Friday, July 21, 2017

Delays ahead for Pacific NorthWest LNG project as National Energy Board receives court order to examine PRGT pipeline route

The NEB has been ordered by a
Federal Court of Appeal to review
its findings on jurisdiction for the
Prince Rupert Gas Transmission line
which would bring natural gas to a
proposed LNG terminal at Lelu Island
Another hurdle has been put in the path of the proposed Pacific NorthWest LNG project as the National Energy Board has been instructed to re-examine the jurisdiction of the pipeline, and whether it should be federal as opposed to provincial.

The pipeline route, known as the Prince Rupert Gas Transmission line would supply the proposed LNG terminal at Lelu Island with natural gas from Northeastern British Columbia's resource fields.

The court order, released on Wednesday, comes as a part of a 28 page judgment from Justice Donald Rennie and in part comes from the efforts of a Smithers environmentalist who has long been opposed to the proposed pipeline and LNG terminal in Prince Rupert.

Mike Sawyer, who received funding from the Skeena Wild Conservation Trust in the Smithers region had asked the NEB during a 2015 hearing to conduct a full hearing related to the jurisdiction of the pipeline and whether it should fall to federal rather than provincial overview.

The NEB rejected that 2015 request setting the stage for the legal challenge and results delivered on Thursday.

Two elements of the decision highlight how the Court viewed the challenge and where the NEB failed to meet the test of oversight.

(74) The Board did not ask itself whether an arguable case for federal jurisdiction had been made out. Rather, it imposed a burden of persuasion on the appellant that it did not have and it engaged in a weighing of evidence on the merits. It made three errors in its application of paragraph 92(10)(a). It did not apply the required constitutional test of functional integration, and it assumed that a project that was different could not be functionally integrated as part of the undertaking as a whole.  

(75) The Board then looked at factors which might displace a prima facie case and, in the course of which, it took into account a constitutionally irrelevant factor—the business arrangement—and it ignored a vast amount of evidence with respect to the management and control test integral to the constitutional analysis.

You can review the full judgment document here.

Following the court order, the NEB advised that it is reviewing the court decision and would consider its next steps.

TransCanada pipeline has sixty days to apply for leave to appeal on the ruling should they wish, the national pipeline company has not issued any comments to this point related to the Court order of Wednesday.

It's unknown to this point as to what impact the delay will have on the Malaysian energy company Petronas, which is currently reviewing its proposal for the Lelu Island development before making a Final Investment Decision.

Some background on Thursday's shift in direction for the LNG story can be reviewed below:

Judge rules that NEB must reconsider B.C. natural gas pipeline jurisdiction
Court orders NEB to examine proposed TransCanada pipeline's Jurisdiction
Pacific NorthWest LNG hits road block as Gas Pipeline Sent back to National Energy Board by Federal Court
TransCanada's Prince Rupert Gas Transmission project faces another hurdle

The court action of Thursday, was just one of a number of court challenges that have been put in motion since the September 2016 approval of the project.

More notes on the Pacific Northwest LNG proposal can be found on our archive page here.

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