net benefits working group recruited the expertise of two biologists with an extensive knowledge of the regional ecosystem. Together with those experts the working group members put forward and worked through a series of proposals, some general and some specific, intended to benefit the parks. As an aid to decision-making, the proposals were given numerical ratings according to a variety of criteria. This process failed to produce a decision but was very helpful in moving the participants to identify the priority criteria. For example, it was generally agreed that the net benefits project should aim to produce on the ground environmental improvements, rather than research or educational opportunities. The rationale for this was that the residual impact of the pipeline looping would be on the ground and not academic or educational. Interesting discussions proceeded for several months, but made little headway in defining the net benefits project. There was general agreement that it should aim to address issues arising out of the linear transportation and utilities corridor, but go beyond the issues raised by the looping itself. One particular quandary for the group was how to approximate the like for like concept. The pipeline looping was traversing sub-alpine forest and montane habitat. All of the surrounding similar habitat was either legally protected or managed by other operators over whom the parties had little or no influence. Under these circumstances it was agreed that a greater range of

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possible offset projects should be considered. Reference was made to the JNP Management Plan[18] and the JNP State of the Park Report[19]. Before these discussions had proceeded very far, the representatives from JNP and MRPP indicated that events were placing them in a difficult position. The filing of the regulatory permit applications by Terasen meant that the parks would have to operate in the position of independent regulators. Therefore, it would be impossible for them to continue to engage as participants in the net benefits discussion. They therefore withdrew their participation, but wished the remaining members well and encouraged continued progress. As we shall see, this severance caused complications later on. In the absence of parks officials, representatives of Terasen and the ENGOs sought expert advice on the impacts and rehabilitation of linear transportation corridors. In particular, advice was sought from the Western Transportation Institute, a well-respected research institute based at Montana State University and active in western Canada. Through WTI interviews were conducted with park managers and scientists, and independent experts, to determine the priority ecological concerns for the region. Based on this input, the remaining working group decided on a general direction of addressing the challenge of wildlife and habitat connectivity across the Yellowhead transportation and utility corridor. The next significant step in the process was the allocation of $3 million by Terasen for the net benefits project. This amount was budgeted by the company without consultation with the stakeholders and it was made clear that it was not open for negotiation. The environmental representatives had hoped for a greater amount of money, but did not persist in this. This obviously put a limit on what could practically be planned for. As time went by the viability of the project came under doubt from two directions. Firstly, in August 2005 Kinder Morgan purchased the pipeline division of Terasen, establishing Kinder Morgan Canada (KMC). It was unknown to any of the parties whether the new company was willing to sustain that commitment to the net benefits project. Fortunately, and to its credit, it did so without reservation or interruption in discussions. Secondly, as the formal permitting of the Anchor Loop project was completed, the two parks services and their respective governments returned to the net benefits discussion. Unfortunately, a change in representatives meant a loss of continuity of engagement. Those new to the table were not sufficiently familiar with both the substance and spirit of the discussions which had been carried out to date. In place of the earlier collaborative attitude, a moreaggressive stance was taken that the allocated funds should be turned over to the park services for application to their preferred projects, irrespective of the priorities which had been identified by the working group. This caused significant tension, particularly when Parks Canada suggested that the involvement of the ENGOs was not legitimate. Fortunately, and again to its credit, KMC stood by its commitment to the project and to the ENGOs.

The impasse was resolved when a settlement was negotiated between the parks and KMC whereby $350,000 was allocated to each park for its own use, out of the $3 million fund. (The $350,000 for Parks Canada was applied to the development of the curriculum and other measures for an educational centre. The $350,000 allocated to Mount Robson Provincial Park is held by the Vancouver Foundation in a fund for future park improvements. In both cases it is hoped that further funds may be raised from other sources for future work.) The remainder of the funds were put in the charge of the newly constituted Trans Mountain Legacy Fund, governed by the Ecological Integrity Project Steering Committee. The funds were paid into trust with the Alberta Ecotrust Foundation. With this KMC ended its formal responsibility for the offset project. The negotiated Terms of Reference of the Fund provided that the Steering Committee was to be made up of one representative from each of the parks, one from each of two environmental organizations (one Alberta-based, one British Columbia-based), and a representative of KMC (at the request of the other parties). The Terms of Reference also reiterated the basic principle that the Fund was to be used to enhance ecological conditions in the two parks (with some parity between them), to deal with ecological connectivity, and be beyond the normal course of operations of the two parks (though consistent with Park management objectives). All work iss to be completed and all funds paid out by December 2014. The Steering Committee identified three priority areas for further examination: aquatic connectivity, connectivity for carnivores across the transportation corridor, and invasive species. Expert reports were commissioned on the first two. The carnivore report advised on the adequacy of existing data and data collection methods, and made some preliminary comments on population viability of carnivores. The more extensive aquatic connectivity report identified specific obstacles to connectivity on particular streams, and recommended specific remedial measures. Just prior to the writing of this paper the Steering Committee allocated over $1.5 million to contract for the recommended remedial work on four or five high-priority sites located within the two parks. This work is expected to be completed in 2013. A small amount of funds are reserved for future projects or for monitoring of the results of the work done. More details on these projects and the progress of the work of the Legacy Fund may be found on its website: www.transmountainlegacyfund.com. LESSONS LEARNED While this project was carried out without reference to the literature on conservation offsets, it has proven to be a valuable learning experience in the practical realities of designing such an offset. Further, our experience has reflected many of the issues and concerns described in the literature.

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a. Motivation in Mutual Risk The project was developed through negotiation between Terasen/KMC, the ENGOs, and the administrations of the two parks. The first two were mainly motivated by risks they were facing. Terasen initially faced the prospect of public controversy and regulatory complexity which may have substantially complicated the Anchor Loop project. The ENGOs, on the other hand, were faced with an existing pipeline with a subsisting right-of-way lease providing for further expansion. They also face the prospect of what they perceived to be a competing, and possibly worse, project in the form of the Enbridge Northern Gateway project. As with most negotiations, the uncertainty of success on either side motivated negotiation and creative thinking. b. Role Flexibility The novelty of the offset approach required creativity and flexibility from all concerned. Because of their motivation and relative lack of structural constraints, the ENGOs and Terasen/KMC were able to adapt in this regard. This was much more difficult, however, for the park managers and government officials. They were placed in the awkward position of reconciling a new role as a relatively-equal stakeholder and negotiator in the offset discussion, with that of official responsibility for the management of their respective areas, and acting as regulators with a duty to carry out decision-making in an unbiased and unfettered manner. These conflicting roles were nested in the relatively rigid structure of government and civil service. The fact that the different parties were unable to bring the same level of flexibility to discussions meant a loss of continuity which gave rise to some tension and conflict. This may have been an inevitable dilemma, but it is a dilemma which other parties would do well to face early on in discussions to see if it may be avoided or minimized. c. Offset Project Selection The long discussions which took place before the offset projects were settled upon were a testament to the challenge of finding or designing offsets appropriate to the main development project. While the academic literature, and the parties in this case, suggested that a like for like" offset located close to the main development project would be most appropriate, the fact in this situation was that most of the disturbance was to subalpine forest. On the adjacent landscape most of that forest was well protected in the two parks. Those disturbances which did exist were, for the most part, due to other facilities that were beyond the control of the parties. This left little option for "like for like" equivalency. It was therefore left to the parties to decide what different sort of ecosystem rehabilitation might be most satisfactory to the circumstances. While much expert opinion was drawn upon, the ultimate decision was a subjective judgment based on the best information available.

d. Equivalency and Aspirations The notion of conservation offset envisions ecological improvement equal to or greater than the residual ecological disturbance left by the development project. The Anchor Loop "net ecological benefit" project sought to exceed mere equivalency. Despite the best efforts and good faith of all involved, it ultimately departed from that goal. As might be expected from any business enterprise, KMC sought to limit its exposure to the project. By making the decision to limit its monetary contribution at $3 million, it effectively diverted the conversation from a quest for ecological benefits exceeding the impact of the pipeline looping, to one of getting the most benefit possible out of a limited fund of money. As academic research considers the monetary value of ecosystems, it may become easier to bridge budget concerns with those of ecological equivalency, but this remains an issue at present. For this project at least, the "net ecological benefit" has devolved to a merely aspirational goal. e. Timing Issues It will have been noted that, for a variety of reasons outlined above, the consideration and design of the net benefits project took several years to reach a decision and actually commission work for an ecological improvement. It will be at least another year before the work is undertaken. Meanwhile, KMC received its Certificate of Public Convenience and Necessity from the National Energy Board (without any intervention from ENGOs) in November 2006[7, p. 1], and actually carried out the looping project in the summer of 2007 and fall of 2008. This discrepancy in the timing of the two projects further detracted from any ability to design the two in concert so as to arrive at ecological equivalence or gain. It also lost the potential opportunity to take advantage of the presence of KMCs remediation contractors and use them to carry out some of the offset work at the same time. For example, at least one offset set currently receiving serious consideration was also worked on by KMC contractors at the time of looping to meet stipulations of park managers. That suggests that greater efficiency could have been achieved if the two aspects were designed and executed together. Finally, the passage of time created the risk of one or more parties losing their commitment to the net benefits project.. Indeed, if KMC had been a less scrupulous operator, it could have allowed its commitment to the net benefits project to wither once it had achieved its development goals. Hopefully, as offset projects become more common and routine, a more predictable schedule can be arrived at, which will strengthen the link with the development project. (Some of the significant issues arising from timing and sequencing are discussed in [1, pp. 66-67].) f. Trust and Understanding Despite the challenges which were faced by the parties in designing the conservation offset, the process proved invaluable exercise in building trust and understanding. The

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representatives of ENGOs were introduced to some of the hard business realities of industrial mitigation and rehabilitation, and corporate officials took the time to delve deeply into the ecological conditions of the landscape and the range of options to improve them. Efforts on both sides brought frank and openminded discussions, and created relationships which will facilitate easier communications in the future. This atmosphere was strengthened by the willingness by all parties to contribute substantially to the collective effort. Terasens early provision of legal documents (over which it could have claimed confidentiality) and financial support for ENGO co-ordination was an important sign of respect for, and openness to ENGO perspectives. Terasen/KMCs continued support of independent facilitation and scientific expertise, and the extra effort of those individuals who played those roles, were very helpful in keeping things on course. For their part, the ENGOS dedicated many days of effort to moving the process forward (and this under the scrutiny of colleagues who were highly skeptical of the project). The two parks services and their respective governments also contributed substantial in-kind support in the form of the time of key personnel and provisions of meeting facilities, etc. CONCLUSION The conception and design of the net ecological benefit project corresponding to the Anchor Loop development project was carried out without reference to the academic literature on conservation offsets. Nevertheless, starting from first principles the parties discovered on their own many of the challenges and promises described in that literature. Despite the challenges, open-minded and patient discussions between the parties led to an atmosphere of trust and understanding, and has paved the way for improvements to the environment of Jasper National Park and Mount Robson Provincial Park which might not otherwise have happened. It is hoped that the use of conservation offsets may be more frequently considered by development proponents and critics alike, and that the lessons of the Anchor Loop project will aid in making any such consideration as efficient and productive as possible. ACKNOWLEDGEMENTS The author would like to thank Terry Antoniuk, Howard Heffler, Roy Howard, Rob McManus, Philippe Reicher, Greg Toth, Wayne Van Velzen, and Niki Wilson for their comments which assisted in the formulation of this paper. The assistance of Natalie Loban and Lexa Hobenshield of Kinder Morgan Canada is also greatly appreciated. REFERENCES [1] Derived from ten Kate, K.; Bishop, J.; Bayon, R. Biodiversity Offsets: Views, Experience, and the Business Case (IUCN and Insight Investment: Gland Switzerland, 2004) .

[2] Energy and Biodiversity Initiative. http://www.theebi.org (accessed February 4, 2012) [3] Business and Biodiversity Offsets Program. http://bbop.forest-trends.org/index.php (accessed February 4, 2012). [4] International Council on Mining and Metals. Biodiversity Offsets A Briefing Paper for the Mining Industry (London, UK: 2005). [5] Olson, N.; Bishop, J.; Anslee, S. Exploring Ecosystem Valuation to Move Towards Net Positive Impact in the Mining Sector, IUCN and Rio Tinto Technical Series No. 1 (IUCN and Rio Tinto: Gland, Switzerland and London, UK: 2011) 6] Dyer, S.; Grant, J.; Lesack, T.; Weber, M. Catching Up: Conservation and Biodiversity Offsets in Albertas Boreal Forest (Canadian Boreal Initiative: Ottawa, 2008). [7] Smith, J.K.; Mears, M.; Heffler, H.R.. 2009. Permitting and Planning a 36" Pipeline Through a UNESCO World Heritage Site: Jasper National Park and Mount Robson Provincial Park, Canada. Paper presented at the Ninth International Symposium on Environmental Concerns in Rights-of-Way Management. September 2009. Portland, Oregon. [8] Greg Toth, Project Director, TMX, Kinder Morgan Canada, personal communication, March 26, 2012. [9] Lexa Hobenshield, Manager, External Relations, Kinder Morgan Canada, personal communication, April 12, 2012. [10] Terasen Pipelines. West Coast Pipeline Expansion: Environmental Issues Consultation, December 8-9, 2004 (PowerPoint presentation). [11] Terasen Pipelines. Project Description: TMX Anchor Loop, Hinton AB to Rearguard, BC (Revised September 27, 2005). [12] Parks Canada. Jasper National Park of Canada Management Plan 2010. [13] UNESCO, Canadian Rocky Mountain Parks. http;//whc.unesco.org/en/list/304 (accessed February 8, 2012). [14] SC 2000, c 32, s. 8(2). [15] RSBC 1996, c 344. [16] SBC 2000, c 17. [17] Yellowstone to Yukon Conservation Initiative. http://www. y2y.net (accessed February 4, 2012).

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[18] Parks Canada, Jasper National Park of Canada Management Plan 2000.

[19] Parks Canada. State of the Park Report: Jasper National Park of Canada (February 2005).

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