Canadian CGL Defends Provincial Oversight
Coastal GasLink, the $6.2bn (US$4.6bn) pipeline that will deliver natural gas from unconventional fields in northeastern BC to LNG Canada’s liquefaction terminal in Kitimat, reiterated in final oral arguments May 2 before the National Energy Board (NEB) that it is properly under provincial jurisdiction.
BC environmentalist Michael Sawyer filed the jurisidictional challenge largely on the grounds that the CGL pipeline, although wholly within the province of BC, would be functionally integrated with the NGTL system, a federally-regulated pipeline owned by TransCanada, which also owns CGL.
However, in his oral summary argument, Sander Duncanson, representing CGL, presented several examples of case law that showed no functional integration even between two companies which shared common ownership, work spaces and internal services and even some personnel.
“Based on these cases, and others, it is clear that a physical connection, close commercial relationship and common ownership – even if all three are found together – is not enough for a finding of federal jurisdiction,” Duncanson argued. “Even a physical connection and exclusive dedication of a local work to a federal undertaking is not enough. Something more is required to show that the two operations are effectively indivisible.”
Since CGL's sole purpose is to move natural gas for five shippers - LNG Canada's joint venture participants - entirely within the province of BC, there is no evidence that it and NGTL are effectively indivisible, he said.
Duncanson also disputed a suggestion from environmental group Ecojustice that the LNG Canada facility in Kitimat is actually a federal undertaking, which would make the CGL pipeline part of that federal undertaking and thus subject to federal jurisdiction.
“The LNG Canada facility, in terms of its construction and its operations, has always been under provincial jurisdiction,” he said. “That jurisdiction has not been called into question in this proceeding, and the board does not have an evidentiary basis to consider that issue.”
The mere fact that LNG Canada has a federal permit to export LNG from Canada and that the facility triggered a federal environmental assessment in addition to a provincial assessment, Duncanson argued, is irrelevant to who has jurisdiction over the export terminal.
“The logical extension of what Ecojustice is arguing is any facility in Canada that exports goods from the country and that is subject to the shared environmental jurisdiction of both levels of government becomes subject to the exclusive jurisdiction of the federal government,” he said. “That argument could capture so much of Canada’s economy – lumber mills, mines, hydro dams – that cannot be the correct interpretation.”
Oral summary arguments will continue today and conclude May 3. It is not known when the NEB will hand down its decision.