How this man’s legal challenge could stall LNG Canada

LNG Canada has announced that the international consortium is ready to proceed with Canada’s largest ever infrastructure project, but, in a David and Goliath scenario, a challenge by a Smithers environmental consultant is aiming to temporarily derail or delay the $40-billion megaproject.

Michael Sawyer is arguing that the Coastal GasLink Project, a 675-kilometre pipeline running from Dawson Creek to Kitimat, should have faced a federal review by the National Energy Board instead of relying on provincial approval.

Although the $4.7-billion pipeline is set to be built entirely within B.C. — which would usually put it under the jurisdiction of the province — the pipeline, which would supply the LNG Canada export terminal in Kitimat, connects to an existing pipeline system that is federally regulated.

Also, Coastal GasLink Pipeline Ltd. is a wholly owned subsidiary of TransCanada Pipeline Ltd., which means under the Constitution Act the pipeline is within federal jurisdiction and should be regulated by the National Energy Board, Sawyer says in an application to the board.

Sawyer-Challenge-CoastalGasLinkProject-NEB by The Narwhal on Scribd

“A pipeline that crosses international boundaries or provincial boundaries would normally be federally regulated,” Sawyer told The Narwhal, pointing to a 1998 Supreme Court decision that said if a provincial pipeline is “functionally integrated” with an existing federally regulated line, it becomes an extension of the federal line.

Sawyer wants the National Energy Board to conduct an environmental review of the pipeline and, if that application is turned down, he is prepared to ask the Federal Court of Appeal for leave to argue to overturn that decision.

It is a process already familiar to Sawyer, who, last year, launched a similar action dealing with the Prince Rupert Gas Transmission pipeline.

That application was rejected by the National Energy Board, but the Federal Court of Appeal then ruled that the National Energy Board had erred and sent it back to the board for reconsideration. The question became moot when Petronas killed the Pacific NorthWest LNG project because of depressed natural gas prices.

Sawyer is hoping the previous ruling will give LNG Canada and the provincial and federal governments, which both support the project, pause to reflect on the financial ramifications of a delay.

It is a wrinkle that is likely to be top of mind for the federal government because of delays in the Trans Mountain oilsands pipeline, which was kicked back to the National Energy Board after its approval was rejected by the Federal Court of Appeal.

“I think I have a really good chance of winning. I think I am on really good legal ground, although I don’t think everyone is going to roll over and say they agree with me,” Sawyer said.

Challenge presents legal risk to LNG Canada

West Coast Environmental Law staff lawyer Erica Stahl agrees there is a risk to LNG Canada going ahead before the application is resolved.

“This case means there is a legal risk to them going ahead without a full resolution of the matters raised by Mike Sawyer,” Stahl said.

“They would be wise to take this seriously because of the Federal Court of Appeal’s previous ruling in the Prince Rupert case,” she said.

West Coast Environmental Law is helping fund the case through its Environmental Dispute Resolution Fund, a grant provided by the Law Foundation of B.C. to help pay for legally meritorious environmental cases.

If the National Energy Board turns down the application and the case has to wend its way through the courts it could be several years before there is an ultimate decision and Sawyer said that, if it becomes necessary, he could apply for an injunction.

A letter sent in August to the National Energy Board by Catherine Davis, TransCanada Pipelines Ltd. vice-president of natural gas pipelines law, calls Sawyer’s application “vexatious” and asks the board to decline to hear the application as the project is not functionally integrated with the federally regulated NCTL pipeline system.

“The application is an attempt by Mr. Sawyer to use the NEB to indirectly challenge natural gas development in B.C. He chose not to participate in the provincial regulatory processes for the project and chose not raise his concerns over the last four years, when he knew he could,” said the letter.

“Instead, he has brought this application on the eve of a FID (financial investment decision) in an obvious attempt to frustrate that project and its associated upstream development.”

Davis concluded that Sawyer has failed to demonstrate any specialized expertise or produce information that would warrant the National Energy Board spending time and resources on reviewing a project that obtained valid provincial permits four years ago.

“I believe that when the government doesn’t follow the law it is incumbent upon citizens to hold their feet to the fire.” — Mike Sawyer

So why is Sawyer, a former whitewater rafting guide, spending his time and money challenging the pipeline project?

“We are told we are living in a society based on law and order and good governance and I believe that when the government doesn’t follow the law it is incumbent upon citizens to hold their feet to the fire,” he told The Narwhal.

LNG and climate change

Sawyer is also concerned about the effect of LNG Canada on climate change.

Although supporters are touting natural gas as the clean alternative to coal used in Chinese industry, when everything from fracking and methane leaks to transporting the gas to China is considered, studies have shown that LNG, over its life cycle, is more carbon intensive than coal, Sawyer said.

With the approval of LNG Canada, there is expected to be an explosion of hydraulic fracturing operations in northeastern B.C., like this one near Farmington, B.C. Photo: Garth Lenz / The Narwhal

An August submission to the B.C. government from Marc Lee, senior economist with the Canadian Centre for Policy Alternatives says that LNG Canada’s emissions, ranging from fracking to liquefaction, would be between nine and 12 megatonnes a year — an amount likely to be a problem when B.C.’s emissions target for 2050 is 13 megatonnes in total.

Premier John Horgan, who is set to unveil a clean-growth strategy this fall, has said he believes climate targets can be met if LNG Canada goes ahead, but there will have to be sizeable reductions in other sectors.

Sawyer also wants a National Energy Board review to look at how LNG Canada will affect caribou herds.

A driving force behind the court decision to send the Trans Mountain pipeline back to the National Energy Board was the failure to consider the effect on endangered southern resident killer whales and Sawyer said the same situation is true of the LNG Canada project because of endangered caribou herds.

The caribou guardians

“There are caribou herds in northern B.C. that are protected under the Species At Risk Act that will go extinct if this project goes ahead,” Sawyer said.

“In the caribou range the government is allowing pipelines and wells to go ahead and that has never been considered so my goal in bumping this to a federal review is to actually have a meaningful analysis of whether this is in the public interest in regard to the monumental impact on greenhouse gases and on endangered species,” he said.

“Right now we have not done an honest assessment of the impacts and we are just salivating at the thought of all the money it is going to bring in.”

Sawyer received threats after filing application

Opposition to the project has come at a high personal cost for Sawyer who received intense criticism and threats from LNG supporters after he submitted the application.

“In the first few weeks after my original application was filed with the NEB I got a real stack of almost vitriolic comments and some of those were implicit threats like ‘we are coming to get you,’ and another guy commented ‘you had better have your house insurance up to date.’ ”

Sawyer reported the threats to the RCMP, but, so far, no action has been taken as the statements were implicit rather than explicit, Sawyer said.

“The way I have interpreted that is that they are angry people who are just expressing their frustration. So, I am paying attention, but I am not taking it too seriously,” he said.

In a September 6 letter sent to Sawyer with a copy to West Coast Environmental Law, 14 northern B.C. mayors reminded Sawyer that, although he has the right to file a jurisdictional challenge, northern communities support the LNG Canada project and the pipeline because of the “financial benefits of employment and economic activity that would follow.”

Others have suggested that Sawyer’s office should be picketed and that local businesses should put pressure on him to drop the legal challenge.

Sawyer, who has worked with the oil and gas industry, First Nations and NGOs, said his interest in natural gas dates back to an incident in Alberta in the late 1980s when he was a whitewater rafting guide.

Shell was working in the area and, unbeknownst to Sawyer and his 75 clients, who were camping beside the Red Deer River, a nearby well blew out releasing gas high in toxic hydrogen sulphide.

“Everyone woke up in the morning feeling really ill and when I walked up to the road a guy from an air monitoring truck roared down wearing a respirator and asked what the hell we were doing there,” Sawyer said.

The group was evacuated safely, but if the wind had been blowing in a slightly different direction it would have been a mass casualty event, he said.

“That kind of opened my eyes. Before that I was a typical Albertan who was just watching things unfold. I really wasn’t knowledgeable about oil and gas,” he said.

But, after talking to Shell and the regulators, who did not want to deal with the issue, he started to watch more carefully.

“It really was an education for me about the nature of the industry,” he said.