Canada orders new regulatory review of Trans Mountain pipeline

The Canadian government on Friday directed its National Energy Board (NEB) regulator to conduct a new review of its application to expand the Trans Mountain oil pipeline, taking into account the impact of additional marine traffic.

The NEB must report to cabinet within 22 weeks, Natural Resources Minister Amarjeet Sohi said in Halifax, Nova Scotia. Canada's Federal Court of Appeal last month overturned the Liberal government's approval of expansion of the pipeline, which runs from Alberta's crude oil heartland to the British Columbia coast.

Sohi said the government would appoint a marine adviser to the NEB. The government will announce shortly whether it will appeal the appellate court's decision to Canada's Supreme Court, and how it will consult with indigenous people about the pipeline, he said.

The appellate court ruled in August that the NEB wrongly narrowed its review of the project to exclude the impact of additional tanker traffic on marine life. Additionally, the federal government failed to adequately consult indigenous people, as required by law, it ruled.

Prime Minister Justin Trudeau's government agreed in May to buy the pipeline from Kinder Morgan Canada Ltd for C$4.5 billion, betting it would win in the Federal Court of Appeal.

The project faces fierce opposition from the British Columbia government, environmental groups and some municipalities and aboriginal communities. Canada's oil producers say the expanded pipeline is needed to address bottlenecks that have sharply reduced prices for their crude.

(Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Steve Orlofsky)