Kinder Morgan Canada Inc. will need to overcome political and regulatory risks for its Trans Mountain pipeline expansion plans, underscored by the challenges of obtaining permits from British Columbia.
The National Energy Board has interprovincial jurisdiction for reviewing Kinder Morgan's expected application to twin its existing Trans Mountain oil pipeline from Edmonton to the Vancouver suburb of Burnaby, but the B.C. Oil and Gas Commission has the authority to grant final permits.
Obtaining provincial permits will be necessary, even if the pipeline company were to win federal approval to expand its Trans Mountain route by building a new $5.4-billiion line.
The B.C. New Democratic Party announced earlier this week that it opposes Kinder Morgan's plans to nearly triple the amount of oil transported along the route from Edmonton to the company's Westridge marine terminal on the shores of Burrard Inlet. B.C. NDP Leader Adrian Dix, whose party is riding high in public opinion polls in the weeks before the May 14 provincial election, said he is concerned about the prospect of increased traffic in and out of the inlet.
Currently, five oil tankers a month sail past picturesque sites such as Vancouver's Stanley Park to get to the Westridge terminal. Kinder Morgan envisages boosting the number of tankers docking at the terminal to 34 a month. First Nations leaders, environmentalists and the mayors of Vancouver and Burnaby also oppose the expansion.
Employees at the B.C. Oil and Gas Commission have the power to approve or reject aspects of an NEB-approved application, after checking whether a proposal complies with the province's Land Act, Forest Act and Water Act, commission spokesman Hardy Friedrich said in an interview Wednesday. "Or it could be approved with conditions," he said from the B.C regulator's head office in Fort St. John.
B.C. NDP environment critic Rob Fleming added that if his party forms the next government, the New Democrats will reverse a decision by the B.C. Liberals to streamline provincial environmental reviews with the Canadian Environmental Assessment Agency. "B.C. should make its own determination on the environmental and economic risks, versus the benefits of these kinds of projects," he said. "The NDP has made a commitment to take back that decision-making authority and put in place a strong, comprehensive made-in-B.C. environmental review."
A spokesman for the B.C. Environment Ministry, however, said it would be "inappropriate to speculate on how an environmental assessment for Kinder Morgan's proposed Trans Mountain pipeline expansion project might be handled."
The existing Trans Mountain line has a capacity of 300,000 barrels a day. An estimated 21 per cent of the oil shipments last year went to the Westridge site, while most of the rest was delivered to refineries in B.C. and Washington state.
The NEB confirmed that Kinder Morgan has provincial hurdles to clear. "Generally speaking, when a company submits an application to the NEB, it is required to include a list of other permits, licences or authorizations that will be required before part or all of the project can proceed," board spokeswoman Brianne Rohovie said. "Beyond federal approval, companies are required to seek and achieve any provincial or municipal permits and licences that are required within those jurisdictions."
By the end of 2013, Kinder Morgan plans to apply to the NEB for permission to construct the new 980-kilometre pipeline.