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Canadian Regulator Greenlights Controversial Kinder Morgan Pipeline — If it Offsets Carbon Emissions

The National Energy Board decision on the west coast project, which has provoked mass protests and arrests, is a major notch in the Liberal government's plan to approve a pipeline that would move Alberta oil to international markets.

by Hilary Beaumont
May 19 2016, 10:00pm

Photo by Hilary Beaumont

The National Energy Board has recommended the Canadian government approve a controversial pipeline — but for the first time, the company must offset greenhouse gas emissions from its construction.

The NEB decision on the project, which has provoked mass protests and arrests, is a major notch in the Liberal government's plan to approve a pipeline that would move Alberta oil to international markets.

While the decision is a blow to environmental and Indigenous groups that have opposed the project for years, the recommendation is sure to comfort Alberta as the province reels from ongoing mass wildfires and a two-year oil slump that has crippled its energy sector.

Kinder Morgan's $6.8 billion TransMountain expansion project would add to an existing pipeline, tripling its capacity from 300,000 to nearly 900,000 barrels of oil per day. That oil would flow from Edmonton, Alberta to the Westridge Marine Terminal in Burnaby, on BC's coast.

Related: Pipeline Politics: Canada's Conflict Over Oil Spills Into Election

The NEB recommended the project subject to 157 conditions, saying the benefits of the project — including access to new markets for Canadian oil, thousands of construction jobs and hundreds of long-term jobs — outweighed its negative effects.

The board considered climate change in its decision, and as a condition of the project, Kinder Morgan will have to offset greenhouse gas emissions from the project's construction. It's the first time the board has ever tacked such a condition onto a pipeline project. The total amount of GHGs is not yet known, but will be calculated if and when the pipeline is built.

The NEB said the expansion "would not likely cause significant adverse environmental effects," although the board found there would be negative environmental impacts from increased tanker traffic. Almost 90 percent of the new pipeline would follow the existing pipeline route, meaning it wouldn't be a large environmental disruption, the NEB report said.

In January, the NEB TransMountain hearings in Burnaby leading up to the decision were roundly criticized for lack of attendance, with heavy security preventing unapproved members of the public from entering a mostly-empty double ballroom set aside for the hearings. Three protesters staged a sit-in to protest that lack of public access and were arrested as a result.

In Burnaby, where almost 70 percent of the town is against the expansion, opposition remains fierce. This week, protesters took to the water in kayaks in an attempt to block an oil tanker from reaching the terminal. And in 2014, more than 100 protesters set up a blockade on Burnaby Mountain, a public park along the pipeline's route, in an attempt to prevent Kinder Morgan workers from surveying the land. Some protesters climbed trees and refused to budge while one activist chained himself to a company vehicle.

Critics say the pipeline expansion would put the Burrard Inlet at greater risk of oil spills, and the Burnaby Fire Department has said it wouldn't have the ability or the resources to put out a fire if one of the company's oil storage tankers were to ignite on Burnaby Mountain — a risk that has homeowners in the area considering selling their properties.

A Kinder Morgan protest in BC in 2014. (Photo by Jonathan Hayward/The Canadian Press)

TransMountain says it takes full responsibility for any emergencies, and if a spill or fire happens, it will deploy its own emergency responders immediately. The company also promised to train the Burnaby Fire Department at its facilities.

Now that the NEB has made a decision on the project, there are a couple more hurdles in the pipeline's path. In January, the Liberal government said it would consult Indigenous people and directly-affected communities along the pipeline route, and undertake an assessment of upstream GHG emissions for the TransMountain project.

It's rare that the NEB will reject a project — more often they are approved with conditions, but the board has pushed back against the perception that it's a rubber-stamp mechanism to approve pipelines in Canada.

This week, the NEB also received the final consolidated application for another pipeline project, TransCanada's Energy East. Of the major pipeline contenders in Canada, Energy East and TransMountain are widely considered the favorites to be built.

Follow Hilary Beaumont on Twitter: @hilarybeaumont