The Federal Court of Appeal ruled Thursday that the regulatory review of the pipeline expansion was “impermissibly flawed” because it excluded project-related tanker traffic, Bloomberg reports.
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"Canadian court nullifies approval of Trans Mountain pipeline"
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In addition, the court found the government failed to fulfil its legal duty to consult indigenous people.
Bloomberg reports that the decision effectively halts construction of the pipeline, which has been seen as a key project for Canadian oilsands producers suffering through lower relative prices for their crude due mainly to a lack of pipelines.
It’s also a major headache for Prime Minister Justin Trudeau, whose government is purchasing the CAN$4.5 billion (US$3.5 billion) pipeline from Kinder Morgan Inc. in order to ensure its construction. About half an hour after the court issued its ruling, Kinder Morgan Canada shareholders, meeting in Calgary, voted almost unanimously to proceed with the sale.
“Within the industry, there’s frustration,” said Allan Fogwill, Chief Executive Officer of the Canadian Energy Research Institute. “It’s not clear to most proponents and customers of the pipelines: when is the approval of a project final and what more has to be done?”
Shares of Canadian oil companies fell on the prospect that the pipeline shortages that have weighed on the price of their crude will continue.
Finance Minister Bill Morneau, speaking on BNN Bloomberg television after the ruling, said the government remains committed to getting the pipeline built, arguing it’s needed to diversify exports and ease the price discount that comes from being so reliant on the US market.
Ian Anderson, President of Kinder Morgan Canada, was similarly undaunted. “We remain committed to building this project in consideration of communities and the environment, with meaningful consultation with indigenous peoples and for the benefit of Canadians,” he said in a statement.
In addition to faulting the National Energy Board report on which the government based its approval, the court said Canada “fell well short of the minimum requirements imposed by the case law of the Supreme Court” at the last stage of the consultations with indigenous people.
Thursday’s unanimous decision indicates the court is advocating for an expanded project review scope. The three judges note the National Energy Board should have included tanker traffic in its review and took issue with how the government made its decision based on the regulator’s recommendation – something Fogwill said he doesn’t believe has been brought up in previous cases.
Read the article online at: https://www.worldpipelines.com/regulations-and-standards/04092018/canadian-court-nullifies-approval-of-trans-mountain-pipeline/