(Adds opposition and challenges to the pipeline)
By Julie Gordon
VANCOUVER, May 19 (Reuters) - Canada's energy regulator on
Thursday recommended the approval of Kinder Morgan (NYSE:KMI) Inc's KMI.N
plan to expand its Trans Mountain oil pipeline, subject to 157
conditions, clearing a major hurdle for the proposed trebling of
capacity to serve lucrative Asian markets.
The National Energy Board (NEB) said it found the C$6.8
billion ($5.19 billion) project, which would boost capacity from
300,000 barrels per day to 890,000 bpd, would not cause
significant harm to the environment.
The decision prompted immediate outcry from critics, who
called on Canadian Prime Minister Justin Trudeau to block the
twinning of the existing pipeline, which carries oil from
Alberta to a port in Metro Vancouver.
Trudeau's cabinet has until December to review the NEB's
533-page report and make its final decision. If approved, legal
experts say protests and a flood of lawsuits from aboriginal
groups will likely follow.
Aboriginals in British Columbia never signed treaties and
have been granted "consent" rights by the courts, sometimes
interpreted as a veto. But Trudeau told Reuters on Thursday that
while community consultation was vital, aboriginal groups do not
have a veto over pipeline development.
Building new oil pipelines in Canada has proven difficult in
recent years, even with approvals. Enbridge Inc's ENB.TO
Northern Gateway pipeline was greenlighted in 2014, but fierce
legal and social opposition has so far hindered construction.
That has weighed on Canada's oil sands producers, who are
desperate for new lines to get their product to international
markets, where it can fetch a higher price.
The NEB said it had determined the "considerable benefits"
of the Trans Mountain expansion outweighed the "residual
burdens." It also found that with mitigation measures and its
conditions, the project "would not likely cause significant
adverse environmental effects."
The agency did note that there would be significant effects
related to the increase in oil tanker traffic, though marine
shipping is not regulated by the NEB. The expansion would boost
oil tanker and barge traffic on Vancouver's waters nearly
five-fold.
Twinning the Trans Mountain pipeline will include the
construction of nearly 1,000 km (621 miles) of new pipeline and
the expansion of an existing marine terminal.
If approved by cabinet, the company said construction could
start in 2017, with the first shipments in 2019.
A ministerial panel, named earlier this week, is now tasked
with consulting with aboriginal groups and other communities on
the proposal, with their report due in November.
($1 = 1.3090 Canadian dollars)