National Energy Board Ministerial Briefing Binder – Status: NEB Review of the Proposed TransCanada Energy East Project

FOR INFORMATION

Security: Protected B
Date: 4 November 2015

BACKGROUND:

The Application

• Energy East is a proposal by Energy East Pipeline Ltd. for a 4,500 km crude oil pipeline from Alberta and Saskatchewan to refineries in Eastern Canada. The Proponent is a wholly-owned subsidiary from TransCanada Pipelines Limited (TransCanada). See map below.
• TransCanada currently owns and operates a natural gas transmission system that extends from the Alberta border across Saskatchewan, Manitoba and Ontario, through a portion of Québec, and connects to various downstream Canadian and international pipelines (TransCanada Mainline or Mainline). TransCanada began its foray into crude oil transport with Keystone and Keystone XL. The Proponent is a second oil subsidiary of TransCanada.
• The Energy East pipeline is proposed to carry 1,100,000 b/d of crude oil. The Proponent values the Energy East proposal investment at about $14.4 billion.
• The proposed project would include:
  • a purchase and conversion of a portion of the existing TransCanada Mainline from gas to oil service for approximately 3,000 km of existing pipeline;
  • approximately 1,500 km of newly constructed pipeline and facilities including laterals and connections, pump stations, and custody transfer metering stations;
  • new marine facilities that will enable access to other markets by ship; and
  • the construction and operation of four oil storage tank terminals.
• The application was filed with the NEB in October 2014. The Proponent announced in April 2015 there would no longer be a marine terminal in Quebec, and that it would file its amendments to the project application in late 2015.

MAP 1: The Proposed Project Route

Proactive Engagement

• The NEB has been proactive to engage and communicate with Canadians on the assessment process for Energy East and how the public can apply to participate in this process:
  • A team of bilingual NEB process advisors is available by phone or email to provide procedural assistance to persons wishing to participate.
  • The NEB increased its web-based presence to augment regular engagement practices, which are also available (more accessible website, easier filing and service of documents, increased plain language information, use of social media).
  • The NEB is leveraging its office in Montreal to provide a French language spokesperson and work with municipalities.
  • The NEB conducted a mail out of NEB postcards to 20,000 potentially affected persons/groups along the proposed pipeline route.
  • The NEB hosted 8 open house sessions along the proposed route in Ottawa and the provinces of Québec and New Brunswick.
  • The NEB delivered 122 online information sessions to educate the public on the Board’s role and help the public understand how they can meaningfully participate.
  • The NEB has conducted more than 40 meetings with Aboriginal groups as part of its enhanced Aboriginal engagement activities.
• An envelope of $5M has been made available for participant funding to facilitate the participation of Intervenors in the Energy East process.

The NEB Application Process:

• Since 2012, section 55.2 of the NEB Act requires a determination to be made as to whether persons applying to participate 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 Panel received approximately 2,300 applications to participate in February – March 2015.
• The Panel announced its decision on Aboriginal Intervenors in July of 2015 and also ruled to admit some late Aboriginal Intervenors. Currently, there are 112 Aboriginal Intervenors on the List of Parties. The Panel has not announced any other decisions on participation as of this date.
• The Energy East Panel determined that it will consider the following issues as part of the hearing process:
  1. The need for the Project.
  2. The economic feasibility of the Project.
  3. The commercial, economic, supply and market impacts of the Project.
  4. The appropriateness of the tolling methodology, and the method of toll and tariff regulation, including whether Energy East should be regulated as a Group 1 or Group 2 company.
  5. The commercial, economic, supply and market impacts of the Asset Transfer, including the need, economic feasibility and commercial impacts of the Eastern Mainline Project. This includes the appropriateness of the proposed capacity of the Eastern Mainline.
  6. Transfer of Assets:
     1. a. The tests to be used to assess the sale and purchase of the assets.
     2. b. The assets to be transferred and any terms to be included.
     3. c. The value which should be assigned to the facilities for the purposes of:
        1. i. removal from the rate base of the TransCanada PipeLines Limited’s natural gas mainline; and
        2. ii. inclusion in Energy East’s toll calculation.
  7. The potential environmental and socio-economic effects of the Project, including the environmental effects of accidents or malfunctions that may occur in connection with the project, and any cumulative effects that are likely to result from the Project, as considered under the Canadian Environmental Assessment Act, 2012.
  8. The potential environmental and socio-economic effects of increased marine shipping.
  9. The appropriateness of the general route and land requirements for the Project.
  10. The engineering design and integrity of the Project.
  11. Potential impacts of the Project on Aboriginal interests.
  12. Potential impacts of the Project on directly affected landowners and their land use.
  13. Safety and security associated with the construction and operation of the Project, including emergency response planning and third-party damage prevention.
  14. Contingency planning for spills, accidents, or malfunctions during construction and operations of the Project.
  15. Financial implications of contingency planning for spills, accidents, or malfunctions during construction and operations of the Project.
  16. The terms and conditions to be included in any recommendation or approval the Board may issue for the Project.
• The Panel determined it would not consider matters related to upstream activities associated with the development of oil sands, or the downstream and end use of the oil transported by Energy East.
• The Panel (which is also the same Panel for Eastern Mainline) established a separate List of Issues for the Eastern Mainline Project. The Eastern Mainline Project is proposed to replace some of the existing gas capacity to be converted to oil. Energy East and Eastern Mainline are interlinked through the asset transfer. The asset transfer would enable the purchase and conversion of the existing TransCanada Mainline from gas to oil service.
• The application filed by the Proponent was approximately 20,000 pages and supplemental filings have increased this total to approximately 35,000.

CURRENT STATUS:

• When the Panel released its decision on the List of Aboriginal Intervenors in July 2015 it also announced plans to undertake oral traditional evidence in 2015. This innovative approach to collect oral traditional evidence before the application is determined complete is used to optimize the time available to hear from Aboriginal Intervenors.
• Oral traditional evidence will be heard from approximately 35 Aboriginal Intervenors scheduled in Alberta, Saskatchewan, Manitoba, and Western Ontario from 9 November to 12 December 2015.
• The Panel has not yet deemed the Application to be complete, so the 15-month time limit (time limits are discussed in NEB Act, subsection 52(4)) has not yet started.
• The Panel is moving forward with the assessment, collecting additional information from the Proponent by asking information requests on parts of the project that will likely not change as a result of amendments.

NEXT STEPS:

• The Panel is expecting amendments to the project application from the Proponent in late 2015.
• Once the content of the amendments are known, the Panel will decide if another application to participate process is required and whether it can determine if the application is now complete.
• Additional dates for oral traditional evidence are planned for 2016 for additional groups to present in Ontario, Quebec and New Brunswick.
• If the application is determined to be complete, a Hearing Order will be issued to establish all hearing steps for participants and the Proponent. The Hearing Order will communicate when Intervenors will be allowed to file evidence with the Panel and ask written questions of the Proponent. Participants accepted by the Panel as Commenters will also have an opportunity to file letters of comments with the Panel.

Date modified:

2021-09-15