It’s been seven years since Kinder Morgan announced it would begin public consultations into twinning the Trans Mountain pipeline. In what is surely turning out to be one of the longest approval processes in Canadian history, Trans Mountain Corporation, now a wholly owned subsidiary of the Canada Development Investment Corporation (CDEV), continues to move slowly towards the finish line. While the National Energy Board (NEB) reconsideration report reached the same conclusion as their original submission — that the project is in the best interests of the country — the report also highlighted issues that will impact the entire shipping industry. Indeed, a closer look at the 16 non-binding recommendations of the reconsideration report to the Governor in Council (GIC) could foreshadow a number of potential regulatory changes that extend far beyond the scope of the Trans Mountain project.
To provide just a brief recap of the process so far: After four years of public consultation and regulatory review, results of the NEB’s first review were released in May 2016. The NEB concluded that the Expansion Project was in the best interest of the Canadian public and recommended to the Federal Government that the project be approved — which it did on November 29, 2016. Shortly thereafter, an appeal of the decision was launched by no fewer than 20 First Nations, municipalities and environmental groups.
In August 2018, the Federal Court of Appeal (FCA) “quashed” the Order in Council which had approved the Certificate of Public Convenience and Necessity. The court cited two flaws with the NEB’s original review — the unjustifiable exclusion of project-related marine vessel impacts and implications under the Species at Risk Act and the Canadian Environmental Assessment Act, 2012; and a lack of consultation and meaningful two-way dialogue by the Government of Canada with Indigenous peoples. As a result, under order of the GIC, in September 2018, the NEB began the process for a reconsideration review.
On February 22, 2019, the NEB announced the results of its reconsideration hearing and again recommended the approval of the Project, this time subject to 156 Project conditions and 16 recommendations (including one of the original conditions) for the GIC’s consideration. The conditions are measures that the NEB can enforce as a regulator. The non-binding recommendations are measures that are beyond the scope of the NEB’s regulatory authority.
The “new” NEB results
The conditions of the new reconsideration report were essentially the old conditions with six revisions. Five have timelines for compliance. For example, while the condition to have a plan for implementing marine spill prevention and response already existed, the NEB added that this plan must be filed within six months of issuance of the Certificate. Trans Mountain is required to also confirm continuation of marine spill prevention and response commitments by filing each year after commencing operations. Another condition — to file an updated Vessel Acceptance Standard and Westridge Marine Terminal Regulations and Operations Guide — requires that Trans Mountain file this at least three months prior to loading the first tanker and re-file each year for the first five years of the operating project.
The sixth change was to the status of Condition 131, a requirement that Trans Mountain undertake a marine public outreach program. This is now considered to be the responsibility of the government and it is recommended that this be assigned to the Pacific Pilotage Authority with appropriate support from Trans Mountain.
The 15 remaining recommendations are measures that are beyond the jurisdiction of the NEB, outside of the scope of the Expansion Project, and recognized to be the responsibility of the government. They call on the Federal Government to undertake such activities as: develop and implement a regional cumulative effects management plan that takes into account the overall environmental state of, and cumulative effects on, the Salish Sea; develop and implement a marine bird monitoring and protection program to better understand impacts of all vessel use within the Salish Sea; develop an offset program to address both the increased underwater noise and the increased strike risk posed to SARA-listed marine mammals; review and update federal marine shipping oil spill response requirements; develop a regulatory framework for enhanced tug escorts; and work with relevant U.S. regulatory authorities to consider a transboundary vessel traffic risk assessment.
“In reconsidering the proposal, the NEB noted that we had already carried out an extensive review with filings already on record and that the conditions originally issued adequately addressed these,” said Bikram Kanjilal, Director of Marine Development for Trans Mountain. “However, what became evident through the process was that Trans Mountain activities today and, in the future, accounted for a very small percentage of overall marine traffic and that the scope of any one proponent to more broadly address all issues related to SARA and CEAA2012 beyond their own project was unrealistic.”
With Trans Mountain’s tanker traffic currently accounting for about 1.1 per cent of the large commercial vessel traffic in the Salish Sea (increasing to about 6.5 per cent if the project were approved), that leaves roughly 94 per cent of the traffic — container ships, bulk carriers, cruise ships, etc. — outside the scope of the project and more likely to be the subject of increased scrutiny with the new recommendations. “The NEB recognized that there is a broader scope of shipping to consider when addressing issues related to the Salish Sea overall,” said Kanjilal. “The recommendations essentially suggest that government should consider initiatives that take into account all traffic, not just tankers for this Project.”
While the onus is now on the Federal Government to decide whether to accept and implement the recommendations, Trans Mountain is already ahead of the curve on much of it. For example, as part of the regulatory process, they have already undertaken a comprehensive risk assessment for the Project, mirroring one of the recommendations. “In doing so, while our focus was on our Project and its impacts we had to gather a lot of additional information to be able to do things like a traffic analysis and a quantitative marine risk assessment,” he said.
These studies and assessments have already led Trans Mountain to implement measures that would mitigate the effects of increased traffic to Westridge Terminal. “We took a close look at the entire shipping lane between J Buoy and the terminal with an eye to seeing how we could make our traffic safer — whether there were any gaps where things could be done better,” Kanjilal said. One result from their study was the increased use of tugs (another recommendation from the reconsideration report).
While traditionally, tugs were being used in the Harbour and selectively at other locations along the shipping lane, now, in the case of tankers, a tug remains tethered to the loaded tanker until it has left English Bay and then escorts it all the way to Race Rocks, including a tethered portion through the Gulf Islands. Should the project be approved, the tug escort would be extended right to J Buoy (the western entrance to Juan de Fuca Strait).
Trans Mountain has also been working with the Western Canada Marine Response Corporation (WCMRC) to increase capacity and capabilities for spill response as part of an enhanced response regime, which is estimated to cost about $150 million. That includes a doubling of the currently mandated response capacity, having eight response bases) and adding up to 120 extra full-time staff. While the enhancements are primarily focused on the project traffic in the Salish Sea, the NEB has also recommended that the government review the current standards to see if there should be “a requirement for additional response resources on all ocean-going vessels.”
While Trans Mountain may be out in front of the regulations, the remainder of the shipping industry is keenly watching developments that may have an impact on the industry as a whole. Additional recommendations include:
The development of short-, medium-, and long-term targets to address the cumulative effects of underwater noise, strike/collision risk of vessels with marine species and measures to achieve those targets.
The expedited completion of a study that is looking at the establishment of a Southern Strait of Georgia National Marine Conservation Area Reserve and, if considered feasible, proceeding to establish it.
In conjunction with relevant U.S. regulatory authorities, consideration of the need for a Canada/U.S. Transboundary Vessel Traffic Risk Assessment.
The development and implementation of greenhouse gas reduction measures related to marine shipping that would align with the final International Maritime Organization Strategy by the year 2023 for reducing greenhouse gas emissions. The recommendation further calls for a mechanism to monitor such reductions and to develop regulations under an appropriate legislation.
Acceleration of the development and implementation of Enhanced Maritime Situational Awareness as well as extending the requirement for Automatic Identification Systems to smaller passenger vessels.
The NEB reconsideration report was submitted to the Federal Government on February 22, 2019. The next step is for the Governor in Council to undertake a 90-day consultation period before delivering a final decision. When asked about the timeline in mid-March, Natural Resources Minister Amarjeet Sohi indicated that Indigenous consultations were underway and that, while he expects to conclude the consultations within the 90-day timeframe, Ottawa was willing to ensure they were given “all the time they need.”
If the government does complete the consultations within the 90-day timeframe, the decision could come as early as this summer. Given that shipper nominations for apportionment are exceeding Trans Mountain’s current pipeline capacity by an average of 30 per cent each month, a positive decision (fingers crossed) can’t come soon enough. For the rest of the industry however, that benchmark may mean the beginning of a whole new process should the government set about implementing the 16 non-binding recommendations.