|
Another Trans Mountain win
National Energy Board adds another 16 proposed recommendations to previous 156
Gary Park for Petroleum News
For the second time in an estimated 1,010 days, Canada’s National Energy Board gave an indisputable green light to the Trans Mountain pipeline expansion, TMX.
And again no one in the industry is inclined to believe that this is the final word and that construction of the 590,000 barrels per day addition to the transportation system from Alberta to the Pacific Coast will proceed this year, regardless of the confident predictions by Alberta Premier Rachel Notley and Canada’s Natural Resources Minister Amarjeet Sohi that the C$9 billion project will be completed.
In response to a directive last August from the Federal Court of Appeal, the NEB reviewed its 2016 recommendation for federal cabinet approval of the pipeline twinning, delivering a 689-page report on Feb. 22, adding another 16 non-binding recommendations to the previous 156 conditions.
The federal regulator conceded the project could have “adverse environmental effects” on the British Columbia coast and marine wildlife, including an endangered killer whale population.
While a worst-case spill from the pipeline or an oil tanker was not likely, the impact would be “significant” said Robert Steedman, the NEB’s chief environment officer.
Although that consideration weighed heavily in the NEB’s reconsideration, the board decided the Canadian government would be justified in allowing the project to go ahead “in light of the considerable benefits (to Canadians jobs, government revenues and greater market access for oil sands crude) and the measures to mitigate the effects,” he told reporters.
New conditions The latest recommendations call for increased spill response measures and reduced emissions from marine vessels operations in the area, including tougher controls on British Columbia ferries operating between Vancouver Island and the Mainland and on whale watching boats.
The NEB’s 689-page report also pointed to the positive impact from TMX construction and operations on the training, jobs and business opportunities for all Indigenous communities along the pipeline route who signed access and benefits agreements with former pipeline owner Kinder Morgan and the Canadian government which is the current owner, having bought the existing Trans Mountain system for C$4.5 billion.
A deadline of May 22 has now been set for the federal government, which has still to complete consultations with 85 Indigenous communities, to deliver a conclusive verdict on the TMX.
Fight not over Both First Nations and environmental groups are emphatic they will not give up their fight.
“Even if one community, one nation says ‘no’ then that project is not happening,” said Neskonlith Chief Judy Wilson, who is also secretary of the Union of B.C. Indian Chiefs.
Eugene Kung, an attorney with West Coast Environmental Law, said the “fix was in from the start,” when the issue was turned over to the NEB. “I’m not sure it’s news that a captured regulator likes pipelines,” he said.
Industry leaders expect further court appeals but hope the NEB’s latest round will limit those actions.
“As things take longer and longer, both sides dig in and become less flexible,” said Kevin Neveu, president of Precision Drilling, saying the anti-development rhetoric “has become less rational.”
Eric Nuttall, a senior portfolio manager with NinePoint Partners, said that if Canadian oil producers can diversify their markets investor fund flows should turn in their favor again at a time when shares are “trading at their lowest valuations in generations.”
Capital investment down The NEB report was released against the backdrop of findings by the C.D. Howe Institute that planned capital investment in the Canadian energy sector dropped from C$146 billion in 2014 to C$35 billion in 2018, based largely on Canada’s record for cancelling and delaying projects.
Chris Bloomer, president of the Canadian Energy Pipelines Association, said the only “definitive point” in the project’s history will occur “when we get oil flowing.”
“We’ve got to demonstrate that we can build these projects,” otherwise investors will continue to bail out of Canada’s resource sectors, he said.
Ian Anderson, Trans Mountain’s president, said the NEB report “provides specific and achievable conditions under which we must operate (and that) will protect the marine and terrestrial environment and communities.”
| 