On May 16, 2014, the National Energy Board received a motion from the City of Vancouver, among others, requesting that the List of Issues for the Trans Mountain Expansion Project hearing be expanded to include environmental and socio-economic effects associated with upstream activities, including development of the oil sands (upstream effects) and the downstream use of the oil intended to be shipped on the pipeline (downstream effects). Vancouver’s request has been dismissed by both the National Energy Board (NEB) and Federal Court of Appeal.

The motion focused on the effects of greenhouse gas emissions from the production of oil sourced from the oil sands that could be shipped by the Trans Mountain Expansion Project and from the end use of that oil. Vancouver argued that the Canadian Environmental Assessment Act, 2012 (CEAA) and the National Energy Board Act (NEB Act) require the Board to consider the upstream and downstream effects.

On July 23, 2014, the NEB issued Ruling No. 25 wherein the Board dismissed the Vancouver motion. The Board held that the Project does not include upstream production and is not dependent on any particular upstream development. It stated that oil sands development is subject to provincial and federal environmental assessment processes and, therefore, as stated in CEAA duplication, should be discouraged. The Board agreed with Trans Mountain that downstream effects are more effectively assessed by and regulated by the jurisdiction where the use occurs, and consideration of downstream effects was not required by CEAA.

On August 20, 2014, Vancouver applied to the Federal Court of Appeal for leave to appeal NEB Ruling No. 25 on the grounds that: (i) the Board derogated its statutory responsibility under the NEB Act and CEAA; and (ii) the Board erred in law or jurisdiction. Trans Mountain responded arguing that upstream oil supply and potential downstream markets are not directly relevant to the NEB’s consideration of the public interest under the NEB Act or the scope and factors established under the CEAA. The Federal Court of Appeal dismissed Vancouver’s application for leave to appeal Ruling No. 25 with costs on October 16, 2014.

The Board’s ruling, and the Federal Court of Appeal’s dismissal of Vancouver’s application, is consistent with previous decisions of the NEB in regard to the exclusion of environmental and socio-economic effects associated with upstream activities, including development of the oil sands and the downstream use of the oil intended to be shipped on the pipeline. These decisions provide greater certainty that the review of NEB-regulated pipelines will be focused on the direct effects of the project under review.