UPDATE 2-Canada to implement oil tanker ban on northern B.C. coast

Fri Nov 13, 2015 5:41pm EST
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(Adds quote from lawyer, oil by rail impact)

By Julie Gordon

VANCOUVER Nov 13 (Reuters) - Canada will implement a moratorium on oil tanker traffic along the northern coast of British Columbia, effectively slamming the door on a controversial pipeline project that was already facing massive development hurdles.

In a letter released on Friday, Canadian Prime Minister Justin Trudeau instructed Transport Minister Marc Garneau to work with numerous other ministries to "formalize" the ban on oil tanker traffic, a Liberal campaign promise ahead of the federal elections last month.

Listed as one of seven "top priorities" for the Transport Ministry, more details on timing are expected after Parliament opens on Dec. 3.

The main casualty of the ban will be Enbridge Inc's Northern Gateway pipeline, which would carry oil sands crude from near Edmonton, Alberta, to a deepwater port at Kitimat, British Columbia for export to Asian markets.

Efforts to move oil by rail to northern British Columbia ports would also no longer be viable, but the moratorium would not impact the proposed tripling of capacity on Kinder Morgan's Trans Mountain pipeline, as that project is in the south.

"It would appear that all oil transportation, including rail and Northern Gateway, are dead in the water," said Vancouver-based lawyer Merle Alexander, who has represented aboriginal groups opposed to pipelines.

With a moratorium in place, the energy industry will likely ramp up pressure on governments to approve other export projects, like the Trans Mountain expansion and TransCanada Corp's Energy East.   Continued...