LNG Canada FID Faces Fresh Hurdle
A British Columbian (BC) environmentalist launched July 30 a challenge to Coastal GasLink (CGL), the TransCanada pipeline that will feed the Shell-led LNG Canada project in Kitimat, BC. He said it should be under federal, not BC, jurisdiction.
In a letter to the National Energy Board (NEB), William Andrews, a Vancouver lawyer acting on behalf of Michael Sawyer, asked that the NEB recognise that CGL is within federal jurisdiction and is regulated by the NEB, not the BC Oil & Gas Commission and the BC Environmental Assessment Office, both of which have approved the project.
“The purpose of TransCanada’s proposed Coastal GasLink pipeline is to move natural gas from the [Western Canadian Sedimentary Basin, or WCSB] to international markets via LNG export from the coast of BC,” Andrews wrote in his letter. “While CGL is situated wholly within BC, CGL is functionally integrated with the interprovincial/international NGTL (Nova Gas Transmission Limited) system.”
That functional integration, combined with the fact that TransCanada maintains common management, control and direction of both CGL and NGTL, supports Sawyer’s conclusion that CGL is, in fact, part of TransCanada’s federally regulated NGTL system and should, therefore, be regulated by the NEB, Andrews said in the application to the board.
Sawyer made a similar argument in 2015 regarding TransCanada’s Prince Rupert Gas Transmission (PRGT) project, which would have supplied feed gas to the Petronas-led Pacific Northwest LNG project in Prince Rupert.
The NEB initially refused to take jurisdiction over PRGT, which led Sawyer to file an appeal with the Federal Court of Appeal. In July 2017, the federal court referred the matter back to the NEB, finding that the board had “erred in its constitutional analysis” that it did not have jurisdiction but did not offer an opinion on whether PRGT was, in fact, within federal jurisdiction.
A month after the court’s referral, Petronas cancelled the Pacific Northwest LNG project, and in October 2017 the NEB dismissed Sawyer’s PRGT application as moot, given the cancellation.
Although LNG Canada has not commented on Sawyer’s application, it remains conceivable that the jurisdictional dispute could impact the timing of the final investment decision on the $40bn project. That decision is widely expected by the end of September; and has to be made by the end of November if it is to enjoy the fiscal incentives announced by the BC government in March.
According to a spokesman at CGL, the NEB has yet to issue a process letter in the matter, which will establish the procedure by which parties will make submissions to the NEB. That letter, the CGL spokesman said, might not be issued for a couple of weeks, based on past experiences, and until it is, the company and its TransCanada parent are saying only that they are “reviewing the application and will respond through the National Energy Board as appropriate.”
Once the process letter is issued, a legal source familiar with NEB procedures told NGW, TransCanada and other interested parties will have a set period to file written submissions, after which Sawyer will have the opportunity to respond.
The NEB, the source said, “will then take as much time as it needs to make a decision,” noting that it could be six to eight weeks from now before the board decides. “After that, parties will have the ability to seek to appeal the decision to the Federal Court of Appeal,” the source said. “That process would take several more months.”
If the NEB ultimately takes jurisdiction, the CGL project could be subjected to a full federal environmental review, a process which could take months.