An incoming Liberal member of Parliament has raised the stakes for prime-minister-designate Justin Trudeau on a controversial pipeline in British Columbia by insisting the company will face a tough new review process – even though Mr. Trudeau has not had a chance to form his government and make any policy decisions.
During the campaign, the Liberals slammed the Conservative government's environmental assessment rules – passed in recent years – saying they undermine Canadians' confidence and make it impossible for companies to win public support for pipelines and other major resource projects. But Mr. Trudeau has also acknowledged the importance of having pipeline access to the West Coast for Canadian oil producers to reach world markets.
A newly elected MP from B.C. told a local newspaper this week that Kinder Morgan Canada may have to go back to square one on the application for its Trans Mountain pipeline expansion project. That could mean further delays for the $5.4-billion project, which would more than triple the existing pipeline's capacity to ship crude to the Burnaby, B.C., terminus for loading onto tankers.
"We've already said there will be no decision on Kinder Morgan in January. Kinder Morgan will have to go through a new, revised process," Terry Beech, the incoming MP for Burnaby North-Seymour, told Burnaby Now. He was not available for comment to The Globe and Mail.
More than $25-billion worth of already-contentious pipeline projects aimed at getting Alberta crude oil to the west and east coasts face increased uncertainty as the newly elected Liberals devise regulatory changes, including possibly overturning existing approvals.
Mr. Trudeau has said his government would ban oil tanker traffic on British Columbia's northern coast, a move that would almost certainly render Enbridge Inc.'s Northern Gateway pipeline to Kitimat useless, as the crude could not be exported from there.
A Liberal spokesman said Mr. Beech's comments as reported do not necessarily reflect the party's policy on pipeline reviews, adding that "there's a lot of internal discussion as to where we go next."
Still, it shows how much potential investment and hopes by the energy industry for new markets are riding on the coming federal policy changes. The Liberals' election platform promised to "immediately review Canada's environmental assessment processes and introduce a new, fair process" that will be thorough, rigorous and allow Canadians greater participation in decision-making.
It is not clear when a legislative review could begin, or what the legal implications would be if the new government overturned existing approvals, such as Northern Gateway's – or changed the rules for existing reviews, such as Kinder Morgan's or TransCanada Corp.'s application for Energy East, which would carry crude from Alberta to refineries and export terminals in Eastern Canada.
For its part, Kinder Morgan said it is proceeding with its application. The National Energy Board is now scheduled to make its recommendations to cabinet on the project in May.
"We look forward to briefing the new federal Liberal government about our project in the days ahead and working constructively with them to build important market access capacity while respecting the environment and First Nations," Kinder Morgan Canada president Ian Anderson said in a statement.
Once the NEB process is completed, cabinet then has three months to decide whether to accept the recommendation or deny it, said former NEB chair Gaétan Caron.
"The very notion that someone would suggest that a different process should be used – there's only one way to do that and that is to amend the National Energy Board Act, so you are talking about an act of Parliament to make any change," he said. He acknowledged that the government could simply turn down the application. Or it could turn it down and invite Kinder Morgan to resubmit an application under the new rules.
TransCanada's Energy East project faces a similar prospect of delay, as noted by former Liberal campaign co-chair Daniel Gagnier in a memo to the company that resulted in his 11th-hour resignation from the election team.
Though the final application has been delayed, TransCanada said Energy East "remains an active file" at the NEB. It, too, would be reviewed under the Conservative rules, unless the Liberal government passed legislation retroactively imposing a new regime.