Court Halts Expansion of Pipeline in Canada

OTTAWA, Ontario — A Canadian court on Thursday froze plans to expand an oil pipeline that the government is about to purchase, ruling that the government’s National Energy Board had not adequately consulted indigenous people along the pipeline’s route or assessed the project’s potential effects on the waters off British Columbia.

While the practical effect of the decision may be a comparatively short construction delay, the ruling added fuel to an already incendiary debate over the Trans Mountain pipeline that links Alberta’s oil sands to an oil tanker port near Vancouver, British Columbia. The pipeline also branches off to refineries in Washington state.

After the pipeline’s owner, Kinder Morgan of Houston, abandoned its plans to add a second pipeline along the existing Trans Mountain route in April, Prime Minister Justin Trudeau’s government stepped in to buy the 715-mile pipeline for 4.5 billion Canadian dollars (about $3.4 billion). The sale is expected to be completed soon, possibly this week.

Environmentalists and some indigenous groups called the ruling a major victory, and some of them urged Trudeau’s government to give up on plans for the expansion, which has drawn widespread protests driven by environmental concerns.

“It’s a huge court case win,” said Chief Lee Spahan of the Coldwater Indian Band, one of the groups that brought the court challenge. “We want our cultural and traditional ways respected.”

The ruling was a setback for Trudeau, not least because he has repeatedly vowed to consult indigenous groups as part of efforts to make amends for past injustices.

Trudeau’s political critics on the right charged that he had bungled the project.

“This is just a complete failure for the Trudeau government’s handling of the energy sector,” Andrew Scheer, the leader of the Conservative Party, told reporters. “This is just another gut punch.”

But Bill Morneau, the federal finance minister, told reporters in Toronto that the government would still complete the expansion project.

“We are absolutely committed to moving ahead with this project,” Morneau told a news conference in Toronto. “What the decision today asked us to do is to respond promptly.”

Trudeau’s backing of the pipeline, which is not universally popular among his supporters, was to some degree a move to persuade Alberta to join his national carbon-tax program. Alberta’s energy industry, particularly the oil sands, is a major carbon emitter, making the province’s cooperation vital.

On Thursday night, however, Rachel Notley, the province’s premier, said that Alberta was withdrawing from the carbon-tax program until construction begins on the Trans Mountain extension.

“I am announcing that with Trans Mountain halted until the federal government gets its act together, Alberta is pulling out of the federal climate plan,” Notley said in a speech. “And let’s be clear: Without Alberta, that plan isn’t worth the paper it’s written on.”

Notley blamed “successive federal governments” for the situation and said that she had told Trudeau to immediately appeal the decision to the Supreme Court. She also wants the federal Parliament to hold an emergency session to “assert its authority.”

The case against the expansion was brought by several indigenous groups, the cities of Vancouver and Burnaby, British Columbia, and two environmental groups.

While most of the consultation with indigenous groups took place under a previous government led by Conservatives, Canada’s Federal Court of Appeal on Thursday found that a final phase during 2016, Trudeau’s first full year in office, “fell well short of the mark set by the Supreme Court of Canada.”

Specifically, the court found, “very few responses were provided by Canada’s representatives in the consultation meetings.”

It added that “when a response was provided it was brief and did not further two-way dialogue.”

But improving the process may be a straightforward matter.

The court said that the new set of consultations it had ordered would most likely be “brief and efficient while ensuring it is meaningful,” making for “a short delay” in the pipeline project.

Gordon Christie, a professor of law at the University of British Columbia and a prominent authority on indigenous legal issues, said that it might take only a few months for the government to engage in more meaningful consultations with indigenous groups.

“This has nothing to do with not building a pipeline,” he said from Vancouver. “All they’re required to do is go back, review the concerns and show that they are going to take them seriously and respond in some way. These are not negotiations.” Nor, he added, does the ruling give indigenous groups the power to shut down the pipeline project.

Spahan said that the Coldwater Band was looking for specific assurances that the expansion would not lead to oil leaks that threatened its drinking water, which comes from wells.

“When they moved forward, they totally disregarded Coldwater,” he said. “It was like stabbing us in the back.”

Many people in Canada’s energy industry said they were frustrated and disappointed by the prospect of a further delay in the pipeline expansion.

“We’re just tired of this stuff,” said Chris Bloomer, the president and chief executive of the Canadian Energy Pipeline Association. “We, as an industry, just sit here and go: We’re responsible, we’re safe, what more can we do?”

The expansion would put a second pipeline alongside about 610 miles of the 715-mile Trans Mountain pipeline, which opened in 1953. It would increase the system’s capacity to 890,000 barrels a day, from 300,000, at a cost of $7.4 billion.

Most of the oil sent through the Trans Mountain pipeline heads to the United States, mainly through a spur pipeline. Supporters of the expansion argue that it would open Asia as a second market for Canadian oil.