Keystone XL pipeline faces new challenge in Canada

The Keystone XL pipeline, already approved by regulatory authorities in Canada but facing continuing approvals challenges in the U.S., is now facing a new challenge in the Canadian regulatory arena.  On September 23, the Communications, Energy and Paperworkers Union of Canada (CEP) wrote to the National Energy Board (NEB) to raise concerns about whether Keystone XL has complied with the sunset clause in its Canadian approval certificate.  Condition 22 of Certificate OC-56 reads:

Unless the Board otherwise directs prior to 11 March 2011, this Certificate shall expire on 11 March 2011 unless construction in respect of the Project has commenced by that date.

In its letter to the NEB, the CEP says that it understands:

that the Board made no direction prior to March 11, 2011, and that no construction in respect of the Project had commenced by that date.  Accordingly, OC-56 expired on March 11, 2011, and there is no current approval that would allow TCPL to proceed further with the Keystone XL pipeline. 

The CEP says that when it asked about the apparent expiry of the Certificate, Ms. Saunders of the NEB advised that TCPL had undertaken some earth moving activity and, in doing so, commenced construction of the pipeline.  CEP challenges this assertion in its letter, reminding the NEB that various requirements to be carried out at least 60 days prior to the commencement of construction have also not been completed by TCPL.

The NEB has now issued a letter to the CEP and to TCPL saying that it would like to gather more information about the situation before responding to CEP's letter.  TCPL has the opportunity to file responding comments by October 14.  CEP may file reply comments by October 21.

An interesting development in a controversial pipeline project.  Worth keeping an eye on.