Ottawa has reopened consultations with Indigenous communities on the Trans Mountain pipeline expansion after a court ruled that its previous efforts were inadequate.
The government did not set a deadline for concluding the talks. Alberta Premier Rachel Notley said pipeline construction might not resume until next fall, adding that the province’s oil patch and government are already losing millions of dollars a day from the shortage of pipeline capacity.
In a news conference on Wednesday, Natural Resources Minister Amarjeet Sohi announced the government will not appeal the Federal Appeal Court ruling that quashed the environmental permits for the pipeline project. It appointed former Supreme Court of Canada Justice Frank Iacobucci to oversee its engagement with First Nations that would be affected by the expansion.
“To get [the project] moving forward in the right way, we need to make sure that we are consulting and engaging with Indigenous communities with open mind and good faith, which means that we will not put a stop clock on the consultations,” Mr. Sohi said. He added, however, that the consultations will build on work already done and can be concluded in a “focused and efficient manner.”
The minister said the government will seek to accommodate the specific concerns of Indigenous communities, although he added that those that remain opposed could not block the expansion.
“We understand that there might be groups that will still oppose this project,” he said. “That’s fine. That’s their right to do so. But that does not mean that if we fulfill our constitutional obligation to consult, that those groups may have a veto.”
Since the appeal court decision in late August, Ms. Notley has pushed the federal government to act urgently to restart work on the Trans Mountain project, saying the province’s economy depends on access to foreign markets for its crude oil. After Mr. Sohi’s announcement, she expressed disappointment that Ottawa will not appeal, although she acknowledged such a step would not speed up the project.
“You don’t lock up your tool box until the job is finished, and the job is not finished yet,” she told reporters in Edmonton.
Still, the Premier agreed with Ottawa’s approach on consultations, saying the process of ensuring Indigenous rights are respected cannot be constrained by a deadline if it is to be meaningful and authentic. The delays could push the resumption of construction “past the summer,” she said, adding it should start sometime in 2019.
In Ottawa, Conservative MPs criticized the timeline, saying the Liberals have failed to act urgently to get construction back on track.
A shortfall of space on pipelines out of Alberta is contributing to a discount in prices that western Canadian producers are being forced to accept on the crude compared to the North American benchmark, West Texas Intermediate (WTI).
On Wednesday, Western Canadian Select for November delivery traded at US$39.98 per barrel less than WTI, which sat at US$75.23 per barrel, according to oil trader Net Energy. At the current differential, producers and governments stand to lose more than $40-million a day, or some $14-billion a year, the Premier said.
The appeal court ruled that Ottawa had failed to adequately consult Indigenous communities, saying those conducting the talks were mere “note takers” and that the government did not make accommodations on specific concerns.
The court also found the National Energy Board (NEB) had wrongly concluded in its original review that it did not have jurisdiction over marine issues and so did not provide recommendations on mitigating impact on coastal waterways. The government ordered the board to re-examine the issue and to conclude its work in 22 weeks, a deadline the B.C. government on Wednesday called insufficient for a thorough review. B.C. Environment Minister George Heyman said the province has registered as an intervenor in the process, as has the Alberta government.
In his news conference, Mr. Sohi insisted the federal cabinet will decide whether to re-approve the project based on conclusions of the NEB and the Indigenous consultations. However, he reiterated that it is crucial to expand Canada’s market for resources beyond the United States.
First Nations leaders said the consultations may be nothing more than a sham given the clear determination of Prime Minister Justin Trudeau and his ministers to complete construction. The government paid $4.5-billion for the pipeline after Kinder Morgan Inc. halted the expansion project over political delays.
A spokesman for the Tsleil-Waututh Nation in Burnaby warned the government will end up back in court if it does not address his community’s concerns, and that means killing or moving the project.
The Alberta Premier decried what she called “jaw-dropping hypocrisy” in British Columbia, where the government opposes increased tanker traffic, but celebrated the approval of a $40-billion liquefied natural gas (LNG) export terminal in Kitimat.
Many First Nations in B.C. support LNG facilities but oppose oil sands pipelines, which have greater environmental risks. Liquefied natural gas evaporates and disperses into the atmosphere when leaked; diluted bitumen fouls coastlines and kills fish and marine mammals.
GLOBAL ENERGY REPORTER
The Globe and Mail, October 3, 2018