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Canadian Government Ratifies Regulatory Approval of Nova Gas Transmission

Canada's year-old Liberal government confirmed Monday that environmental and native opposition has failed to stop natural gas pipeline construction in the western heartland of the industry.

The federal cabinet ratified regulatory approval by the National Energy Board (NEB) of C$1.3 billion (US$975 million) in additions to TransCanada Corp.'s supply gathering network in Alberta and British Columbia, Nova Gas Transmission Ltd. (NGTL).

Natural Resources Minister Jim Carr said in a statement, "The twin imperatives of economic prosperity and environmental protection guided us in our decision-making. I am confident the right decision was made in the interest of Canadians and that this project supports the principles of sustainable development."

His announcement came as a relief to the industry. Cabinet ratification of NEB rulings was a formality under previous administrations. The Liberals added a political screen to the process, with cabinet representatives double-checking NEB findings and collecting public opinion to keep a 2015 election promise of increased sensitivity to environmental and native issues.

The Liberals also pledged to strengthen the economy and root their decisions in evidence, expertise and experience. The NGTL ratification stood out as the second affirmation in a month that Canada is staying open to gas projects.

The first signal arrived in the Sept. 27 approval of a hotly contested liquefied natural gas (LNG) project, the Asian-sponsored Pacific NorthWest LNG plan for a 3 Bcf/d export terminal on the northern BC coast (see daily GPISept. 28). Aboriginal opponents, beating drums outside the Vancouver courthouse, last week filed a protest lawsuit even though a majority of the communities directly affected have made benefits agreements with the development.

The federal approval authorizes NGTL to loop five stretches of pipeline and raise power at two compressor stations, with construction scheduled for completion in 2017 (see Daily GPIJune 2). The initial driver of the program is a package of 25 contracts with seven producers for gas deliveries of 318 MMcf/d.

The project enables gas producers both to maintain and expand output for oil sands plants by replacing aging conventional wells with new shale output, chiefly the accessible Montney but also the more remote Horn River, Cordova, Liard and Duvernay deposits.

To keep up with both new oilsands and gas production, NGTL told NEB that the new facilities are required to be built and in service by late 2017.

Hearings on the NGTL expansion highlighted the increasing public sensitivity of pipeline and oilsands issues. Additions packages of varying sizes are annual events on TransCanada's grid, and for generations rarely caught attention outside immediately affected industry participants.

Even though nine-tenths of the installations only affect established rights-of-way and operating sites, the new package escalated into a complex approval case involving 16 aboriginal groups, 24 commercial interveners, two federal government departments and a provincial agency. NEB tacked dozens of conditions onto the construction approval, with special attention given to protecting the habitat of caribou as an endangered species and to employing native monitors as watchdogs over industry behavior in traditional territories and sensitive environmental areas. The federal cabinet ratification decision upheld the NEB conditions.

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