By Julie Gordon and Rod Nickel
NANAIMO, British Columbia, Aug 23 (Reuters) - Canada's Supreme Court on Thursday dismissed an application by the City of Burnaby, British Columbia to appeal a regulatory decision that allowed expansion work on the Trans Mountain oil pipeline to skirt some bylaws.
Burnaby sought to overturn a December ruling by Canada's National Energy Board that allowed pipeline owner Kinder Morgan (NYSE:KMI) Canada KML.TO to sidestep some municipal permits while building the project. The board found that Burnaby's bylaw review process caused unreasonable delay.
Burnaby is the end point of the Trans Mountain pipeline system on the Pacific Coast. The city had claimed that Trans Mountain's applications were incomplete.
The Supreme Court decision removes some legal uncertainty about whether the Trans Mountain expansion can be built. The project still faces other legal challenges - particularly a federal court case on whether there was adequate public consultation.
The project has faced formidable environmental and political opposition, including concerns raised by British Columbia's left-leaning government, and in May Kinder Morgan announced a sale of the existing pipeline and expansion to the Canadian government. Natural Resources Minister Amarjeet Sohi told reporters outside a Cabinet meeting in British Columbia that the ruling underlines that municipalities cannot unduly withhold permits on such projects.
On Wednesday, he said that construction was delayed, but did not give a new timeline. disappointed that the courts seem unwilling to review decisions made by the National Energy Board that hamper municipal jurisdiction,” said Burnaby Mayor Derek Corrigan.
The Trans Mountain expansion would triple capacity on the existing pipeline from oil-rich Alberta to the British Columbia coast to 890,000 barrels per day, and was approved by the federal government in 2016 despite fierce opposition from environmentalists, aboriginal groups and some municipalities.
Canada's oil industry says it needs the expanded pipeline capacity to open up export markets in Asia and boost the price of its landlocked crude.
Kinder Morgan shareholders are scheduled to vote on the pipeline sale to Ottawa next week.