National Post (National Edition)
‘ SHOULD BE BUILT’
TRANS MOUNTAIN GETS GREEN LIGHT FROM NATIONAL ENERGY BOARD IN REVISED REPORT.
CALGARY • Oil executives downplayed National Energy Board’s recommendation Friday to, once again, approve the Trans Mountain pipeline expansion as only a small step toward building a project that will continue to face challenges.
The NEB announced the 590,000 barrels- per- day Trans Mountain expansion project could have “significant adverse environmental effects” on the West Coast and marine wildlife, but is still in the national interest.
The pipeline regulator recommended Ottawa, which bought Trans Mountain last year for $4.5-billion from Houston-based Kinder Morgan Inc., proceed with the project subject to 156 conditions and 16 non-binding recommendations.
It’s the second positive recommendation for the project from the NEB, which first approved the plans to twin an existing pipeline to the West Coast subject to 157 conditions in 2016. But a new regulatory review was ordered after the Federal Court of Appeals found in Aug. 2018 that the first recommendation failed to consider the pipeline’s contribution to tanker traffic on the West Coast.
“It feels like a re-victory,” Canadian Association of Petroleum Producers president and CEO Tim McMillan said of the new NEB recommendation.
The Canadian energy sector considers the pipeline to be critical infrastructure because oil production currently outstrips available export pipeline capacity, but executives stopped short of excessively celebrating the decision.
“Until we get the oil flowing, we don’t have a pipeline. So that’ ll be the definitive point,” Canadian Energy Pipelines Association president and CEO Chris Bloomer said, adding that he was encouraged by the NEB report reconfirming the project was in the national interest.
“We’ve got to demonstrate that we can build these projects and get them online,” he said, otherwise investors would continue to leave the country’s resource sectors.
That reaction was shared both inside the energy sector and the Alberta provincial government.
“It’s a step, not a victory, but it is an important step,” Alberta Premier Rachel Notley said Friday, noting that she expects there will be appeals filed following the approvals.
However, she noted that appeals couldn’t be filed until after the federal government makes a decision on whether to build the project 90 days from now.
“There is more work to do but today was a good step forward,” she said, adding that she believes construction might resume on the project by the fall of 2019.
Similarly, Trans Mountain president and CEO Ian Anderson called the recommendation “a step forward” in his long quest to build the project and suggested the updated conditions and new recommendations would not impede construction.
“It provides specific and achievable conditions under which we must operate to ensure, if approved, the project will protect the marine and terrestrial environment and communities,” Anderson said in a release.
The next step in the process requires the federal government to consult with affected Aboriginal groups on the NEB’s recommendation, and offer accommodations where possible.
It was this step — consultations after the NEB report — that the Appeals Court found lacking previously and Natural Resources Minister Amarjeet Sohi said the government was committed to getting it right this time.
“We are doing things differently now,” Sohi said, adding that he’s personally met with 50 Indigenous communities, his eight teams on the ground have met with 85 communities and Ottawa is committed to “adequately fulfilling its duty to consult.”
“We owe to Canadians, our energy sector workers and Indigenous communities that the process works,” he said.
The importance of this next round of consultations — called “phase three” consultations — is not lost on the energy sector.
“They have to get this right,” CAPP’s McMillan said. “It’s always frustrating that this project should have been in operation today but we’re still working through the regulatory process.”
Immediately after the announcement, opposed environmental and First Nations groups renewed their vows to continue fighting the project.
“Without question there will be further lawsuits as we move forward,” said Grand Chief Stewart Phillip of the Union of B.C. Indian Chiefs, adding that he expected more rallies and protests in opposition to the project.
“This pipeline, as I’ve said on many, many occasions, will never see the light of day,” Phillip said.
There are dozens of Indigenous communities along the pipeline route in Alberta and B.C. that have benefits agreements in place with Trans Mountain but the project has still faced opposition from First Nations on the West Coast.
“Even if one community, one nation, says ‘ no,’ then that project is not happening,” said Neskonlith Chief Judy Wilson, who is also secretary treasurer of the Union of B.C Indian Chiefs.
Environmental groups also sought to discredit the NEB process on Friday, potentially setting up an appeal after Ottawa issues its final decision later this year.
“The fix was in from the start,” said Eugene Kung, a lawyer with West Coast Environmental Law. “I’m not sure it’s news that a captured regulator likes pipelines.”
Energy executives said they expected further appeals of the recommendation, but were encouraged that the NEB had satisfied the Appeals Court, which should limit the effectiveness of future appeals.
“As things take longer and longer, both sides dig in and become less flexible,” Precision Drilling Corp. president and CEO Kevin Neveu said. “I hear the rhetoric, the anti- development rhetoric, it seems like each time we move further along the path of due process, the anti-development rhetoric becomes less rational.”
He said the project would benefit his company and the oilfield services sector in general by boosting investor sentiment in Canada, a sentiment echoed by investors.
“Increased egress and customer diversification are critical to the Canadian economy and progress on both will lead to investor fund flows coming back into Canadian oil stocks, which are now trading at their lowest valuations in generations,” said Eric Nuttall, senior portfolio manager and partner with NinePoint Partners.
THIS PIPELINE ... WILL NEVER SEE THE LIGHT OF DAY.