Canada Gazette, Part I, Volume 152, Number 11: ORDERS IN COUNCIL
March 17, 2018
NATIONAL ENERGY BOARD
NATIONAL ENERGY BOARD ACT
Order — Certificate of Public Convenience and Necessity GC-128 to NOVA Gas Transmission Ltd. to operate the Albersun Pipeline Asset Purchase Project
P.C. 2018-191 March 4, 2018
Whereas, on April 27, 2016, NOVA Gas Transmission Ltd. (
"NGTL") applied to the National Energy Board (
"Board") pursuant to Part III of the National Energy Board Act (
"Act") for a certificate of public convenience and necessity to operate the Albersun Pipeline Asset Purchase Project (
Whereas NGTL obtained leave from the Board on December 14, 2017 to purchase the Albersun Pipeline Asset and NGTL intends to operate the Project as part of NGTL's interprovincial pipeline system;
Whereas the Board held a public hearing on NGTL's application and heard submissions from government, industry and Indigenous participants using written submissions and oral traditional evidence;
Whereas the Governor in Council accepts the Board's recommendation that the Project will be, if NGTL complies with the terms and conditions set out in Appendix II of the Board's Report of December 2017 entitled NOVA Gas Transmission Ltd. GHW-001-2016, required by the present and future public convenience and necessity and will not likely cause significant adverse environmental effects;
Whereas the Governor in Council, having considered Indigenous concerns and interests identified in the Board's report, is satisfied that the consultation process is consistent with the honour of the Crown and that the concerns and interests have been accommodated;
Whereas the Governor in Council consents to NGTL's occupation of Fort McMurray #468 Indian Reserve lands for the purpose of the Project pursuant to section 78 of the Act;
And whereas the Governor in Council considers that the Project would contribute to the safe operation of pipeline infrastructure for natural gas transmission within the Fort McMurray area and Northeast Alberta;
Therefore, on the recommendation of the Minister of Natural Resources, pursuant to section 54 of the National Energy Board Act, Her Excellency the Governor General in Council directs the National Energy Board to issue Certificate of Public Convenience and Necessity GC-128 to NOVA Gas Transmission Ltd. for the Albersun Pipeline Asset Purchase Project, subject to the terms and conditions set out in Appendix II of the National Energy Board Report of December 2017 entitled NOVA Gas Transmission Ltd. GHW-001-2016.
(This note is not part of the Order.)
Proposal and objective
This order in council is required pursuant to section 54 of the National Energy Board Act (NEB Act) to direct the National Energy Board (NEB or Board) to issue Certificate of Public Convenience and Necessity GC-128 (Certificate) to NOVA Gas Transmission Ltd. (NGTL) for the operation of the Albersun Pipeline, an existing 179-kilometre (km) natural gas pipeline and associated facilities, in Northeast Alberta. This follows the decision of the Board on December 14, 2017, granting NGTL leave to purchase the pipeline from Suncor Energy Logistics Corporation (Suncor) and recommending that the Certificate be issued.
Suncor, a corporation incorporated under the laws of Alberta, owns and operates a natural gas pipeline in northeastern Alberta (Suncor Pipeline), which is subject to provincial jurisdiction and regulated by the Alberta Energy Regulator (AER). Some sections of the Suncor Pipeline have been operating for over four decades.
NGTL, a wholly owned subsidiary of TransCanada PipeLines Limited (TransCanada), owns the NGTL System, an extensive natural gas pipeline system comprising approximately 24 500 km of pipeline, associated compression and other facilities located in Alberta and British Columbia. The NGTL System gathers and transports natural gas produced in the Western Canadian Sedimentary Basin for delivery in Canada and the United States. The NGTL System is regulated by the NEB.
On November 14, 2014, NGTL and Suncor entered into a transfer agreement for NGTL to purchase the majority of the Suncor Pipeline, referred to as the Albersun Pipeline. The 179-km Albersun Pipeline interconnects with the NGTL System and is currently used by NGTL to deliver sweet natural gas to Fort McMurray, the hamlet of Anzac, and other small delivery customers in the Fort McMurray area through a
"transportation by others" arrangement with Suncor. Pipeline sections retained by Suncor after the sale consist of four short segments located near Suncor facilities at Mildred Lake, at Gregoire Lake near Anzac, and at Hangingstone.
On April 27, 2016, NGTL filed an application asking the Board to
- grant leave to NGTL to purchase the Albersun Pipeline from Suncor, in accordance with the transfer agreement, pursuant to paragraph 74(1)(b) of the NEB Act;
- issue a report recommending the issuance of a certificate, pursuant to section 52 of the NEB Act, to authorize the continued operation of the Albersun Pipeline following the transfer, as well as its physical isolation from a provincially regulated pipeline owned by Canadian Natural Resources Limited (CNRL) that currently connects to the Albersun Pipeline at its southern terminus (located immediately south of NGTL's Crow Lake Sales Lateral tie-in);
- authorize NGTL, pursuant to section 59 of the NEB Act, to include the purchase price of the Albersun Pipeline plus adjustments in the NGTL System rate base, effective upon the closing of the sale;
- grant leave to NGTL to open the Albersun Pipeline pursuant to section 47 of the NEB Act; and
- grant such further and other relief as NGTL may request or the Board may consider appropriate.
The cumulative effect of these decisions would be to integrate the Albersun Pipeline into the NEB-regulated NGTL System. All of the decisions are within the authority of the Board under the NEB Act, except for the issuance of the Certificate, which must be directed by the Governor in Council after the Board has made its recommendation.
On December 14, 2017, the NEB issued Report GHW-001-2016 (Report) recommending that a certificate be issued for the Albersun Pipeline subject to 16 conditions, including those related to safety and consultations with Indigenous peoples. The NEB also decided to grant NGTL the authorizations sought in its application, conditional on the issuance of the Certificate being authorized by the Governor in Council. In determining whether the Albersun Pipeline Asset Purchase Project (Project) was in the public interest, the Board considered the issues listed in Appendix I of its Report, including the potential impacts of the Project on Aboriginal interests, the environmental and socio-economic effects of the Project, safety and security during construction and operation of the Project, and the need for the Project.
For the Albersun Project, NGTL implemented a phased stakeholder engagement program that began in April 2015 and is ongoing. The three-phase public consultation program includes introducing the Project to key stakeholders, providing stakeholders with regulatory schedule updates, responding to and incorporating (where possible) stakeholder concerns into purchase implementation, and communicating material changes to the Albersun Pipeline purchase. Before and after the application, NGTL has engaged with landowners, community members, municipal leaders, elected officials, government agencies, non-governmental organizations and emergency responders.
On November 21, 2016, the Board issued Hearing Order GHW-001-2016, establishing a public hearing through which the Board would consider the application. The Hearing Order provided an opportunity for intervenors to file written evidence, implemented a written information request process to test all filed evidence and allowed for oral cross-examination. The Hearing Order also provided opportunities for Indigenous intervenors to provide oral traditional evidence and for all intervenors and NGTL to provide written arguments. Pursuant to section 55.2 of the NEB Act, the Board received and considered a total of three applications to participate (ATP) and one late ATP in the hearing from Bigstone Cree First Nation (Bigstone). The Board granted standing to participate to all of those who applied.
Of these four hearing participants, three participated as intervenors, including one Indigenous group (Bigstone), one commercial party (ATCO), and one provincial government department (Alberta Ministry of Justice). The remaining commercial party (Suncor), participated in the hearing as a commenter. On February 7, 2017, the Board, through its Participant Funding Program, which is administered at arm's length, made available $80,000 to facilitate participation in the public hearing for the Project. One eligible application was received, and the Board allocated a funding award of $30,000 to Bigstone Cree First Nation.
NGTL identified 11 First Nations groups and organizationsfootnote 1 for consultations on the Project. The Aboriginal engagement process used for the Project was guided by TransCanada's Aboriginal Relations Policy, which seeks to engage with all Aboriginal communities early and often. Under this policy, TransCanada shares project information, gathers input from Aboriginal communities and responds to questions. For the operations phase, NGTL stated it would use TransCanada's Public Awareness Program and a proactive approach to Aboriginal community engagement. The approach will focus on maintaining ongoing relationships with Aboriginal communities in the area of the Albersun Pipeline through TransCanada's regionally based Aboriginal regional liaisons. With the exception of Bigstone Cree First Nation, no Indigenous group applied to the NEB to participate in the hearing process, or indicated to the Board outstanding Project-related concerns. The Albersun Pipeline's right-of-way is not located on federal Crown lands; 148 km (83%) is located on provincially owned Crown lands, and 25 km (14%) on privately owned freehold lands.
Approximately 6 km of the Albersun Pipeline is located on the reserve lands of Fort McMurray First Nation 468 (FMFN 468). Use of the lands is subject to a permit under section 28 of the Indian Act (section 28 permit), which is currently being updated by Suncor and FMFN 468 so that at the closing of the Albersun Pipeline sale transfer, the section 28 permit will be assigned to NGTL. FMFN 468 has approached NGTL regarding an opportunity to enter into short- and long-term crossing agreements. NGTL explained that since the Project would not become part of the NGTL System until transfer of the assets is complete, discussions about crossing agreements would not be possible until such time. Section 78 of the NEB Act requires Governor-in-Council consent for the occupation of reserve land by a company. This consent is granted under the present order in council, taking into account that the Albersun Pipeline is an existing operating pipeline and that FMFN 468 has secured terms, including compensation, for the Albersun Pipeline's use of FMFN 468 reserve land.
Bigstone Cree First Nation
On November 28, 2016, the Board received a letter from Bigstone requesting a late ATP. In the letter, Bigstone stated that it was not initially identified by NGTL as a group to be consulted and as a result, obtained very late notice about the Project, which it believes will directly and adversely affect Bigstone.
In its letter of December 6, 2016, the Board granted Bigstone standing as an intervenor, stating that there was no prejudice caused to the other applicants or NGTL by granting the late request. On January 17, 2017, Bigstone filed its written evidence with the Board, and on May 12, 2017, and June 14, 2017, the Board heard oral traditional evidence from Bigstone in Wabasca, Alberta. On July 21, 2017, Bigstone filed its final argument with the Board. Topics that were covered by Bigstone Elders during the oral traditional evidence session included, among other things, cumulative impacts on traditional land and resource use; lack of benefits from development of pipelines within Treaty 8 territory; current and past traditional and cultural uses of the land in and around the Wabasca, Pelican River and Athabasca River areas; and reclamation concerns after the transfer of assets.
Bigstone expressed concerns during the hearings and filed written arguments regarding the following issues.
Traditional land use, cumulative impacts and environmental studies
Bigstone argued that the Project triggers a new NEB approval and a process of consultation and accommodation, which allows for the assessment and accommodation of Bigstone's traditional land use studies and other concerns surrounding specific and cumulative impacts arising from the Project. Bigstone proposed that, should the Project be recommended for approval, the Board impose a condition providing Bigstone with the opportunity to conduct its own studies or independently verify the information contained in NGTL's Environmental and Socio-economic Assessment (ESA) and Environmental Protection Plan (EPP). Bigstone discussed various cumulative effects from existing infrastructure and resource projects in its traditional area. In Bigstone's view, these effects decrease the ability of Bigstone members to use the land for harvesting and other cultural purposes. Given that NGTL had indicated in its application that approximately 74 km of the pipeline are in caribou range, Bigstone raised concerns regarding potential Project impacts on caribou habitat and migration paths. In response, NGTL stated that it will review and consider Bigstone's written evidence and oral traditional evidence, and will respond to the issues raised including how NGTL has addressed or will address the concerns through the process outlined by the NEB.
Consultations, Aboriginal rights and benefits
Bigstone stated that while the Project was not within its traditional territory, it was part of the band's traditional area, and that members of its First Nation have been actively trapping in the area for generations. Furthermore, Bigstone noted that the Project is within Treaty 8, of which Bigstone is a member, and its treaty rights extend beyond the written terms of the Treaty to include self-governance rights and the right to promote environmental conservation, in order to ensure that Bigstone can continue to exercise its rights within its territory. Bigstone claimed that the Project has impacts on its territory, within the context of cumulative effects arising from existing and proposed activities. As a result, Bigstone is owed a constitutional duty of consultation by the Crown, and that neither NGTL nor the Crown had meaningfully engaged with Bigstone in respect of the proposed Project.
In oral traditional evidence presented to the NEB, Bigstone stated its concerns with the Project are part of its broader concerns regarding benefit flowing from pipeline development within Treaty 8 territory. Bigstone inquired as to whether there were existing contracts in place for the Albersun Pipeline. In response, NGTL noted that the current operating licence for the Project by the Alberta Energy Regulator does not contain any outstanding conditions related to agreements with Aboriginal groups or Bigstone.
NEB views and recommendations
The Board has considered the nature of the interests and the anticipated effects, and the fact that the Project as proposed by NGTL is a purchase transaction of an existing and operational pipeline and facilities that NGTL intends to continue to operate. The Board has evaluated the consultation undertaken with respect to this Project, including the mandated consultation performed by NGTL, in light of the Project's nature and anticipated effects. The Board has also considered the mitigation measures proposed by NGTL to address the various concerns and potential effects and the conditions the Board proposes, should the Project be approved.
In its Report, the Board noted that Bigstone was provided with participant funding to assist it in participating in the Board's process. The Board also noted NGTL's commitment to continuing proactive Indigenous community engagement during the operations phase of the Project, with a focus on maintaining ongoing relationships with Indigenous communities in the area of the Albersun Pipeline. The NEB's recommendation for the Certificate includes Condition 7, requiring NGTL to file an Aboriginal Engagement Report 12 months from the effective date of the Certificate. In addition to the company's engagement with Bigstone, the report must include a summary of the concerns raised by Aboriginal groups, a description of how NGTL has addressed or will address the concerns raised, a description of any outstanding concerns, and either a description of how NGTL intends to address any outstanding concerns or an explanation as to why no further steps will be taken.
The Board noted in its Report that any potential Project impacts on the interests, including rights, of affected Aboriginal groups, including Bigstone, are likely to be minimal and can be effectively addressed, given that the Project involved a purchase transaction of an existing operating pipeline section and that NGTL will comply with regulations, environmental and emergency management plans and detailed mitigation measures. In addition, the Board is of the view that there has been adequate consultation and accommodation for the purposes of the Board's decision to grant NGTL leave to purchase the Albersun Pipeline in this case, and that there has been adequate consultation and accommodation for the purpose of the Board's recommendation on this Project. As a result, the Board is of the view that the Crown duty to consult under section 35 of the Constitution Act, 1982 has been met, such that a decision granting leave to purchase the Albersun Pipeline and a recommendation to issue a certificate for the operation of the Albersun Pipeline in this case are in keeping with the honour of the Crown.
The Board is further of the view that NGTL has undertaken an appropriate level of public engagement, commensurate with the setting, nature and magnitude of the Project, and that NGTL's public engagement has met the expectations set out in the NEB Filing Manual. The Governor in Council, having considered Indigenous concerns and interests identified in the Board's Report, is satisfied that the consultation process is consistent with the honour of the Crown and that the concerns and interests have been accommodated.
Market and economic issues
In the Board's view, the evidence it was presented demonstrated adequate supply and markets to support the ongoing use of the Albersun Pipeline. In addition to supply and market outlooks, the NEB accepted NGTL's evidence that the purchase of the Albersun Pipeline is the lowest-cost solution for providing delivery service to the Fort McMurray market. The Board also noted that, in comparison to the alternative of building a new pipeline, the proposed purchase would result in no service disruptions to downstream customers, and reduced project footprint and environmental effects by eliminating or deferring incremental facilities. Further, the NEB found that NGTL is capable of financing the purchase of the pipeline through its parent company, TransCanada, which has sufficient access to financial markets.
As indicated in its Report, the Board is of the view that the Project is unlikely to result in new or increased interactions between the Project and the environment, new or increased environmental or socio-economic effects, and new or increased contributions to cumulative effects. The Board is of the view that overall, with the implementation of NGTL's environmental protection procedures and mitigation and the NEB's recommended conditions, the Project is not likely to cause significant adverse environmental effects. Since no new construction activity is associated with the Project, the only physical activity would stem from the authorization for NGTL to isolate the Albersun Pipeline from the CNRL-owned pipeline. This activity will include minor, short-term ground disturbance on the existing right of way for the pipeline.
The Board noted the commitment of NGTL to avoid the migratory bird-breeding period and the caribou restricted access period and encourages NGTL to appropriately plan for the physical isolation activities outside of these periods. Other potential environmental interactions are associated with operating the pipeline and no adverse environmental impact are expected.
The pipeline is located in the area of the Regional Municipality of Wood Buffalo, in Northeast Alberta, where several species at risk may be found, including Woodland Caribou. The pipeline crosses within the East Side Athabasca Caribou Range, defined as critical habitat by Environment and Climate Change Canada. The Board noted the commitment from NGTL that no new access to the East Side Athabasca Caribou Range will be created as a result of the pipeline. NGTL also committed to avoiding activity within the East Side Athabasca Caribou Range during the February 15 to July 15 breeding cycle restricted period. The Board noted NGTL's commitment to adhering to the recommendations and mitigation measures set out in the Environmental and Socio-Economic Assessment and in the Environmental Protection Plan filed with the Board. The Board found this commitment to be adequate.
In its Report, the Board noted some concerns regarding the long-term stability of certain slopes on the pipeline and noted that many of these slopes are relatively close to population or important infrastructure in the Fort McMurray area. The Board noted that in 2016, urgently recommended slope indicator repair and installation was deferred a year, due to the Fort McMurray wildfires. Consequently, the Board is of the view that additional monitoring information and assessment is required to ensure that the slopes' movement and potential pipe movement and deformation are assessed. The Board has therefore added conditions of approval to this effect (Condition 9 — Repair and Installation of Slope Indicator Casings and Geotechnical Evaluation of Slope Stability; and Condition 10 — Geotechnical Evaluation of Slope Stability).
The Board was satisfied that the Albersun Pipeline meets the National Energy Board Onshore Pipeline Regulations requirements, and that the facilities are fit for their designed service. However, the Board is of the view that 4 500 kilopascals (kPa), rather than the provincially licensed maximum operating pressure (MOP), is an appropriate MOP at this time, and this limit is included in the Board's approval of the opening of the pipeline under section 47 of the NEB Act. Should a higher pressure be required, an engineering assessment demonstrating that the pipeline is safe at a higher pressure must be filed with and approved by the Board.
For more information, please contact
Petroleum Resources Branch
Natural Resources Canada