Kinder Morgan Canada will still need to seek permits from Burnaby, the provincial government and other municipalities as part of its Trans Mountain pipeline expansion project, but whenever there is a dispute over foot-dragging, the National Energy Board (NEB) has committed to resolving it within three to five weeks.
As detailed yesterday in Business in Vancouver, Kinder Morgan Canada (TSX:KML) has pushed had to push back its expected in-service date by one year, due largely to permitting delays.
The biggest obstacle has been the City of Burnaby, which the company claims has not issued routine approvals, such as tree cutting permits, in a timely fashion. The company has calculated it is losing $75 million in anticipated earnings for every month the new pipeline’s in-service date is delayed.
As a federal regulator, the NEB has the constitutional authority to override provincial and municipal laws, which it did in December, when it gave Kinder Morgan the authority to proceed with various construction projects in Burnaby, including the expansion of the Westridge Marine Terminal, despite not having the city’s approval.
But there are still dozens more provincial and municipal permits that will still be needed as work on the $7.4 billion project proceeds.
In addition to asking the NEB to set aside the current Burnaby permits, Kinder Morgan also asked the NEB for a process for dealing with future disputes as they arose, and warned that it needed clarity on the issue before it could fully commit funding to the project.
The NEB received written objections to such a process from the attorney general of B.C., the Katzie First Nation, Chilliwack, Surrey and Langley. It received written support from the attorneys general of Canada and Alberta.
On January 18, the NEB announced a new “generic process” for considering future disputes.
The company is still obliged to seeks permits and variances for the work it has to do from provincial and municipal governments and make every effort to satisfy the requirements.
But in the event of future delays, the NEB has committed to resolving those disputes within three to five weeks.
In a written statement, Kinder Morgan Canada Ian Anderson welcomed the decision.
"Provision of a process that is open, fair and provides certainty for all parties is good news and is an important component of the assurances we need for the successful execution of the Trans Mountain expansion project," he said.
