LNG Pipeline to Lelu Island Heads to Federal Court of Appeal


January 27, 2017

LNG Pipeline to Lelu Island Heads to Federal Court of Appeal

VANCOUVER –Petronas’ massive LNG export facility on Lelu Island could face another obstacle if a bid to challenge provincial jurisdiction over TransCanada’s Prince Rupert Gas Transmission pipeline (PRGT) is successful in the Federal Court of Appeal this week. 

Mike Sawyer, a former environmental consultant and resident of Smithers, B.C., argues that TransCanada Pipeline Limited’s (TCPL) proposed PRGT project was improperly transferred from federal to provincial (B.C.) jurisdiction without any notice in 2013. Sawyer says the $5-billion pipeline project is actually within federal jurisdiction and must be regulated by the National Energy Board (NEB).

The pipeline would transport natural gas from the North Montney area of northeastern B.C. through TCPL’s federally regulated Nova Gas Transmission Limited (NGTL) pipeline system to Petronas’s LNG facility on Lelu Island for export to overseas markets.

Sawyer made two applications to the NEB to have the pipeline declared to be in federal jurisdiction, arguing that the pipeline is part of TransCanada’s federally regulated network of gas pipelines, and so it is under federal jurisdiction. The NEB denied both applications. However, the Federal Court of Appeal granted Sawyer leave to appeal in February 2016.

“My approach to this is a principled approach. Moving natural gas through a federally regulated interprovincial pipeline system in order to export LNG to overseas markets is a federal matter within our Constitution and it has to be examined from a national public interest perspective,” Sawyer said. “PRGT is not a local distribution pipeline – it’s a crucial part of the interprovincial pipeline network to bring natural gas to export markets,” he added.

One of Sawyer’s underlying concerns is that federal regulation of interprovincial pipelines and the export of LNG should not be fragmented by allowing the province of B.C. to implement its aggressive promotion of LNG exports by purporting to approve a pipeline – the PGRT project – that is legally within federal jurisdiction.   

Sawyer’s legal case centres on a 1998 Supreme Court of Canada ruling, Westcoast Energy vs. The NEB, which laid out the criteria for federal jurisdiction over projects that are located wholly within a province but are part of an interprovincial pipeline system. In rejecting Sawyer’s applications, the NEB endorsed an argument by TransCanada that the Westcoast Energy test should be shifted toward narrower federal jurisdiction. That was a legal error the Federal Court of Appeal should correct, according Sawyer’s lawyer, William Andrews, in pre-filed written arguments.

A successful outcome for Sawyer would have the case sent back to the NEB for a full jurisdictional hearing to decide if the PRGT pipeline is within federal jurisdiction under the Constitution.

Sawyer’s hearing in the Federal Court of Appeal is set for 9:30 a.m., Monday, January 30th at 701 West Georgia Street, 6th Floor in Vancouver.

For more information or comments contact Mike Sawyer at: 250-847-5751, or lawyer William Andrews at 604-924-0921.