The National Energy Board won't hear discussion of any environmental concerns on the expansion of the Trans Mountain pipeline as it considers how much companies should pay to move Alberta oil to the British Columbia Lower Mainland.
In a ruling that directly slaps down a series of requests by environmental groups and the city of Vancouver, the NEB says a series of spill-related topics are off-limits as it considers the proper tolls for a $4.1-billion expansion of the Trans Mountain pipeline system.
The NEB ruling affects only an initial hearing on commercial terms for the pipeline, which must be approved by the federal regulator. It does not pertain to the more fulsome hearing to approve or reject construction of the expansion itself; that hearing will come in a year or two and will discuss a broad range of issues related to the economic and environmental underpinnings of the project.
For that first toll hearing, however, the list of verboten issues includes the cost of insuring and protecting the new pipe against a spill, the cost of cleaning up a spill and the corporate structure of the Kinder Morgan entity that would own and operate the pipeline, and therefore be held liable in case of an accident.
The NEB does not consider those issues "relevant" to the discussion of commercial terms on a pipeline that Kinder Morgan has yet to formally apply for, the board wrote in a letter released this week. The letter added: "The Board does not take a position on whether these issues may be found to be relevant to any future proceeding."
In other words, those issues may be up for discussion when Kinder Morgan Inc. applies to expand the 300,000 barrel-a-day pipeline to 750,000 a day, an application expected late next year.
Kinder Morgan's move to determine tolls first is unusual, but done in the name of "efficiency," said spokesman Andy Galarnyk.
"It just brings certainty for us and the shippers that, 'here are the commercial terms going forward,'" he said. The ruling to keep environmental issues out "is kind of a normal course for the board," he said. He added: "The environmental issues and all of those other items that are mentioned in this particular letter from the board are typically heard at facilities applications."
The ruling is, however, a setback to those who wanted the NEB to consider forcing Kinder Morgan, and those who ship oil on its pipe, to specifically determine and pay for the cost of avoiding – or cleaning up – any potential disaster. Among the chief proponents of that view has been the city of Vancouver, which sent a three-page letter to the NEB in July. It asked the board to examine the tolls in a way that does "not discriminate against those who will be impacted and suffer adverse environmental and financial consequences in the event of any leak, rupture, or other escape of oil."
Letters with similar requests were filed by Kennedy Stewart, the NDP MP for Burnaby and Ecojustice, an environmentally oriented legal firm that made a submission on behalf of several Burnaby residents. That city is where additional volumes of crude would be transferred from Trans Mountain onto tankers, most of them bound for California.
In an interview, Ecojustice executive director Devon Page said it's too early to respond.
"We first have to review the decision with our clients, and then we'll advise them of options, one of which will be whether we can sue the NEB for their response," he said.