Regulatory Law Chambers logo

NEB Reconsideration of Aspects of its OH-001-2014 Report – Trans Mountain Pipeline ULC Application for the Trans Mountain Expansion Project (MH-052-2018 Report)

Link to decision summarized

Trans Mountain Expansion Project


In this Reconsideration Report (the “Reconsideration”), the NEB undertook the reconsideration directed by the Governor in Council (“GIC”) in Order in Council P.C. 2018-1177 (“OIC”).

As directed by the OIC and, as reflected in the NEB’s list of issues from Hearing OH-001-2014, the Reconsideration was focused on whether Project-related marine shipping was likely to cause significant adverse environmental effects on the Southern resident killer whale.

In the Reconsideration, the NEB confirmed the recommendation and replaced certain conditions that it provided to the GIC in its OH-001-2014 Report and recommended additional conditions.

The NEB recommended that the GIC approve the Project by directing the issuance of a certificate of public convenience and necessity (“CPCN”) to Trans Mountain Pipeline ULC (“Trans Mountain”), subject to conditions.

Pursuant to the Canadian Environmental Assessment Act, 2012 (“CEAA 2012”) the NEB found that the designated Project was likely to cause significant adverse environmental effects. Specifically, Project-related marine shipping was likely to cause significant adverse environmental effects on the Southern resident killer whale, and on Indigenous cultural use associated with the Southern resident killer whale. This was despite the fact that effects from Project-related marine shipping would be a small fraction of the total cumulative effects, and the level of marine traffic was expected to increase regardless of whether the Project was approved.

The NEB also found that greenhouse gas (“GHG”) emissions from Project-related marine vessels would result in measurable increases and, taking a precautionary approach, were likely to be significant. While a credible worst-case spill from the Project or a Project-related vessel was not likely, if it were to occur, the environmental effects would be significant.

Pursuant to the Species at Risk Act (“SARA”), the NEB identified the adverse effects of the Project and its related marine shipping on each SARA-listed wildlife species and its critical habitat, imposed conditions, and recommended to the GIC measures to avoid or lessen those effects and to monitor them.

Background

The Project would expand the existing Trans Mountain Pipeline system between Edmonton, Alberta and Burnaby, British Columbia (“BC”), nearly tripling its capacity to ship oil from 300,000 to 890,000 barrels per day. Almost 90 percent of the Project route paralleled existing disturbance, including the right-of-way for the existing pipeline. The Project included approximately 987 kms of new pipeline, new and modified facilities such as pump stations and tanks, and the reactivation of 193 kms of the existing pipeline. The Westridge Marine Terminal (“WMT”) would also be expanded. Oil would be loaded onto tankers at the WMT for transit to Washington State, California, and Asia.

Regulatory and Judicial History

Project-related marine shipping was considered as part as part of the NEB OH-001-2014 hearing, but only under the NEB Act – not under the CEAA 2012. On November 29, 2016, the GIC approved the Project, issuing OIC P.C. 2016-1069. Accordingly, on December 1, 2016, the NEB issued CPCN OC-064 to Trans Mountain, along with amendments to other existing CPCNs.

On August 30, 2018, the Federal Court of Appeal (the “FCA”) in Tsleil-Waututh Nation v. Canada (Attorney General) (“Tsleil-Waututh”) set aside OIC P.C. 2016-1069, in part because, in the FCA’s view, the NEB unjustifiably excluded Project-related marine shipping from the scope of the “designated project” reviewed under the CEAA 2012.

On September 20, 2018, the GIC issued the OIC directing the NEB to conduct a reconsideration taking into account the environmental effects of Project-related marine shipping in view of the requirements of the CEAA 2012, and the adverse effects of Project-related marine shipping on species at risk in view of any requirements of section 79 of the SARA.

NEB Review of the Trans Mountain Expansion Project

Below is a map of the Project.


Trans Mountain Map (00096405xC5DFB).png

2018-1177, the NEB concluded that Project-related marine shipping between the WMT and 12-nautical-mile territorial sea limit was “incidental” to the Project and therefore part of the “designated project,” as those terms are defined in the CEAA 2012.

Regulatory Framework and Summary

Recommendation under the CEAA 2012

Pursuant to the CEAA 2012, the NEB found that Project-related marine shipping was likely to cause significant adverse environmental effects on the Southern resident killer whale, and on Indigenous cultural use associated with the Southern resident killer whale. The NEB also found that greenhouse gas emissions from Project-related marine vessels would result in measurable increases and, taking a precautionary approach, are likely to be significant. The NEB found that, although a credible worst-case spill from a tanker associated with the Project would result in significant adverse environmental effects, such an event is not likely.

However, the NEB found that the potential to cause significant adverse environmental effects could be justified in the circumstances.

Justification Analysis Under the CEAA 2012

The justification analysis under CEAA 2012 involves balancing adverse environmental effects against social, economic and other benefits.

The NEB found that the expected significant social and economic benefits outweighed the significant adverse environmental effects. The NEB also identified a recommended follow-up program to be implemented with respect to the designated project. The NEB made this finding considering Trans Mountain’s commitments, NEB conditions, and recommendations to the GIC to mitigate and reduce adverse environmental effects.

The NEB concluded that the Project was in the Canadian public interest.

In the NEB’s view, the benefits of the Project were considerable, including:

(a) increased access to diverse markets for Canadian oil;

(b) jobs created across Canada;

(c) the development of capacity of local and Indigenous individuals, communities, and businesses;

(d) direct spending on pipeline materials in Canada; and

(e) considerable revenues to various levels of government.

However, the NEB also found that the Project and its related marine shipping carried risks. Its burdens include the significant adverse effects that are likely to be caused by Project-related marine shipping on the Southern resident killer whale and Indigenous cultural use associated with the Southern resident killer whale.

On the whole, the NEB found that the benefits of this Project outweighed the residual burdens and concluded that the Project was in the present and future public convenience and necessity, and in the Canadian public interest.

The NEB set out conditions regarding Project-related marine shipping that it considered necessary or desirable in the public interest, should the Project be approved by the GIC. Conditions include technically and economically feasible mitigation measures to eliminate, reduce, or control the adverse environmental effects of Project-related marine shipping in accordance with CEAA 2012.

The NEB also provided recommendations for measures to mitigate, avoid, or lessen the effects of Project-related marine shipping that are within the authority of the GIC, but beyond the scope of the NEB’s regulatory authority and Trans Mountain’s control. Furthermore, the NEB considered measures that would avoid or lessen any adverse environmental effects of Project-related marine shipping on all SARA-listed species and their critical habitat, and to monitor them under subsection 79(2) of the SARA.

Accordingly, the NEB confirmed its recommendation that a CPCN should be issued and the Project should be approved.

Consultation

Trans Mountain’s Stakeholder Engagement Program

The NEB found that Trans Mountain developed and implemented a broadly based public consultation program, offering numerous venues and opportunities for the public, landowners, governments and other stakeholders to learn about the Project, and to provide their views and concerns to the company.

The NEB imposed Condition 102 requiring Trans Mountain to confirm that it created, and will maintain, a process/system that tracks Project-related landowner and tenant complaints or concerns and how Trans Mountain addresses them, up until the Project is abandoned or decommissioned pursuant to the NEB Act.

The NEB found that with Trans Mountain’s commitments and the NEB’s recommended conditions, Trans Mountain could continue to engage the public, landowners and other stakeholders effectively, and address issues raised throughout the Project’s operational life.

Trans Mountain’s Consultation Activities with Indigenous Groups

The NEB recognized Trans Mountain’s plans for future engagement on marine-related Project conditions that would occur through workshops, ongoing one-on-one meetings and Indigenous Engagement Roundtables planned for 2019.

The NEB noted that Trans Mountain engaged with Indigenous communities since the close of the OH-001-2014 hearing, and committed to continue to work with Indigenous communities.

The NEB was satisfied that Trans Mountain would continue to engage with Indigenous communities in order to learn more about their interests and concerns and address issues raised by Indigenous communities throughout the Project’s operational life.

Section 35 of the Constitution Act, 1982

Section 35 of the Constitution Act, 1982 recognizes and affirms the existing Indigenous and treaty rights of Indigenous peoples. The NEB found that its recommendations and decisions with respect to this application were consistent with both subsection 35(1) and procedural fairness requirements. The NEB found the consultation process was appropriate, recognizing the complexity of this application, the importance of the constitutionally protected rights of Indigenous peoples, and the many and varied societal interests that must be considered in its assessment.

Government of Canada’s Duty to Consult

The NEB explained that its mandate was to reconsider its recommendation, taking into account the effects of Project-related marine shipping. It was the GIC’s role to make the final decision on the Project, taking into account the NEB’s MH-052-2018 Report and the information to be provided by the Federal Authorities regarding the adequacy of the Crown’s consultation and accommodation.

In response to concerns raised about the Crown relying on the NEB’s reconsideration process to meet its duty to consult, the NEB affirmed that the Crown may rely on the NEB MH-052-2018 hearing, to the extent possible, to identify, consider and address how the Crown’s conduct in relation to Project-related marine shipping might adversely impact potential or established Indigenous and Treaty rights.

Conclusion on Consultation

The NEB found that adequate consultation and accommodation for the purpose of the NEB’s recommendation on this Project was undertaken.

Any potential Project impacts on the interests, including rights, of affected Indigenous communities, after mitigation, were not likely to be significant and could be effectively addressed, with the exception of the impacts on the traditional use of Southern resident killer whales by Indigenous peoples.

The NEB found that its recommendations with respect to this Project were consistent with section 35 of the Constitution Act, 1982 and the honour of the Crown.

Summary

The Reconsideration process and the resulting report discharged the relevant requirements of the NEB under the NEB Act, CEAA 2012, and SARA. The NEB found that the Trans Mountain Expansion Project was in the Canadian public interest and recommended to the GIC that it be approved.

If the Project is approved, the NEB will regulate it throughout its full lifecycle. The NEB will oversee Project construction and operation, and will hold Trans Mountain accountable for meeting its commitments and applicable regulatory requirements, keeping its pipelines and facilities safe and secure, and protecting people, property, and the environment.

Related Posts

Judd v Alberta Energy Regulator, 2024 ABCA 154

Judd v Alberta Energy Regulator, 2024 ABCA 154

Link to Decision Summarized Download Summary in PDF Appeal – Production of Records Application Michael Judd ("Appellant") appealed a decision by the Alberta Energy Regulator (“AER”) that denied his...