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Report on Business NEB could examine plans for short pipeline while reviewing jurisdiction of Coastal GasLink in B.C.

Coastal GasLink received regulatory approval within B.C. in 2014 to proceed with plans to construct a 670-kilometre pipeline from northeast B.C. to a West Coast terminal.

Amber Bracken/The Globe and Mail

The National Energy Board is set to decide whether it will examine plans for a 1.5-kilometre pipeline that would connect TransCanada Corp.'s Coastal GasLink project in British Columbia with an existing energy network in northeast B.C. that extends into Alberta.

The short but important route has been raised by B.C. environmentalist Mike Sawyer as part of his arguments submitted to the NEB to persuade the regulator that oversight of the $6.2-billion Coastal GasLink project in British Columbia should be federal and not provincial jurisdiction.

Coastal GasLink received regulatory approval within B.C. in 2014 to proceed with plans to construct a 670-kilometre pipeline from northeast B.C. to a West Coast terminal. The $18-billion terminal, for exporting liquefied natural gas to Asian markets, is being built in Kitimat by LNG Canada.

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Mr. Sawyer argues that the NEB should conduct a full federal review of Coastal GasLink. He points to TransCanada’s plans to build a federally regulated pipeline that would connect to a provincially regulated route, or “sausage link” in industry terms. He said the short line is planned in northeast B.C. to connect Coastal GasLink with TransCanada’s Nova Gas Transmission Ltd. (NGTL) system in B.C. that leads into Alberta. If that connection is made, it would clear the way for natural gas from Alberta to reach Kitimat.

Coastal GasLink and NGTL “are functionally integrated and under common management, control and direction,” Mr. Sawyer said in a 25-page submission this week to the NEB. “Coastal GasLink is not a local distribution pipeline.”

He launched his application to the federal regulator in July, 2018. His financial donors include West Coast Environmental Law’s dispute resolution fund.

The NEB has scheduled a hearing in Calgary for May 2 and 3. If it turns out that the NEB rules the case should be under federal purview, the second phase will be a full NEB hearing, extending the regulatory process into 2020 and potentially 2021.

The list of intervenors in the NEB case includes Ecojustice Canada, the country’s largest environmental law charity. Also intervening are the B.C., Saskatchewan and federal governments, as well as the five international co-owners of LNG Canada: Royal Dutch Shell PLC, Malaysia’s state-owned Petronas, PetroChina, Japan’s Mitsubishi Corp. and South Korea’s Kogas.

LNG Canada said in a filing to the NEB this week that Coastal GasLink has a mission to transport natural gas from northeast B.C. to Kitimat. “Coastal GasLink will not be an open-access pipeline,” LNG Canada said in its 22-page submission. “Coastal GasLink is properly within, and should remain within, provincial jurisdiction.”

The federal government notes that the co-owners of LNG Canada don’t have any contracts to be supplied with natural gas that originates in Alberta and Saskatchewan. Coastal GasLink “is located entirely within B.C., is not physically connected to NGTL and does not depend on the NGTL system for its gas to transport to the LNG Canada facility,” according to federal lawyers.

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The Saskatchewan government added: “Succinctly, provinces are meant to regulate within the province."

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The NEB said it will not be reviewing whether the B.C. Environmental Assessment Office (BCEAO) conducted an adequate review since the federal regulator will be focused on the issue of whether Coastal GasLink should be subject to B.C. or federal jurisdiction, and it is not an appeal process of the BCEAO’s approval.

Ecojustice told the NEB in a written submission that it backs Mr. Sawyer’s application: “In performing the jurisdictional analysis, the board should consider that both the federal and provincial governments have a duty to make use of their respective powers to ensure adequate environmental protection.”

Elected Indigenous leaders, who met last week with Coastal GasLink officials in Vancouver, hope to acquire equity ownership amounting to at least 22.5 per cent in the B.C. pipeline project. Mr. Sawyer said Coastal GasLink would still operate the line, even if a minority stake were to be bought by elected band councils.

All 20 elected First Nations councils along Coastal GasLink’s route support the project. But a group led by eight Wet’suwet’en Nation hereditary chiefs opposed to the project say Indigenous authority rests with hereditary and not elected leaders over the traditional territory in which 28 per cent of the pipeline route would cross.

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