The Federal Court of Appeal has granted a pipeline opponent
leave to appeal the question of whether the Prince Rupert Gas
Transmission Project (PRGTP) is within federal jurisdiction and
subject to regulation by the National Energy Board (NEB). The PRGTP
is currently being regulated by the Province of British Columbia
and received an Environmental Assessment Certificate in November
2014. This is another example (similar to recent challenges related
to Northern Gateway and Energy East, as discussed in a prior
post) where pipeline opponents are disputing whether federal or
provincial regulators, or both, should oversee and regulate
The PRGTP is a proposed 900 km natural gas pipeline that will
deliver gas from Hudson's Hope (near Fort St. John) to a
proposed liquefied natural gas (LNG) facility near Prince Rupert.
The LNG facility is called Pacific NorthWest LNG and it is to be
owned by a consortium led by Petronas. As seen in recent news
stories (for example, here, here and here), that LNG project is facing significant
uncertainty as the proponents await a decision on an environmental
assessment from the Canadian Environmental Assessment Agency and as
questions mount about potential impacts from the Federal
Government's climate change policies.
In an October 2015 Application to the NEB, Michael Sawyer
asserted that the PRGTP should be subject to federal jurisdiction
despite the fact that it is wholly located in British Columbia. Mr.
Sawyer argued to the NEB that the PRGTP will be operated together
with TransCanada Pipelines' NOVA Gas Transmission Limited
System (NGTL). He relied on the test set out by the Supreme Court
of Canada in Westcoast Energy Inc. v. NEB and
asserted that PRGTP will be operated with NGTL as a "single
federal undertaking" and is therefore subject to federal
jurisdiction. The project proponent (TransCanada) disagreed, and
asserted that the PRGTP is a local work that offers intraprovincial
gas transportation service under a different arrangement than
In a Decision dated November 30, 2015, the NEB
declined to find jurisdiction over the PRGTP and denied Mr.
Sawyer's Application. The NEB indicated that it is not
persuaded that the PRGTP and NGTL systems will be functionally
integrated and commonly managed and controlled, such that they are
operated as a single "enterprise."
In February 2016, the Federal Court of Appeal granted Mr. Sawyer leave to appeal the
NEB's Decision. There is no information about when
the appeal will be heard. If Mr. Sawyer's appeal is successful,
it would introduce more uncertainty around the Pacific NorthWest
LNG project. Such a decision could also provide support to future
pipeline opponents who seek to add levels of review to local
pipeline projects that are connected to larger interprovincial
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
In Bank of Montreal v Bumper Development Corporation Ltd, 2016 ABQB 363, the Alberta Court of Queen's Bench enforced the "immediate replacement" provision in the Canadian Association of Petroleum Landmen 2007 Operating Procedure...
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).