National Energy Board Ministerial Briefing Binder – Status: NEB Review of the Proposed Kinder Morgan Trans Mountain Expansion Project

FOR INFORMATION

Security: Protected B
Date: 4 November 2015

BACKGROUND:

The Application

• The Trans Mountain Expansion Project (TMX) is a proposal by Trans Mountain Pipeline ULC (a subsidiary of Kinder Morgan Canada) to expand the existing Trans Mountain pipeline system between Edmonton, AB and Burnaby, BC. See map below.
• Kinder Morgan Canada operates a number of pipeline systems and terminal facilities including the Trans Mountain pipeline, the Cochin pipeline, the Puget Sound and the Trans Mountain Jet Fuel pipelines, the Westridge marine terminal, the Vancouver Wharves terminal in British Columbia and the North Forty terminal in Edmonton, Alberta.
• The Trans Mountain pipeline currently transports approximately 350,000 barrels per day (b/d) of crude oil and refined petroleum from the oil sands in Alberta to Burnaby, BC. From Burnaby, some of the oil is loaded onto tankers for Pacific Rim destinations such as Washington State, California and Asia.
• Expansion of the Trans Mountain pipeline would increase capacity from 300,000 b/d to 890,000 b/d. The Proponent values the TMX proposal investment at about $5.4 billion.
• The proposed expansion would include:
  1. approximately 987 km of new pipeline,
  2. new and modified facilities, such as pump stations and tanks,
  3. the reactivation of 193 km of existing pipeline, and
  4. the expansion of the Westridge Marine Terminal in Burnaby.

MAP 1: The Proposed Route

The NEB Application Process

• Since 2012, section 55.2 of the NEB Act requires the NEB to make a determination as to whether applicants who seek to participate in a hearing are “directly affected” by the project proposal or whether they have “relevant information or expertise.” The NEB Act says the Board must hear from those who are directly affected and may hear from those who have relevant information or expertise.
• The Board received 2,118 applications to participate in the TMX hearing. The three-member Panel, acting on behalf of the Board, ruled that of those, 1,650 (or 78%) would be granted the opportunity to participate in the hearing process (400 intervenors and 1,250 commenters).
• The Panel determined that it will consider the following issues as part of the hearing process:
  1. The need for the proposed project.
  2. The economic feasibility of the proposed project.
  3. The potential commercial impacts of the proposed project.
  4. The potential environmental and socio-economic effects of the proposed project, including any cumulative environmental effects that are likely to result from the project.
  5. The potential environmental and socio-economic effects of marine shipping activities that would result from the proposed project, including the potential effects of accidents or malfunctions that may occur.
  6. The appropriateness of the general route and requirements for the proposed project.
  7. The suitability of the design of the proposed project.
  8. The terms and conditions to be included in any approval the Panel may issue.
  9. Potential impacts of the project on Aboriginal interests.
  10. Potential impacts of the project on landowners and land use.
  11. Contingency planning for spills, accidents or malfunctions, during construction and operation of the project.
  12. Safety and security during construction of the proposed project and operation of the project, including emergency response planning and third-party damage prevention.
• The Panel determined it would not consider the environmental and socio-economic effects associated with upstream activities, the development of oil sands, or the downstream use of the oil transported by the pipeline.
• The evidentiary record for the hearing is currently estimated at 100,000 pages, including the Proponent’s original application which totalled approximately 15,000 pages.

Legislated Time Limit

• Since 2012, subection 52(4) of the NEB Act has required the Board to conduct its review and submit its Recommendation to Governor in Council (GIC) by the time limit specified by the Chairperson, which is to be no longer than fifteen months from the date the application is determined to be complete (the time limit for the TMX project is 15 months). However, the Board Chairperson and the Minister/GIC have the authority to grant “excluded periods” (or “time outs”) or extend the time limit in certain circumstances.

CURRENT STATUS:

• The hearing has been underway from 2 April 2014 until present, with 21 days of oral submissions (1 day for a constitutional argument and 20 days for the Panel to gather oral traditional evidence from Aboriginal people). Oral evidence is typically non-technical information that describes the potential impacts of a project on Aboriginal communities’ rights and interests.
• Since 2012, regardless of the Board’s recommendation, as part of its report to GIC, the Board must include a list of all conditions it considers necessary and desirable in the public interest. With this in mind, in August 2015, the Panel released 145 draft conditions for comment by all participants. The conditions are intended to mitigate the risks and effects posed by the project so that it is designed, constructed and operated in a safe manner that protects human health and the environment. Conditions set out the requirements that the Proponent must meet in relation to the project if it is approved, and would be enforced by the Board.
• In July 2015, it was announced by the then-Minister of Natural Resources, that Steven Kelly, an engineer, would be appointed as a permanent Board Member to the NEB. Mr. Kelly and his then-firm, IHS, had submitted expert evidence, on behalf of the Proponent, as part of the TMX hearing.
• The Panel considered this matter and ruled that the evidence in question should be struck from the record in order to avoid any apprehension of bias, given Mr. Kelly would be joining the NEB in the near future.
• The Panel, with the Chair’s approval, has implemented two excluded periods. The first was initiated because the Proponent changed its route through Burnaby Mountain and the second was to collect replacement evidence following the decision to strike the evidence of Mr. Kelly. In both cases, the excluded period was set so that the Proponent and the other hearing participants could submit and test relevant evidence. The first timeout was for seven months, the second is for five months.
• As a result of the second excluded period, oral final arguments – originally scheduled for August 2015 - have been postponed.
• The NEB’s Participant Funding Program (PFP) provides modest funding to facilitate public participation in hearings. For TMX, the Board has awarded $3M in participant funding to 71 applicants to date.  In response to requests to provide additional funding to those intervenors impacted by the 21 August 2015 decision to strike evidence prepared by Mr. Kelly from the hearing record, the PFP will provide up to an additional $10,000 per eligible intervenor for expert and legal fees.

NEXT STEPS:

• Oral final arguments are scheduled for late January and early February 2016.
• The revised deadline – as a result of the excluded periods – for the Board to provide its report to GIC is 20 May 2016.
• The Board’s Report to GIC will contain the Board’s detailed assessment pursuant to its mandates under the NEB Act and CEAA 2012. It will also include the Board’s Recommendations to GIC under CEAA 2012 on whether TMX is likely to result in significant adverse environmental effects; and under the NEB Act on whether to issue a Certificate of Public Convenience and Necessity.

APPENDICES:

• October 24, 2015 letter from Robyn Allan to Prime Minister-Designate Justin Trudeau.
• Briefing Note to DM-NRCAN For Information with respect to the Allan letter (RDMIS #892486).
• NEB’s response to letter from Robyn Allan.

October 24, 2015
Prime Minister Trudeau
House of Commons
Ottawa Ontario
K1A  

Dear Mr. Prime Minister

Re: National Energy Board and Kinder Morgan’s Trans Mountain Expansion

As you know from your extensive election campaign, the National Energy Board (NEB) has lost the public’s trust. This is regrettable. Canadians need the NEB to operate as an effective and efficient institution that fosters responsible economic growth and development in the long term interests of Canadians and the environment.

As a professional economist with a long career in both the private and public sector, I was an expert intervenor on behalf of the public interest in the Kinder Morgan Trans Mountain expansion project review. I was also an expert witness at the Enbridge Northern Gateway hearing.

Although the Northern Gateway hearing had its flaws—as numerous court challenges to the Board’s review by First Nations and environmental groups attest—the unfortunate erosion of the NEB as an agent of sound decision making has intensified during the Kinder Morgan review. The Board’s violations of the basic principles of natural justice and procedural fairness, along with its inability, or unwillingness, to duly consider the Canadian public interest, has turned the review process into a farce and exposed the Board as the industry-captured regulator it has become.

After more than eighteen months of intensive participation in the Trans Mountain review I withdrew. Direct experience with the Board process led me to conclude that the outcome of its deliberations would not be fair or balanced. I have attached, for your information, my letter to the Board detailing my concerns and reasons for withdrawal^{Footnote 1}. In particular, it explains how the NEB has designed the scope of its review so narrowly, restricted participation so profoundly, and removed essential features of quasi-judicial inquiry—such as cross examination—so completely, that it pre-determines an outcome that favours Kinder Morgan and puts the rest of us at risk.

Certainly the appointment of Trans Mountain’s consultant to the Board immediately prior to the election campaign is indicative of the former government’s complete disregard for due process and contempt for the Canadian public interest. In order to return it to the important role it was intended to play, the NEB needs the clear and decisive direction you promised during your campaign, particularly as outlined in the Liberal policy statement on making Environmental Assessments credible again^{Footnote 2}. As you accurately characterize the issue, “governments might grant permits, but only communities can grant permission.”

Under the current NEB process Trans Mountain will never be granted a social license to expand. Numerous local mayors have been quite direct and vocal in expressing their concern^{Footnote 3}. In an open letter last March they called on senior government to step in and fix the broken process. The call, to date, has gone unheeded. The only avenue for reasoned intervention capable of setting the NEB process back on a considered and trusted path lies with your government.

That is why I am writing to you today. I wish to bring to your attention the fact that both the NEB and Kinder Morgan continue to operate as if they are unaware, or doubt the intent, of commitments you, and your candidates, made during the campaign.

Liberal election campaign commitments were clear

In Esquimalt, BC on August 20, 2015 you were very clear when asked if the overhaul of the NEB applied to Kinder Morgan’s application. You answered, “Yes, yes. It applies to existing projects, existing pipelines as well...because we’re going to change the government and that process has to be redone.”^{Footnote 4}

At campaign events and in interviews you explained how the Harper government tried to accelerate resource projects by minimizing environmental oversight and marginalizing voices that have legitimate concerns, but that this, ironically, resulted in a lack of progress on pipeline projects. The gutting of environmental legislation and politicization of the NEB by the former government undermined the Board’s legitimacy. People don’t believe or trust the NEB the way they used to. If elected you confirmed your government would understand the need for both environmental oversight and economic development, and the first step toward this end would be to restore the public’s trust by making the NEB process credible.^{Footnote 5}

Numerous Liberal candidates underscored your commitments during the campaign and recently reconfirmed the need to redo the Trans Mountain review. North Vancouver newly elect MP, Jonathan Wilkinson, explained on his website that, “The current National Energy Board regulatory approval process has lost the trust of Canadians. A new, independent, evidence-based process must be established. The Kinder Morgan expansion project must satisfy this new rigourous review that its environmental and social impacts can be effectively addressed.”^{Footnote 6}

In an interview with the Burnaby Now on October 21, 2015, newly elected MP for Burnaby North—Seymour, Terry Beech confirmed that, “We are going to redo the National Energy Board process. We’re going to broaden the scope. We’re going to make sure it’s objective, fair and based on science. We’re going to make sure proponents of any major energy projects, including Kinder Morgan, have to work towards getting community support and support from partner First Nations,” he said, reiterating pre-election promises. “We’ve already said there will be no decision on Kinder Morgan in January (sic). Kinder Morgan will have to go through a new, revised process.”^{Footnote 7}

Kinder Morgan believes its business as usual

In stark contrast, Kinder Morgan is dismissive of Liberal promises to fix the system. The company maintains that under a Liberal government it will be business as usual—effectively the same as when the Conservatives behaved as cheerleaders for pipeline projects, rather than referees.

Kinder Morgan Inc., (KMI) is the US parent of Trans Mountain Pipeline ULC. During its third quarter earnings conference call in Houston, Texas on October 21, 2015, an analyst asked KMI executives how the new Liberal majority might impact Trans Mountain’s application. Ian Anderson, president of Kinder Morgan Canada Inc., and V-P of KMI, fielded the question.

“I’m wearing...I’m wearing my Liberal red tie.” After audible laughter, Mr. Anderson continued. “Um...it’s too early to speculate on what a Liberal government is going to mean for us. You know we’re going to continue to focus on the NEB process that we’re involved in and all the requirements of that while we continue our project planning and preparation. We’ll certainly be briefing the Liberal government in due course on the project and kind of the progress we’ve made but I don’t yet have any comment on what a Liberal government may do to us with respect to the project. We’ll just keep working very hard and keep them informed and plan to execute the project as soon as we get approval.”^{Footnote 8}

It is important to understand what Kinder Morgan means when it says it will “brief” your government. Mr. Anderson and his staff are intensely engaged in, and skilled at, lobbying government. During the Conservative reign they held numerous meetings with the former Minister of Natural Resources responsible for the NEB—Joe Oliver—and his senior staff. Included in some of those meeting were staff from the Prime Minister’s Office.

Under Freedom of Information I petitioned the substance of the discussion in 20 meetings held during 2013 and 2014^{Footnote 9}. While Kinder Morgan was actively pursuing the expansion of its Trans Mountain system at what was supposed to be an independent NEB hearing it was meeting with the government to lobby its cause. I was shocked to learn that there were no records, no agenda, no minutes or briefing notes from those meetings—just the required indication on the lobby registry that a meeting to discuss their pipeline interests had taken place.

Not only is the absence of a paper trail irresponsible administration and puts the government at risk, it is also a betrayal of the public trust. All Canadians know is that the meetings were held. What was said, and what promises were made, are effectively secret back-room agreements between a Texas based multinational and the former Harper government known for championing the cause of pipeline projects before they are assessed.

NEB dismissive of campaign promises

With respect to the NEB, you may be unaware as to how your Trans Mountain review commitments are being treated. As reported by the Burnaby Now, when asked how the Liberal majority changes the NEB process, NEB “spokesperson Craig Loewen said the Liberal majority doesn’t change anything for the pipeline at the moment because the process the board follows falls under a legislated mandate. “That doesn’t change unless the legislation changes or we’re ordered to do things differently,” he explained. “The reality is there were a lot of things said in the campaign.”^{Footnote 10} (emphasis added).

The NEB cynically regards your promises as campaign rhetoric. What Canadians heard as important statements confirming that a Liberal government would restore the credibility of a broken process, the NEB summarily throws into a basket along with “a lot of things said in the campaign.”

The NEB requires clear direction. You have promised an overhaul of the process, you have considered policy direction for the future, and, you will require legislative amendments and regulatory changes to enforce your vision. It is understood that these substantive issues take time to consider and implement. However, unless clear direction is communicated, vested corporate and bureaucratic interests will endeavour to get out in front of promised Liberal policy changes making real change—meaningful change—difficult.

If the NEB review of Trans Mountain is allowed to continue it will undermine the credibility of your election promises while sending a message to the NEB and Kinder Morgan that it’s business as usual. More significantly, First Nations, communities, organizations and individuals engaged in the review will further incur a significant waste of time and money.

Unlike the unprecedented NEB sanctioned $136 million fund Kinder Morgan is able to draw on to finance its application, many intervenors do not have access to adequate funding. Forcing intervenors to continue when the process is to be overhauled and the application redone adds insult to injury already sustained during this deeply flawed process. Taking action now is especially important. The NEB has announced an aggressive time schedule for the preparation of evidence and written argument-in-chief during November and December^{Footnote 11} with delivery of oral summary argument during late December and into February 2016. Subsequent to oral summary argument the process is finalized but for the delivery of the Board’s report to Cabinet by May 20, 2016.^{Footnote 12}

I respectfully suggest that as soon as practicable an order to suspend the current NEB Trans Mountain review process be issued. This suspension will ensure no further waste of time and resources by any of the parties involved and will provide the assurance that a credible process will be applied to Trans Mountain’s application. Canadians need this reassurance. It will also enable an opportunity for your government to properly address, and fully consider, the policy and legislative changes necessary to reinstate a credible environmental review process that authentically respects First Nations, the broader public interest and the environment.

Sincerely,

(original signed by Robyn Allan)

Robyn Allan
Independent Economist
s.19 (1)
Whistler BC s.19 (1)

cc: Terry Beach, MP, Burnaby North-Seymour
Kennedy Stewart, MP, Burnaby South
Ron McKinnon, MP, Coquitlam-Port Coquitlam
Carla Qualtrough, MP, Delta
Peter Julian, MP, New Westminster-Burnaby
Jonathan Wilkinson, MP, North Vancouver
Dan Ruimy, MP, Pitt Meadows-Maple Ridge
Fin Connelly, MP, Port Moody-Coquitlam
Joyce Murray, MP, Vancouver Quadra
Murray Rankin, MP, Victoria
Pam Goldsmith-Jones, MP, West Vancouver-Sunshine Coast-Sea to Sky
Peter Watson, Chair, National Energy Board

Memorandum / Note de Service

Security/Sécurité: Protected B
Date: October 27, 2015
RDIMS: 892486

Purpose:
To provide you with an overview of the NEB’s position on key issues presented in Ms. Allan’s letter, dated 24 October 2015. This briefing note does not address matters that fall outside of the NEB’s legislated mandate.

Consultations:

Key Messages/Considerations:

• Under the NEB Act, once the Board has determined an application to be complete, it has 15 months to assess the application and provide its recommendation to the Governor in Council (GiC). The legislated time limit for the Board to issue its report on TMX to the GiC is 20 May 2016.
• In accordance with the legislated time limit, the Panel is proceeding with next steps in the ongoing hearing process, including oral summary argument, to ensure the Panel has the information required to prepare the report.
• 1,650 applicants were granted the opportunity to participate (400 applicants were granted intervenor status, with the remainder being granted commenter status) and an estimated 100,000 pages of evidence placed on the record.
• Should there be a change in future to the NEB Act, the Board would examine the implications for the hearing process at that time.

Issues:

1. “The NEB has lost the public’s trust…”
   • There have been a number of court challenges already relating to the Panel’s process for TMX.  One appeal is currently being heard by the Federal Court of Appeal (Tslieil-Waututh Nation) and none of the other court challenges were granted leave to appeal by the Federal Court of Appeal or the Supreme Court of Canada.  
   • Details include,
     • L. Quarmby – challenge to the constitutionality of the standing test in the NEB Act or alternatively the Board’s application of it in the TMX hearing and whether it violated subsection 2(b) of the Charter. Both the Federal Court of Appeal and the Supreme Court of Canada dismissed the leave application.
     • City of Burnaby – argument that the Board erred in law and jurisdiction in the exercise of the NEB’s jurisdiction relating to Burnaby bylaws. The Federal Court of Appeal dismissed the leave application. Proceedings continue before the BC Supreme Court.  Previous applications before the BC Supreme Court and BC Court of Appeal were dismissed.
     • L.D. Harvey – argument that not including certain issues relating to upstream and downstream effects violated section 7 of the Charter. The Federal Court of Appeal dismissed the leave to appeal application.
     • Vancouver – dismissal by the Federal Court of Appeal of Vancouver’s leave to appeal application requesting an amendment to the list of issues to includes environmental and social-economic effects associated with certain upstream and downstream activities including the development of oil to be transported.
2. “How the NEB has…restricted participation…”
   • When assessing Applications to Participate in a certificate hearing, the NEB applies section 55.2 of the National Energy Board Act (NEB Act), the list of issues, and the Guidance Document on Section 55.2 – Participation in a Facilities Hearing.
   • Section 55.2 states:
     • “55.2 On an application for a certificate, the Board shall consider the representations of any person who, in the Board’s opinion, is directly affected by the granting or refusing of the application, and it may consider the representations of any person who, in its opinion, has relevant information or expertise. A decision of the Board as to whether it will consider the representations of any person is conclusive.”
   • It is up to the person applying to participate to provide enough information to demonstrate to the Panel’s satisfaction that they are either directly affected by a proposed project or are in possession of relevant information or expertise. The Panel makes its decision under section 55.2 of the NEB Act on a case-by-case basis, taking into account the specific facts and circumstances of each project application, and the information provided in the completed Application to Participate (ATP).
   • Approximately 1,650 (78%) applicants have been granted participation. 468 were denied standing during the initial ATP process as their applications did not demonstrate to the Panel’s satisfaction that they met section 55.2.
   • The matters raised in the denied ATPs related to issues outside of the Board’s mandate (e.g. oil sands development, climate change, sustainable energy alternatives), or were related to issues that were not specific to the particular applicant or the project (e.g. the effects from facilities that are not part of the project application, such as the Chevron tank farm).
   • Under the Canadian Environmental Assessment Act, 2012 (CEAA 2012), the Board must consider the representation of any person with relevant information and expertise.
3. “…removed essential features of quasi-judicial inquiry…” [Cross-examination]
   • The Board is an administrative tribunal established by Parliament under the National Energy Board Act (NEB Act). As with any administrative tribunal, the Board must act within the scope of the powers delegated to it by its enabling legislation – the NEB Act.
   • The Board operates within a system of checks and balances. The Board’s decisions are subject to independent and impartial judicial oversight, generally through the Federal Court of Appeal (FCA) and Supreme Court of Canada, and the Board is bound to act in accordance with the courts’ decisions.
   • As part of our commitment to transparency, we share information on our website about court challenges^{Footnote 1} to the Board’s decisions and recommendations to the Governor in Council (GIC). This serves to provide Canadians with up-to-date information about the status of these legal challenges, regardless of the outcome.
   • Ms. Allan (and others) filed a motion requesting the Panel to amend the Hearing Order for the Application to include a phase for the oral cross-examination of witnesses. The Panel denied these motions in a single ruling.
   • In its ruling to deny the motions, the Panel stated:
     • “In the Board’s view, the legislation makes it clear that the Board is master of its own procedure and can establish its own procedures for each public hearing with regard to the conduct of hearings. This includes the authority to determine for a particular public hearing the manner in which evidence will be received and tested. In the circumstances of this hearing, where there are 400 intervenors and much of the information is technical in nature, the Board has determined that it is appropriate to test the evidence through written processes. All written evidence submitted will be subject to written questioning by up to 400 parties, and the Board.”
   • It is estimated that a hearing utilizing oral cross-examination for all active intervenors will require 124 hearing days, or about 9 months, excluding argument. The TMX panel had to consider this factor, along with many other issues including the legislated timelines when making its process decisions.
   • In the current process, Aboriginal Oral Traditional evidence was heard in 6 cities for a total of 20 days. Some participants said that allowing oral traditional evidence is unfair to other, non-Aboriginal intervenors that did not get to provide oral evidence. The Panel did not find that concern to be persuasive. Aboriginal people have an oral tradition that cannot always be shared adequately in writing. In this light, the current process provides an opportunity for Aboriginal people to bring project-related concerns before the Board, should they wish.
   • The scheduled process will also include oral summary argument phases in Calgary and Burnaby.
4. “The NEB has designed the scope of its review so narrowly…”
   • In July 2013, the Panel decided on a list of 12 issues it will consider during the hearing process. The Panel does not intend to consider the environmental and socio-economic effects associated with upstream activities, the development of oil sands, or the downstream use of the oil transported by the pipeline.
   • The issues are:
     • The need for the proposed project.
     • The economic feasibility of the proposed project.
     • The potential commercial impacts of the proposed project.
     • The potential environmental and socio-economic effects of the proposed project, including any cumulative environmental effects that are likely to result from the project, including those required to be considered by the NEB's Filing Manual.
     • The potential environmental and socio-economic effects of marine shipping activities that would result from the proposed Project, including the potential effects of accidents or malfunctions that may occur.
     • The appropriateness of the general route and land requirements for the proposed project.
     • The suitability of the design of the proposed project.
     • The terms and conditions to be included in any approval the Board may issue.
     • Potential impacts of the project on Aboriginal interests.
     • Potential impacts of the project on landowners and land use.
     • Contingency planning for spills, accidents or malfunctions, during construction and operation of the project.
     • Safety and security during construction of the proposed project and operation of the project, including emergency response planning and third-party damage prevention.
5. “A new, independent, evidence-based process must be established”
   • Section 52 requires the Board, when making a recommendation to Governor in Council, to have regard to all considerations that appear to the Board to be directly related to the pipeline and to be relevant.
   • An estimated 100,000 pages of evidence has been placed before the Panel by intervenors and the applicant. Some key figures are:
     • The original application was 15,000 pages
     • Trans Mountain’s responses to the first round of intervenor information requests (IRs) was 15,000 pages
     • Trans Mountain’s responses to the second round of IRs was 10,000 pages in response to 5,700 questions
     • Substantive written evidence provided by 104 intervenors, with IRs exchanged on much of this evidence
     • In 6 main rounds of IRs and on replacement evidence, the NEB issued 462 IRs
6. “The NEB has announced an aggressive time schedule…”
   • The Panel’s process must follow the legislation set out in the NEB Act.
   • Section 11 of the NEB Act requires the Board to determine an application as expeditiously as the circumstances and considerations of fairness permit but in any case within time limits.
   • Under the NEB Act, once the Board has determined an application to be complete, it has 15 months to assess the application and provide its recommendation to the GiC.
   • The legislated excluded period for the Panel to issue its report to the GiC, is 20 May 2016, and is in accordance with the process steps taken to this point. This schedule to arrive at the legislated excluded period complies with the legislated assessment period of 15 months, inclusive of two time-outs to gather more information from Trans Mountain, which are per section 52(5) of the NEB Act.
7. “Unlike the unprecedented NEB sanctioned $136 million fund Kinder Morgan is able to draw on...many intervenors do not have access to adequate funding”
   • This statement is incorrect. The NEB has only approved a toll methodology, which allows Kinder Morgan to charge a service fee that, over time, allows it to advance capital projects and conduct activities in the support of a potential expansion of the pipeline.
   • Based on Trans Mountain’s filings in the RH-1-2012 proceeding, the $136 million appears to be a projection of how much it anticipated it will have collected from the Firm Service Fee and allotted to TMX when the project goes into service.
   • To be clear, in 2011, the NEB approved Trans Mountain’s proposed treatment of the Firm Service Fee to “advance incremental capital projects and conduct preliminary activities in support of a potential expansion of the Pipeline”. Firm Service Fees are paid by a subset of Trans Mountain’s shippers for “firm service” (priority shipments) to the Westridge Dock for export from Burnaby. The issue of capacity allocation on the Trans Mountain pipeline has been the subject of multiple hearings and negotiated settlements in the past decade. Shippers have been willing to pay a premium to acquire capacity and to explore other solutions to the capacity constraint. As of December 2013, over $31 million of the $53 million in firm service fees collected had been spent on expanded services at the Edmonton Terminal, which benefits all shippers on the existing Trans Mountain pipeline. It is not unusual for shippers to contribute to costs associated with new projects.
   • The NEB has a Participant Funding Program (PFP), which provides funding to facilitate public participation in hearings. For TMX, the Board has awarded $3M in participant funding to 71 applicants to date.
   • The total PFP of the NEB budget is approved by Parliament through the annual budgetary process. While the NEB has asked that this envelope be increased, these requests were not approved.
   • In response to requests to provide additional funding to those intervenors impacted by the 21 August 2015 decision to strike evidence prepared by Mr. Kelly from the hearing record, the NEB’s PFP will provide up to an additional $10,000 per eligible intervenor for expert and legal fees.

Robyn Allan
s. 19 (1)
Whistler, BC
s. 19 (1)

Dear Ms. Allan:

The National Energy Board (the Board) acknowledges your letter of October 23, 2015 to Prime Minister Elect Justin Trudeau regarding the Board’s ongoing consideration of the proposed Trans Mountain Expansion Project.

As you are aware, a Panel of the Board is currently reviewing the proposed project in accordance with the requirements of the National Energy Board Act (NEB Act) and the Canadian Environmental Assessment Act, 2012. Additional information about the Board’s hearing process is available at: http://www.cer-rec.gc.ca/en/applications-hearings/view-applications-projects/trans-mountain-expansion/index.html.

The Board is an independent, quasi-judicial regulatory tribunal established by Parliament under the NEB Act. We are guided by the principles of natural justice and fairness. As with any regulatory tribunal, the Board must act within the scope of the powers delegated to it by its enabling legislation. The Board’s decisions are subject to independent and impartial judicial oversight, generally through the Federal Court of Appeal and the Supreme Court of Canada. The Board is bound to act in accordance with the courts’ decisions.

I appreciate your interest in the Board and the review process.

Yours sincerely,

Original signed by Josée Touchette

Josée Touchette, LLL, CPA (CMA), MBA
Chief Operating Officer

cc. Justin Trudeau, Prime Minister Elect
Terry Beech, MP, Burnaby North-Seymour
Kennedy Stewart, MP, Burnaby South
Ron McKinnon, MP, Coquitlam-Port Coquitlam
Carla Qualtrough, MP, Delta
Peter Julian, MP, New Westminster-Burnaby
Jonathan Wilkinson, MP, North Vancouver
Dan Ruimy, MP, Pitt Meadows-Maple Ridge
Fin Donnelly, MP, Port Moody-Coquitlam
Joyce Murray, MP, Vancouver Quadra
Murray Rankin, MP, Victoria
Pam Goldsmith-Jones, MP, West Vancouver-Sunshine Coast-Sea to Sky

Date modified:

2021-07-23