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Nova Gas Transmission Ltd. Application to Construct and Operate the Edson Mainline Expansion Project, CER Report GH-001-2019

Link to Decision Summarized

Pipeline Facilities


In this Report, the CER discussed its recommendation, decisions, and reasons in respect of the application from NOVA Gas Transmissions Ltd. (“NGTL”) to construct and operate the Edson Mainline Expansion Project (the “Project”). The Project consisted of “Section 52 Pipeline and Related Facilities”, which is the proposed construction and operation of approximately 85 kilometres of new gas pipeline and associated facilities in Alberta. The Project also consisted of “Section 58 Facilities and Activities”, which is the proposed Right of Way preparation activities and commencement of trenchless crossings in proposed select locations, the temporary infrastructure required for pipeline construction, and the installation of tie-in assemblies located within the boundaries of the existing NGTL Clearwater Compressor Station.

Recommendation to Governor in Council

As required by section 36 of the transitional provisions for the Canadian Energy Regulator Act (“CER Act”), the consideration of this application from NGTL by the CER was done according to the National Energy Board Act (“NEB Act”).

Section 52 of the NEB Act required that a recommendation be made to the Minister responsible for the Act (the Minister of Natural Resources Canada) as to whether a Certificate of Public Convenience and Necessity (“Certificate”) should be issued for any portion of the applied-for pipeline. This decision on the issuance of a Certificate would be required to consider whether the pipeline was and would be required by the present and future public convenience and necessity, and the reasons for that recommendation. Section 52 of the NEB Act also required that regardless of the recommendation, the CER must include all the terms and conditions necessary or desirable in the public interest to which the Certificate will be subject if the Governor in Council (“GIC”) were to direct the issuance of the Certificate.

Public Convenience and Necessity

In the CER’s view, the benefits of the Project were considerable and would be realized throughout the lifecycle of the Project. Project benefits included:

  • maintaining access to natural gas supplies for diverse Canadian consumers;

  • increased access to intra-basin markets for Canadian natural gas;

  • increased training and employment opportunities for Indigenous peoples and potential contracts for Indigenous-owned businesses;

  • socio-economic benefits related to the construction phase of the Project, through direct, indirect, and induced employment, as well as contract and procurement opportunities for local communities and workers from elsewhere in Alberta;

  • efficient use of and expansion to the NGTL System in terms of Project land requirements; and

  • contributions to local, regional, provincial and federal economies.

The CER noted its view that the Project carried burdens which included:

  • potential negative effects on the health and well-being of Indigenous peoples and Project workers;

  • limitations on access for traditional users within the Project area during active construction and during operations and maintenance activities, as well as corresponding potential socio-economic impacts to Indigenous peoples;

  • potential impacts on unidentified traditional land and resource use and cultural sites;

  • cultural implications stemming from potential cumulative effects on traditional land and resource use and potential negative impacts on the ability of Indigenous peoples to pass on intergenerational knowledge; and

  • permanent loss of 2.4 ha of old seral stage forest, including culturally important plants.

The CER noted its view that, while having respected all considerations directly related and relevant to the application, the Project was and would be required by the present and future public convenience and necessity. In coming to this recommendation, the CER considered the public interest, recognizing that consideration of economic, environmental, and social interests was required.

Environmental Assessment

Subsections 52(3) and 58(6) of the NEB Act require that if an application relates to a designated project as defined in section 2 of the Canadian Environmental Assessment Act, 2012 (“CEAA 2012”), the Report concerning the application must also set out an environmental assessment prepared under CEAA 2012 in respect of the project.

Following this assessment, the CER concluded that the Project was not likely to cause significant adverse environmental effects. This was based on the implementation of NGTL’s environmental protection procedures and mitigation measures and the conditions that the CER had recommended and imposed concerning the Section 52 Pipeline and Related Facilities and Section 58 Facilities and Activities respectively.

Consultation with Indigenous Peoples

The CER assessed all evidence on the record, including Indigenous knowledge that had been provided in confidence, and considered NGTL’s engagement commitments. Following this assessment and further considering the conditions outlined in this Report, the CER was of the view that the honor of the Crown had been upheld. There had been adequate consultation and accommodation for the CER’s recommendation on this Project under section 52 of the NEB Act and its decisions under section 58 and Part IV of the NEB Act. The CER was also of the view that, within this Project area, any potential Project impacts on the rights and interests of affected Indigenous peoples were not likely to be significant with the implementation of the mitigation measures and commitments made by NGTL, as well as the conditions and accommodations recommended and imposed by the CER.

Decisions Made by the CER

Section 58 Facilities and Activities

NGTL sought exemptions for various facilities and activities from the detailed route process according to section 58 of the NEB Act. It stated these exemptions would be required to achieve the proposed construction schedule and commercially required in-service date for the Project. NGTL sought this exemption for temporary infrastructure required for construction of the pipeline, right of way (“ROW”) preparation activities, and commencing trenchless crossing in select areas (combined not exceeding 40 km in length). It further requested the exemption for the installation of tie-in assemblies located within the boundaries of the existing Clearwater Compressor Station.

The CER was of the view that the Section 58 Facilities and Activities would be in the public interest, should the Governor in Council direct the Commission to issue a Certificate in respect of the Section 52 Pipeline and Related Facilities. Accordingly, the Commission made an order pursuant to section 58 of the NEB Act exempting NGTL from paragraphs 31(c) and 31(d), and section 33 of the NEB Act for the Section 58 Facilities and Activities, subject to conditions outlined in the Report.

Tolling Matters

The CER found NGTL’s proposal to roll in the cost of the Project facilities to the rate base for the NGTL System and to apply the existing NGTL System toll methodology to be appropriate.

Conclusion

When considering the balance between the benefits and the burdens associated with the Project, the CER found that the Project is in the public interest and is consistent with the requirements of the NEB Act. In assessing NGTL’s application, the CER recommended and included conditions in addition to the legislation and standards regarding pipeline integrity, safety, and environmental protection to which the Project would also be subject. In the case of the approval and completion of the Project, NGTL’s Accountable Officer would be required to submit a condition compliance filing to the CER for the Section 52 Pipeline and Related Facilities and the Section 58 Facilities and Activities.

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