Kinder Morgan Inc. may be forced to hold more than $1-billion in liability coverage and detail how it will offset greenhouse gas emissions associated with construction of its Trans Mountain pipeline if the project goes ahead, Canada's National Energy Board said.
The energy regulator on Wednesday floated 145 draft conditions that could apply to the contentious pipeline if it is built. The move does not signal approval of the project; it's a legally required step that informs the regulator's final recommendation to Ottawa. A decision on the project is expected next year.
"We could see more conditions attached to the final recommendation or less. It depends on what we hear in these final stages of the hearing," board spokeswoman Tara O'Donovan said. "They may look slightly different than what we're floating today."
U.S.-based Kinder Morgan is seeking permission to nearly triple capacity on the Edmonton-to-Burnaby, B.C., Trans Mountain system, to 890,000 barrels a day.
The $5.4-billion plan is supported by some of the world's largest energy companies, but it has drawn sharp criticism from environmental and local groups opposed to increased tanker traffic off the B.C. coast. More than 30 participants walked away from hearings into the project on Wednesday, calling the review process "biased" and "unfair."
Critics say the environmental impacts of oil sands development should be given equal weight to the resource's economic spinoffs in deliberations – a view the NEB has so far rejected as beyond its mandate.
The issue has emerged as a flashpoint in the federal election campaign, with NDP Leader Thomas Mulcair and his Liberal counterpart, Justin Trudeau, blaming weak oversight under Conservative Party Leader Stephen Harper for delaying new export projects.
The list of conditions published by the board on Wednesday covers a range of issues, from caribou habitat restoration to aboriginal employment and oil spill preparedness. The company must also detail a plan for providing offsets for all carbon emissions associated with project construction.
As part of a proposed financial assurance plan, the regulator said Kinder Morgan must provide a total of $1.1-billion in liability coverage to cover cleanup costs in the event of the spill. That includes $100-million in so-called "ready cash" to compensate third parties for losses and damages while insurance claims are processed, the regulator said.
By contrast, the NEB attached 209 conditions to Enbridge Inc.'s rival Northern Gateway project, including a provision to maintain $950-million in liability coverage.