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Chapter 3
Environmental and
socio-economic matters

3.1 Joint Review Panel process

In August 2003, the federal Minister of the Environment referred the Mackenzie Gas Project to a Joint Review Panel under the Canadian Environmental Assessment Act. In January 2004, the Inuvialuit Environmental Impact Screening Committee, under the Western Arctic Claim: The Inuvialuit Final Agreement, made the decision to refer the project to the review panel process. On 20 April 2004, the Mackenzie Valley Environmental Impact Review Board announced that it had decided to refer the project to an environmental impact review. In May 2004, the Minister of Indian Affairs and Northern Development Canada gave his approval for the Mackenzie Valley Environmental Impact Review Board to enter into an agreement to establish a joint review panel. An Agreement for an Environmental Impact Review of the Mackenzie Gas Project was released on 9 August 2004. This agreement created the Joint Review Panel, set out its mandate and established the Scope of the Environmental Impact Review, including the factors to be considered in the review.

 

Under the Joint Review Panel Agreement, the signatory agencies issued the Environmental Impact Statement Terms of Reference for the Mackenzie Gas Project in August 2004. Terms of Reference contained guidelines for the preparation of an Environmental Impact Statement for the Mackenzie Gas Project, including the nature and scope of the issues that the Proponents needed to address. The Environmental Impact Statement served as a basis for the Joint Review Panel's review and evaluation of the potential impacts of the Mackenzie Gas Project on the environment.

 

As set out in the Joint Review Panel Agreement, the Joint Review Panel was also required to have regard to “the protection of the existing and future social, cultural and economic well-being of residents and communities”, in addition to its consideration of environmental matters. The social, cultural and economic concerns that were raised with the Joint Review Panel included:

  • resource harvesting;
  • land use;
  • cultural heritage;
  • infrastructure and services; and
  • economic, social and cultural impacts.

Our hearing focused on safety, engineering and economic issues, but comments received during the consult to modify process and final argument also included a number of social, cultural and economic issues and concerns.

On 2 September 2004 the federal Minister of Environment appointed Mr. Rowland J. Harrison, Q.C., a member of the National Energy Board, as one of the seven members comprising the Joint Review Panel. On 15 October 2004, the National Energy Board authorized Mr. Harrison to report and make recommendations to us in our consideration of the Mackenzie Gas Project.

On 30 December 2009 the Joint Review Panel issued its report and Mr. Harrison adopted it as his report to us. The report contained 176 recommendations, 85 of which were addressed to us. The remainder required action by various federal and territorial governments and agencies.

3.2 Consult to modify process

Subsection 141(6) and section 137 of the Mackenzie Valley Resource Management Act require the National Energy Board as a designated regulatory agency to adopt the recommendations of the Joint Review Panel or, after consulting with the Joint Review Panel, adopt the recommendations with modifications or reject them.

On 6 January 2010, we established a process to consult on the Joint Review Panel recommendations. Parties to both our hearing and the Joint Review Panel hearing were invited

to provide comments on recommendations within the National Energy Board's mandate according to the following schedule:

schedule
28 January 2010 The Proponents sent comments to us and parties to both hearings
11 February 2010 Parties to both hearings sent comments to us, the Proponents and other parties
18 February 2010 The Proponents sent reply comments to us and parties to both hearings
9 March 2010 We drafted proposed modifications and provided them to the Joint Review Panel for written response
29 March 2010 The Joint Review Panel responded to our proposed modifications

For recommendations that fell outside of the National Energy Board's mandate, we provided a separate administrative process to gather comments for use by other federal and territorial government departments and agencies.

In a letter dated 9 March 2010, attached as Appendix H, we proposed modifications to the Joint Review Panel recommendations that were directed to us and listed our proposed conditions, many of which were designed to address the Joint Review Panel recommendations as modified. We indicated that the proposed modifications preserved the intent of the recommendations and were made to clarify desired end results and timing for implementation. We also stated that some recommendations were not included as

conditions because they were duplicative of the requirements of statutes and regulations or of the mandate of other regulatory authorities; required the National Energy Board to delegate its authority to others; related to internal operational matters; or fell outside the scope of the present applications.

The Joint Review Panel responded to the proposed modifications on 29 March 2010. The Joint Review Panel concluded that:

the NEB Proposed Conditions have not rejected any of the Panel's recommendations that are directed to the NEB and that the modifications proposed by the NEB are primarily for the purpose of ensuring that the implementation of those recommendations conforms to established NEB protocols and procedures, operational requirements and other statutes and regulations.

A copy of the letter is included in Appendix J.

The summary of the Joint Review Panel's recommendations directed to the National Energy Board and references to our associated conditions can be found in the Concordance Table in Appendix I.

3.3 Environmental matters discussed in final argument

In keeping with the purposes of establishing the Joint Review Process, we relied on the Joint Review Panel Report for the environmental and socio-economic assessment of the Mackenzie Gas Project. Matters arising from the Joint Review Panel Report were raised in final argument. These matters were:

  • cumulative effects and upstream impacts;
  • end use of gas and downstream impacts;
  • air quality issues and greenhouse
  • gas emissions;
  • impacts of climate change on the project;
  • wildlife and species at risk;
  • environmental protection plans; and,
  • National Energy Board’s role in enforcing recommendations directed at others.

3.3.1 Cumulative effects and upstream impacts

To address the potential effects of the project as filed and the potential cumulative effects of future developments, the Joint Review Panel directed recommendations to us, governments, and regulatory agencies and authorities. The Joint Review Panel concluded that, subject to the full implementation of its recommendations, the project is not likely to have significant adverse environmental effects. The Proponents submitted that this conclusion is unsustainable because it was inappropriate for the Joint Review Panel to tie its recommendations related to speculative or hypothetical future developments to the environmental assessment

decision for the Mackenzie Gas Project. The Proponents stated that:

 

from an environmental assessment perspective, the issue in any event isn’t whether the Proponents believe that the addition of future facilities is reasonably foreseeable. The issue is whether there is sufficient detail about future facilities to allow for a meaningful assessment of their effects to be made, which in this case there clearly is not.

 

The Proponents submitted that future induced development should not be included in the cumulative effects assessment in the first place because it is contrary to the law and contrary to environmental assessment guidance. For this same reason, the National Energy Board should not include conditions about such developments in the Mackenzie Gas Project decision. The Proponents then concluded that the National Energy Board must not include those Joint Review Panel recommendations related to future facilities in the environmental assessment decision for the Mackenzie Gas Project, and that the National Energy Board:

 

should make a decision to permit the Mackenzie Gas Project to proceed, subject to the implementation of the mitigative and remedial measures and follow-up programs as proposed in the NEB letters dated March 9 2010, on the basis that the Mackenzie Gas Project is not likely to cause significant adverse environmental effects.

The Sierra Club of Canada countered this by reaffirming what was heard before the Joint Review Panel: that there is a typical sequence of development that follows a pipeline going into a frontier area and that the commonality between the Sproule Associates Limited and Gilbert Laustsen Jung Associates Ltd. supply studies shows likely locations of future development, therefore future development is neither hypothetical nor fanciful. World Wildlife Fund Canada submitted that the Joint Review Panel appropriately exercised its discretion as to what it regards as reasonably foreseeable projects. Both the Sierra Club of Canada and World Wildlife Fund Canada submitted that we should not revisit the Joint Review Panel’s conclusion on the importance of induced development for sustainability, but rely on the Joint Review Panel’s conclusions and recommendations in light of the delegation of the social and environmental review to it.

Related views were presented on the linkage between future induced developments and sustainability and its relevance to our decision. The Proponents submitted that the basis for the Joint Review Panel’s sustainability conclusion on page 585 of the Joint Review Panel Report is flawed because the Joint Review Panel actually assessed future development for which little is known, instead of assessing the Mackenzie Gas Project itself. The Sierra Club of Canada submitted that specialist advisors to the Joint Review Panel emphasized the importance of considering induced development before being able to determine sustainability. The Sierra Club

of Canada also proposed that it is incumbent on the National Energy Board to take on the idea of sustainability as part of its own processes.

Parties also stated their concerns to us about how cumulative effects of future development would be managed. The Joint Review Panel Report presented a number of recommendations related to future development directed to us and to government authorities. Alternatives North submitted that Northerners do not want to see the same pattern of hydrocarbon development that happened in Alberta, and that it is unacceptable that each development be assessed separately at different times without adequate up-front consideration of cumulative effects. World Wildlife Fund Canada supported the principle of Conservation First, submitting that this means anticipating cumulative effects and induced development and sequencing up front certain conservation accomplishments while Northerners still have a chance to do so. The Sierra Club of Canada expressed the need for up-front controls on the pace and scale of upstream-induced development. The Sierra Club of Canada supported the Joint Review Panel’s position that mitigation must occur up front, in a proactive manner, not as each individual development project is proposed. It suggested that we consider a number of up-front strategies proposed by the Joint Review Panel, such as the federal government’s completion of species recovery strategies, interim withdrawals to support a network of protected areas, and land use planning to incorporate thresholds

and limits of acceptable change. The Sierra Club of Canada urged us to make sure that the recommendations from the Joint Review Panel to control cumulative impacts from induced development are put in place before the project goes ahead.

The Inuvialuit Regional Corporation submitted that:

While we do not support the extent to which the Joint Review Panel report recommends additional assessment procedures throughout this expansion process, we nevertheless appreciate, in principle, the need to ensure the future development of our region’s hydrocarbon resources does not occur at a scale and pace that will endanger our natural environment and overwhelm the social fabric of our communities.

The Inuvialuit Regional Corporation stated that the Inuvialuit have worked in close partnership with government departments and agencies, with co-management boards, and with other Aboriginal groups to identify both the anticipated impact of these developments and the measures that should be taken to either mitigate or to manage them. The Inuvialuit Regional Corporation would like to see us direct the government to provide the necessary financial resources to allow initiatives such as the Beaufort Sea Strategic Regional Plan of Action, the Beaufort Regional Environmental Assessment process and the impact planning in advance of the Mackenzie Gas Project impact

fund to take place. The Mackenzie Valley Aboriginal Pipeline Limited Partnership (Aboriginal Pipeline Group), representing members of the Inuvialuit, Gwich’in and Sahtu, submitted that care must be taken so that the project is not burdened with unreasonable expectations. It objected to the Joint Review Panel’s recommendations which would freeze future development, and did not believe that was their mandate in the first place. The Aboriginal Pipeline Group added that:

We have protected our land for thousands of years. We are proud of this land given to us by the Creator to provide for us. We will continue to use our land wisely.

The Sierra Club of Canada submitted that imposing conditions related to future projects does not fetter the discretion of future panels. The Sierra Club of Canada submitted that, under theCanadian Environmental Assessment Actand Mackenzie Valley Resource Management Act, mitigation measures relied upon to conclude that a project can go ahead must actually be implemented. Dehcho First Nations submitted their concerns that we did not understand the spirit and intent of many recommendations such as those involving future projects that are not currently before us. Dehcho First Nations suggested adjusting the timing of Joint Review Panel recommendations related to future projects so they apply to this project instead. The Proponents submitted that future development, be it new gas fields or a pipeline expansion, would be subject

to the intense scrutiny of the regulatory process, including scrutiny by the National Energy Board.

The Joint Review Panel’s response to our proposed modifications to the recommendations stated that, where we noted that a relevant Joint Review Panel recommendation is:

[o]utside the scope of the Mackenzie Gas Project (MGP) applications as it involves future application(s), [t]he Joint Review Panel does not understand this notation to be a rejection by the NEB of the relevant recommendation. The relevant Joint Review Panel recommendations stand and the Panel expects that they would, accordingly, be considered by the NEB in the specific context of any future applications.

The Sierra Club of Canada held the position that it is relevant that the National Energy Board has jurisdiction over approving future induced developments, but that does not take away from the Joint Review Panel’s assertions that this work needs to be done up front. According to the Sierra Club of Canada, rights issuances and exploration in the area will increase, and this is not within the National Energy Board’s purview. The Sierra Club of Canada submitted that they would agree with the Joint Review Panel’s response interpreted as the Joint Review Panel agrees that once preparatory work is done, then future applications can be dealt with one at a time because the necessary preparatory work is complete.

Views of the Board

The matter of cumulative effects and upstream impacts was heard in full before the Joint Review Panel. We rely on their methodology and conclusions.

In response to the concerns raised regarding the need for up-front planning and the National Energy Board’s jurisdiction over future projects, we continue to rely on the Joint Review Panel’s assessment to identify mitigation measures appropriate for addressing cumulative effects of future development. We believe that our approach to implementing mitigation measures related to future development at the time of application for that development maintains the spirit and intent of the Joint Review Panel recommendations while adhering to the principles of natural justice and procedural fairness for future projects. The National Energy Board will consider all relevant evidence at the time of future applications, including cumulative impacts on the environment, and will make decisions in the public interest. The Joint Review Panel agrees that this procedural modification does not mean that we are rejecting the Joint Review Panel’s recommendations directed at future projects. The Joint Review Panel stated that they expect that [cumulative effects] would be considered by the National Energy Board in the specific context of any future applications. The National

Energy Board will continue to play its role in decision-making and project oversight in order to minimize environmental impacts now and in the future.

People at the hearing were concerned about the future. While views differed in the details, common threads included the integration of the land, the economy and the people; the importance of future generations; and community self-reliance. We listened to these views and incorporated them into our public interest determination. We heard from the Inuvialuit Regional Corporation:

We ask that you consider not only the need to ensure the protection of our environment, but also the provision of economic opportunity to our residents and the social integrity of our communities.

We also heard from the Dehcho Elders and Harvesters:

We’re talking about the future of our children and we need to make sure that things are going to be better for our children in the long future and we don’t want anything sitting wrong for our children in the future.

The Aboriginal Pipeline Group stated that they “need to regain socio-economic self-sufficiency for our people today and for our future generations.”

The National Energy Board will continue to listen to Northerners through its lifespan regulatory oversight and accompany them in the pursuit of a sustainable energy future. Achieving sustainable outcomes will be a product of many parties including government authorities, communities, industry, and the Canadian public, that all support different pieces of the picture.

3.3.2 End use of gas and downstream impacts

Parties brought forward concerns in final argument related to the downstream impacts of the project and the end use of Mackenzie gas. The Sierra Club of Canada and France Benoît expressed concern that the gas from the Mackenzie Gas Project was intended for use in the oil sands where it would significantly increase greenhouse gas emissions. The Sierra Club of Canada submitted that, short of carbon neutrality, the Mackenzie Gas Project could contribute to a sustainable energy future if the gas is used wisely by displacing more carbon-intensive fuels. The Sierra Club of Canada proposed a National Energy Board certificate condition which would delay ‘leave to open’ for the pipeline until satisfactory implementation of Joint Review Panel recommendations 8-8 and 8-9. These recommendations were directed at the federal government to implement initiatives to manage greenhouse gas emissions (8-8) and to direct natural gas to ‘wise’ end-use applications (8-9). Ecology North also recommended the National Energy Board support these Joint Review Panel recommendations.

According to the Proponents, the Mackenzie Gas Project would deliver gas into the Alberta pipeline system where it would be commingled with other gas supplies and sold into markets throughout Canada and the United States. The Proponents submitted that there is no direct connection between the Mackenzie Gas Project facilities and a specific facility where gas will be burned, thus it is not relevant to our decision for us to consider the environmental effects of the combustion of Mackenzie gas at all facilities across North America where the gas could be burned. The Sierra Club of Canada countered that since the location of greenhouse gas emissions is irrelevant to their impacts, it is not logical to ignore end use impacts for the reason that the location of end use is unknown.

Views of the Board

Mackenzie gas would enter the North American market, where it would augment other supplies of natural gas. The end use of this gas would be determined by competitive markets operating within a public policy framework. The Joint Review Panel Report concluded that:

mandating carbon neutrality and intervening in the market to specify preferred end uses for natural gas cannot be resolved on a project-by-project basis through the environmental assessment process, but must be addressed by governments through comprehensive climate change strategies.

When the National Energy Board is asked to consider the impacts of downstream facilities, it looks for a direct connection between these downstream facilities and the project under consideration. It is not possible to identify any particular downstream facility that would use the gas transported by the Mackenzie Gas Project. The gas would be transported through the TransCanada Alberta System to markets in southern Canada and elsewhere in North America. Where that gas would be delivered depends on future gas sales contracts and it is not possible at this time to determine what portion, if any, would be consumed in Alberta or in which sectors of the North America economy over the life of the pipeline. No specific markets or consumers can be directly linked to the Mackenzie Valley Pipeline and the operation of downstream facilities is not contingent upon receiving Mackenzie gas. Because there is no direct connection between the Mackenzie Valley Pipeline and any particular downstream facility, the environmental effects arising from the operation of downstream facilities do not appear to us to be relevant to the applications before us.

Nevertheless, we believe that augmenting the Canadian supply of natural gas, a relatively clean-burning and efficient fuel source, is of benefit to the Canadian public. Greater gas supply in the market increases the potential that fuels with

higher greenhouse gas outputs would be preferentially displaced. Global energy demand is independent of whether Mackenzie gas comes on stream or not. Since natural gas is relatively low in greenhouse gas output per unit of energy produced, overall emissions would tend to be lower than the alternative where other carbon-based energy sources would be used.

3.3.3 Air quality issues and greenhouse gas emissions

Air quality issues

Air quality in the North is considered to be of high quality and Northerners are very concerned that it remains that way. Both Environment Canada and the Proponents agreed that existing air quality in the proposed project area is good and, along with other government regulators, emphasized the need to “keep clean areas clean.” This principle requires new industrial development to be “planned, constructed and operated in a manner that minimizes the degradation of air quality in these areas.”

Air quality issues for the project included project emissions for the pipeline and development fields, monitoring, and greenhouse gases in the context of monitoring climate change. These are aligned with the issues identified in the Joint Review Panel report. In its view the key air quality issues included:

  • the project would be a long-term source of new air emissions in a generally pristine environment, and while impacts are not predicted to exceed relevant standards and guidelines, participants invoked the “keep clean areas clean” principle;
  • Environment Canada and the Government of the Northwest Territories recommended the use of best available technology to minimize emissions, while the Proponents countered that they would use best practical technology, which is “technology that considers safety, engineering requirements, cost and environment, to reduce operational emissions”; and
  • the project’s air emissions would require appropriate monitoring during the construction and operation phases.

The Joint Review Panel noted that the National Energy Board would be the prime regulator of air emissions from the project and that Environment Canada and the Government of the Northwest Territories would play advisory roles. The Joint Review Panel recognized the National Energy Board’s expertise and experience in regulating interprovincial aspects of the oil, gas and electric utility industries, including environmental matters. The Joint Review Panel also recognized the extensive environmental and local knowledge that Environment Canada and the Government of the Northwest Territories can provide.

Air emissions can be related to the project-specific effects of construction, operations, and waste incineration. Specific components of air emissions for the project might include:

sulphur dioxide; nitrous oxides; ozone; carbon monoxide; carbon dioxide; volatile organic compounds; particulate matter; and compounds that include sulphates and nitrates, together called potential acid input. Carbon dioxide, methane and nitrous oxides are compounds that have the potential to collect in the atmosphere and influence global temperatures (greenhouse gases). Air quality impacts can be local to regional in the case of particulate matter and sulphur dioxide, or global in the case of greenhouse gases.

Specific discussion regarding air quality issues including emissions for the three gas fields is included in Chapter 4, Development fields. Further specific discussion on air emissions pertaining to facility design is found in Chapter 6, Facilities.

The Joint Review Panel report indicated that the Proponents’ baseline information was compiled from historical data and results of air quality monitoring that was carried out over one year near the communities of Inuvik and Norman Wells, and periodically at the Parsons Lake and Taglu gas fields. The Proponents’ monitoring data and other sources indicated that background concentrations of air contaminants are generally below detection levels or applicable guidelines. The one exception that is not below detection levels is ozone; relatively high background levels were monitored in Inuvik and Norman Wells. The Proponents indicated that elevated ozone levels at high latitudes in the northern

hemisphere are thought to result from the intrusion of stratospheric ozone. The Proponents stated that all ground-level concentrations of compounds released by the project during operations at the gas fields, the Inuvik Area Facility, and compressor and heater station sites would increase, but would be below those outlined in applicable federal and territorial guidelines at all locations in the production area and along the pipeline corridor.

Environment Canada recommended that the Proponents design and implement suitable air quality monitoring programs with its help. Environment Canada focused its recommendations on pollution prevention and the use of best available technology and best management practices to minimize the degradation of air quality. Further discussion around application of these principles may be found in Chapter 6, Facilities.

The Dehcho Elders and Harvesters indicated that the project needs to be designed to minimize air quality impacts, with monitoring plans in place to verify the predicted emissions and impacts. Corrective action needs to be taken quickly to avoid impacts upon the land and wildlife from degraded air quality.

Greenhouse gas emissions

Parties were concerned about the impacts of the project on climate change, especially in light of Canada’s international efforts under the United Nations Framework Convention on Climate Change and the Kyoto Protocol.

Greenhouse gas emissions arising from the project include carbon dioxide, methane and nitrous oxides with each compound having a different climate change potential. During operation, the project would emit greenhouse gases from burning natural gas at combustion related sources such as compressors and methane gas released through normal venting procedures and minor leaks (fugitive emissions). Further specific discussion on air emissions pertaining to facility design is found in Chapter 6, Facilities.

In the Joint Review Panel’s view, Environment Canada is responsible for the design and implementation of ongoing climate monitoring in the region, the analysis of the data and the assessment of potential impacts. The Proponents’ responsibility should be limited to providing relevant site-specific monitoring information to Environment Canada and ensuring that their operations and maintenance program takes into account any changes beyond that currently predicted.

Alternatives North submitted that the National Energy Board and the Government of Canada have a public interest mandate that requires consideration of greenhouse gas emissions.

Ecology North deemed that high project-specific standards for greenhouse gas emissions, based on a robust and strong definition of best available technology and accompanied by penalties in the cases where they do not meet those project standards or targets, would provide the best possible protection in terms of

minimizing upstream greenhouse gas emissions associated with the project.

Sierra Club of Canada submitted that we need to specify an actual target and it is not enough to just leave it up to the Proponents. Sierra Club of Canada indicated that the targt should at least match the general recommended target in Joint Review Panel recommendation 8-8.

Views of the Board

We understand the importance of clean air in the North and that air quality must be considered in a cumulative manner. We also recognize the need to minimize greenhouse gas emissions resulting from the project. The Joint Review Panel directed several recommendations to us relating to air quality and air emissions. We have addressed air issues through several conditions for the Mackenzie Gas Project. These conditions are focused on the Proponents taking appropriate measures to minimize air emissions and address air quality. We are committed to working collaboratively with Environment Canada and the Government of the Northwest Territories to protect air quality in the North, recognizing the extensive environmental and local knowledge that these agencies can provide.

Conditions 11, 12 and 13 address technologies for reducing emissions, incorporation of best management practices and best available technologies,

and facility design. Condition 12 requires the submission of a report evaluating incinerator emissions from camps and station facilities. Technologies and practices must be reflected in the waste management plans required by Conditions 16 and 59. Condition 67 requires the Proponents to minimize and reduce emissions from flaring. Further specific discussion for these conditions regarding air emissions pertaining to facility design is found in Chapter 6, Facilities.

Air quality monitoring is part of comprehensive environmental monitoring under an environmental management system. Through environmental management, systems are established to address the effects of the project on the environment and of the environment on the project, with the overall goal of minimizing negative impacts. Adaptive management is a systematic process for continually improving management practices by learning from their outcomes.

Environmental monitoring is an important part of environmental management that directly supports adaptive management by observing and evaluating the effects that occur, then changing or adding mitigative measures, as appropriate, to limit or reverse the environmental effects. Environmental monitoring can include:

  • compliance monitoring, to verify that all environmental mitigation is implemented as presented in the Environmental Protection Plan (EPP) and environmental alignment sheets and that work is in compliance with environmental regulations; and
  • effects monitoring, to assess the effects resulting from project-environment interactions and evaluate the effectiveness of approved mitigation measures. This is further discussed in section 3.3.6, Environmental Protection Plans.

The National Energy Board promotes goal-oriented environmental management and monitoring. This means the National Energy Board tends to require a desired end result and the proponent may choose the means of achieving that result provided the means are acceptable to the National Energy Board. A proponent is expected to implement Environmental Protection and Monitoring and Surveillance Programs which include protection of the environment as one of the main goals.

The Onshore Pipeline Regulations, 1999 require the proponent to implement an Environmental Protection Program which must include monitoring and adaptive management. (Section 48: “A company shall develop and implement an environmental protection program to anticipate, prevent, mitigate and manage conditions which have a potential to adversely affect the environment.”)

Monitoring is required by the National Energy Board under Section 39 of the Onshore Pipeline Regulations, 1999. (“A company shall develop a monitoring and surveillance program for the protection of the pipeline, the public and the environment.”) A monitoring program may:

  • identify any issues or potential concerns that may compromise the protection of the environment;
  • include methods for developing measures to prevent or mitigate the impact of the identified issues;
  • provide for continued monitoring of sites to evaluate success of mitigative measures undertaken;
  • provide a system for implementing additional mitigative measures as necessary; and
  • provide a feedback system that allows for adaptation of successful mitigation to future pipeline projects.

Monitoring programs may have specific goals and targets and could include methods for evaluating and interpreting collected data such as air quality or emissions data. Monitoring may include any relevant environmental practices (e.g., vegetation establishment, water quality sampling, waste disposal).

Responsibilities of the National Energy Board regarding monitoring include:

  • conducting environmental inspections of facilities, verifying compliance with terms and conditions, and assessing the effectiveness of mitigation;
  • monitoring ongoing operation and verifying reclamation and maintenance of the project site to acceptable standards; and
  • conducting environmental audits, evaluating environmental management systems and environmental programs.
The National Energy Board generally requires the filing of environmental post-construction monitoring reports as a condition of an authorization. The Filing Manual provides guidance for companies on the content of environmental post-construction monitoring reports. The information in monitoring reports should include:
  • confirmation of proper implementation of mitigation and reclamation measures used;
  • identification of the outstanding environmental issues; and
  • discussion of the company’s plans for how outstanding issues will be resolved.

We have addressed the monitoring of air emissions through several conditions. Condition 3 requires the Proponents to submit for approval an Environmental Protection Plan prior to pre-construction activities which includes monitoring of activities for this stage of the project. Condition 15 outlines expectations for an Air Quality Monitoring Program and includes the requirement for consultation

with other government agencies, location and selection methods of monitoring sites, and complaint response. Condition 16 includes the requirement for monitoring incinerator emissions.

A commitment to continuous improvement, outlined in Joint Review Panel recommendation 8-6, is expected to be a component of the Air Quality Monitoring Program required by Condition 15. We are of the view that the commitment to continuous improvement is not limited to greenhouse gas emissions but should apply to all discharges to the environment, which in this case is the atmosphere. Condition 15 also covers the requirements for methods and locations of monitoring.

Condition 13 requires the Proponents to file a report outlining the use of best available technology for station facility construction. Selection of best available technology is the most significant factor in determining achievable air emissions targets. Condition 59 outlines the requirements for an Environmental Protection Program. The condition requires the Proponents to submit policies, practices and procedures for management of air emissions including maximum proposed greenhouse gas targets and reduction strategies for air emissions including particulate matter, NOx and greenhouse gases. Condition 59 also addresses other matters from the Joint Review Panel recommendations including

employee training, monitoring, public communication, waste management and required consultation with Environment Canada and the Government of the Northwest Territories. With these conditions, we find it acceptable for the Proponents to develop greenhouse gas targets for the project consistent with the use of best management practices and in consultation with appropriate government agencies.

3.3.4 Impacts of climate change on the project

Warming of the global and regional climate could raise sea levels and affect weather patterns. The Niglintgak and Taglu fields are located in the low-lying Mackenzie Delta near the Beaufort Sea. We heard concerns that seasonal flooding and storm surges could affect these facilities during the life of the project. The companies provided evidence that the facilities would be high enough to protect them from storm surges and flooding even if sea levels were to rise. Parsons Lake is located on higher ground and further from the sea, so its facilities would be less exposed to possible effects of climate change.

The Sierra Club of Canada was concerned about the lack of peer-reviewed research publications on the effects of climate change, specifically for the Mackenzie Delta over the 30 year lifespan that was used by Shell in the design of the Niglintgak facilities. The Sierra Club of Canada

stated that from a design perspective, there is uncertainty regarding the effects of climate change on the permafrost, the rise in sea level and the degree of flooding. The Sierra Club of Canada referred to the Arctic Climate Impact Assessment prepared by the International Arctic Science Committee. The Arctic Climate Impact Assessment states that the Arctic is experiencing the most rapid and severe climate change on earth, including the disappearance of Arctic sea ice which allows higher waves and storm surges.

The Proponents said that climate change would be considered further in detailed engineering design, where required, such as for well pads, pipelines, facilities, and the right of way. Other possible impacts of climate change, such as landform changes and groundwater flows, would be handled through monitoring and mitigation. Overall, the Proponents indicated that their designs were sufficiently conservative to address potential climate change and variability.

Environment Canada indicated that interactions of climate variability and climate change would likely be a more significant environmental stressor on Project components over the anticipated lifespan of the project of about 25 years than currently acknowledged by the Proponents. Therefore, appropriate assessment, monitoring and mitigation approaches must be incorporated into the project’s design, maintenance, contingency plans and decommissioning plans. Environment Canada also recommended that, prior to construction:

climate change modeling employed by the Proponents properly incorporate
the upper limit temperature scenarios to ensure that the safety margin built into the project design is adequate to cover the range of future temperature conditions including their variability extremes.

The Joint Review Panel was generally satisfied that the Proponents had taken climate change into account in their design. Nevertheless the Joint Review Panel recommended that the National Energy Board add a condition which would require the Proponents to file final design plans that incorporated further analysis of the impacts of climate change on permafrost and terrain stability over the design life of the project and post-abandonment. The Joint Review Panel was of the view that this analysis should be conducted for a series of representative locations, conditions and terrain types and should incorporate climate variability, in particular, upper limit temperature scenarios to account for the range of future temperature conditions, including variability and extremes, and the impact of this variability on stream flow regimes. The Joint Review Panel added that the results should be incorporated into monitoring, mitigation and adaptive management plans. The Joint Review Panel thought that this analysis should be provided to other appropriate regulators in sufficient time for review and to provide input to the National Energy Board.

Indian and Northern Affairs Canada suggested in final argument that the Proponents should demonstrate how upper limit temperature scenarios have been considered in their design.

Further specific discussion on climate change regarding project design is found in Chapter 4, Development fields and Chapter 6, Facilities.

Views of the Board

We are satisfied with the Proponents’ climate change estimates used in the design. Given the uncertainty regarding climate change predictions, a prudent step would be to assess the design using upper limit temperature scenarios as suggested by the Joint Review Panel. As the name implies, upper limit temperature scenarios would be less likely to occur than what has been used by the Proponents for the design of the project. Condition 6 requires the Proponents to submit a report which includes an analysis of the impacts of climate change and variability on permafrost and terrain stability for a series of representative locations and conditions using potential upper limit temperature scenarios which may occur along the pipeline. The analysis is to include potential impact on slope and water course crossing design. We have not specified how the study should be structured. We are of the view that, as part of this study, government departments such as Environment Canada, Indian and Northern Affairs Canada and Natural Resources Canada should be consulted to benefit from their expertise.

Conditions N8, T7 and P8 require the Proponents to provide final detailed design information which incorporates an analysis of the impacts of climate change

and variability on permafrost and terrain stability for each facility using potential upper limit temperature scenarios which may occur during the operational life of the project. The Proponents will also provide information about how upper limit temperature scenarios may impact precipitation, rise in sea level, storm surges, ice floes and flood levels, and watercourse crossing designs. We are of the view that government departments such as Environment Canada, Indian and Northern Affairs Canada and Natural Resources Canada should be consulted to benefit from their expertise for the field design.

3.3.5 Wildlife and species at risk

Throughout final argument, parties reaffirmed the importance of wildlife to the people of the North and to Canada as a whole. The Dehcho stated:

We have depended on the wildlife and plants to provide for our physical, emotional, and spiritual health, as well as providing our economic base for long before the last ice age.

The Sierra Club of Canada submitted that species at risk are of national interest and that biodiversity loss is a pressing gloal problem.

Parties presented three outstanding concerns with respect to wildlife and species at risk:

  • habitat disruption and sensory disturbance;
  • woodland caribou; and
  • conditions regarding species at risk.

Habitat disruption and sensory disturbance

Parties to our hearing restated in final argument their concerns about habitat disruption and sensory disturbance to wildlife.

The Dehcho Elders and Harvesters were concerned about the disruption to wildlife that would occur from work on the pipeline. They submitted that disturbance of wildlife and wildlife habitat must be minimized as much as possible for all animals, including those that hibernate and live underground. They stated:

the destruction of winter feeding, breeding and birthing areas and migration routes of all animals in the clearing of the land for the right of way, facilities and activities must be minimized and, in some cases, avoided by choosing an alternative pipeline route or facility location.

They also confirmed that the pipeline corridor must not be a barrier to wildlife movement.

Sensory disturbance such as noise and vibration were of concern to the Dehcho Elders and Harvesters. They submitted that noise and vibration pollution from the Enbridge pipeline affected animal migration and fish runs and that proper studies need to be undertaken to determine the sensitivities of all fish and wildlife to the sounds and vibrations generated by pipeline operation and how these affect their behaviour patterns, migrations and other activities. The project design should then be changed as required to ensure that its operation has no effect on wildlife behaviour.

Views of the Board

We heard that the Proponents have already committed to some mitigation measures to reduce wildlife disturbance and habitat disruption. These include:

  • use of insulation and sound-suppression equipment;
  • minimizing the use of flares and lighting;
  • preventative maintenance to minimize unplanned activities; and
  • altered design of laterals to allow for passage by caribou and harvesters.

It is our view that with the Proponents’ commitments and with the additional requirements specified in Conditions 29 through 36 and similar Conditions on the approvals for the three development plans, disturbance to wildlife and their habitats will be minimized. We require the Proponents to submit for approval Wildlife Protection and Management Plans that include pre-construction wildlife surveys, detailed descriptions of mitigation measures and how these will be implemented, and protocols for monitoring and adaptive management. Among the mitigation measures the Proponents must submit are the scheduling of activities to minimize wildlife disturbance, procedures to avoid denning areas, measures to avoid sensory disturbance, and measures to minimize impacts of vehicle and air traffic on wildlife. Annual den surveys and mitigation

measures to avoid dens must also be completed and filed with the Government of the Northwest Territories and wildlife management boards.

We require the Proponents to submit Wildlife Protection and Management Plans prior to filing the detailed route. Any adjustments to the detailed route that would minimize impacts to wildlife populations or their habitat will be evaluated and completed at the design stage. The National Energy Board will assess the effectiveness of Wildlife Protection and Management Plans and will monitor their implementation. The National Energy Board will conduct compliance monitoring throughout the lifespan of the project and will require all commitments to be satisfied.

We also require that the Wildlife Protection and Management Plans be developed in consultation with wildlife management boards, the territorial government and Environment Canada. We ask for evidence of this consultation to be provided with the Proponents’ submission. Through this, we are satisfied that agencies with expert knowledge on wildlife management in the North will have input into the Plans. We believe that Condition 28 regarding the hiring of local residents as monitors will also assist local residents to identify any areas where mitigation measures are not working. The National Energy Board can direct the Proponents to take

appropriate action to adaptively manage the situation. We heard from the Dehcho Elders and Harvesters that, “we need to work together and closely and to make sure that everything is safe”. We plan to do so.

Woodland caribou

Canada’sSpecies at Risk Act requires the Minister of the Environment to put in place a recovery strategy and action plan for listed wildlife species, which includes boreal woodland caribou. This has not yet been completed. The Sierra Club of Canada submitted that since legal obligations under the Species at Risk Act have not been fulfilled, the environmental assessment is not complete because the Joint Review Panel has accordingly been unable to determine the significance of impacts on species at risk such as woodland caribou.

The Proponents submitted that the Joint Review Panel made recommendations to address the uncertainty about the significance of the impacts the project might have on woodland caribou, including recommendation 10-4. Recommendation 10-4 states that a further assessment of the impacts that the project is predicted to have on species listed on Schedule 1 of the Species at Risk Act (listed species) should take place once the Proponents have greater certainty about the location of project facilities. It also states that surveys and impact assessments for listed species must be carried out after recovery strategies and action plans have been completed. The Sambaa K’e Dene Band submitted

that we had not taken full consideration of Joint Review Panel recommendation 10-4 in our proposed conditions.

The Sierra Club of Canada, Alternatives North, Jean Marie River First Nation and the Sambaa K’e Dene Band submitted that the woodland caribou recovery strategy and action plan must be finalized and approved under theSpecies at Risk Act as a prerequisite to the development of a Wildlife Protection and Management Plan for woodland caribou and in advance of National Energy Board final authorizations. Jean Marie River First Nation also submitted that required mitigation measures include avoidance of critical overwintering habitat for woodland caribou. The proposed Mackenzie Valley Pipeline corridor is home to over-wintering woodland caribou, traditionally harvested by the Sambaa K’e Dene Band members. The Sambaa K’e Dene Band field and literature research carried out over a period of three years, consistent with other woodland caribou research, indicates that these animals are most vulnerable to industrial development during the late winter months—January through March—which is precisely when Mackenzie Gas Project activities will be occurring. The Sierra Club of Canada argued that consideration of the impacts on these key species at risk was meant to be conducted in public hearings, either before the Joint Review Panel or before the National Energy Board, and that this public process was being omitted from the proposed National Energy Board conditions.

Views of the Board

We acknowledge the importance of woodland caribou to the people of the North and of species at risk to Canadian biodiversity. We believe that our Conditions 29 and 30 capture the intent of the Joint Review Panel recommendations related to woodland caribou protection and management, and are within the National Energy Board’s abilities to effectively assess, manage, and enforce.

Mitigation measures must be developed by the Proponents in consultation with Environment Canada—the same agency responsible for completing the woodland caribou recovery strategy and action plans under the Species at Risk Act. We expect that through this consultation, the Protection and Management Plan for woodland caribou will be informed by the same research that is going into the development of the recovery strategy and action plans.

Conditions 29 and 30 require the Proponents to conduct pre-construction surveys and submit, for National Energy Board approval, updated impact assessments, specific mitigation measures, protocols for monitoring and adaptive management, and provisions for updating the Wildlife Protection and Management Plan for woodland caribou as recovery strategies and action plans are effected

and additional knowledge becomes available. Mitigation measures to be described by the Proponents include:

  • the timing and dates of project activities to avoid conflict with caribou movement or sensitive feeding and calving time;
  • measures to limit predator travel along right of ways;
  • access management; and
  • measures to avoid or minimize linear disturbance, effects of habitat fragmentation, and barriers to movement.

These mitigation requirements were derived directly from Joint Review Panel recommendations 10-1, 10-4 and 10-16, which had been recommended to the Joint Review Panel by the Government of the Northwest Territories who are involved in the preparation of woodland caribou recovery strategies. We have also stipulated that the Wildlife Protection and Management plans be developed in consultation with Environment Canada, the Government of the Northwest Territories, and wildlife management boards. Based on comments received by parties on the Joint Review Panel recommendations, we also included specific consultation requirements with the Dehcho Boreal Caribou Working Group. Between the combined efforts of the Proponents and these authorities we believe that potential adverse impacts of the project on woodland caribou will be

minimized. When the recovery strategies and action plans are finalized, the Proponents are required to update their Wildlife Protection and Management Plans accordingly. However, we expect that such modifications to plans will be minimal since consultation with the parties responsible for developing the recovery strategy and action plan is required throughout.

We recognize that without a recovery strategy for woodland caribou in effect at this time, critical habitat has not yet been established as defined under the Species at Risk Act although research is in progress. However, Condition 29 requires Wildlife Protection and Management Plans to be filed for approval by the National Energy Board prior to decisions being made on the detailed route. In the case that the recovery strategy and action plan for woodland caribou remain incomplete at this time, we expect that additional science-based and traditional knowledge will be available to inform the detailed route in avoiding critical habitat to the extent possible. The knowledge of the Dehcho Boreal Caribou Working Group should be a valuable tool for the Proponents in identifying and protecting critical habitat.

We are of the mind that, with the application of the mitigation measures proposed in Conditions 29 and 30, developed in consultation with federal,

territorial and Aboriginal government authorities and approved by the National Energy Board prior to filing of the detailed pipeline route, impacts of the project on woodland caribou can be minimized.

Species at risk

Environment Canada submitted that the draft conditions circulated by the National Energy Board may unduly impose survey requirements for those species at risk where the Minister of Environment has determined that its recovery is not feasible at this time, such as the Eskimo curlew. Environment Canada also clarified that the requirements for listed species described in Conditions 29, N22, T21 and P21 should apply to all species at risk added to Schedule 1 of theSpecies at Risk Act at the time the Proponents file their Wildlife Protection and Management Plans with the National Energy Board, not only to those listed species assessed during the Joint Review Panel hearings.

Environment Canada submitted that Condition 34 be amended so that the survey area for yellow rail and western toad be based on the latest information on the species. Environment Canada stated that in some cases, the Committee on the Status of Endangered Species in Canada reports may not include the most up-to-date information, and management authorities for the species may have more current information on species range.

Views of the Board

We agree that pre-construction surveys are not required for species at risk for which recovery is not feasible at this time, and modified our Conditions 29, N22, T21 and P21 accordingly. We expect that any incidental observations of individuals will still be reported as per part (a) of these conditions. We also agree with Environment Canada’s clarification regarding newly listed species at risk. We expect that the Wildlife Protection and Management Plans will address all known species at risk current at the time of Plan submission.

With respect to the survey area for yellow rail and western toad, it is our view that Condition 34 as proposed addresses Environment Canada’s concern. Condition 34 requires evidence of consultation with Environment Canada and the Government of the Northwest Territories when preparing the surveys and proposing mitigation and monitoring measures specific to those species. Any discrepancies regarding survey area may be addressed by the Proponents and the appropriate management authorities through this consultation.

3.3.6 Environmental Protection Plans

Concerns regarding protection of the land were raised during final argument. These

concerns included impacts to the environment such as air quality, aesthetic impacts, and noise. The Dehcho raised specific concerns regarding project specific environmental monitoring requirements, protection of water resources, and minimizing invasive plant introduction.

The National Energy Board adds a requirement to facility approval documents for a company to develop and file for approval an Environmental Protection Plan. The Environmental Protection Plan is a document that guides environmental oversight for the duration of a project and typically includes elements such as environmental mitigation measures, reclamation and re-vegetation. The Environmental Protection Plans are an important element of our regulatory approach to environmental protection.

The Environmental Protection Plan is an important tool that is used to communicate the environmental procedures and mitigation measures to the Proponent’s field personnel and construction or operation contractors. The purpose of the Environmental Protection Plan is to document and communicate all the project-specific environmental protection measures or mitigation committed to by the Proponent in a clear and user-friendly document. It is a way to ensure the Proponent will honour all the environmental commitments that were made during the hearing process. It also helps to outline clear lines of responsibility and accountability for the company.

During review of the Environmental Protection Plan, the National Energy Board verifies that

all relevant mitigation and environmental commitments are included. The Proponents use the Environmental Protection Plan to communicate environmental commitments to its contractors and mandatory language is used to facilitate compliance. There is flexibility for the Proponent in developing the overall content of the Environmental Protection Plan. Other plans such as the Waste Management Plan, Wildlife Protection and Management Plan, and Heritage Resources Plan may be incorporated into the Environmental Protection Plan as specific chapters to make it more encompassing for field staff.

The Environmental Protection Plan typically addresses the following:

  • specific goals for protecting environmental and socio-economic elements identified as important (air, vegetation, soils, permafrost, native plants, access management, wetlands, water resources, mitigating noise and aesthetic impacts, preventing weeds and invasive species, and reclamation);
  • practices and procedures that can be implemented to meet these goals;
  • criteria for evaluating the success of practices and procedures, particularly for reclamation and any new mitigation measures;
  • incorporation of flexibility by covering options for environmental practices and procedures that may be used;
  • criteria by which decisions will be made regarding which practices and procedures to implement and under what circumstances;
  • assignment of accountabilities and responsibilities for carrying out environmental practices and procedures, making criteria-based decisions, and how to confirm compliance;
  • requirements of permits by other regulators with regulatory responsibilities for the project;
  • evidence of consultation with other regulatory agencies that confirms satisfaction of proposed environmental mitigation;
  • frequency and scheduling of monitoring activities;
  • schedule of expected reporting to the National Energy Board on the progress and success of the mitigation measures implemented;
  • inclusion for adaptive management, which allows for appropriate means to evaluate and amend issues that may arise during project operations; and
  • effective means of reporting issues that may arise and reporting structures.

The Environmental Protection Plan incorporates the environmental alignment sheets. References to the Environmental Protection Plan are also incorporated into these alignment sheets. The Environmental Protection Plan is a comprehensive document that includes requirements of all regulatory agencies.

The requirement for an Environmental Protection Plan is consistent with National Energy Board goal-oriented regulation. An Environmental Protection Plan must be submitted to the National Energy Board for approval prior to pre-construction activities and pipe-laying operations for the Mackenzie

Valley Pipeline and Mackenzie Gathering System. As the project begins the operational phase the Environmental Protection Program (Section 48 of the Onshore Pipeline Regulations, 1999) will apply. Prior to any drilling or construction activity relating to a Development Plan Application, authorizations under paragraph 5(1)(b) of the Canada Oil and Gas Operations Actwould be required. Section 6 of the Canada Oil and Gas Drilling and Production Regulations states that an operator shall provide an Environmental Protection Plan for an authorization under paragraph 5(1)(b). Each of the Proponents will submit their own specific Environmental Protection Plan for the applications and may file several plans depending on timing of construction, the type of activity, and site specific considerations.

Alternatives North requested that the Conditions N11, T10, and P10 which deal with Environmental Protection Plans for Kendall Island Bird Sanctuary and Fish Island be filed with the National Energy Board for approval.

Views of the Board

We listened to the issues raised about the land, water resources, invasive species and other biophysical components. Through appropriate environmental management and planning we believe that these matters can be appropriately addressed during all stages of the project. We are committed to protection of the environment and will ensure measures are in place to address potential environmental impacts. A key component of this includes adherence to our conditions and Environmental Protection Plans required by Conditions 3, 38, N11, T10 and P10.

We will ensure that Environmental Protection Plans for the project are enforceable; that commitments made during the hearing are included; that appropriate field practices are incorporated; and that routine field amendments are addressed. The Environmental Protection Plans will facilitate environmental regulatory oversight for the project because they will incorporate all the environmental protection requirements in one document for each portion of the project. The Environmental Protection Plans provide a basis for working collaboratively with other Northern agencies. We will monitor and inspect all aspects of the project and the Environmental Protection Plans will be utilized as a document to verify compliance.

Required Environmental Protection Plans also address Joint Review Panel recommendation 6-4, Construction and Operation Plan for the Kendall Island Bird Sanctuary and Fish Island.

Conditions N11, T10, and P10 address Environmental Protection Plan requirements regarding the Development Plan Applications. The National Energy Board will assess future applications for authorizations for work or activity at the anchor fields along with the accompanying Environmental Protection Plan. Environmental mitigation during construction and operation for Fish Island will be addressed through Section 39 and 48 of the Onshore Pipeline Regulations and will also be addressed in the specific Environmental Protection Plans.

3.3.7 National Energy Board’s role in enforcing recommendations directed to others

During final argument, parties submitted that the National Energy Board has a responsibility as “key gatekeeper” on this file to ensure that all Joint Review Panel recommendations are fulfilled. World Wildlife Fund Canada submitted that the National Energy Board must address the broader roster of Joint Review Panel recommendations, including those directed to government authorities, because they fall within the National Energy Board’s fundamental mandate

to recommend a project if and only if it is in the public interest. They added that the Joint Review Panel felt compelled to underline that the full suite of recommendations were needed to make the project sustainable. The Sierra Club of Canada submitted that we are leaving critical sustainability issues to others such as governments because almost all those recommendations intended to control the pace and scale of upstream development and those intended to ensure sustainability in relation to the end use of gas are not reflected in the National Energy Board’s proposed conditions. Alternatively, the Gwich’in Tribal Council submitted that not all of the Panel’s recommendations need to be accepted before the project can proceed; that matters best left to government policy should not be addressed by the recommendations; and that the completion of third-party actions should not be a pre-condition to project advancement.

Some parties had confidence in the ability of Northern agencies to protect the land. The Inuvialuit Regional Corporation stated:

Much of the responsibility for the health of our environment is held collectively by the organizations and co-management bodies established under our land claim agreement and by the residents of every Inuvialuit community.

Over the past 25 years, the Inuvialuit have gained a high level of confidence in the ability of these organizations and individuals to collectively provide for the
ongoing health of the environment and wildlife across the Inuvialuit Settlement Region while allowing the orderly conduct of development and other commercial activities.

As we look forward to the future development of the resource within our region, we do so in the comfort that our organizational structures have both the skills and the experience to maintain a responsible and objective balance between the health of our environment and the provisions of economic opportunity to the residents of our communities.

Other parties expressed concern that Joint Review Panel recommendations directed to other authorities would not be met. The Sierra Club of Canada submitted that we must set conditions that provide reasonable assurance that all of the Joint Review Panel’s recommendations will be implemented, or say no to the project at this time. The Canadian Parks and Wilderness Society submitted that we should consider conditions that provide a greater level of certainty that recommendations outside the National Energy Board’s mandate are fulfilled. The Sierra Club of Canada and Canadian Parks and Wilderness Society gave examples of ways in which we could ensure compliance. The Sierra Club of Canada suggested a two-part approach in which we first weigh the government response to evaluate whether the response commits to substantial implementation of the Joint Review Panel’s recommendations, then we add a condition that the certificate does not take effect until

the National Energy Board has determined in a public process that governments have met their commitments. Canadian Parks and Wilderness Society suggested other assurances such as timelines, land withdrawals, funding requirements, or checklist tracking. World Wildlife Fund Canada requested we state that this project is only in the public interest if all the Joint Review Panel’s recommendations are implemented. World Wildlife Fund Canada cited an example in which another regulator, the Natural Resources Conservation Board, chose to make an approval come into effect upon the completion by government of a statutory order creating a wildland recreation area. World Wildlife Fund Canada suggested that we could, if we chose, take on a similar sequencing consideration and stipulate the order in which things happened, even where those things are not immediately within the National Energy Board’s purview. Parties were afforded a further opportunity to comment on these and related matters upon receipt of the government response. In general, parties were concerned about the adequacy of the government response and either proposed strengthened conditions or took the view that, given this response, the project is not in the public interest.

Views of the Board

The National Energy Board has considerable responsibility with respect to the Mackenzie Gas Project. Fourteen federal and territorial agencies, departments and regulatory boards also have a role in managing environmental aspects of the project.

After making its regulatory decisions, the National Energy Board collaborates with others to protect wildlife, water, air and vegetation from potential negative impacts resulting from project development.

Our responsibility begins with making the public interest determination. The question central to our public interest determination is whether Northerners and other Canadians would be better or worse off if the Mackenzie Gas Project is approved. This question is answered in Volume 1, Respecting all voices: Our journey to a decision.

The public interest determination takes into account benefits and impacts of the project on the land, the people, the economy, and safety and technical concerns. The review and hearing of environmental and socio-economic impacts was conducted by the Joint Review Panel, whose assessment helped inform our determination. In order to make a decision that the project is in the public interest, we had to be assured that environmental impacts could be minimized and that high standards for environmental protection will be maintained throughout the project life. The National Energy Board has within its abilities three important regulatory tools to achieve this. The National Energy Board’s authority allows us to condition, enforce and conduct compliance monitoring for a number of requirements related to environmental protection, which include many recommendations of the Joint Review

Panel. The National Energy Board is responsible for lifespan regulation of the project. The National Energy Board also has jurisdiction over the assessment of new applications for future developments. In addition, northern agencies and federal authorities have responsibilities related to monitoring the project and managing the effects. We regard these responsibilities as complementary to the National Energy Board’s responsibilities, and the National Energy Board is committed to working in collaboration with others to support an effective and efficient regulatory scheme.

It is our view that conditions contingent upon third-party actions would unduly leave both Northerners and the Proponents in a state of uncertainty about whether and when the project could proceed. We heard that people need certainty and time to make appropriate preparations for development. These preparations include training workers, resolving outstanding land issues, developing job and business opportunities, and conducting detailed permitting by land and water boards, among others. Since we feel that a high standard of environmental protection will be met through the National Energy Board’s regulatory authority to enforce those Joint Review Panel recommendations directed to us, to enforce those commitments made by the Proponents during our hearing and the Joint Review Panel hearing over the project’s lifespan,

and to assess the impacts of future related developments, we believe that a clear public interest determination can be made at this stage without the ultimate reliance on third-party action. We remain committed to collaboration with other authorities to protect wildlife, water, air and vegetation.

3.4 Socio-economic matters discussed in final argument

3.4.1-Socio-Economic Agreement

The Government of the Northwest Territories stated that the Mackenzie Gas Project is crucial to the socio-economic future of the Northwest Territories, and has the potential to:

transform the Territories from a region dependent on the support and contributions from the rest of Canada to a self-sufficient Territory.

The Government of the Northwest Territories also noted that the Mackenzie Gas Project is expected to impact the well-being of residents and communities in the Northwest Territories, and that a socio-economic agreement for the Mackenzie Gas Project was therefore a critical component of the project.

To address concerns of mutual interest, the Proponents and the Government of the Northwest Territories signed the Socio-Economic Agreement for the Mackenzie Gas Project in 2007. The Agreement outlines commitments that are intended to optimize beneficial

opportunities and mitigate negative impacts arising from the Mackenzie Gas Project for Northwest Territories residents. The Socio-Economic Agreement includes measures to address employment and training, social and cultural well-being, business, net effects on government, monitoring, reporting and adaptive management.

The Government of the Northwest Territories requested that we ensure compliance by the Proponents with the terms outlined in the Socio-Economic Agreement by requiring adherence to the Socio-Economic Agreement as a condition of approval.

Views of the Board

The commitments set out in the Socio-Economic Agreement provide important measures for addressing the socio-economic impacts and optimizing the benefits of the Mackenzie Gas Project. Enforcement is best left to the parties to the agreement and we see no value in attaching a condition to the Certificate requiring the implementation of the agreement.

3.4.2 Employment and training

The Dehcho Elders and Harvesters Councils stated that the Proponents and government should provide Dehcho communities with educational and training opportunities, to help mitigate impacts and enhance benefits of the project. The Dehcho Elders and Harvesters Councils stated this should include educational

upgrading, safety courses, survival training, as well as information and scholarships for careers as forest rangers, fisheries officers, game wardens, and park rangers. The Dehcho Elders and Harvesters Councils and the Liidlii Kue First Nation also stated that Canada needs to fulfill the original terms of the Mackenzie Gas Project Impacts Fund by limiting it to the Aboriginal communities and regions along the pipeline corridor, and to make the first phase of funding immediately available. The Dehcho Elders and Harvesters Councils and the Liidlii Kue First Nation also suggested that some of the Mackenzie Gas Project Impacts Fund be used for wilderness, language and cultural programs.

The Dehcho Elders and Harvesters Councils also stated ongoing training, information sessions and workshops in Dehcho communities for follow-up and monitoring programs are needed. The Dehcho Elders and Harvesters Councils further stated that Dehcho communities should be provided with financial and logistical support to allow them to hire their own dedicated Mackenzie Gas Project environmental monitors, who would report directly to the Dehcho communities. The Dehcho Elders and Harvesters Councils stated that management, monitoring and follow-up programs for the project must include the direct involvement of the Dehcho, to ensure that the needs and interests of Dehcho communities are represented and protected, and that such programs must fully incorporate Dene knowledge.

To achieve this, the Dehcho Elders and Harvesters Councils recommended the establishment of a Dehcho Mackenzie Gas Project monitoring agency to oversee, observe and protect land, wildlife and habitat during the planning, construction and reclamation of the project. The Sambaa K’e Dene Band also requested that the Proponents or Canada provide funding to the Sambaa K’e Dene Band for an independent environmental monitoring program during and for a period following construction.

Concerns were also raised about training for Mackenzie Gas Project personnel, which the Dehcho Elders and Harvesters Councils stated should include cultural awareness training, seminars and workshops, as well as participation in on-land activities with Dehcho Elders and harvesters.

The Government of Yukon requested that we adopt Joint Review Panel recommendations 15-7 and 15-8, relating to the inclusion of the Yukon in the Proponents’ Human Resources and Employment Database for the Mackenzie Gas Project, and designating Whitehorse as a point-of-hire. Alternatives North requested that the requirement for a communications plan as part of the Proponents’ diversity plan originally included in recommendation 15-9 of the Joint Review Panel be included in our conditions. Northern Pipeline Projects Ltd. recommended that contact between closed camp worker populations and local people should be planned and minimal.

Views of the Board

We recognize the potential benefits, as well as the potentially undesired effects, that employment generated by the Mackenzie Gas Project can bring to communities. A number of our conditions and the Proponents’ commitments address these effects. Condition 28 requires the Proponents to provide information to the National Energy Board related to the hiring of local residents as monitors to carry out compliance and environmental impact monitoring for the Mackenzie Gas Project. In addition, Condition 29 requires the Proponents to prepare and submit to the National Energy Board a number of Wildlife Protection and Management Plans that will address general wildlife and species-specific protection, and will include details on protocols for monitoring and adaptive management, in addition to Conditions 3 and 38 which require Environmental Protection Plans for the Mackenzie Gas Project.

The Socio-Economic Agreement for the Mackenzie Gas Project details the measures and commitments that are intended to minimize the socio-economic impacts of the project and enhance benefits. Section 2 of the Socio-Economic Agreement outlines the employment, training and hiring commitments made by the Proponents, including hiring priorities, points of hire for the Mackenzie Gas

Project, employment requirements and policies, human resources development, and the services and support for employment, education and training that will be provided by the Government of the Northwest Territories. Section 3 of the Socio-Economic Agreement outlines the commitments of the Proponents for promoting cultural preservation and understanding. These include the provision of cultural sensitivity and cross-cultural awareness training for all project workers, and supporting cultural activities such as community-based traditional lifestyle initiatives, traditional harvesting and the promotion of traditional culture and positive relationships with communities.

We believe these measures, commitments and programs will adequately address employment and training needs, and concerns relating to monitoring and cultural protection.

Regarding the recommendation by Northern Pipeline Projects Ltd. related to work camps, we believe the requirements for closed work camps and the preparation by the Proponents of plans to monitor and minimize adverse effects of worker-community interactions as contained in Conditions 24, 25 and 26 will provide for planned and limited interactions between the Mackenzie Gas Project workforce and local communities, and will minimize potential negative interactions.

With respect to the Government of Yukon’s request for us to adopt Joint Review Panel recommendations 15-7 and 15-8, we note the Government of Yukon confirmed that these recommendations were consistent with, if not specifically contemplated by, the Proponents’ written commitments to the Government of Yukon, and we are therefore confident these issues will be addressed. We are similarly confident that the existing requirements for monitoring and reporting systems contained in Conditions 23, N28, T27 and P27 will sufficiently address communications needs related to the Proponents’ diversity plans, and no additional requirements to these conditions are needed.

3.4.3 Impacts to harvesters, land and resources

The Dehcho Elders and Harvesters Councils, the Sambaa K’e Dene Band and the Liidlii Kue First Nation raised a number of concerns regarding potential impacts on harvesters, land and resources in the Dehcho Region. The Sambaa K’e Dene Band stated its opposition to the development of borrow pits within the K’eotsee (Trainor Lake) watershed.

The Sambaa K’e Dene Band also requested that harvester compensation be addressed through a consultation agreement with Canada and the Proponents, through the conclusion of the Dehcho Process, or through the conclusion of an Impact Benefits Agreement.

To address compensation concerns, the Liidlii Kue First Nation requested that we require the Proponents to enter into a benefits agreement with the Liidlii Kue First Nation and the Dehcho First Nations as a condition of approval. The Liidlii Kue First Nation further requested that the agreement include funds to allow the Liidlii Kue First Nation to establish and maintain a monitoring program throughout the life of the project in their territory.

The Dehcho Elders and Harvesters Councils stated that research is required on the traditional Dehcho economy and the impact the project will have on physical, cultural and spiritual health and well-being. The Dehcho Elders and Harvesters Councils also requested that routing and siting of all project facilities avoid burial and sacred sites, and that work along water courses be conducted in a ceremonial manner with the involvement of the Dehcho. To address concerns regarding compensation for resources, the Dehcho Elders and Harvesters Councils requested that Dehcho harvesters be covered by a Harvesters Compensation Agreement before the project is allowed to proceed, and that compensation be provided for the value of all timber stands cleared on the right of way.

Finally, the Dehcho Elders and Harvesters Councils requested that the project be designed and built in a manner that minimizes the aesthetic impacts upon people and wildlife, and that Dehcho communities be involved in the development of a granular management

plan for the project. The Dehcho Elders and Harvesters Councils expressed the desire of Dehcho communities to work with the Proponents to identify alternative sources of granular material, and that Dehcho communities, not Canada, be the recipients of any granular royalties.

Views of the Board

We recognize the importance of harvesting to the economy of the Northwest Territories, as well as its socio-economic and cultural importance for Aboriginal communities. In response to the concerns of the Dehcho Elders and Harvesters Councils regarding timber resources, Condition 75 for the Mackenzie Valley Pipeline will require the Proponents to notify and consult with Aboriginal and municipal authorities regarding community use of merchantable timber cleared along the right of way. With respect to harvester compensation, the report of the Joint Review Panel summarized the commitments made by the Proponents to provide compensation to harvesters. The Proponents committed to providing compensation to harvesters in accordance with the terms of the Inuvialuit Final Agreement, and the Comprehensive Land Claim Agreements for the Gwich’in and Sahtu Settlement Areas. They also committed to providing compensation to Dehcho harvesters on terms similar to these final agreements. We are satisfied with the commitments

the Proponents have made to address harvester compensation.

For matters relating to granular resources, we will continue to rely on the authority of northern regulatory bodies and federal departments. For concerns over borrow pits and participation in management plans raised by the Sambaa K’e Dene Band and the Dehcho First Nations, the Mackenzie Valley Land and Water Board has regulatory oversight for permitting activities related to granular resource extraction in the Mackenzie Valley. In response to concerns over impacts to burial or sacred sites and aesthetic impacts raised by the Dehcho Elders and Harvesters Councils, Condition 21 requires the Proponents to submit to the National Energy Board their Heritage Resources Management Plan, as reviewed by the Prince of Wales Northern Heritage Centre. The mitigation measures committed to by the Proponents, as detailed in their Environmental Impact Statement, will adequately address aesthetic and visual impacts.

3.4.4 Project reporting

Alternatives North requested that we commit to a full public registry for all Mackenzie Gas Project applications and follow-up to ensure transparency and accountability. They further suggested the public registries of the Mackenzie Valley Environmental Impact Review Board and the Mackenzie Valley Land and Water Board could serve as models.

Views of the Board

We are committed to the open, transparent sharing of information with all those who have an interest in the Mackenzie Gas Project, including the northern institutions and federal departments with whom we will continue to work cooperatively as the project proceeds. Subject to statutory limitations, we will continue to make information about the project publicly available on our repository. For all projects regulated by the National Energy Board that have proceeded to construction, our public repository includes submissions made by proponents relating to their compliance with certificate conditions, as well as responses to these submissions by the National Energy Board.