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Enbridge Northern Gateway Project Joint Review Panel

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1 Principles, considerations, and disposition

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© Her Majesty the Queen in Right of Canada as represented by the National Energy Board 2013

Cat. No. NE23-174/2013E-PDF

ISBN 978-1-100-22968-3

This report is published separately in both official languages and is available in multiple formats. Copies are available upon request from:

The Publications Office

National Energy Board

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Calgary, Alberta, T2P 0X8

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Printed in Canada

Sources for figures

All maps, illustrations, and graphs in this volume are based on evidence provided by Northern Gateway during the hearing process

Contents

1 Principles, considerations, and disposition

1.1 The project

1.2 The review process

1.3 The Panel's approach to sustainable development

1.4 A precautionary approach

1.5 Improving the project design through regulatory review and environmental assessment

1.6 Conditions set out by the Panel

1.7 Recommendations

1 Principles, considerations, and disposition

The first volume of the Joint Review Panel report, Connections, summarizes the Panel's conclusions and recommendations for the Enbridge Northern Gateway Project. This second volume, Considerations, provides a more detailed description of the issues and reasoning behind the conclusions and recommendations. The Joint Review Panel and its process are described in more detail in Appendix 3.

Many Aboriginal and non-Aboriginal people described the complex connections between land, sea, air, and the people who use these natural resources. They asked the Panel to consider the complex economic, social, and environmental connections that could be affected if the Enbridge Northern Gateway Project is built. The Panel assessed the proposed facility design and operation to determine whether the project could be constructed and operated in a safe, reliable, and environmentally-responsible manner. The Panel considered how negative effects could be prevented or minimized, and how benefits could be realized and maximized.

Ultimately, the Panel is required to make a recommendation on whether the project is in the public interest. In other words, would Canada and Canadians be better off, or worse off, if the project is built and operated? The Panel's consideration of the Canadian public interest is described in Chapter 2.

Figure 1.1 Proposed Pipeline Route

The Alberta portion of the proposed pipeline route is about 520 kilometres in length and crosses more than 360 watercourses. About half of the Alberta portion of the route would cross private land and half would cross provincial or federal Crown lands. The British Columbia portion of the proposed pipeline route is about 660 kilometres in length and crosses about 850 watercourses. More than 90 per cent of the British Columbia portion of the route would be on provincial Crown lands. Much of the route in both provinces would cross lands currently and traditionally used by Aboriginal groups.

Figure 1.1 Proposed Pipeline Route

1.1 The project

Northern Gateway Pipelines Limited Partnership (Northern Gateway) proposed to build and operate a terminal at Kitimat, British Columbia, and two pipelines between Bruderheim, Alberta, and Kitimat (Figure 1.1). A primary purpose of the project would be to provide access for Canadian oil to international markets including existing and future refiners in Asia and the United States West Coast. The project would also be intended to provide greater diversification in the supply of condensate used for diluting heavy oil.

The total estimated capital cost of the project is $7.9 billion, which includes $500 million for associated marine infrastructure. Northern Gateway said that the project would be completed by late 2018.

The three major components of the project are:

  • one 914 millimetre (36 inch) outside diameter export pipeline that would carry an average of 83,400 cubic metres (525,000 barrels) per day of oil products west from Bruderheim to Kitimat;
  • a parallel import pipeline, 508 millimetres (20 inches) in outside diameter, that would carry an average of 30,700 cubic metres (193,000 barrels) of condensate per day east from Kitimat to the terminal at Bruderheim; and
  • a terminal at Kitimat with 2 tanker berths, 3 condensate storage tanks, and 16 oil storage tanks.

Appendix 2 provides a more detailed description of the project.

The Joint Review Panel Agreement and the Panel's List of Issues defined the scope of the hearing. The Panel considered the project's environmental effects, the risks of accidents, effects to local economies and traditional resource use, economic benefits, the need for the project, the safety of facilities, and marine transportation, among many other factors.

In the early stages of the public hearing, the Panel heard from many people who said that the Panel should consider the environmental impacts of bitumen extraction, including the production of greenhouse gases and related effects on climate change. The Panel considered the degree of connection between the Enbridge Northern Gateway Project and upstream oil sands development, downstream air emissions from bitumen upgrading, and eventual use of petroleum products to be transported by the project. The Panel concluded that connections to oil sands development were not sufficiently direct to allow consideration of their environmental effects in its assessment of the project, other than in its consideration of cumulative effects. The Panel also concluded that downstream effects would be hypothetical and of no meaningful utility to the Panel's process. The Panel considered emissions arising from construction activities, pipeline operations, and the operation of tankers in Canadian waters to be within the scope of its assessment.

1.2 The review process

The Minister of the Environment and the Chair of the National Energy Board established the Joint Review Panel under the Canadian Environmental Assessment Act and the National Energy Board Act. The National Energy Board appointed two of its members as Panel members. The Minister of the Environment selected the third member who was subsequently appointed as a temporary member of the National Energy Board. The Panel was directed to conduct an environmental assessment of the project and submit a report recommending whether or not the project was in the public interest. In its report, the Panel was to set out terms and conditions necessary or desirable in the public interest. The Panel was also directed to set out its rationale, conclusions, and recommendations relating to the environmental assessment of the project.

As an independent expert tribunal, the Panel believed that it was important to gain a broad perspective on all aspects of the proposed project before making its recommendation. This included technical, as well as human and cultural, aspects of the project. The Panel heard local, regional, and national perspectives about the project from affected individuals, Aboriginal groups, and other groups along the proposed pipeline and shipping routes.

The Panel sought at all times to ensure that the joint review process was fair, open to the public, safe, respectful, and transparent. The Panel designed and implemented a hearing process that encouraged and supported meaningful public and Aboriginal participation. This included the collection of oral traditional evidence, such as Aboriginal community knowledge, and the testing of the technical evidence filed during the review process. People were able to share their information with the Panel orally, in writing, or using both methods.

In preparation for the hearing process, the Panel's Secretariat staff hosted 35 public information sessions and 32 online workshops to share procedural information and answer questions about how to participate in the hearing process.

Public hearings for the proposed project attracted a high level of public interest. There were 206 intervenors, 12 government participants, and 1,179 oral statements before the Panel. Over 9,000 letters of comment were received. The Panel held 180 days of hearings, of which 72 days were set aside for listening to oral statements and oral evidence. Most of the hearings were held in communities along the proposed pipeline corridor and shipping routes. The entire record of the proceeding is available on the National Energy Board website.

The Panel acknowledges and thanks all parties for their contributions to the Enbridge Northern Gateway Project proceeding. There was a high level of participation by individuals and groups who had never before appeared in front of a regulatory panel. The Panel acknowledges the challenge of dealing with large volumes of technical evidence, particularly when additional information was submitted during the review process in response to questioning. The Panel sincerely appreciates the time and effort that people invested in their submissions and testimony. Many adjusted personal schedules and travelled long distances to express their views on the proposed project.

1.3 The Panel's approach to sustainable development

If approved and built, the Enbridge Northern Gateway Project could operate for 50 years or more. The Panel heard from participants that it must consider the project's implications for future generations. People expressed a passionate commitment and sense of stewardship for the environment and told the Panel how important it was to think about the long term. In making its public interest recommendation on the project, the Panel was mindful of the implications to future generations of Canadians, and of the need to integrate current environmental, social, and economic considerations.

One of the purposes of the Canadian Environmental Assessment Act, 2012 is to encourage federal authorities to take actions that promote sustainable development and, thereby, achieve or maintain a healthy environment and a healthy economy. Under the National Energy Board Act, the Panel must determine whether the project is in the public interest based on the evidence put before it. These two objectives are complementary and both relate to sustainable development.

Hearing directly from those who may be affected by the project is key to any consideration of sustainable development. The Panel designed the public hearing to support and encourage public participation. The public hearing design included:

  • public input on the draft List of Issues, additional information requirements, and locations for oral hearings;
  • oral comments on the process for hearings heard in Whitecourt, Kitimat, and Prince George;
  • public information sessions held in 16 communities;
  • process advisors available to assist participants throughout the hearing process;
  • community hearings for oral statements and oral evidence held in 21 communities to hear from those potentially affected by the project, and to enable Elders and First Nations to share their oral history and traditional knowledge;
  • online workshops to assist participants in preparing for oral statements, questioning of witnesses, and participation in final argument;
  • final hearings for questioning held in Edmonton, Prince George, and Prince Rupert;
  • hearings for final argument held in Terrace;
  • transcripts and documents that were all publicly available on the National Energy Board website; and
  • audio from the hearings was webcast live.

In order to optimize opportunities for individuals and groups to present their evidence and opinions to the Panel, the Panel incorporated remote participation through video and telephone links into the hearing room during all aspects of the oral hearings, including questioning. It is the Panel's view that this approach was effective. Many participants, including expert witnesses, commented that they found the remote participation options useful and effective. This approach provided all participants with opportunities to participate and not be excluded from giving evidence and opinions due to travel, finances, work, and life commitments.

1.4 A precautionary approach

The Panel used a careful and precautionary approach in its assessment of the project. Precautionary aspects of the Panel's report and recommendations were guided by five principles:

  • Precaution is an element of risk detection, risk reduction, and risk management.
  • Precautionary mitigation should be based on scientific and technical information made available and tested through a public hearing process.
  • Precaution is appropriate when potential environmental effects are difficult to predict accurately due to natural variability and incomplete knowledge of natural processes.
  • Continuing community engagement and follow-up environmental monitoring can help to reduce scientific uncertainty and unnecessary precaution, over time.
  • A public and transparent assessment process improves the quality of a precautionary approach.

1.5 Improving the project design through regulatory review and environmental assessment

Northern Gateway refined the design of the project during the review process in response to participants' views, questions, and advice. New information and analysis produced during the environmental assessment also allowed Northern Gateway, the public, and the Panel to identify and evaluate new and innovative mitigation measures.

The assessment of the Enbridge Northern Gateway Project involved predicting complex biophysical system behavior years into the future. An element of uncertainty was inevitable and had to be accommodated in the Panel's conclusions and recommendations. Some precautionary conditions set out by the Panel would require ongoing monitoring and research to help reduce uncertainty. Examples include prevention and mitigation of potential undesirable project effects on old growth forests, wetlands, caribou, grizzly bear, and marine mammals.

The Panel did not need the final design details of the Enbridge Northern Gateway Project to be presented during the hearing. Final engineering would commence if the project receives certificates of public convenience and necessity, and if the company decides to proceed with the project subject to all required terms and conditions. The Panel acknowledges that many final engineering details can only be determined after the Panel's process is concluded and project construction has begun in the field.

Through Northern Gateway's application, responses to information requests, questioning, reply, and final argument, the Panel has received sufficient detail to complete a comprehensive and precautionary assessment of the proposed project. The Panel is of the view that follow-up and monitoring programs, as set out in the Panel's conditions, would minimize adverse project impacts on people, communities, and the environment, and would support improvements to future assessments.

Northern Gateway has proposed mitigation measures that go well beyond those typically proposed for pipeline projects. An example is the funding of research chairs and the vision for a collaborative marine shipping community through the proposed Fisheries Liaison Committee (see Chapter 9 for details). The Panel finds that these types of measures would respond, to some extent, to society's broader expectations of industry.

1.6 Conditions set out by the Panel

The National Energy Board Act requires the Panel to set out conditions that it considers necessary or desirable in the public interest, should the Governor in Council direct the National Energy Board to issue certificates to authorize the project. The purpose of conditions is to mitigate potential risks and effects associated with the project so that the project would be designed, constructed, and operated in a safe manner that protects human health and the environment.

The Panel sets out 209 conditions in Appendix 1. The conditions address all aspects of the proposed project, including potential risks associated with the oil pipeline, the condensate pipeline, the Kitimat Terminal, and associated activities and facilities. The Panel's conditions incorporate all of Northern Gateway's voluntary commitments. During the hearing, the Panel made all of its potential conditions available for review and considered all comments received, before finalizing the conditions.

If the Governor in Council approves the Enbridge Northern Gateway Project, the National Energy Board would issue certificates of public convenience and necessity for the oil pipeline and the condensate pipeline. The certificates would be subject to the terms and conditions set out in this report, unless the Governor in Council orders the National Energy Board to reconsider any of them. If ordered to reconsider any condition, the National Energy Board would prepare a report either confirming the condition or replacing it with another one.

Any commitments made by Northern Gateway in its application, or in submissions or testimony during the public hearing, would become regulatory requirements attached to the certificates. A number of conditions would specifically require Northern Gateway to implement its commitments relating to marine navigation safety measures and the types of tankers that would access the oil and condensate terminal in Kitimat. These conditions would take effect through the certificates of public convenience and necessity authorizing the operation of the marine terminal and pipelines.

If the project is approved, and Northern Gateway decides to proceed, it would be required to comply with all conditions that are set out in the certificates. Some conditions require third party review of certain programs or plans that would be filed by Northern Gateway. The National Energy Board would monitor and enforce compliance during the lifespan of the project through audits, inspections, and other compliance and enforcement tools. Documents filed by Northern Gateway in relation to condition compliance, and related National Energy Board correspondence, would be available to the public in the project registry on the National Energy Board website.

1.7 Recommendations

In its application, Northern Gateway asked for:

  • a certificate of public convenience and necessity pursuant to section 52 of the National Energy Board Act, authorizing the construction and operation of the oil pipeline and associated facilities, including tankage and terminal facilities at Kitimat;
  • a certificate of public convenience and necessity pursuant to section 52 of the National Energy Board Act, authorizing the construction and operation of the condensate pipeline and associated facilities, including tankage and terminal facilities at Kitimat;
  • an order pursuant to Part IV of the National Energy Board Act approving the toll principles applicable to service on each of the oil and condensate pipelines, including tankage and the terminal at Kitimat; and
  • such further and other related relief as Northern Gateway may request or the National Energy Board may deem appropriate pursuant to section 20 of the National Energy Board Act.

The Panel was satisfied that the proposed Enbridge Northern Gateway Project is, and will be, required by the present and future public convenience and necessity, taking into account the terms and conditions set out in Appendix 1, including all commitments made by Northern Gateway during the hearing process. This conclusion reflects the Panel's consideration of the entire record of the Northern Gateway proceeding, including, but not limited to, environmental effects to be taken into account under section 5 of the Canadian Environmental Assessment Act, 2012. Our reasoning is set out in the various chapters of this volume.

The Panel recommends that the Governor in Council find that the two cases of significant adverse environmental effects are justified in the circumstances. The Panel's environmental assessment findings are summarized in Chapter 2 and are detailed in Chapter 8.

Therefore, the Panel recommends to the Governor in Council that certificates of public convenience and necessity, incorporating the terms and conditions in Appendix 1, be issued pursuant to Part III of the National Energy Board Act.

The Panel finds that the toll principles are acceptable for developing tolls for each pipeline in a later Part IV application, subject to the Panel's comments and conditions.

Finally, the Panel finds it appropriate for Northern Gateway to be designated a Group 1 company, and orders that it be so designated.

Joint Review Panel

Sheila Leggett, Chairperson
Kenneth Bateman, Member
Hans Matthews, Member

Calgary, Alberta, December 2013

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Date Modified:
2013-12-19