Kinder Morgan Canada Ltd. does not have to abide by some bylaws in Burnaby, B.C., as the company starts construction on its contentious Trans Mountain oil pipeline, Canada's top energy regulator says.
The National Energy Board said Thursday that the company is not required to comply with sections of the city's bylaws over preliminary planning approvals and tree-cutting permits for work at its Burnaby storage terminal and a nearby temporary infrastructure site.
Kinder Morgan had asked the regulator to intervene after it complained about delays obtaining local permits needed to proceed with construction on the $7.4-billion pipeline. It said the city's refusal to issue permits raised "serious issues of jurisdiction" and that the company objected on constitutional grounds.
In a brief statement, the board said the decision allows the company to start work on both sites, "subject to other permits and authorizations that may be required."
The decision is a small victory for Kinder Morgan, although the NEB has yet to decide whether to establish a special panel to quickly resolve future permitting issues as per the company's request.
Kinder Morgan has said it needs clarity on permitting before ramping up spending on the 590,000-barrel-a-day expansion, while warning that startup could be delayed by at least nine months, past September, 2020.
The company welcomed the decision.
"It reinforces the view that this federally approved project is in the national interest," Kinder Morgan president Ian Anderson said in a statement.
The City of Burnaby and its mayor, Derek Corrigan, have been vocal opponents of the pipeline and have joined a separate legal challenge in the Federal Court of Appeal that also involves other municipalities, First Nations and environmental groups.
But Mr. Corrigan has also insisted the city has simply followed its normal permitting process. He said the NEB decision was frustrating, but not unexpected.
"It's been apparent that the National Energy Board is dedicated to ensuring that these projects go ahead and are prepared to eliminate any obstacle that gets in their way," he said, adding that he's concerned this won't be the last instance of the NEB overriding his city.
"They say that they're only taking these two areas and eliminating Burnaby's input, and other bylaws have to be obeyed, so they aren't able to proceed with impunity," he said. "But it doesn't bode well for any other bylaws being applied."
He said the city is awaiting the board's full reasons to assess the impact of the decision before considering whether to appeal.
Alberta Premier Rachel Notley, whose government has intervened in both the NEB hearings as well as the Federal Court of Appeal case, said the ruling was a good step forward.
"It probably means that the NEB has accepted our argument that this is a project that is in the national interest and, as a result, we can't have individual jurisdictions interfering with it," Ms. Notley told reporters in Edmonton.
Ms. Notley's support for the pipeline has put her at odds with her NDP counterparts in B.C., where the ruling New Democrats came to power earlier this year on a promise to do what they could to block the project.
B.C. Environment Minister George Heyman said he was "shocked" by the NEB ruling.
"And frankly, on behalf of British Columbians, I'm angry," he said in an interview.
"The NEB placed a condition on Kinder Morgan's project that they had to get permits from local governments. They've now changed their own conditions for this project. That's exactly the kind of interference and one-sidedness in this process that led us to the Federal Court of Appeal to fight this project."
Mr. Heyman noted that the expansion still requires more than 1,000 permits from the B.C. government, and he's worried how the NEB will handle subsequent permitting disputes.
With a report from James Keller in Vancouver