The first of the 209 conditions the National Energy Board set for the Northern Gateway pipeline is that the company comply with the other 208.
That’s the kind of determined legal loophole-closing you like to see in a regulator. There will be no arguments over which “shoulds” are “musts.” All of them are considered mandatory.
If the crude ever starts flowing through the line to Kitimat, the company must file a confirmation within 30 days, “signed by the president of the company,” that all the conditions were met. If compliance with any of them can’t be confirmed, an explanation must be provided.
Taken as a whole, the lengthy list of conditions is a sizable add-on to the countless commitments the company has made already to get the $8 billion project underway.
But they are unlikely to stall it at this point. Many of them were pitched earlier as proposed conditions and have been on the table for months.
There’s enough potential profit in getting Alberta oil to the coast that even installing triple redundancy in most safety systems would not render the project uneconomical.
Enbridge is going down the list and analyzing the conditions.
Many of the conditions are technical requirements pertaining to the pipeline and the marine terminal, and many others govern performance in building both.
Some examples:
• No oil or condensate tankers can move until all the voluntary promises about marine safety are fulfilled. Those include live field trials in Douglas Channel with tugs and ballasted tankers, and an acceptance program that stipulates high standards for any tankers that third parties use to move the products.
• As well, a spill-response outfit capable of handling a big spill must be on site and audited for proof it can respond within six to 12 hours to a spill.
• During construction, Northern Gateway must notify the NEB of any application it makes for temporary foreign workers.
• A monitoring program of local hiring and another one for aboriginal hiring, to track progress toward the goal of having 15 per cent of the hiring from First Nations during construction.
• Reports are required on any complementary leak-detection system, over and above the standard systems.
There are also a number of pipeline-inspection requirements. They appear to be based on the company’s disastrous performance in 2010 in detecting a leak in Michigan, and even worse performance in responding to it. U.S. authorities found deficient pipeline integrity checks and “pervasive organizational failures” allowed a well-documented corroded crack to expand until the line burst.
Inspection and leak detection were highlighted in the B.C. government’s sharply critical submission against the pipeline last year.
One of the key section of conditions is on financial assurances. As in: Where would the money come from to cover the huge liabilities that would ensue after a major leak?
Northern Gateway must file a financial plan nine months before opening the valves that provides $950 million worth of coverage.
During hearings, the company suggested there was no need for such a financial assurance and the proposed one should be modified or withdrawn.
It wasn’t. There are numerous stipulations that the funds must be secure, dedicated, separate from routine cash flow and are not to be raised by the sale of assets.
“Within 10 days after a large spill … Northern Gateway must have unfettered access to at least $100 million to cover costs. Once used, this source must be replenished immediately to cover the costs of a potential future spill.”
Northern Gateway must have core coverage of at least $600 million at all times, and financial backstopping of at least $250 million.
A big share of the conditions relate to reporting and tracking progress on the project and recording every operational detail of the pipeline and its maintenance. They give at least the impression that regulators will watch the project closely every step of the way, should it get the final green light from the federal government. They also suggest the paper flow on the project would rival the flow of oil.
