KINDER MORGAN KEEPS WINNING IN COURT
The streak continues.
For Alberta and Kinder Morgan, the legal hurdles to build the Trans Mountain Pipeline expansion continue to be slowly cleared.
Two key British Columbia court rulings went in favour of Trans Mountain on Thursday, in cases legal experts say could have implications in the broader dispute between Alberta and B.C. over the $7.4-billion pipeline project.
The Supreme Court of B.C. ruled against the Squamish Nation and City of Vancouver in their attempts to quash an environmental assessment certificate for the pipeline’s expansion issued by the B.C. government.
For Kinder Morgan, that’s 16 straight times the courts have ruled in favour of Trans Mountain during various challenges of the review process and decisions related to the project.
Thursday’s victories put two more in the win column.
“This has been an extraordinarily in-depth process and as much as people are trying to knock holes in it, it’s been rigorous and lengthy — and painful for all concerned,” said Nick Schultz, general counsel for the Canadian Association of Petroleum Producers, which backs the development.
“But it is standing up to a lot of tire-kicking.”
The case dates back to early 2017, when the B.C. government of former premier Christy Clark issued an environmental certificate to Kinder Morgan for the oil pipeline.
The green light came several months after the National Energy Board and the Trudeau government approved the development.
The City of Vancouver, which opposed the project before the NEB, then headed to court, arguing the province acted unreasonably and failed to follow proper process when it gave the project an environmental licence.
Separately, Squamish Nation argued the province failed to properly consult it before issuing a certificate to the Trans Mountain expansion (TMX), which would triple the amount of oil it could ship from the Edmonton area to Burnaby.
Justice Christopher Grauer dismissed both petitions while pointing out what the issue was essentially about.
“This case is not about whether the (project) should or should not go ahead. It is not about whether the TMX is in the national interest, or presents an unacceptable risk of environmental harm,” the judge wrote in the Vancouver case.
“What this case does concern is whether British Columbia complied with administrative law principles and its own legislation.”
The province “can have no impact on the decision of the federal government that this project shall proceed, other than delay,” he added.
The wording is key.
While the decision to approve Trans Mountain is unpopular in some corners of British Columbia, the judge wasn’t ruling on the NEB’s process or whether this energy infrastructure is in Canada’s interests, something Ottawa has already determined.
The judge clearly noted the NEB is the primary regulator of cross-border pipelines, such as this one.
While a provincial government can impose appropriate conditions on the project, the B.C. government can’t withhold a permit from Trans Mountain.
“Ultimately, they were obliged to issue one,” Grauer said.
The Squamish Nation had asked the B.C. Supreme Court to quash the environmental licence, contending B.C. failed to adequately consult it over the potential impact of the pipeline.
But it was reasonable for the province to rely on the NEB’s assessment, and “the consultation that took place was adequate,” he added.
“The take-away is the province did an adequate job of consultation,” said Nigel Bankes, chair of natural resources law at the University of Calgary.
“It’s another victory for Trans Mountain and Kinder Morgan.”
That point wasn’t lost on project proponents, as well as the Notley and Trudeau governments.
“It’s good news for the Trans Mountain expansion because it gives a little bit more certainty,” federal Natural Resources Minister Jim Carr told reporters in Ottawa.
The twin rulings remove another potential barrier for the project, but other potholes remain in its path.
A judicial review of the project’s approval by the NEB and the federal government is now before the Federal Court of Appeal. Fierce opponents aren’t going away, either.
“Kinder Morgan still faces insurmountable challenges to building this pipeline,” said a statement by Tzeporah Berman of Stand.earth, former co-chair of the Alberta Oil Sands Advisory Group.
However, there were hopeful signs for Alberta contained within Thursday’s rulings.
University of Calgary law professor Martin Olszynski noted the Vancouver decision uses the word “comprehensive” six times to describe the NEB’s assessment of the project. Such thinking could have ramifications for B.C. Premier John Horgan’s reference question to the courts about his ability to restrict bitumen shipments into the province.
“It’s another pro for the province of Alberta and others who support the pipeline, that ultimately B.C.’s attempts to impose additional terms, conditions and regulations will not be successful,” Olszynski said.
But 16 straight legal victories won’t mean much if the federal and provincial governments don’t reach a speedy conclusion with Kinder Morgan before the end of May to derisk the project from further delays.
The company has suspended all non-essential spending as negotiations with the two governments continue.
As Schultz pointed out, it’s a welcome sign to keep winning in the court of law. Yet, if other delays keep popping up, the project — and Alberta’s ability to move more oil to the west coast — will be in jeopardy.
“Delay is the enemy here,” he said. “There are a lot of obstacles still to be addressed.”