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NOVA Gas Transmission Ltd. Application for 2021 NGTL System Expansion Project, CER Decision GH-003-2018

Link to Decision Summarized

Gas Pipeline – System Expansion


In this decision, the CER considered an application from NOVA Gas Transmission Ltd. (“NGTL”) to construct and operate the 2021 System Expansion Project (the “Project”). The CER recommended to the Governor in Council that a certificate be issued for the construction and operation of the Project pursuant to section of the National Energy Board Act (“NEB Act”).

Background

The Project consists of approximately 344 kilometres of pipeline in eight pipeline section loops and three compressor station unit additions. The Project is located wholly in Alberta, near Grande Prairie and runs roughly south towards Calgary, mostly adjacent to existing rights of ways and facilities.

In its application, NGTL stated the Project was needed to transport natural gas from areas of increasing production in northwestern Alberta and northeastern British Columbia to intra-Alberta and export markets. If approved, NGTL indicated it planned to begin operating the Project by April 2021.

Legislative Framework

Section 36 of the transitional provisions of the CER Act states that applications pending before the National Energy Board immediately before the commencement day of the CER Act were to be considered by the CER in accordance with the NEB Act as it read immediately before the commencement day.

Section 52 of the NEB Act requires that a recommendation (“Recommendation”) be made to the Minister responsible for the act (the Minister of Natural Resources) as to whether or not a certificate should be issued for all or any portion of the applied-for pipeline. Making the Recommendation considers whether the pipeline is and will be required by the present and future public convenience and necessity, and the reasons for that Recommendation.

CER Findings

Economic Feasibility and Need for the Project

The CER considered the economic feasibility of the proposed Project. Specifically, the CER had regard to the supply and markets available to the pipeline, transportation matters including the contracts underpinning the facilities, and NGTL’s ability to finance the Project. The CER also considered the proposed tolling treatment and the economic benefits associated with the Project.

The CER found that the applied-for facilities were economically feasible. The CER indicated its finding was consistent with the long-term contractual commitments made by shippers to underpin the facilities. The CER also found that NGTL and TransCanada had the ability to finance the Project, including the construction, operation and abandonment of the facilities.

The CER found NGTL’s proposal to roll in the cost of the Project’s facilities to the rate base for the NGTL System and to apply the existing NGTL System toll methodology to be reasonable. The CER considered the degree of integration of the Project’s facilities to the existing system and the nature of service provided on the Project’s facilities. The CER found the Project to be sufficiently integrated into the existing system because the Project would be comprised of various pipeline loops and compressor station unit additions that expand the capacity of the NGTL System. Additionally, the transportation services provided through the facilities would be identical to those already offered on the NGTL System, and no party opposed NGTL’s proposed tolling treatment.

The CER found that the Project would provide overall economic benefits to Canadians. The Project would allow for growth in both Canadian natural gas production and demand, which would provide economic benefits to Canadians in the form of tax revenues, royalties and jobs. As well, the Project would provide increased reliability to gas distributors, who could then more reliably serve communities, such as cities, towns, rural areas, and Indigenous communities across Saskatchewan and Alberta.

Facilities and Emergency Response Matters

The CER indicated it holds its regulated companies accountable so that Canadians and the environment are protected throughout the lifecycle of each pipeline or project. Using a risk-informed approach, the CER conducts compliance verification activities. The CER noted that the Project would be part of the existing NGTL System, which is subject to the CER’s comprehensive regulatory oversight. The CER also indicated it was satisfied with NGTL’s commitments to identify areas of high risk and to implement additional risk mitigation measures where needed.

Land Matters

The CER indicated it was satisfied that NGTL had proposed suitable mitigation to address the Project’s potential land-related effects during the design, construction, and operation of the Project. The CER noted that NGTL’s:

  • route selection criteria minimized potential adverse effects, including avoiding sensitive environmental areas and minimizing environmental and social impacts and fragmentation as much as possible;

  • route selection process and the criteria used to determine the route were reasonable and justified; and

  • proposed route was appropriate.

Further, the CER found that NGTL’s anticipated requirements for land rights and the process for the acquisition of these land rights was acceptable and was satisfied that the acquisition would meet the requirements of the legislation.

Public Engagement

The CER found that NGTL adequately and appropriately identified stakeholders and potentially affected landowners and developed appropriate engagement materials. The CER also found that NGTL’s design and implementation of engagement activities for the Project were adequate, given the scope and scale of the Project.

The CER noted that it expects NGTL to continue its efforts to engage and maintain effective and timely engagement activities, as appropriate, throughout the lifecycle of the Project.

Matters Related to Indigenous Peoples

The CER found that there had been adequate consultation and accommodation of Indigenous peoples for the purpose of the CER’s decision on this Project. The CER found that any potential Project impacts on the rights and interests of affected Indigenous peoples, after mitigation, and with the imposition of conditions imposed by the CER, were not likely to be significant and can be effectively addressed.

Overall, the CER was of the view that approval of this Project was consistent with section 35 of the Constitution Act, 1982 and the honour of the Crown.

Environment and Socio-Economic Matters

As the Project would be over 40 km in length, it was designated under the Canadian Environmental Assessment Act, 2012 (“CEAA 2012”), requiring an environmental assessment. The CER noted it also considers environmental protection as part of its broader mandate. When making its recommendations, the CER is responsible for assessing the environmental and socio-economic effects of the Project.

The CER found that after conducting an environmental assessment of the Project, it was of the view that overall, with the implementation of NGTL’s environmental protection procedures and mitigation measures and the CER’s recommended conditions, the Project was not likely to cause significant adverse environmental effects.

Infrastructure, Employment and Economy

The CER found that the measures planned by NGTL would adequately address the potential impacts of the Project on local infrastructure and services, including effects on traffic. Given the Project was spread across multiple locations and would require a relatively small outside workforce, the CER found that Project demands were unlikely to exceed the available capacity of community infrastructure and services or impact the quality of local services.

The CER found that the Project would benefit local, regional, and provincial economies. The CER further found that the socio-economic benefits related to the construction phase of the Project, through both direct and indirect employment, procurement and contracting opportunities, would benefit local communities as well as workers from elsewhere in Alberta.

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