Northern Gateway 2.0? Dream on

Aboriginal title and litigation biggest hurdle for Northern Gateway 2.0

Social media, the Alberta legislature, and even Parliament have been abuzz with calls for the Enbridge pipeline project to be resubmitted to the National Energy Board and for the federal government to fast track its approval and construction. But a revived Northern Gateway is highly unlikely, say legal experts, and the biggest reason is indigenous opposition.

During Wednesday’s question period in the House of Commons, Conservative leader Andrew Scheer asked Prime Minister Justin Trudeau if he would “commit today to reviving it and completing the [indigenous consultation] process, while in the Alberta legislature UCP leader Jason Kenney was demanding Alberta Premier Rachel Notley press the Prime Minister on the same issue.

But people like lawyer Bill Gallagher, author of the book Resource Rulers and an expert on indigenous litigation and natural resource development, say there is no provision within existing legislation for re-starting the project where it left off in 2016. And even if there were, the legal obstacles would be almost insurmountable. “[It] would run into a totally changed legal landscape, 180 degrees different from where they left it,” he said “The right-of-way would run through the central part of BC across traditional lands, all of it unceded territory. So, they’re back to the drawing board.”

Northern Gateway was proposed in the mid-2000s and consisted of two pipelines: one shipping 525,000 b/d of crude oil west, and another sending 193,000 b/d of condensate east to Alberta. After years of fierce opposition from First Nations in British Columbia, the Stephen Harper government approved the project in 2014.

But as the summer of 2016 rolled around, Enbridge still lacked firm long-term crude oil supply agreements – one of the NEB’s 209 conditions – with customers for 60 per cent of the pipeline’s 525,000 b/d capacity. The company asked the regulator for a three-year extension while it tried to entice shippers to sign on. Then the Federal Court of Appeal struck down the Harper Government’s approval of the project in June because Ottawa failed its constitutional duty to consult First Nations. The company had 30 days to appeal the decision. It didn’t.

“Northern Gateway 1.0 was already dead when Prime Minister Justin Trudeau drove a spike through it,” Gallagher said. 

No wonder the prospects for a Northern Gateway reboot are dim.

“I would be very surprised if the Northern Gateway project could credibly rise from the dead to move forward once again given the extent of opposition and legal and financial hurdles that it was facing at the time of its demise,” Gavin Sims, a lawyer with West Coast Environmental Law, said in an interview.

Aboriginal title and litigation

According to Gallagher, the legal landscape for pipeline projects in BC is radically different than it is in Alberta or the rest of the country.

“Natives have a de facto veto. By stopping two pipelines in BC (Northern Gateway and Trans Mountain Expansion approvals were quashed by the Federal Court of Appeal because of First Nations legal challenges), they actually have a de facto legal veto,” he said.

Only one case of aboriginal title, often referred to as the Tsilhqot’in case, has been established within British Columbia, according to David Wright, assistant professor law at the University of Calgary. Once title is proven then consent is required, but there are still exceptions.

“The [federal] government may still infringe those rights. The test for that is set out in a case called Sparrow and it’s a little bit unpredictable which way that can go, but there has to be overriding public interest factors that essentially require the infringement of the rights,” he said in an interview.

Wright adds that if one or more other First Nations along the pipeline route could prove aboriginal title before Northern Gateway was ready for review by the regulator, that would be a serious impediment to construction. “If they’re in a situation where there’s been proven Aboriginal title, it’s going to be relatively difficult for the Crown to satisfy that justification [for infringement] test,” he said, noting that aboriginal title takes a long time to prove. 

But even if Aboriginal title did not come into play for Northern Gateway 2.0, Gallagher points to recent environmental impact assessment legislation from the Government of BC that explicitly recognizes indigenous consent. “We are moving from consultation to consent,” he said. “When you put all the [many legal wins] together, natives do have a de facto veto. I was in Calgary recently and had dinner with a retired Court of Appeal judge and he agreed with that. So, no matter what the academics say, no matter what industry wants, and Aboriginal title genie cannot be stuffed back into the bottle.”

Environmental assessment legislation

Smith says that how BC’s new environmental assessment will work with the old BC-Canada equivalency agreement is unclear because the Trudeau government has new environmental assessment legislation of its own, Bill C69, which is much reviled in Alberta for being pipeline-unfriendly.

“If a new Northern Gateway project were to be advanced, it’s not entirely clear whether that would continue to be covered by the equivalency agreement, or whether the new provincial government would see to use its new environmental assessment act to impose a more rigorous process,” he said.

Would Northern Gateway 2.0 be able to pick up where it left off under the Harper Government’s rules?

“There is nothing in CEAA 2012 that speaks to what happens when a proponent wants a second kick at the can. Presumably, then, they have to go through the review process a second time,” says Martin Olszynski, assistant professor of law at the University of Calgary.

If Ottawa decided that the review process would be governed by Bill C69 provisions – which the oil and gas industry claims will ensure there will never be a new pipeline project application – that alone might discourage Enbridge from considering a Northern Gateway 2.0.

Bill C48 – oil tanker ban

If that uncertainty isn’t enough to make Enbridge think twice about Northern Gateway 2.0, then there’s the federal moratorium on oil tankers off the northern BC coast.

“Bill C48, which has been passed by the House of Commons and is currently at second reading at the Senate, would effectively take future Northern Gateways off the table legally. The bill would prohibit the loading and unloading of crude oil supertankers in the North Coast region,” said Smith.

Northern Gateway 2.0 doomed before it starts

In addition to aboriginal title, new environmental assessment rules, and the oil tanker moratorium, there is still fierce public opposition (indigenous communities and other BC pipeline opponents) and Premier John Horgan’s NDP minority government to contend with.

Kinder Morgan cited the uncertainty created by “inter-governmental” conflict for its decision to sell its Canadian assets, including Trans Mountain Expansion, to the Canadian government for $4.5 billion.

Northern Gateway 2.0 would likely face even greater uncertainty given the array of obstacles facing it, making it highly unlikely Enbridge would revive the project.