Full History Of Kinder-Morgan TransMountain Pipeline Expansion Project

Prepare a full history of the Kinder-Morgan TransMountain pipeline expansion project (the “Project”)

When was the Kinder-Morgan TransMountain Project first announced

This report focuses on the full history of the Kinder-Morgan Trans Montaigne pipeline expansion project and issued faced under this project even after getting approval of National Energy Board (“NEB”). It emphasises on the reasons of Environmentalists who oppose the project as it will lead to increased tanker traffic, impacting British Columbia’s population of Killer Whales. This report is divided into six parts which have been highlighted and used as criteria for preparing this case report. The large oil deposits Alberta around Leduc were discovered. The idea was quickly emerged which was driven by growing demand for oil in the West coast of Canada and Asia and United states for that the pipelines were fitted from Alberta to British Columbia (BC). Because of ongoing Korean War the US military got interest in the development of the infrastructure by which they can easily accessed the oil for their military purposes.

The Trans Mountain Pipeline Company was established on 21^st March, 1951 by the special act of Parliament. After this on the same day the proposal was made regarding the pipeline to the Board of Transport Commissioners. A split occurred between the companies which broke into Canadian Bechtel Ltd and Standard Oil. After the approval from the board in February, 1952 the construction was started. The design, engineering and construction were done by the Canadian Bechtel Ltd. The first time when oil start pumped up it cost approx. $93 million on 17^th October, 1953.

The second pipeline which was spread between Hinton, Hargreaves, British Columbia and Alberta which was parallel to the first pipeline and that was started by Kinder Morgan in 2004. Canada’s National Energy Board got 82 spills since 1961 by the Trans Mountain. In the year 2005, crude oil of around 210 m³ dumped by a ruptured pipeline.In 2007, ruptured of pipeline by a contractor who was working on the sewage project caused spillage of crude oil in the city of Burnaby. In 2009, Burnaby at the Trans Mountain Burnaby 305 m3 crude was released (Graben, & Sinclair, 2015).

The Canada government granted approval for this project which is TransMountain Expansion Project on 29^th of November, 2016. On the recommendation of the Federal Governor in Council the National Energy Board (NEB) concluded the project in the public interest for Canadian citizens and in that way it was approved by the council. On 11^th of January 2017 the British Columbia Environmental Assessment Office (BCEAO) certified the Trans Mountain Expansion Project on environmental assessment (Pérez-Fortes, et. Al. 2016).

The federal Court on 30^th August 2018 issued the decision on cancelling the order in council and this had approved the certificate for the expansion project of Public Convenience and Necessity (CPCN). In May 2018 the intention to acquire the pipeline the federal Government to acquire it as a crown corporation announced its intention and to seek complete expansion, it seek investors from outside to complete it. On 26^th September, 2018 the NEB announced a public hearing for the reconsideration of its project (Pérez-Fortes, et. Al. 2016).

In 1953 the original Trans Mountain Pipeline was built which is continued till today.With the initial expansion in 1957, the pipeline system capacity has been increased numerous times (Akbari, et al, (2016).The most recent expansion was done in 2006 and 2008 which was with the construction of 13 new pump stations and modifications to its stations. During this time only the Anchor Loop project was also added which was 160 kilometres pipe between Mount Robson and Jasper National Park which was between Hargreaves and Alberta. This project of expansion was a twinning of its 1,150 kilometre pipeline which was between Burnaby and Strathcona county Alberta.  This pipeline was having its minimum capacity from 300,000 barrels to 890,000 barrels per day. This expansion was approximately $7.4 billion in its costing (Jeong, et al. 2015).

NEB mandate and jurisdiction

This project will create many benefits of short or long term jobs or training opportunity for these jobs. It will also increase the taxes which are created by the three level of government. It will create 37000 direct or indirect jobs per year during its operation. During the construction programme around 15000 people were working in its pipeline expansion (Jeong, et al. 2015).

In its 20 years of expansion operation, the combined impact on the revenue of government for construction is $46.7 billion which can be used for the public services like education and health care. In its revenue generation British Columbia receives $5.7 billion, $19.4 billion received by Alberta and the rest of the revenues were received by Canada which is $21.6 billion.

The new pipelines were approximately 980 kilometres long. This long range of pipeline includes 193 kilometres of reactivated pipeline. The pump stations will be built in the number of 12. In Burnaby storage terminals 19 tanks will be added and new berths will also be built at West ridge Marine Terminal. Once new berths will be completed and come to in service, the total number of tankers will be increased by 34 per month (Jeong, et al. 2015).

The pipeline which already exits will carry synthetic crude oils, refined products and light crude oils which will be having capability for heavy crude oils. The heavier oils will be carried by the new twin pipelines for the transportation of light crude oils. The construction activities will be begun in September 2017 (Heinelt, 2018).  Since 2012 stakeholders, landowners, community engagement and Aboriginal communities have been ongoing and they will be continued through operation.In the entire route the Environmental protection plans have been developed (Wong, & Zhou, 2015).

The main aim behind the expansion of this Trans Mountain Expansion Project was to help and make sure that Canada gets the full value for its oil. Workers will also get benefit in its $7.4 billion project of construction. Oil producers will generate more revenue with their products. More revenue will be collected by the Government form oil. These all kinds of revenue will benefit and contribute to the services which will benefit the Canadians (Komeily, & Srinivasan, 2015).

The oil products produced in Western Canada supplies in the market of United States Midwest. From the last decade, the oil products have been sold to the United States at discount by the Canada to the world price for oil products of similar nature (Xu, et al. 2016). if Canada’s oil will be shipped from the Trans Mountain’s Pacific tidewater terminal which is in Burrard inlet then it will give a better price. This project will give earning of approximately $3.7 billion per year to the Canada if the Canadian oil will be delivered to international market (Canter, 2018).

New opportunities and new markets are emerging by the expansion of oil sands products in Alberta. With the expansion of Trans Mountain Pipeline system the growing needs for the years will be provided in the coming years (Pérez-Fortes, et. Al. 2016).

Pipeline Expansion and Benefits

The oil producers which are included in this Trans Mountain Pipeline project have made a significant commitment of 15 to 20 years to add up the capacity to 80 percent. The oil producers which are included in this project are as follows: Athabasca Oil Corporation, BP Canada Energy Trading Company, Cenovus Energy Inc., Total E&P Canada Ltd., Imperial Oil Limited, and Husky Energy Marketing Inc.  (Vaillancourt, et al. 2014).

The National Energy Board was established in 1959 as an independent federal regulator. The National Energy Board was established by the National Energy Board Act which was having privileges and rights of superior court as a quasi-judicial body. The decisions of NEB are enforceable in law (Victor, 2017). Public hearings are hold for the inquiry and application of some major nature. In these hearings parties submit their evidences as a public record in which decisions are based on evidence which is submitted to the board. Federal energy policy is not created or debated here.The mandate is having by the elected officials and parliament of Canada.The participation of this board is showed by giving expert opinion on the matters relating to the energy which are used by the government to set the energy policy (Akbari, et al, 2016).

The main purpose of National Energy Board is to promote security, safety, efficient energy and environmental protection and markets in the public interest of Canada. The mandate is set by the Parliament and we act accordingly for the regulation of trade, energy development and pipelines (Giacchetta, Leporini, & Marchetti, 2015).

The main responsibilities of this Board are interprovincial operation and construction, international designated international power lines and other international power lines and gas pipelines. The tariffs and tolls for the pipelines are also regulated by this board under the jurisdiction of National Energy Board.The import and export of these products like export of oil, natural gas, electricity and natural gas liquids and similarly import of natural gas are done by this board (Keil, 2014).

To affect Canadian energy market the information relating to the Canadian events, trends and issues are published by the National Energy Board to the Canadian. The matters which are not regulated by the provincial or joint federal like gas and oil exploration and development and regulation of specified areas are managed by the board. The regulation of National Energy Board is extended over 73,000 kilometres of pipeline which is across the country and 1,400 kilometres of international power lines (Bahn, et al. (2013).

The activities which are regulated by the NEB for those activities applications are being to them. After the submission of application the determination of application is being done that if it is required for hearing or not and if hearing is required then whether oral or written hearing. Few applications relating to international or interprovincial pipelines which are more than 40 kilometres are being dealt by the board (Aleklett, et al. 2010). The hearing process is convened by passing hearing order in which all the details relating to process, the direct affected persons or persons having relevant information or some expertise person can participate and deadline of application to participation is been provided (Vaillancourt, et al. 2008).

Environmental concerns

Every project in which NEB is involved is not necessarily end with the sanction. The board, for the approval of the project can involve any number of conditions. These conditions are enforced and monitored through the complete cycle of the project which is approval to the abandonment.  At the time of reviewing the application the jurisdiction and mandate of the board is considered. A list of issues is outlined when any application is issued for the hearing which is considered by the board (Gibbs, et al. 2008).

From the beginning in 1959 the National Energy Board considers the environmental factor in making any regulatory decisions. During construction, planning, operation and abandonment of facilities the promotion of environmental responsibility must be included within the jurisdiction of the board (Vaillancourt, et al.  2014).  To protect the environment appropriate actions for the enforcement and proper safety measures must be in place. The expertise team of 75 people in different-different areas are included in the specialised team of environmental protection. To satisfy the National Energy Board the companies are planning to build energy facilities for the proper effects of anticipated environment which is associated with the project (Haszeldine, 2009).  An environmental assessment is being conducted at the time of review of application for the public interest mandate.Some major projects of National Energy Board are assessed by the Canadian Environmental Assessment Act, 2012 (McNicol., Rand, & Williams, 2011).  The National Energy Board is a responsible authority under the CEA Act 2012 who conducts its projects under its jurisdiction in standards which is prescribed by the legislation for the right environmental assessment. The routine maintenance and monitoring procedure including the inspection and auditing of the activities of the company are the life cycle of an energy project (Bishop, & Dachis, 2016).

The National Energy Board possesses many powers with it. The powers which it has are in the name of Court of record, the board is a court of record. The official seal of the board have some judicial notice in it. The Board has the power of inspection and production of the documents which are produced before it. It has power with respect to the swearing, examination and attendance of the witnesses. They have necessary power for the inspection and entry of the property and other necessary matters which are necessary for the exercise of its jurisdiction (Hale, & Bartlett, 2017).

If any act is done which is in the eyes of Board is not in the public interest, prohibited or not authorised by the board then the board can give any direction, sanction, leave or approval which by law is authorised to them to give or make. The board has a power to inquire into the matters relating to any accident which involve abandonment of the pipeline, other facility or international power line, the operation of which is regulated by the NEB.  They can find cause of the accident or factors which are contributing to the event. They have power to make recommendations for any failure on the part of the projects or prevention of any similar kind of accident (Graben, & Sinclair, 2015).

Cancellation of the Project

Whether matter is relating to law of fact the Board has full jurisdiction to determine and hear the matter. The Canadian government or the Government of Northwest Territories may agree to let the Board regulate these territories for the successive period of 20 years each. The early termination before the expiry of 20 years is possible by these authorities. Any order or requirement given by the board to any person can be given which need to be fulfilled in a specified time period in a prescribed time. The Board can also forbid to do any act or to continue any act, thing or matter which is contrary to the law, regulation or direction (Pontier, 2016).

The Judicial supervision of the National Energy Board is to indicate both the idea of appellate review and judicial review of the board by way of appeal to the federal court with leave. In the case of Forest Ethics and Sinclair Case, an application for the judicial review came before the court. The circumstances of the case states that the board did not err in ruling that the larger environmental effects need not to be considered which have the effects of pipeline project which includes the climate change contribution which was made by Alberta oil sands. The supervision of the Board is governed by the National Energy Board Act and the Federal Courts Act. The federal court ruled that the Board does not have duty to consult with the aboriginal communities when they are making their decisions; this was stated in the case of Haida Nation v. British Colombia Minister of Forests, 2004 (Pontier, 2016).

It involves study of unique attributes relating to the environment which are from endangered species to the existing hazardous waste. The procedure of Environmental Assessment ensures that the environmental implication needs to be considered before making any final decision relating to assessment of environmental attributes. This process of environmental analysis effects the environment and it is useful for the reporting of effects which is undertook in the public consultation exercise and it lastly revels the decision to the public after reviewing the report. The main strength of this assessment is its flexibility. The process of project planning can integrate the Environmental Assessment as an essential step for the social, economic and environmental impacts of the projects (Hanson, 2018).

Summarize the principal reasons for the Court’s ruling that a new Environmental Impact Assessment was ordered 

The reasons behind the establishment of Environmental Assessment project are to facilitate decision making for the local authority. It gives a systematic analysis of the implications relating to environment for the proposed project or action. It is helpful in the aid in the formation of development. It is sometimes considers as hurdle for many developers to proceed with their projects or activities.The other processes for obtaining the permission from the various authorities is time consuming and costly and in that way EIA gives a good benefit to them. It works as a great aid in the development and formulation of actions. It indicates the areas where the project can be modified to eliminate the adverse impact on the environment. It provides a relation between the local authority, developer and planning authority to get a smoother process for the planning and worth financial returns and expenditures. It works as an instrument for the sustainable development. In providing sustainable development it maintains the overall quality of life; maintain the access to the natural resources and avoiding the damages caused to the environment.

Conclusion

The National Energy Board possesses many powers within it and it takes all the related decisions without the interferences of other government and courts. It is analyzed that there is panel in the National Energy Board which takes all the imperative decisions in the best interest of the society and environment at large.  It is analyzed that National Energy Board for the approval of the project and any other acts could involve any number of conditions which he may thinks fit and it could be determined by it on the basis of its own independent discretions. These conditions are enforced and monitored through the complete cycle of the project which is approval to the abandonment.  It is found that National Energy Board possesses right to restrict and limit evidences or exclude the participation from the kinder Morgan pipeline hearing. It was done on the basis of the effect of the supreme court of the Canada decisions which are done to not to hear a constitutional challenges of the federal government revisions to national board of the energy.  This was done to promote the National Energy Board with a view to promote the energy safe program and promoting the environment at large. National Energy Board pledges the critics to redouble their efforts to ensure efforts of the federal government to rate a fair process for pipeline propose. It could be inferred that on the basis of the decision of the Supreme Court, National Energy Board was free from any of the interferences. It was done due to the approval given on this pipeline proposal. It was assessed that Canada government granted approval for this project which is TransMountain expansion Project on 29^th of November, 2016. On the recommendation of the Federal Governor in Council the National Energy Board (NEB) concluded the project in the public interest for Canadian citizens and in that way it was approved by the council The crux of this discussion is that with a view to promote National Energy Board for economic and social development, supreme court kept National Energy Board possesses free from any of the interferences and frustration of the federal government interventions.

Conclusion 

After assessing the case study and evaluating the National energy board actions and undertaken work, it is found that if any act is done which is not in the public interest, prohibited or not authorised by the board then the board can give any direction, sanction, leave or approval which by law is authorised to them to give or make without the intervention of the federal government. The main aim behind the expansion of this Trans Mountain Expansion Project was to help and make sure that Canada gets the full value for its oil.  It was found that if the project proposed is accepted then project will create many benefits of short or long term jobs or training opportunity for people and also render good amount of benefits to society. It will also increase the taxes which are created by the three level of government. It was done with a view to promote the National Energy Board to independently undertake all the works and mitigate the issues related to promotional environmental benefits in society.  The crux of this report is that National Energy Board should take assistance of expert members before sanctioning any of the decisions. However, it may keep its records and other actions confidential without the interpretation of the any of authority and federal government.

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