By Rod Nickel
WINNIPEG, Manitoba, Feb 4 (Reuters) - Canada's Federal Court of Appeal is scheduled to rule on Tuesday whether Prime Minister Justin Trudeau's government adequately consulted indigenous people when it approved last year an expansion of the Trans Mountain oil pipeline.
Approval would clear some uncertainty over the twinning of a 67-year-old pipeline that runs from Alberta to the British Columbia coast. If the panel of judges decides that indigenous consultation - required by law for major Canadian resource projects - was insufficient, the decision could further delay what the energy industry says is a vital project.
Ottawa bought the pipeline in 2018 to ensure expansion proceeded, offering a lifeline to Alberta's struggling oil patch. Congested pipelines have forced the Alberta provincial government to curtail production to reduce a glut in storage that has weighed on prices and led to layoffs in the industry.
The Federal Court intends to post the decision online at 1 p.m. ET (1800 GMT).
"Every investor is really watching this situation," said Stephanie Kainz, senior associate at consultancy RS Energy Group in Calgary, adding she expects further challenges. "Until there's a definite go-ahead, I think it's concerning for everybody."
Four indigenous groups alleged in court in December that Ottawa delayed sharing key information and listened half-heartedly to concerns.
"We've been really trying to stand up for our interests and articulate that the minimum standard that the government has applied in this case has not been lived up to," said Squamish Nation council member Khelsilem, who uses a single name.
Squamish, located in British Columbia, is concerned about potential spills on land and sea, he said.
A Canadian court ruled in August 2018 that Ottawa had failed to properly consult indigenous people, prompting the government to redo consultation before reapproving the expansion in June 2019. In September, the Court of Appeal agreed to hear fresh concerns that the government fell short again.
"The Trans Mountain pipeline is vital for not only Alberta, but Canada as a whole," said Kavi Bal, senior press secretary for Alberta Energy Minister Sonya Savage. "With construction already underway, we remain optimistic that Trans Mountain will be completed."
The Canada Energy Regulator is separately conducting hearings for contested portions of the Trans Mountain route.
Trans Mountain expansion is one of three projects, along with TC Energy Corp's TRP.TO Keystone XL and Enbridge Inc's ENB.TO Line 3, that have been stalled for years.
On Monday, Line 3 cleared key hurdles before a Minnesota regulator.