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NorthRiver Midstream NEBC Connector GP Inc., CER Report OH-001-2022

Link to Decision Summarized

Natural Gas Liquids – Facilities

Application

NorthRiver Midstream NEBC Connector GP Inc. (“NorthRiver”), a wholly owned subsidiary of NorthRiver Midstream Inc., applied for authorization to construct and operate the NEBC Connector Project (the “Project”). The Project consisted of two parallel 215-kilometer (“km”) small-diameter pipelines from the existing Highway Liquids Hub (“Highway Hub”) approximately 25 km northwest of Wonowon, British Columbia (“BC”) to a riser site in the Gordondale area of Alberta, approximately 19 km east of the BC/Alberta border. Approximately 195 km or 91 percent of the proposed route parallels existing linear disturbances. The pipelines will transport natural gas liquids (“NGL” or “C3+”) and condensate.

Decision

Recommendation under s 183 of the CER Act

The CER found the Project is and will be required by the present and future public convenience and necessity, and recommended that the Governor in Council (“GIC”) approve the Project and direct the issuance of a certificate under section 186 of the CER Act, authorizing the construction and operation of the Project.

Exemption from CER Act s 213 Requirements (Leave to Open)

The CER denied NorthRiver’s request for exemption from the requirement to seek leave to open for its proposed pump station and storage capacity additions at the Highway Hub.

Exemption from CER Act s 214(1) requirements

The CER exempted NorthRiver, contingent upon a certificate being issued, from the requirements of ss 198(c), 198(d) and 199 of the CER Act with respect to: temporary infrastructure required for construction of the pipelines; right of way (“ROW”) preparation activities (subject to some excluded lands); and installation of pump station and storage capacity within the boundaries of the existing Highway Hub footprint.

Method of Regulation

Regarding financial regulation, the CER found it appropriate to regulate NorthRiver as a Group 2 company, which regulates the traffic, tolls, and tariffs of such companies on a complaint basis.

Pertinent Issues

The Project’s purpose is to meet a need for market access for existing and anticipated growth of volumes of NGLs and condensate from the Montney Play (“Montney”) in the Western Canadian Sedimentary Basin. It will provide an alternative transportation option for northeast BC producers, fostering competition and increasing shipper choice.

Context

The CER noted the unique context of this Project, particularly the implications of the decision in Yahey v British Columbia, 2021 BCSC 1287 (“Yahey”). In the Yahey decision, the Supreme Court of British Columbia made four declarations relating to the infringement of Blueberry River First Nations’ (“BRFN”) treaty rights due to the cumulative impacts of industrial development. The Project traverses the BRFN’s claim area, which was the area at issue in the Yahey decision.

In response to Yahey, NorthRiver’s Project application acknowledged the existence of significant adverse cumulative effects. In particular, NorthRiver acknowledged the effects on wildlife and wildlife habitat, fish and fish habitat, and traditional land and resource use (“TLRU”). NorthRiver made the conservative assumption that all Indigenous Peoples asserting rights under s 35 of the Constitution Act, 1982 are similarly affected.

The CER noted that its hearing process allowed for meaningful consultation with Indigenous Peoples that supports several key objectives of the United Nations Declaration on the Rights of Indigenous Peoples (“UN Declaration”) focused on the participation of Indigenous Peoples. The CER made its recommendation and decisions on this Project with consideration for the Government of Canada and CER’s commitments to Reconciliation and the implementation of the UN Declaration. At all stages of the hearing process and in undertaking its assessment of the Project, the CER noted that it was guided by the need to uphold the honour of the Crown and advance Reconciliation.

Project Economics and Financial Matters

The CER found that the Project is economically feasible and likely to be used at a reasonable level over its economic life, even when taking into consideration reasonable expectations about the potential impacts of current climate change laws, policies, and regulations. The CER found that NorthRiver adequately accounted for risks associated with uncertainties posed by any scenario in which Canada achieves net-zero greenhouse gas emissions by 2050, in its analysis of the Project’s economic feasibility. The CER determined that the Project will benefit Canadian oil and gas producers by enhancing shipper choice, improving overall transportation efficiency and safety and decreasing transportation costs and third-party impacts.

Pipeline Design, Construction and Operation

The CER found the Project’s general design and material specifications to be appropriate for its intended use and found the description of NorthRiver’s integrated management system adequate. The CER was satisfied with NorthRiver’s emergency response planning, emphasizing that processes, procedures and communication protocols were established for its Emergency Response Plans.

Land Matters

The CER found that, on balance, the applied-for route corridor is appropriate, reasonably minimizing impacts on the environment, Indigenous Peoples, landowners, and land users, while also providing the most efficient design for construction and operations. In response to expressed concerns from one intervener, the CER recognized that NorthRiver did not meet all the route selection criteria for the portion of the route crossing this intervener land but noted that feedback from potentially affected landowners is one of the routing criteria used. The CER was convinced that the Project route was responsive to feedback from landowners. In making the recommendation for the Project, the CER made no findings about the best possible detailed route of the pipeline on the lands of this intervener leaving the issue open for a potential detailed route hearing.

Matters Related to Indigenous Peoples

The CER found that NorthRiver adequately designed and implemented engagement activities with Indigenous Peoples for the Project. NorthRiver’s engagement program was designed to continue for the life-cycle of the Project, and the CER expressed an expectation that NorthRiver will follow through on its engagement obligations and commitments accordingly.

The Crown Consultation Coordinator (“CCC”), which is part of the CER, confirmed that it intends to rely on the CER’s assessment process for this Project, to the extent possible, to meet the Crown’s duty to consult. The CCC was involved in early engagement, actively participated in the hearing, and conducted concurrent consultation activities outside of the hearing. Based on its consultation with Indigenous communities on the Crown List, the CCC filed several Crown submissions on the hearing record.

During the hearing, the CER received Indigenous knowledge directly, through multiple methods, which shaped the CER’s findings, analysis and recommended conditions issued for the Project.

The total cumulative effects for the TLRU are high, as they were assumed to be significant by NorthRiver in recognition of Yahey. However, NorthRiver included a plan to offset the impacts of the Project. As a result of the offset plan, the CER found that the potential adverse effects of the Project on the rights of Indigenous Peoples would be of a medium degree of severity.

The CER found that Indigenous Peoples monitoring the Project is a valuable and meaningful opportunity for the sharing and incorporation of Indigenous knowledge in the planning, pre-construction, construction, post-construction, and operational life-cycle activities of the Project. The involvement of Indigenous Peoples in monitoring would also be of value in assessing mitigation measures effectiveness, including reclamation. In addition, NorthRiver committed to providing an opportunity for all interested Indigenous communities to participate as monitors during construction. The CER imposed various conditions regarding plans for Indigenous Peoples’ participation in construction, post-construction and operations monitoring.

Environmental Effects

The CER recognized the importance of the construction environmental protection plan (“Construction EPP”) as a compilation of general and Project-specific mitigation measures for use during Project construction. The CER imposed conditions regarding Construction EPP, operations environmental protection plan (“Operations EPP”), and post-construction environmental monitoring reports to ensure potential adverse effects are effectively mitigated and, where they have not, to adaptively manage deficiencies.

Health, Social and Economic Effects

One landowner intervener raised concerns regarding impacts on agricultural operations, watercourse and wetland areas, groundwater and surface water drainage issues, as well as aerial operations being conducted concurrently with the operations of their airstrip. The CER determined that all issues raised would be mitigated through the implementation of NorthRiver’s Construction EPP, as well as its commitment to ongoing engagement with the landowner regarding the proposed construction method in the specific area. The CER acknowledged the information NorthRiver provided during the hearing on how it intends to monitor the socio-economic effects of the Project, including its preliminary Indigenous socio-cultural monitoring plan. The CER imposed several conditions to ensure added transparency.

Cumulative Effects and NorthRiver’s Proposed Offset Plan

Indigenous intervenors were unanimous that existing cumulative effects in the area are high. The CER agreed that past and existing development, including forestry, oil and gas, agriculture, and linear developments, such as roads and pipeline corridors, have led to adverse cumulative effects of high significance on wildlife and wildlife habitat, fish and fish habitat, and the TLRU. NorthRiver applied the mitigation hierarchy appropriately in the design and development of the Project and through the modifications it made during the hearing. NorthRiver first avoided effects where feasible through its route selection. NorthRiver then identified opportunities to avoid and reduce effects through mitigation and to restore certain areas along the right-of-way. Where significant adverse effects remained or were assumed, offsetting was presented as mitigation.

The CER acknowledged the evolution from the Preliminary Offset Plan through the Final Offset Plan, submitted throughout this process. Some notable changes to NorthRiver’s offset plan included: incorporation of the mandatory BRFN – British Columbia (“BRFN-BC”) Restoration Fund contribution; expansion to include contribution to the Treaty 8 Restoration Fund and offsets for all New Disturbance on Crown land in BC and Alberta; and, incorporation of Indigenous-led governance with capacity funding and an increased overall dollar amount. The CER, considering all submissions, concluded that the offset plan should include the following components:

  • NorthRiver must contribute to the BRFN-BC Restoration Fund for New Disturbance in HV1 and priority watershed management basin areas following the BRFN Implementation Agreement.
  • NorthRiver must contribute to the Treaty 8 Restoration Fund for New Disturbance within Treaty 8 Enhanced Management Corridors using a similar methodology as the BRFN Implementation Agreement.
  • NorthRiver-established Indigenous-led Land Securement Fund based on the remainder of Crown lands in BC and Alberta that meet the definition of New Disturbance and are not directly addressed by Offset Components 1 and 2.

The CER accepted the majority of NorthRiver’s Final Offset Plan except for refinements to the Land Securement Fund. Accordingly, the CER imposed conditions regarding the revised Final Offset Plan, BBRFN-BC Restoration Fund Reporting, Treaty 8 Restoration Fund Reporting, and Land Securement Fund Reporting.

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