Trans Mountain and Line 3 Approved; Northern Gateway Rejected

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On November 29, 2016, the federal government announced its decisions on three controversial pipeline projects. Ottawa has approved the Kinder Morgan Trans Mountain Pipeline Expansion Project (TMX) and the Enbridge Line 3 Expansion project (Line 3), while rejecting Enbridge’s Northern Gateway pipeline (Northern Gateway).  The Prime Minister also announced the Canadian government’s intention to develop and implement legislation to ban crude-oil tanker traffic off of Canada’s Northwest Coast.

Trans Mountain Pipeline Expansion Project

TMX is a $6.8-billion project that would twin the current 1,150-kilometre Trans Mountain Pipeline from Edmonton, AB to the Westridge Marine Terminal in Burnaby, BC, and increase the pipeline’s capacity to nearly 900,000 barrels of crude oil per day. The project’s owner, Kinder Morgan, has stated that construction could begin as early as 2017, with anticipated completion in 2019.

The federal government’s approval of TMX was based on the National Energy Board’s (NEB) 553-page report issued in May 2016, which included 157 conditions (for our analysis of the report, click here). The federal approval requires Kinder Morgan to satisfy each of the 157 conditions, which include vague requirements regarding a host of issues, including:

  • environmental protection (including air quality and greenhouse gases; water quality; soil, vegetation and wetlands; wildlife and wildlife habitat; fish and fish habitat; and marine mammals); and
  • Indigenous engagement (on environmental issues; heritage and cultural resources; traditional land and marine use).

However, federal approval is not the only major government decision required for TMX to proceed.  British Columbia must also issue an environmental assessment certificate pursuant to its Environmental Assessment Act (for an understanding why this is a requirement for trans-provincial pipelines, read this blog post).  Although BC’s certificate cannot frustrate the federal approval of the project, there is a possibility that certain additional conditions will be imposed in relation to potential impacts to resources and communities within the Province.

Line 3

The federal government also announced the approval of Enbridge’s Line 3 Replacement project. The decision was based on the NEB report recommending that the federal government approve the Line 3 Replacement on April 25, 2016, subject to 89 conditions. A replaced Line 3 will be the largest pipeline project in Enbridge’s history, replacing 1,067 kilometres of pipeline currently running between Alberta and Manitoba. The current Line 3 has been a source of spills in the past and Enbridge cites increased maintenance issues associated with the aging pipeline as a justification for the replacement. The $7.5-billion project would also include the installation of 55 new remotely operated vales, 18 new pump stations and 3 new oil storage tanks at the Hardisty Terminal in Alberta. The replacement project is expected to take approximately 15 months to complete and would increase the average daily capacity of the pipeline to 760,000 barrels of oil per day.

Northern Gateway

Northern Gateway, Enbridge’s most contentious project, received NEB and federal government approval under the former Harper Conservative government subject to 209 conditions.  Subsequently, the Federal Court of Canada overturned the federal government approval due to a failure to adequately consult Indigenous peoples along the project’s 1,177 kilometre route. After today’s announcement, it is unlikely Northern Gateway has any chance of becoming a reality.

Our Thoughts on TMX

With continued opposition to TMX (less than half of all Indigenous groups consulted throughout the TMX review process have provided project support), there is still significant uncertainty concerning the fate of this controversial project.

In recent years, Canadian courts have increasingly recognized the importance and scope of  Aboriginal rights and title held by Indigenous communities, as witnessed in the watershed case of Tsilhqot’in v British Columbia (for our analysis on this case, click here). There has also been increased recognition of emerging international legal norms concerning the requirement of free, prior and informed consent of Indigenous peoples to development on their traditional lands (see our blog post on Canada’s support of United Nations Declaration on the Rights of Indigenous People).  Finally, significant media and social awareness of Indigenous concerns about development has emerged of late, including a focus on the recent events at Standing Rock.

All of this leads to a simple conclusion: expect litigation; expect appeals to the international community; and expect protests.  Simply put, receiving federal approval is simply the first hurdle on a very long track to project development, and pipeline developers like Kinder Morgan and Enbridge still have a lot of work in front of them.