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Canadian regulator overrules city to allow Trans Mountain construction to start

The National Energy Board ruled that Kinder Morgan Inc.'s Canadian unit does not have to comply with a local government's permitting process, clearing the way for the start of construction on the Trans Mountain oil pipeline expansion.

The NEB said Dec. 7 that Kinder Morgan Canada Ltd. can start construction at its Westridge Terminal in British Columbia and at another temporary site without permits from the city of Burnaby, where the work areas are. The company had filed a motion asking the board to use its constitutional authority as an agency of the federal government to allow it to start construction. Kinder Morgan argued that Burnaby had not issued a single permit more than six months after the company applied to start work.

"The National Energy Board issued an order today declaring that Trans Mountain Pipeline ULC is not required to comply with two sections of the city of Burnaby's bylaws as the company prepares to begin constructing the Trans Mountain Expansion Project," the board said in a statement posted on its website. "This decision allows the company to begin work at its temporary infrastructure site near the Westridge Marine Terminal, and some work at the Burnaby Terminal, subject to any other permits or authorizations that may be required."

The NEB said it will release its reasons for the ruling at a later date.

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Kinder Morgan Canada's Westridge Terminal in Burnaby, British Columbia, where Canada's National Energy Board has cleared expansion work to start.

Kinder Morgan Canada image

The ruling came after two days of hearings in Calgary, Alberta, in which Burnaby argued that deficiencies in Kinder Morgan's applications, not the municipal government's stated opposition to the project, caused the delays.

Kinder Morgan has warned that the delays to the project to almost triple the capacity of the Eisenhower-era line linking Alberta's oil sands with a marine terminal in British Columbia are costing as much as C$35 million per month. The Canadian government issued permits for the expansion in 2016, and construction was supposed to start in September. Work at the marine terminal is the only part of the line that has so far been cleared by the NEB.

The association representing Canada's biggest pipeline companies welcomed the news. "The Canadian Energy Pipeline Association is pleased with the National Energy Board's order declaring that Trans Mountain is not required to comply with two sections of the city of Burnaby's bylaws," the organization said in an emailed statement. "This decision is within the NEB's jurisdiction and is a positive and necessary step in advancing this critical energy infrastructure project for Canada."

The government of Alberta has been advocating for the expansion to boost exports from the oil sands. The work to double parts of the system and reactivate idled pipe would boost Trans Mountain's capacity to 890,000 barrels per day from 300,000 bbl/d.

The ruling "gets us another step closer to shovels in the ground and more markets for our energy resources — something that benefits each and every Canadian," Alberta Premier Rachel Notley said in an emailed statement. "This pipeline comes with a world-class coastal protection plan, and the resources it carries will be produced under the strongest climate change action plan in Canada, if not all of North America. We are going to continue to make sure that the moderate, progressive majority of Canadians knows why this pipeline matters."