With its own pipeline project soon to face regulatory scrutiny, Kinder Morgan Canada Inc. says a lengthy list of conditions set out by the National Energy Board for the proposed Northern Gateway pipeline could burden other projects with unnecessary costs, red tape and labour shortages.
In April, the NEB laid out a list of 199 conditions specific to Enbridge’s Northern Gateway project, should the heavy oil pipeline from Alberta across British Columbia to the Pacific coast be approved. Although the NEB says the conditions are specific to Northern Gateway, Kinder Morgan doesn’t appear convinced the requirements won’t be applied to the pipeline industry more broadly.
The midstream company has sent a letter to the joint review panel – which is in the process of assessing the environmental effects of the proposed Northern Gateway project – stating that “the wider implications” of the conditions need to be considered, as they “may have a material impact on pipeline and infrastructure development in Canada.”
Kinder Morgan is concerned on a number of fronts, including that the NEB seems to be returning to a more prescriptive approach to regulation, and is asking for marine terminal and research programs plans for Northern Gateway as long as three years prior to operations – a requirement Kinder Morgan says could force companies to “materially alter a project’s schedule.”
The company also says conditions such as requiring a certain type of pipeline coating, and purpose-built escort tugs for ocean rescue as part of the marine tanker traffic and enhanced oil spill response plan – “beyond the requirements of existing codes” – will heighten the competition for required materials and services among pipeline companies over the next several years.
“Since several export pipelines are currently proposed,” states the Kinder Morgan letter, “the commercial effect of conditions that may exacerbate shortages of labour and materials should be a relevant consideration.”
Kinder Morgan Canada, which transports approximately 20 per cent of all liquid petroleum products produced in Alberta to markets in western North America, plans to twin its existing 1,150-kilometre Trans Mountain pipeline from just east of Edmonton to Burnaby, B.C., increasing capacity to nearly 900,000 barrels per day of oil sands crude from the current 300,000. Its full regulatory application is expected later this year.
In an e-mail, Kinder Morgan spokesman Andrew Galarnyk said the company’s letter emphasizes the importance of regulatory process predictability for pipeline and other infrastructure projects.
“If broadly applied, the proposed conditions could limit the ability of companies to respond to specific project unique conditions and community needs, and could limit the locally-focused approach Kinder Morgan takes in developing projects,” Mr. Galarnyk said.