In advance of the Aug. 3 Joint Review Panel (JRP) deadline, B.C. has formally submitted its intention to cross-examine Northern Gateway Pipelines (NGP) on their Enbridge Northern Gateway Project at the JRP hearings, Minister of Environment Terry Lake announced.

"Our government, as an intervener in the hearings, has some tough questions for Northern Gateway Pipelines that we believe are at the heart of ensuring B.C.'s environment is protected from any and all heavy oil pipeline proposals," said Lake. "We have made our requirements clear: if you want to do business in British Columbia, you must have world-leading polices and processes governing spill prevention, spill response and liability insurance that reduces government and public exposure to risk."

Specific elements of world-leading marine and land oil-spill management will be of particular relevance to the anticipated cross-examination and relate directly to the findings in government's July 23, 2012 technical analysis, "Requirements for British Columbia to Consider Support for Heavy Oil Pipelines."

Questioning will focus on:

• Spill prevention, including tanker evaluation, provisions for escort tugs and the training of tug crews as well as commitments NGP has recently made to improve pipeline safety and mitigate spill risk. Those commitments include increasing the wall thickness of the pipeline, increasing the frequency of inspections, installing dual leak-detection systems and 24/7 staffing of pump stations in remote locations.
• Spill response, including commitments NGP has made to exceed regulatory standards for spill response and tanker safety, the use of rescue and escort tugs as well as crew training. Further information will be sought regarding response planning, including the ability to overcome geographic and climate challenges, and challenges specific to the nature of heavy oil. The extent of NGP's reliance on the Western Canada Marine Response Corporation and practices of NGP in the wake of the spill in Michigan will also be probed.
• Financial liability of NGP and its partners for spill response and restoration as well as details regarding liability insurance and plans for full environmental restoration in the event of a spill. This includes the scope of NGP's liability and insurance.

Beyond the B.C. government's cross examination of NGP, there are five requirements that must be met before consideration of any heavy oil pipeline proposal will proceed:

1. Successful completion of the environmental review process. In the case of NGP, that would mean a recommendation by the National Energy Board Joint Review Panel that the project can proceed.

2. World-leading marine oil spill response, prevention and recovery systems for B.C.'s coastline and ocean to manage and mitigate the risks and cost of heavy-oil pipelines and shipments.

3. World-leading practices for land oil-spill prevention, response and recovery systems to manage and mitigate the risks and costs of heavy-oil pipelines.

4. Legal requirements regarding Aboriginal and treaty rights are addressed, and First Nations are provided with the opportunities, information and resources necessary to participate in and benefit from a heavy-oil project.

5. British Columbia receives a fair share of the fiscal and economic benefits of a proposed heavy-oil project that reflects the level, degree and nature of the risk borne by the province, the environment and taxpayers.

These requirements not only inform B.C.'s cross-examination of the company to the extent that they are relevant to their accountabilities, but are also informing engagement with the governments of Alberta and Canada.

"Thousands of British Columbians have registered to participate in the hearings," said Lake. "This speaks to the vital importance environmental protection has in this province, and is reflected in the principled position our government is taking with this and any proposal for a heavy oil pipeline."

Cross-examination at the joint panel final hearings will begin Sept. 4 and run through December 2012. Final hearings are scheduled in Edmonton (tentatively Sept. 4 to 28), Prince George (tentatively Oct. 1 to Nov. 10) and Prince Rupert (tentatively Nov. 12 to Dec. 18).

B.C. awaits specific dates for its cross-examination from the joint review panel, and in the meantime will continue to review evidence and refine lines of questioning. Given the nature of the topics being discussed in each community and the scheduled locations of specific witness panels, B.C. anticipates undertaking some cross-examination in each of the three communities.

The applicant, all interveners (including B.C.) and government participants have the opportunity to make final arguments during the final-argument phase of the JRP's review, currently scheduled for March and April 2013.

A letter to the JRP follows as a backgrounder.

Media Contact:

Suntanu Dalal
Communications
Ministry of Environment
250 387-9745

BACKGROUNDER

Letter to the Joint Review Panel

August 2, 2012

VIA ELECTRONIC FILING

TO FOLLOW BY FACSIMILE

Secretary to the Joint Review Panel
Enbridge Northern Gateway Project
444 - Seventh Avenue S.W.
Calgary, Alberta T2P 0X8
Attention: Ms. Sheri Young

Dear Madam:

Re: Hearing Order OH-4-2011 and File No. OF-Fac-Oil-N304-2010-01 01

Enbridge Northern Gateway Project Application

Cross-examination of Enbridge

Pursuant to the Panel's letter of July 25, 2012, the Province writes to inform the Panel of those parties it anticipates questioning at the final hearings, and the time it will require for this questioning.

The Province intends to question Northern Gateway Pipelines ("NGP"). Specifically, the Province currently intends to question the four witness panels speaking to Volumes 1 and 2, 7C and 8C, 7B and 8A of the application. I have received a message from Mr. Neufeld that the same panel will be speaking to Volumes 7C and 8C.

The Province is unsure about the proper witness panel for certain of the areas on which it wishes to question. We will be in touch with counsel for NGP to clarify this, and will then be in further communication with the Panel if necessary. For example, we are unsure about whether certain questioning will be covered by the witness panels speaking to volumes 8A or 8C. I note that Enbridge indicated in its letter of July 13 that it may revise its witness panels.

The Province is currently considering the time it may require to question these four panels, especially in light of the recently filed reply evidence. The following estimates are therefore subject to change. In addition, these estimates may change following clarification from counsel for NGP regarding the appropriate witness panel. If and when a more accurate estimate can be made, the Province will be in further communication with the Panel. The Province currently estimates that it will require 1.5, 3 and 4 hours to question the first three referenced witness panels, respectively. To the extent our questions are answered by the panel speaking to Volume 8C, we may not have further questions for the witnesses speaking to Volume 8A.

At a very general level, the following subjects are those on which the Province currently intends to question NGP:

• Spill prevention including tanker evaluation, provisions for escort tugs and the training of tug crews as well as commitments NGP has recently made to improve pipeline safety and mitigate spill risk. Those commitments include increasing the wall thickness of the pipeline, increasing the frequency of inspections, installing dual leak detection systems and 24/7 staffing of pump stations in remote locations.
• Spill response including commitments NGP has made to exceed regulatory standards for spill response and tanker safety, the use of rescue and escort tugs as well as crew training. Further information will be sought regarding response planning, including the ability to overcome geographic and climate challenges, and challenges specific to the nature of heavy oil. The extent of NGP's reliance on the Western Canada Marine response organization and practices of NGP in the wake of the spill in Michigan will also be probed.
• Financial liability of NGP and its partners for spill response and restoration as well as details regarding liability insurance and plans for full environmental restoration in the event of a spill. This includes the scope of NGP's liability and insurance.

If you have any questions, please do not hesitate to contact me.

Yours truly,

Christopher H. Jones

Counsel for the Province of British Columbia

cc. OH-4-2011 Parties

Media Contact:
Suntanu Dalal
Communications
Ministry of Environment
250 387-9745