As Atlantic Canada’s new natural gas industry prepares to beginproduction and export deliveries Nov. 1, the National Energy Board(NEB) has set out to keep it clear of legal and political feudsdisrupting the region’s fishing community.

Step one is a ruling that native rights still stop short of aveto over pipeline projects. The NEB handed down the decision in acase involving the powerful Mi’kmaq, on the heels of their triumphin winning a ruling that they can trap lobsters commerciallyyear-’round after a hot contest in the Supreme Court of Canada.

Since it was handed down at the start of October, the lobsterruling has ignited a mini-civil war, with police SWAT teams postednear docks after conventional fishermen damaged native lobstertraps and Mi’kmaq warriors burned pickup trucks and buildings.Multiple criminal charges have been laid, attempts to negotiate atruce have failed and further action is awaited after a late-nightemergency debate in the Canadian Parliament in Ottawa.

The NEB set out to stop any such conflict in the new gasindustry before it has a chance to start. The board rejected aMi’kmaq demand to postpone approval of C$77.7-million(US$52-million), 78-mile, 120 MMcf/d Nova Scotia branch or”lateral” off the new Maritimes & Northeast Pipeline tointroduce gas service to Halifax. The NEB, while acknowledging thenatives have also made initial moves on taking their pipeline caseto court, refused to delay the project by putting any of its weightbehind claims for enhanced power.

The board said “it would be preferable for the parties to workout the terms of the agreement or protocol between themselves.”The NEB’s aboriginal policy parallels standard Canadian practice inindustry relations with non-native communities. Developers arerequired to make disclosures and conduct extensive consultation andnegotiation with landowners. Once approved, gas pipeline projectshave power to expropriate contested property for rights-of-way withlocal authorities determining compensation.

MN&P and Sable Offshore Energy Project (SOEP) are onschedule to start deliveries Nov. 1 as commissioning of theprojects proceeds after the last pipeline weld was completed Oct.9. Markets drive the industry – and not government regulation anymore anywhere in Canada, the NEB said in a series of decisions toturn down calls for intervention. The rejected demands includedefforts by would-be local distribution companies, now competing fora Nova Scotia franchise, to make MN&P increase the size of itsproject to match their more optimistic projections of gas use. TheNEB agreed with MN&P that, as elsewhere in the industry, anAtlantic Canadian distribution grid will have to invest in localservices such as facilities for consumption peaks. Thelong-distance lines’ responsibilities are to be big enough fordemand projected from known sales contracts and to incorporateexpansion possibilities in their designs.

The New Brunswick and Nova Scotia governments were told that theend has come, on the East Coast as well as the rest of the country,to intervention on behalf of future Canadian consumers. NewBrunswick, and Nova Scotia only somewhat less forcefully, urged theNEB to hold off approving the sale by Imperial Oil of its share ofSable Island production to Boston Gas because as-yet unknown newCanadian customers could step forward. The board upheld a12-year-old “market-based procedure,” devised by retired chairmanRoland Priddle, that allows exports unless Canadians are unable toobtain gas-supply contracts on comparable terms.

The NEB called the cornerstones of the East’s new gas industry,SOEP and MN&P, “the result of market-driven initiatives.” Theboard warned that “setting aside uncontracted quantities of gasreserves for Canadian markets before exports are allowed” – therule before the Priddle system – “could in fact introduce harmfulmarket distortions.”

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