TransCanada Asks Regulator to Dismiss Jurisdictional Review
Canadian pipeline company TransCanada has asked the National Energy Board (NEB) to dismiss an application from a BC environmentalist asking that the Coastal GasLink (CGL) pipeline, which would serve the Shell-led LNG Canada project in Kitimat, be treated as a federal rather than provincial undertaking.
In an August 24 letter to the board, Catharine Davis, TransCanada’s vice president, natural gas pipelines law, said that the “substantive objective” of environmentalist Michael Sawyer’s application for a jurisdictional review of Coastal GasLink “is to frustrate upstream natural gas development” in BC.
“This ulterior purpose renders the application vexatious and an abuse of process, which should lead the board to dismiss the application under its broad public interest jurisdiction,” Davis says in her letter.
Davis points out that Sawyer has had ample time to raise his jurisdictional concerns: the public process into Coastal GasLink (which Sawyer chose not to participate in) began six years ago, the project was approved four years ago, but only now is he seeking to create “uncertainty masked in a question of constitutional law.”
“While aware of the issues raised in the application for at least four years, the applicant has waited until the eve of the publicly known final investment decision (FID) date for the LNG Canada project to impact that project and associated developments,” Davis wrote. “It is not in the public interest to allow an applicant to proceed at the eleventh hour on a legal question that in effect challenges provincial competence over project assessment and approval, without that person demonstrating they have made every, or at least any, reasonable effort to participate in the provincial review process, that they raised their question within a reasonable time, and that they possess some specialized expertise or material information to illuminate the alleged flaws in the regulatory framework.”
Beyond the fact that Sawyer took an unreasonable amount of time to file his application, Davis said his application should be dismissed because the facts on which it depends – that Coastal GasLink is, indeed, directly connected to a federally-regulated pipeline system (the Nova Gas Transmission Limited, or NGTL, system in Alberta) – are hypothetical.
Based on the known facts, she said, Coastal GasLink is a provincial work with no connection to a federal work, and the public interest is not served by the board conducting a lengthy and complex jurisdictional inquiry “based on speculation about what facts may or may not exist in the future.”
“While CGL has expressed its expectation that the project will be connected to the NGTL system in the future, contrary to statements in Mr. Sawyer’s application there is no existing or applied-for pipeline to connect the project to the NGTL system,” Davis wrote. And even if CGL is ultimately connected to the NGTL system, she said, the two systems will serve different functions: CGL will operate as “an express single-purpose pipeline for one downstream provincial facility, the LNG Canada project” while NGTL would continue to function as a complex and integrated network of more than 1,000 receipt points and over 300 delivery points moving western Canadian gas to markets throughout Canada and the US.
“NGTL’s function would not be integrated with and would not be dependent on (CGL), and CGL would not provide the same services as NGTL.”
Allowing Sawyer’s application to proceed, Davis said, would reward strategic litigation – litigation launched for an ulterior purpose – cause public, regulatory and investment uncertainty and put “real, tangible, long-term benefits for communities and First Nations at risk.”
The estimated construction benefits of the Coastal GasLink project include the creation of as many as 2,500 construction jobs for four years and more than $1bn worth of conditionally-awarded or anticipated construction contracts for local communities and First Nations. Over the 30-year operational life of the pipeline, it would generate $21mn/year in property taxes to municipalities and $42mn/year in operational expenditures.
Davis also offered other reasons Sawyer’s application should be rejected, including its timing and purpose, Sawyer’s lack of any direct interest in the project or specialised expertise in constitutional law and his lack of any material new facts that were not previously known to provincial regulators.
“For all of the above reasons, CGL submits that the board should exercise its broad public interest jurisdiction to decline to hear the application without any further process,” Davis concludes.
The full text of TransCanada’s letter to the NEB can be downloaded here. Sawyer has until September 7 to reply to its contents.