History of Kinder Morgan Trans-Mountain Pipeline Expansion Project

This report focuses on the full history of the Kinder-Morgan Trans Montaigne pipeline expansion project and issued faced under this project even after getting approval of National Energy Board (“NEB”). It emphasises on the reasons of Environmentalists who oppose the project as it will lead to increased tanker traffic, impacting British Columbia’s population of Killer Whales. This report is divided into six parts which have been highlighted and used as criteria for preparing this case report.

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case study annalysis
History of Kinder Morgan Trans-Mountain Pipeline expansion project
History of Kinder Morgan Trans-Mountain Pipeline expansion project
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Table of Contents
Introduction...........................................................................................................................................2
When was the Kinder-Morgan TransMountain Project first announced...............................................2
The mandate and jurisdiction of NEB....................................................................................................5
How does the NEB operate – what criteria do they have the right to look at?.....................................6
What are the “powers” of the NEB, a federal government administrative tribunal?............................7
What Court ruled that the NEB must produce a new Environmental Impact Assessment?..................7
Summarize the principal reasons for the Court’s ruling that a new Environmental Impact Assessment
was ordered...........................................................................................................................................8
How Is the NEB free from interference or frustration from the Federal Government?.........................9
Conclusion.............................................................................................................................................9
References...........................................................................................................................................11

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Introduction
This report focuses on the full history of the Kinder-Morgan Trans Montaigne
pipeline expansion project and issued faced under this project even after getting approval of
National Energy Board (“NEB”). It emphasises on the reasons of Environmentalists who
oppose the project as it will lead to increased tanker traffic, impacting British Columbia’s
population of Killer Whales. This report is divided into six parts which have been highlighted
and used as criteria for preparing this case report. The large oil deposits Alberta around
Leduc were discovered. The idea was quickly emerged which was driven by growing demand
for oil in the West coast of Canada and Asia and United states for that the pipelines were
fitted from Alberta to British Columbia (BC). Because of ongoing Korean War the US
military got interest in the development of the infrastructure by which they can easily
accessed the oil for their military purposes.
When was the Kinder-Morgan TransMountain Project
first announced
The Trans Mountain Pipeline Company was established on 21st March, 1951 by the
special act of Parliament. After this on the same day the proposal was made regarding the
pipeline to the Board of Transport Commissioners. A split occurred between the companies
which broke into Canadian Bechtel Ltd and Standard Oil. After the approval from the board
in February, 1952 the construction was started. The design, engineering and construction
were done by the Canadian Bechtel Ltd. The first time when oil start pumped up it cost
approx. $93 million on 17th October, 1953.
The second pipeline which was spread between Hinton, Hargreaves, British Columbia and
Alberta which was parallel to the first pipeline and that was started by Kinder Morgan in
2004. Canada’s National Energy Board got 82 spills since 1961 by the Trans Mountain. In
the year 2005, crude oil of around 210 m3 dumped by a ruptured pipeline.In 2007, ruptured of
pipeline by a contractor who was working on the sewage project caused spillage of crude oil
in the city of Burnaby. In 2009, Burnaby at the Trans Mountain Burnaby 305 m3 crude was
released (Graben, & Sinclair, 2015).

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The Canada government granted approval for this project which is TransMountain Expansion
Project on 29th of November, 2016. On the recommendation of the Federal Governor in
Council the National Energy Board (NEB) concluded the project in the public interest for
Canadian citizens and in that way it was approved by the council. On 11th of January 2017 the
British Columbia Environmental Assessment Office (BCEAO) certified the Trans Mountain
Expansion Project on environmental assessment (Pérez-Fortes, et. Al. 2016).
The federal Court on 30th August 2018 issued the decision on cancelling the order in council
and this had approved the certificate for the expansion project of Public Convenience and
Necessity (CPCN). In May 2018 the intention to acquire the pipeline the federal Government
to acquire it as a crown corporation announced its intention and to seek complete expansion,
it seek investors from outside to complete it. On 26th September, 2018 the NEB announced a
public hearing for the reconsideration of its project (Pérez-Fortes, et. Al. 2016).
In 1953 the original Trans Mountain Pipeline was built which is continued till today.With the
initial expansion in 1957, the pipeline system capacity has been increased numerous times
(Akbari, et al, (2016).The most recent expansion was done in 2006 and 2008 which was with
the construction of 13 new pump stations and modifications to its stations. During this time
only the Anchor Loop project was also added which was 160 kilometres pipe between Mount
Robson and Jasper National Park which was between Hargreaves and Alberta. This project of
expansion was a twinning of its 1,150 kilometre pipeline which was between Burnaby and
Strathcona county Alberta. This pipeline was having its minimum capacity from 300,000
barrels to 890,000 barrels per day. This expansion was approximately $7.4 billion in its
costing (Jeong, et al. 2015).
This project will create many benefits of short or long term jobs or training opportunity for
these jobs. It will also increase the taxes which are created by the three level of government.
It will create 37000 direct or indirect jobs per year during its operation. During the
construction programme around 15000 people were working in its pipeline expansion (Jeong,
et al. 2015).
In its 20 years of expansion operation, the combined impact on the revenue of government for
construction is $46.7 billion which can be used for the public services like education and
health care. In its revenue generation British Columbia receives $5.7 billion, $19.4 billion

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received by Alberta and the rest of the revenues were received by Canada which is $21.6
billion.
The new pipelines were approximately 980 kilometres long. This long range of pipeline
includes 193 kilometres of reactivated pipeline. The pump stations will be built in the number
of 12. In Burnaby storage terminals 19 tanks will be added and new berths will also be built
at West ridge Marine Terminal. Once new berths will be completed and come to in service,
the total number of tankers will be increased by 34 per month (Jeong, et al. 2015).
The pipeline which already exits will carry synthetic crude oils, refined products and light
crude oils which will be having capability for heavy crude oils. The heavier oils will be
carried by the new twin pipelines for the transportation of light crude oils. The construction
activities will be begun in September 2017 (Heinelt, 2018). Since 2012 stakeholders,
landowners, community engagement and Aboriginal communities have been ongoing and
they will be continued through operation.In the entire route the Environmental protection
plans have been developed (Wong, & Zhou, 2015).
The main aim behind the expansion of this Trans Mountain Expansion Project was to help
and make sure that Canada gets the full value for its oil. Workers will also get benefit in its
$7.4 billion project of construction. Oil producers will generate more revenue with their
products. More revenue will be collected by the Government form oil. These all kinds of
revenue will benefit and contribute to the services which will benefit the Canadians
(Komeily, & Srinivasan, 2015).
The oil products produced in Western Canada supplies in the market of United States
Midwest. From the last decade, the oil products have been sold to the United States at
discount by the Canada to the world price for oil products of similar nature (Xu, et al. 2016).
if Canada’s oil will be shipped from the Trans Mountain’s Pacific tidewater terminal which is
in Burrard inlet then it will give a better price. This project will give earning of
approximately $3.7 billion per year to the Canada if the Canadian oil will be delivered to
international market (Canter, 2018).
New opportunities and new markets are emerging by the expansion of oil sands products in
Alberta. With the expansion of Trans Mountain Pipeline system the growing needs for the
years will be provided in the coming years (Pérez-Fortes, et. Al. 2016).

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The oil producers which are included in this Trans Mountain Pipeline project have made a
significant commitment of 15 to 20 years to add up the capacity to 80 percent. The oil
producers which are included in this project are as follows: Athabasca Oil Corporation, BP
Canada Energy Trading Company, Cenovus Energy Inc., Total E&P Canada Ltd., Imperial
Oil Limited, and Husky Energy Marketing Inc. (Vaillancourt, et al. 2014).
The mandate and jurisdiction of NEB
The National Energy Board was established in 1959 as an independent federal regulator. The
National Energy Board was established by the National Energy Board Act which was having
privileges and rights of superior court as a quasi-judicial body. The decisions of NEB are
enforceable in law (Victor, 2017). Public hearings are hold for the inquiry and application of
some major nature. In these hearings parties submit their evidences as a public record in
which decisions are based on evidence which is submitted to the board. Federal energy policy
is not created or debated here.The mandate is having by the elected officials and parliament
of Canada.The participation of this board is showed by giving expert opinion on the matters
relating to the energy which are used by the government to set the energy policy (Akbari, et
al, 2016).
The main purpose of National Energy Board is to promote security, safety, efficient energy
and environmental protection and markets in the public interest of Canada. The mandate is
set by the Parliament and we act accordingly for the regulation of trade, energy development
and pipelines (Giacchetta, Leporini, & Marchetti, 2015).
The main responsibilities of this Board are interprovincial operation and construction,
international designated international power lines and other international power lines and gas
pipelines. The tariffs and tolls for the pipelines are also regulated by this board under the
jurisdiction of National Energy Board.The import and export of these products like export of
oil, natural gas, electricity and natural gas liquids and similarly import of natural gas are done
by this board (Keil, 2014).
To affect Canadian energy market the information relating to the Canadian events, trends and
issues are published by the National Energy Board to the Canadian. The matters which are
not regulated by the provincial or joint federal like gas and oil exploration and development
and regulation of specified areas are managed by the board. The regulation of National

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Energy Board is extended over 73,000 kilometres of pipeline which is across the country and
1,400 kilometres of international power lines (Bahn, et al. (2013).
The activities which are regulated by the NEB for those activities applications are being to
them. After the submission of application the determination of application is being done that
if it is required for hearing or not and if hearing is required then whether oral or written
hearing. Few applications relating to international or interprovincial pipelines which are more
than 40 kilometres are being dealt by the board (Aleklett, et al. 2010). The hearing process is
convened by passing hearing order in which all the details relating to process, the direct
affected persons or persons having relevant information or some expertise person can
participate and deadline of application to participation is been provided (Vaillancourt, et al.
2008).
How does the NEB operate – what criteria do they have
the right to look at?
Every project in which NEB is involved is not necessarily end with the sanction. The board,
for the approval of the project can involve any number of conditions. These conditions are
enforced and monitored through the complete cycle of the project which is approval to the
abandonment. At the time of reviewing the application the jurisdiction and mandate of the
board is considered. A list of issues is outlined when any application is issued for the hearing
which is considered by the board (Gibbs, et al. 2008).
From the beginning in 1959 the National Energy Board considers the environmental factor in
making any regulatory decisions. During construction, planning, operation and abandonment
of facilities the promotion of environmental responsibility must be included within the
jurisdiction of the board (Vaillancourt, et al. 2014). To protect the environment appropriate
actions for the enforcement and proper safety measures must be in place. The expertise team
of 75 people in different-different areas are included in the specialised team of environmental
protection. To satisfy the National Energy Board the companies are planning to build energy
facilities for the proper effects of anticipated environment which is associated with the
project (Haszeldine, 2009). An environmental assessment is being conducted at the time of
review of application for the public interest mandate.Some major projects of National Energy
Board are assessed by the Canadian Environmental Assessment Act, 2012 (McNicol., Rand,
& Williams, 2011). The National Energy Board is a responsible authority under the CEA Act

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2012 who conducts its projects under its jurisdiction in standards which is prescribed by the
legislation for the right environmental assessment. The routine maintenance and monitoring
procedure including the inspection and auditing of the activities of the company are the life
cycle of an energy project (Bishop, & Dachis, 2016).
What are the “powers” of the NEB, a federal
government administrative tribunal?
The National Energy Board possesses many powers with it. The powers which it has are in
the name of Court of record, the board is a court of record. The official seal of the board have
some judicial notice in it. The Board has the power of inspection and production of the
documents which are produced before it. It has power with respect to the swearing,
examination and attendance of the witnesses. They have necessary power for the inspection
and entry of the property and other necessary matters which are necessary for the exercise of
its jurisdiction (Hale, & Bartlett, 2017).
If any act is done which is in the eyes of Board is not in the public interest, prohibited or not
authorised by the board then the board can give any direction, sanction, leave or approval
which by law is authorised to them to give or make. The board has a power to inquire into the
matters relating to any accident which involve abandonment of the pipeline, other facility or
international power line, the operation of which is regulated by the NEB. They can find
cause of the accident or factors which are contributing to the event. They have power to make
recommendations for any failure on the part of the projects or prevention of any similar kind
of accident (Graben, & Sinclair, 2015).
Whether matter is relating to law of fact the Board has full jurisdiction to determine and hear
the matter. The Canadian government or the Government of Northwest Territories may agree
to let the Board regulate these territories for the successive period of 20 years each. The early
termination before the expiry of 20 years is possible by these authorities. Any order or
requirement given by the board to any person can be given which need to be fulfilled in a
specified time period in a prescribed time. The Board can also forbid to do any act or to
continue any act, thing or matter which is contrary to the law, regulation or direction (Pontier,
2016).

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What Court ruled that the NEB must produce a new
Environmental Impact Assessment?
The Judicial supervision of the National Energy Board is to indicate both the idea of appellate
review and judicial review of the board by way of appeal to the federal court with leave. In
the case of Forest Ethics and Sinclair Case, an application for the judicial review came before
the court. The circumstances of the case states that the board did not err in ruling that the
larger environmental effects need not to be considered which have the effects of pipeline
project which includes the climate change contribution which was made by Alberta oil sands.
The supervision of the Board is governed by the National Energy Board Act and the Federal
Courts Act. The federal court ruled that the Board does not have duty to consult with the
aboriginal communities when they are making their decisions; this was stated in the case of
Haida Nation v. British Colombia Minister of Forests, 2004 (Pontier, 2016).
It involves study of unique attributes relating to the environment which are from
endangered species to the existing hazardous waste. The procedure of Environmental
Assessment ensures that the environmental implication needs to be considered before making
any final decision relating to assessment of environmental attributes. This process of
environmental analysis effects the environment and it is useful for the reporting of effects
which is undertook in the public consultation exercise and it lastly revels the decision to the
public after reviewing the report. The main strength of this assessment is its flexibility. The
process of project planning can integrate the Environmental Assessment as an essential step
for the social, economic and environmental impacts of the projects (Hanson, 2018).
Summarize the principal reasons for the Court’s ruling
that a new Environmental Impact Assessment was
ordered
The reasons behind the establishment of Environmental Assessment project are to
facilitate decision making for the local authority. It gives a systematic analysis of the
implications relating to environment for the proposed project or action. It is helpful in the aid
in the formation of development. It is sometimes considers as hurdle for many developers to
proceed with their projects or activities.The other processes for obtaining the permission from
the various authorities is time consuming and costly and in that way EIA gives a good benefit
to them. It works as a great aid in the development and formulation of actions. It indicates the

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areas where the project can be modified to eliminate the adverse impact on the environment.
It provides a relation between the local authority, developer and planning authority to get a
smoother process for the planning and worth financial returns and expenditures. It works as
an instrument for the sustainable development. In providing sustainable development it
maintains the overall quality of life; maintain the access to the natural resources and avoiding
the damages caused to the environment.
How Is the NEB free from interference or frustration
from the Federal Government?
The National Energy Board possesses many powers within it and it takes all the
related decisions without the interferences of other government and courts. It is analyzed that
there is panel in the National Energy Board which takes all the imperative decisions in the
best interest of the society and environment at large. It is analyzed that National Energy
Board for the approval of the project and any other acts could involve any number of
conditions which he may thinks fit and it could be determined by it on the basis of its own
independent discretions. These conditions are enforced and monitored through the complete
cycle of the project which is approval to the abandonment. It is found that National Energy
Board possesses right to restrict and limit evidences or exclude the participation from the
kinder Morgan pipeline hearing. It was done on the basis of the effect of the supreme court of
the Canada decisions which are done to not to hear a constitutional challenges of the federal
government revisions to national board of the energy. This was done to promote the National
Energy Board with a view to promote the energy safe program and promoting the
environment at large. National Energy Board pledges the critics to redouble their efforts to
ensure efforts of the federal government to rate a fair process for pipeline propose. It could be
inferred that on the basis of the decision of the Supreme Court, National Energy Board was
free from any of the interferences. It was done due to the approval given on this pipeline
proposal. It was assessed that Canada government granted approval for this project which is
TransMountain expansion Project on 29th of November, 2016. On the recommendation of the
Federal Governor in Council the National Energy Board (NEB) concluded the project in the
public interest for Canadian citizens and in that way it was approved by the council The crux
of this discussion is that with a view to promote National Energy Board for economic and
social development, supreme court kept National Energy Board possesses free from any of
the interferences and frustration of the federal government interventions.

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Conclusion
After assessing the case study and evaluating the National energy board actions and
undertaken work, it is found that if any act is done which is not in the public interest,
prohibited or not authorised by the board then the board can give any direction, sanction,
leave or approval which by law is authorised to them to give or make without the intervention
of the federal government. The main aim behind the expansion of this Trans Mountain
Expansion Project was to help and make sure that Canada gets the full value for its oil. It was
found that if the project proposed is accepted then project will create many benefits of short
or long term jobs or training opportunity for people and also render good amount of benefits
to society. It will also increase the taxes which are created by the three level of government.
It was done with a view to promote the National Energy Board to independently undertake all
the works and mitigate the issues related to promotional environmental benefits in society.
The crux of this report is that National Energy Board should take assistance of expert
members before sanctioning any of the decisions. However, it may keep its records and other
actions confidential without the interpretation of the any of authority and federal government.

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