Rep: OEB
Doc: 128r5
Rev: 0













ONTARIO ENERGY BOARD

Volume: 1

March 21, 2002


BEFORE:



S. HALLADAY

PRESIDING MEMBER

R. BETTS

MEMBER

P. SOMMERVILLE

MEMBER



1
HEARING RP-2001-0059

2
IN THE MATTER OF the Ontario Energy Board Act, S.O. 1998, c. 15, Schedule B;

3
AND IN THE MATTER OF an Application by Imperial Oil for an order or orders granting leave to construct a liquid hydrocarbon transmission line, (the "PRISM Pipeline") in the former Township of Flamborough, the City of Hamilton, the Township of Onondaga, County of Brant and the Township of Walpole, Haldimand County.


4
APPEARANCES

5

PAT MORAN

Board Counsel

WILFRED TEPER

Board Staff

ZORA CRNOJACKI

Board Staff





DAVID HUNTER

Imperial Oil

SHARI ELLIOT

Imperial Oil

GREG BROWN

Imperial Oil

CHRIS HERSH

Union Gas



6
TABLE OF CONTENTS

7

APPEARANCES:

[15]





PRELIMINARY MATTERS:

[25]





EXAMINATION BY MR. HUNTER:

[75]





CROSS-EXAMINATION BY MR. MORAN:

[162]





QUESTIONS FROM THE BOARD:

[194]





EXAMINATION BY MR. HUNTER:

[234]





CROSS-EXAMINATION BY MR. MORAN:

[419]





QUESTIONS FROM THE BOARD:

[582]





CLOSING ARGUMENT BY MR. HUNTER:

[632]





8
EXHIBITS

9

EXHIBIT NO. 4.3: AFFIDAVIT OF SERVICE OF JENNIFER LYNCH AND SUZANNE ZINMAN

[33]









EXHIBIT NO. 10.1: REVISED WITNESS LIST

[41]









EXHIBIT NO. 10.2: DRAFT NO. 3 - ONTARIO ENERGY BOARD STAFF PROPOSED CONDITIONS OF APPROVAL

[61]









10
UNDERTAKINGS

11

12
--- Upon commencing at 10:05 a.m.
13
MS. HALLADAY: Please be seated. Good morning. The Board is sitting today to hear an application by Imperial Oil, a partnership between Imperial Oil Limited and its wholly-owned subsidiary, McColl-Frontenac Petroleum Inc., for an order granting leave to construct the PRISM pipeline, a 61-kilometre, 12-mps, liquid hydrocarbon transmission line from lot 27, concession 3, at Peters Corners in the former township of Flamborough, City of Hamilton, through the township of Onandaga, Brant County, to the Imperial Oil Nanticoke refinery in lot 9, concession 3, geographic township of Walpole, Haldimand County.

14
My name is Sheila Hallady. With me are Rob Betts and Paul Sommerville. May I have appearances, please.

15
APPEARANCES:

16
MR. HUNTER: Good morning, Madam Chair. My name is David Hunter. I'm counsel to Imperial Oil. With me is Ms. Shari Elliott, two L's and two T's. She is my associate. And with me, and my directing solicitor, is Mr. Greg Brown from Imperial Oil. Good morning.

17
MS. HALLADAY: Good morning, Mr. Hunter, Ms. Elliott, Mr. Brown.

18
MR. BROWN: Good morning.

19
MS. HALLADAY: Other appearances?

20
MR. HERSH: My name is Chris Hersh, H-e-r-s-h, counsel to Union Gas, and I just have a few brief statements. And with the Board's permission, I will enter my appearance and leave.

21
MS. HALLADAY: Good morning, Mr. Hersh. Any other appearances?

22
MR. MORAN: Madam Chair, Pat Moran, Board counsel.

23
MS. HALLADAY: Last but not least, Mr. Moran. Thank you very much.

24
Before we begin, are there any preliminary matters?

25
PRELIMINARY MATTERS:

26

MR. HUNTER: Yes, there are, Madam Chair. I have already provided to counsel a revised list indicating the witnesses and the evidence that they will adopt today, and I'd like to file with the Board two affidavits of service made yesterday morning with respect to Union Gas and to the Board with respect to the revisions to prefiled evidence and additional evidence which was provided yesterday.

27
MS. HALLADAY: Thank you, Mr. Hunter.

28
MR. HUNTER: And if I might, Madam Chair, I'll address this issue in more depth when we get to panel 2. Mr. Ralph Parks became ill last night and he will not be able to attend as a witness today, so we have an alternative.

29
MS. HALLADAY: Thank you, Mr. Hunter. I think we need an exhibit number for this.

30
MR. MORAN: That would become Exhibit 4.3, Madam Chair.

31
MS. HALLADAY: Exhibit 4.3, that's the revised witness and evidence list?

32
MR. MORAN: That would be the affidavit of service of Jennifer Lynch.

33
EXHIBIT NO. 4.3: AFFIDAVIT OF SERVICE OF JENNIFER LYNCH AND SUZANNE ZINMAN

34
MR. MORAN: And the affidavit of service of Suzanne Zinman.

35
MS. HALLADAY: Did we get copies of those?

36
MR. MORAN: I'm not sure. I have copies here.

37
MS. HALLADAY: That's fine. So that's the exhibit you're giving for the affidavits of service.

38
MR. MORAN: That's right.

39
MS. HALLADAY: Are we going to give the revised witness list an exhibit number as well?

40
MR. MORAN: That will become Exhibit 10.1.

41
EXHIBIT NO. 10.1: REVISED WITNESS LIST

42
MS. HALLADAY: Thank you.

43
Mr. Hunter, are there any other preliminary matters?

44
MR. HUNTER: No, Madam Chair, there are not.

45
MS. HALLADAY: Okay.

46
Mr. Hersh, did you want to say something?

47
MR. HERSH: Madam Chair, I'd just like to state that Union's interest in this project is with regard to the 14 locations in which the proposed pipeline will cross its facilities, and I am advised that the parties, Union Gas and Imperial Oil, are negotiating. And the purpose of my appearance here is to advise the Board of Union Gas's interests and to ensure that Union Gas is provided with all materials and is -- if something develops that would affect its interests in this project. And that's the extent of my submissions on that now at this time. If the Board has no questions of me, I will excuse myself.

48
MS. HALLADAY: Thank you, Mr. Hersh.

49
Mr. Hunter, do you have any concerns?

50
MR. HUNTER: No concerns, Madam Chair, and I understand that Union Gas has been provided with all material.

51
MS. HALLADAY: Thank you.

52
Mr. Moran?

53
MR. MORAN: Just one item, Madam Chair.

54
MS. HALLADAY: Is this with respect to Mr. Hersh's --

55
MR. MORAN: Oh, no, I have no comment on this area.

56

MS. HALLADAY: Then, Mr. Hersh, thank you for dropping by and you are excused.

57
MR. HERSH: Thank you, Madam Chair.

58
MS. HALLADAY: Mr. Moran.

59
MR. MORAN: Yes. You have a document that's entitled: "Draft No. 3 - Ontario Energy Board Staff Proposed Conditions of Approval," dated March 21, 2002. I'd like to mark that exhibit as Exhibit 10.2.

60
MS. HALLADAY: Thank you.

61
EXHIBIT NO. 10.2: DRAFT NO. 3 - ONTARIO ENERGY BOARD STAFF PROPOSED CONDITIONS OF APPROVAL

62
MS. HALLADAY: Thank you. Any other preliminary matters?

63
MR. MORAN: Not from me.

64
MS. HALLADAY: Thank you very much.

65
Mr. Hunter?

66
MR. HUNTER: Thank you. If I stumble, Madam Chair, I trust I will be assisted. I'm not entirely familiar with your procedures; I haven't been here for quite some time. I think I'll get the hang of it.

67
We have two panels which we've identified. The first panel is in place now and I understand that they will be sworn, and I intend to ask them to adopt their evidence and to provide you with an overview of the project and the evidence that has been put before you.

68
MS. HALLADAY: Thank you, Mr. Hunter, that's great. The witnesses will stand to be sworn in.

69
B.VINCENT; Sworn.

70
I.HOWIESON; Sworn.


71
A.FORTH; Sworn.

72
MS. HALLADAY: Mr. Hunter.

73
MR. HUNTER: Thank you, Madam Chair.

74
Just one preliminary comment with the indulgence of Board counsel and staff, and indeed of the Board. If it were possible, and I'm sure you hear this all the time, to receive an oral decision as expeditiously as possible, and we would sincerely appreciate that in the course of our presentation. Thank you.

75
EXAMINATION BY MR. HUNTER:

76
MR. HUNTER: Mr. Iain Howieson is the project executive for -- director for the sulphur gasoline project for all of Canada.

77
Mr. Howieson, do you adopt the prefiled evidence in section 2-1, section 2-2, section 2, schedule 1; interrogatories 3 and 13; supplemental interrogatories 5, and supplemental filing B-1?

78
MR. HOWIESON: Yes, I do.

79
MR. HUNTER: Thank you, sir.

80
Mr. Vincent is the project coordinator for pipeline operations.

81
Mr. Vincent, do you adopt the prefiled evidence, section 1-1, section 2-1, section 2-3; section 2, schedule 1; section 3; section 4-1; section 4-2; section 4-3; interrogatories 1, 2, 3, 4, 10, and 11; and supplemental interrogatories 1, 4, and 12?

82
MR. VINCENT: Yes, I do.

83
MR. HUNTER: Thank you, Mr. Vincent.

84
Mr. Forth, Allan Forth, is the area supervisor in Ontario for the Sarnia Products pipeline.

85
Mr. Forth, do you adopt the prefiled evidence at section 4.2, interrogatories 8, 9, and 10, and supplemental interrogatories 2 and 4?

86
MR. FORTH: Yes, I do

87
MR. HUNTER: Thank you, sir.

88
Madam Chair and Board members, with that, I would turn the panel over to Mr. Howieson to address the information which has been provided to you in hard copy in this presentation. It was our view and our hope that this would assist staff and the Board in terms of appreciating, getting an overview of this important project and the public significance of it.

89
Having said that, Mr. Howieson.

90
MR. HOWIESON: Thank you, Mr. Hunter.

91
Good morning, Madam Chair, Mr. Somerville, Mr. Betts. My portion of the presentation this morning will cover a number of topics. I will begin with an overview of Imperial Oil and talk about our facilities across Canada. I'll follow that with a summary of the federal regulations regarding sulphur and gasoline. I'll continue then to talk about Imperial Oil's compliance plans in relationship to those regulations, and I'll summarize with an update on the Six Nations agreements which I've been personally involved with and I'll provide with you an overview of that as well.

92
So if I direct your attention to page 4 of the booklet which we've prepared, Imperial Oil is the largest integrated oil company in Canada. We own and operate extensive crude oil and natural gas production facilities. We have four refineries situated in Halifax, Nanticoke, Sarnia, and Edmonton, and a major chemical plant operation in Sarnia as well. We own product distribution terminals across Canada, a series of pipeline networks, and probably what people are most familiar with is our service stations and Imperial Oil branded stations.

93
If I focus on Ontario specifically, we have the two refineries, as I mentioned, one in Sarnia and one in Nanticoke, and in between those two we produce about 35 percent of the gasoline consumed in Ontario. Between the two sites, they process 37.2 thousand cubic metres a day which is equivalent to 135,000 barrels a day, and we employ between the two sites about 1,500 employees.

94
Turning to page 5, federal regulations were promulgated in June of 1999 which require producers of gasoline to lower their sulphur limits. The maximum amount of sulphur which is permitted in gasoline will be reduced by 97 percent by January 1st, 2005.

95
If I direct your attention to the chart which is on that page, you will see presently the allowable specification of sulphur in gasoline is 1,000 parts per million. The regulation calls for a two-step phase down. The first is to average 150 parts per million between July 1st, 2002, and December 31st, 2004. An ultimate spec of 30 parts per million will be required, as I said, January 1st, 2005.


96
I'd like to talk briefly about that interim specification. The federal government has allowed producers of gasoline to manage that interim specification in whichever manner they see fit depending upon their own specific situation. As an example, over that 30-month period, a refiner could produce 300 parts per million for the first 15 months and drop down to zero the remaining 15 months in order to average 150 during that period of time.

97
I direct your attention to page 6. I start by saying that Imperial Oil will comply with all regulations, and the specific compliance plan to the 150 parts per million spec will be complied with by advancing the start-up of the ultimate 30 parts per million facilities to October 2003.

98
So if we refer back to the example I used of the 300 and zero, we're going to be somewhere less than 300 for the first 15 months, and then follow that up with 30 parts per million for the remainder of the period of time.

99
Now, I'd like to talk briefly about gasoline and gasoline blending. Gasoline is made up of a number of different components. So you have different components which are blended together into a cocktail mix and we call it gasoline. One of those components, cat naptha, is the component which most refiners need to deal with in terms of removing of sulphur. The other components, generally speaking, all meet the lower sulphur limits, but cat naptha is the higher sulphur component which we have to remove the sulphur from and that's the real crux of the facilities which need to go into all the refineries across Canada.

100
So what we've chosen to do, Ontario represents a unique situation for Imperial Oil where we have two refineries fairly close together and almost completely interconnected except for a portion of the 61 kilometres which is the subject of the hearing today. What we plan to do is to install a single processing unit at the Nanticoke refinery. Installing this facility and getting it completed by October 2003 will allow to us to meet both the interim specification and the final 30 parts per million specification, and building a single unit minimizes our operational and execution risks.

101
The Sarnia site will comply with the 30 parts per million and the 150 parts per million specification by transferring that cat naptha stream two-thirds of the way along an existing pipeline system, and then we will fill in the rest by building the new PRISM pipeline so that we can transfer that material down to the new unit being built in the Nanticoke refinery. So that's the crux of what it is we're dealing with.

102
Now, in order to be compliant and in order to ensure success, the new pipeline must be started up between three to four months ahead in advance of the new facilities at Nanticoke in order for us to verify and optimize its operation.

103
If I refer you now to page 7, I briefly put together an approval and construction time line to show you a better idea of the overall construction requirements and the approval requirements.


104
The top bar indicates the leave to construct which we are seeking through the Ontario Energy Board, and we're anticipating an April completion date for that.

105
Following that time frame we get into pipeline permitting - further permitting will be required - the design, final design of the pipeline, and the contracting of the actual execution. The construction activity commences in July and proceeds through to the end of this year.

106
We'll follow in the first quarter and early in the second quarter with the pipeline start and additional testing to verify its operation, and we are driving the Nanticoke facility start-up to a July completion date. So we've shown the start-up of those facilities between July and October so that we, again, are again ensuring the compliance with the 150 and ultimately to the 30 parts per million specification.

107
Ultimately you can see that by following this route we are providing 30 parts per million gasoline to the Ontario public over a year in advance of the actual federal regulation with regards to the 30 parts per million.

108
If I direct your attention to page 8, what you see is a very simplified drawing to help explain further. There is an existing pipeline which runs between Sarnia and Toronto which transports our fuels products there today; gasoline, diesel fuel, jet fuel travel down that system. In addition, you can see from the Nanticoke site, we also have gasoline facilities, a pipeline facility which also ends up in Toronto.

109
What we will be doing is transferring that cat naptha portion of gasoline from Sarnia down the new pipeline lateral into Nanticoke where it will be further processed, and then transfer back through the new system back into Toronto, so basically divert that cat naptha, process it in Nanticoke, and it ends up in the same place it would have initially.

110
On page 9, I talk to the alternatives that were considered. We did extensive work in the early portion of the planning to ensure that we have the correct facility. The first alternative considered was to construct process units at both Sarnia and Nanticoke refineries. The difficulty and the key aspect of that is that by building a new sulphur-removal facility at both locations, we actually create a product blending imbalance. That product blending imbalance requires surface transportation of 15 trucks a day, bringing high octane components from Nanticoke back to Sarnia to ensure we can continue to blend gasoline in the Sarnia location.

111
In addition, building two process units versus one provided us with increased labour risks, and by that I mean we were concerned about availability of labour during this period of high construction in the region, and ultimately it would produce higher project costs for us.

112

The option of building the processing unit in Sarnia versus Nanticoke was also considered. However, the logistics of the existing pipeline system was uni-directional from Sarnia towards Nanticoke. There's no pipeline system which moves the other way today, so the movement would have to be by surface means only, and that movement would be truck, marine or rail, in order to transfer that product of the gasoline components from Nanticoke to Sarnia.

113
The other key aspect is that the components we're dealing with, there's twice the volume which would have to move from Nanticoke into the Sarnia site.

114
The last point is, again, there would be higher project costs building in Sarnia versus Nanticoke.

115
We also considered alternate transportation means versus pipeline, and all of those alternate forms of transportation increase the overall risk; risks from a safety perspective, risks from an environmental perspective, and operational and ultimately cost. The equivalent road transportation is an example. To move this product, we would need 50 trucks per day.

116
Now, to close I'll talk about the Six Nations agreements, and just to refamiliarize personnel, the pipeline, the PRISM pipeline traverses an area that falls within a land claim by the Six Nations of the Grand River. And we've been in negotiations with the Six Nations to address this land claim and to ensure their ongoing cooperation through the construction, and ultimately the operation of the system.

117
And I'm happy to report that agreements were signed with Six Nations on March the 14th, 2002. Two agreements were put together. One is a lands agreement which includes provisions for Imperial Oil to pay fair compensation for a pipeline easement should the claim be settled in favour of the Six Nations.

118
The second agreement deals with employment and education and it focuses on preparing Six Nations' personnel for employment in the processing and manufacturing industries and seeks to encourage their participation in construction-related activities, both for the pipeline and for the facilities being built in Nanticoke refinery. And truly this is an extension of Imperial Oil's aboriginal policy.

119
So to close, I'd like to restate that the project is an environmentally driven project. We are complying to a federal regulation. The solution that we have chosen is in the best interests of both ourselves, Imperial Oil, and the public. Thank you.

120
MR. HUNTER: Thank you, Mr. Howieson.

121
Mr. Vincent.

122
MR. VINCENT: Thank you, Mr. Hunter.

123

In this part of the presentation, I will provide information about the scope of the PRISM Pipeline Project, how it fits in pipelines in the region, and how it will be integrated into Imperial Oil's pipeline operations.

124
Starting on page 12, the map illustrates the location of a number of pipelines that Imperial Oil uses to move refined products or fuels from the refineries to the marketplace. The majority of Imperial Oil's refined projects are shipped by pipeline in southern Ontario. The Enbridge and the Sarnia Products lines, which extends from Sarnia to north Toronto, carries the majority of the Sarnia refinery fuels to terminals in St. George and north Toronto. And as Mr. Howieson pointed out, there is also a pipeline from Nanticoke to north Toronto, which is trans-northern pipeline.

125
PRISM pipeline will collect Sarnia products with Nanticoke refinery, and joining Sarnia pipeline to St. George and Waterdown, as illustrated on the map.

126
In addition to these pipelines in the area, there are -- there is a system of crude oil pipelines that we haven't tried to illustrate. They are required to supply crude feed stock to the various refineries. We did consider using parts of the crude oil pipeline system, but that option was -- to move product from Sarnia to Nanticoke, that option was eliminated due to capacity limitations on the crude systems quality, product quality concerns, and costs.

127
Moving to page 12, page 13, the map on page 13 illustrates the location of PRISM pipeline in more detail; the blue line being the new line, the top orange line being the Enbridge line 8 from the lower orange line to Sarnia Products pipeline. The PRISM pipeline will be defined as a low vapour pressure oil transmission pipeline. You'll hear the phrase "low vapour pressure" a number of times in this presentation and in the second panel, and it's important because that definition defines the design criteria for the pipeline.

128
Low vapour pressure means that the fluids that are carried in the pipeline are normally liquids. If they were in a glass, they would remain a liquid. It means to contrast with high vapour pressure or a natural gas pipeline, which at normal atmospheric pressure they are gases. That's the distinction between high and low vapour pressure.

129
The pipeline will have a capacity of 14,300 cubic metres a day. There will be, approximately 61-kilometres long, a normal diameter of 12 inches or 323.9 millimetres.

130
Its design pressure will be 9,930 kilopascals, operating at a pressure of approximately 6,895. The line can be isolated and sectionalized through motorized valves which are located at both ends of the pipeline, plus those that will be located along the pipeline itself.

131

There will be a meter station at the terminus of the pipeline at Nanticoke refinery. There is no need to build a pump station for this line; it will use facilities on the Sarnia Products pipeline for that. All the equipment along the pipeline will be remotely monitored and can be operated from a distance, and the pipeline will have -- will be built in order to be able to accept tools to do internal inspections over the life of the pipeline.

132
The total cost for the project is in the order of $35 million.

133
Approximately 98 percent of the route of the pipeline will be within an electricity transmission corridor on land owned by Hydro One Networks. Imperial Oil and Hydro One have an agreement that Hydro One will grant an easement to Imperial subject to our successful receipt of a leave to construct. They have agreed to grant us a 10.5-metre wide easement. An indication of their commitment is in schedule 7-4 of the prefiled evidence which is Exhibit 1.1.

134
The pipeline does move off of Hydro One land in five locations and onto property owned by private landowners. More detail will be given in the second panel about the land owners that were affected.

135
Moving to page 14, what will the pipeline transport? They will be liquids; they will be similar to conventional fuels like gasoline and diesel fuel. As Mr. Howieson mentioned, the main commodity that requires processing is cat naptha. It typically forms about 30 to 45 percent of retail gasoline when blending is completed and has characteristics very much like gasoline.

136
There will be another gasoline component required for blending in Nanticoke and also to help protect the quality of the naptha during the transportation, and it's known as raffinate, and it constitutes 8 to 10 percent of the gasoline, of finished gasoline.

137
Deliveries to Nanticoke will occur for about one and a half days every five days. The Sarnia Products pipeline will alternate its deliveries between the terminals at St. George in Toronto with the deliveries at Nanticoke. When the pipeline is not delivering to Nanticoke, it will be idle but it will still be full of product -- of one of the products that is destined to be delivered to Nanticoke. So the line is not emptied each time delivery is made.

138
Sarnia and Nanticoke refineries operate as an integrated operation, and we anticipate there will be requirements to send other fuel components from Sarnia to Nanticoke. Those haven't been defined yet; they are likely to be components of fuels like diesel fuel or furnace fuel. The type and the amount will vary over time and with the season, depending on the refinery production.

139
The last page of my portion of this presentation, I'd like to tell you a little bit about Imperial Oil as a pipeline operator and how PRISM pipeline will fit into the operation.

140

Imperial Oil owns and operates pipelines transporting liquids to four provinces in Canada. In our prefiled evidence, we mention that we operate 1,600 kilometres of pipeline. We recently completed a merger with ExxonMobile of Canada's pipeline operations; that number has increased to 3,900 kilometres over 20 pipeline systems. The total of those pipelines move approximately 100,000 cubic metres of fuels, crude oil, and natural gas liquids every day.

141
All those pipelines will be operated from the Imperial Oil Calgary control centre. It has a continuous operation or staff on site 24 hours a day, seven days a week, controlling the pipelines. It is their sole function. It has the ability to remotely monitor and control all pipeline operations. There are continuously monitored leak detection systems in the control centre, and the operators have the ability to shut down pipelines if an emergency situation were identified.

142
Imperial Oil's pipeline organization is a single organization within the corporation. It's responsible for the management, the operation, and the maintenance of all of the liquid pipeline activities. It does include the control room in Calgary; it does include the Sarnia Products maintenance staff that are located in Ontario that Mr. Forth will tell you about in a few minutes.

143
Sarnia Products itself is one of our pipelines. It ships about 10 percent of our total daily cct through-put. It is licensed by the Ontario Technical Standards and Safety Authority as the operator of an oil transmission pipeline, and we've been operating that pipeline in Ontario since 1952.

144
Thank you.

145
MR. HUNTER: Mr. Forth. Thank you, Mr. Vincent.

146
MR. FORTH: Thank you, Mr. Hunter.

147
If you turn to page 17, as the PRISM pipeline, the operator is part of the current Sarnia Products pipeline operation, I'm going to talk about the following responsibilities and programs that will be expanded to include the new pipeline system:

148
Maintenance personnel are currently located in both Sarnia and Waterdown. Their roles are to respond to all maintenance, operational, and emergency issues within the system. We have an extensive preventative maintenance program in place, executed by our staff to ensure the reliability, operability, and safety of the system. Some of the key elements of our preventative maintenance program are valve, instrument, and meter maintenance, right-of-way inspections, and maintenance and emergency shutdown tests.

149
Our integrity program, which runs in parallel with our preventative maintenance program, is to address specific areas such as river crossing inspections, internal inspection logs. A baseline internal inspection log of PRISM will be performed once commissioned and this is will be used as a reference for future logs. And we also do annual cathodic protection surveys.

150
I will refer you to page 18. Surveillance. Currently, Sarnia Products pipeline has aerial surveillance once per week all year round, and the PRISM portion will be added to that program.

151
Imperial Oil is also a member of Ontario One Call, and as a member our PRISM system, will be added for third-party locates and crossings.

152
We have a fairly extensive public awareness program. Some of the key elements of the program are our annual communications to stakeholders which include landowners, tenants, municipalities, emergency responders and regulators. This is performed through a combination of mail-outs and personal visits, repair and replacement of signage programs, participation in trade and safety shows, as part of our public awareness. Right-of-way entry clearances to landowners and tenants prior to work being performed in an area. As well, we annually keep the landowner and tenant database updated.

153
I will refer you to page 19, our emergency response system. We have manuals in the control centre and a field manual to be updated to include PRISM. The field emergency response manual has already been filed with the Board. It includes documentation on reporting, responding, key contacts. With the addition of PRISM portion, there is no substantive change to the program.

154
Some of the things that will be added with the PRISM pipeline is control point mapping on the PRISM pipeline system, and what that entails is access to control points for containment. It will provide us with information with respect to width, depth, and flow of streams as well as preferred containment methods for that area. We also -- as part of that upgrade there will be local emergency and municipal phone lists that will be updated, and they are updated on an annual basis.

155
Mapping and the emergency response contact people and training will be completed prior to commissioning of the PRISM portion. As far as emergency response resources, we have an emergency trailer located at the SPPL Waterdown site for first-response capability. We have 24-hour coverage. Our maintenance personnel are trained in emergency response techniques. We also have equipment and resources at Nanticoke refinery and our Finch Avenue terminal in Toronto for 24-hour coverage. We also have contracted an emergency response company in Hamilton to respond on a 24-hour basis as well, and for additional support, if required, we have links to the Imperial Oil regional national teams as well as our crisis management teams.

156
Thank you.

157
MR. HUNTER: Thank you, Mr. Forth.

158
Madam Chair, that is our overview.

159
MS. HALLADAY: Thank you, Mr. Hunter.

160
Mr. Moran, do you have any questions?

161

MR. MORAN: Thank you, Madam Chair. Most of my questions are actually going to be for the next panel, but I do have a couple of questions for this panel.

162
CROSS-EXAMINATION BY MR. MORAN:

163
MR. MORAN: In the application, you describe the applicant as a partnership between two companies, one being Imperial Oil Limited and the other being McColl-Frontenac Petroleum Incorporated. I wonder if you could explain who the second company is and what its overall relationship is with Imperial Oil.

164
MR. HOWIESON: We may need to get back to you further on that question. McColl-Frontenac is a result of the merger that took place several years ago with Texaco Canada, and we took over the McColl-Frontenac piece of their operation. I can confer with -- get back to you afterwards.

165
MR. HUNTER: Mr. Moran?

166
MR. MORAN: Madam Chair, I know that corporate counsel is here, and I wonder if it would be appropriate for corporate counsel to perhaps explain that. I'm in your hands.

167
MS. HALLADAY: Sure, if he can explain it.

168
MR. BROWN: Sure. McColl-Frontenac Petroleum Inc. is a wholly-owned subsidiary of Imperial Oil Limited. It basically holds the interests of the former Texaco Canada Inc.

169
So when we purchased all the shares of Texaco Canada back in 1990, I believe it was, the way we merged the two businesses was through the partnership. So for purposes of today, all the refineries, the distribution terminals, the pipelines, systems, they are actually all assets of this partnership, so that's why we have the applicant as a partnership.

170
MR. MORAN: All right. Thank you.

171
So there's nothing in this relationship, then, as I understand it, that would affect the ability of Imperial Oil Limited to control the operations of this pipeline out of Calgary?

172
MR. VINCENT: No, there's nothing in the partnership that affected our pipeline assets that are owned by Imperial Oil.

173

MR. MORAN: All right. And the Sarnia Products pipeline, I take it, that's owned by Imperial Oil Ltd., not participated in the partnership. Sorry.

174
MR. VINCENT: Yes, it is one of the Imperial Oil assets.

175
MR. MORAN: Now, you've described how things are controlled out of Calgary and you've also described what kind of people you have on the ground in Waterdown and in Sarnia. I wonder if you could just elaborate - and this is probably a question for you, Mr. Forth - I wonder if you could elaborate on the communication between those locations, the people who are in Waterdown, the people who are in Sarnia, and the people who are in Calgary, particularly if there's a problem on the pipeline.

176
MR. FORTH: The people in Sarnia and Waterdown are all working for Sarnia Products Pipeline, they all report to myself. How we integrate or communicate with the Calgary control centre, we're basically one organization and on a daily basis we are in constant communication with them. They have -- we all wear pagers, we all have cell phones, and there's no issue with the Calgary control centre, getting a hold of a maintenance personnel or myself down in this area if they have an issue or a problem. We also have call-out lists, emergency-response lists, so somebody is always on call.

177
MR. MORAN: All right. And with respect to the remote control out of Calgary, what kind of backup do you have if, for whatever reason, there's a breakdown between Ontario and Calgary on that communication link?

178
MR. VINCENT: The communication system between the control centre and the operating facilities have been very reliable, but what we do have is that if communications are lost for a period of time, the pipeline automatically shuts down to a safe position until communications can be re-established.

179
MR. MORAN: Thank you.

180
The environmental report that was prepared for this project contains a number of recommendations in it, and it also proposes and recommends an environmental protection plan. I take it that Imperial Oil accepts and adopts those recommendations for the purposes of asking the Board for approval here?

181
MR. VINCENT: Yes, we are going to accept those recommendations.

182
MR. MORAN: All right. And as I understand it, there are also recommendations that come out of the Ontario Pipeline Coordinating Committee review. Is it Imperial Oil's position with respect to those recommendations?

183

MR. VINCENT: That discussion I'd like to defer today to the members of the second panel, please.

184
MR. MORAN: All right.

185
If you take a look at Exhibit 10.2, the draft submissions for approval, I don't know if you have copies there.

186
MR. VINCENT: Yes, we do.

187
MR. MORAN: If you look at position 1.3, based on your answer, then, I guess you accept half of the conditional approval and the other half you will leave to the next panel to comment on?

188
MR. VINCENT: That's correct.

189
MR. MORAN: With respect to the preparation of the construction specifications, who would be responsible for that?

190
MR. VINCENT: That would be Mr. Williams, in the second panel.

191
MR. MORAN: On that basis, then, I think those are all my questions, Madam Chair.

192
MS. HALLADAY: Thank you, Mr. Moran.

193
Mr. Betts.

194
QUESTIONS FROM THE BOARD:

195
MR. BETTS: Thank you.

196
These relate -- I have two, I guess, different types of questions. One relates to the operation of the pipeline itself. The question is: How would a rupture, and hopefully -- obviously, hopefully it would never happen, but if a rupture did happen, how would it be detected?

197
MR. VINCENT: There's a variety of ways, but first, I agree hopefully there would never be one, and pipelines are considered the safest form to move large volumes of hydrocarbons so occurrences like that are very rare on pipelines.

198

The equipment that we will install on the pipeline feeds information to a control system that control system constantly monitors the situation along the pipeline, including the flow rates in and out to make sure that what goes in comes in; and secondly, it also measures the pressure profile along the pipeline. Using that information, the control system decides whether or not there is -- it could be a problem. If there is a problem and it's a large problem, there's an indication within a minute. And then if there's a problem, it is alarmed to the controller and the controller reacts by shutting down the pipeline. This is the leak detection system.

199
When it does occur, as I said, it reacts quickly, but it also would be able to pinpoint the location of the incident within a kilometre.

200
MR. BETTS: Thank you. And one other question, and perhaps this would probably be best directed to Mr. Howieson. It's regarding -- I guess I'm still a little uncertain. If you have a single refining unit at Nanticoke to deal with the cat naptha issue, how does that assist in the production of gasoline at Sarnia? How do you get the reduced cat naptha back to Sarnia, or does it have to get back to Sarnia?

201
MR. HOWIESON: That's the clarification, is it does not have to get back to Sarnia. The remaining components, if we remove the cat naptha from the Sarnia pool, the remaining components of gasoline will still be blended up to meet the regular gasoline requirement. As we said, cat naptha on it's own is very similar to regular gasoline, and the remaining components themselves are already low in sulphur and we can produce 30 parts per million or less with those components.

202
MR. BETTS: Thank you.

203
MS. HALLADAY: Thank you, Mr. Betts.

204
I just had one question for clarification. I understand that the unprocessed cat naptha will be transported to Nanticoke one to one and a half days every five days, and that the pipeline won't be empty, it will be idle. Are there any plans for the pipeline to be used bi-directionally, to pump out the processed cat naptha, or are you going to be using the trans-northern pipeline?

205
MR. VINCENT: Products that will be blended, processed and blended in Nanticoke, we will use the trans-northern system to go to the Toronto market. There are no plans at this time to reverse -- make the PRISM line bi-directional. In order to do that, we'd have to put in another pump station at the Nanticoke refinery to make it go the other way, and we don't have any plans to do that at this time

206
MS. HALLADAY: By that, it is possible that sometime in the future, the PRISM pipeline could be bi-directional, as you mentioned, before it could carry other products other than cat naptha as well.

207

MR. VINCENT: You could make it bi-directional. You need to put in the pump station, as I said, you need a destination.

208
MS. HALLADAY: But right now the plans are that the blended product would be transported by the trans-northern pipeline

209
MR. VINCENT: Yes, they will, yes

210
MS. HALLADAY: Okay. Thank you.

211
Thank you very much. The panel is now excused.

212
MR. HUNTER: Thank you, Madam Chair.

213
MS. HALLADAY: Just one moment, please.

214
Excuse me. The panel feels now might be an appropriate time for the next break so you can get the next panel organized, so we will reconvene in 15 minutes.

215
MR. HUNTER: Thank you, Madam Chair.

216
--- Recess taken at 10:56 a.m.
217
--- On resuming at 11:08 a.m.
218
MS. HALLADAY: Please be seated.

219
Mr. Hunter

220
MR. HUNTER: Madam Chair, thank you.

221
As I indicated earlier, Mr. Ralph Parks, a land agent for Imperial Oil who was involved in the negotiations with landowners and negotiations with Hydro One, took ill last night and is not able to attend. So in his stead, we discussed this briefly with counsel, Mr. Inwood with whom he had worked very closely, and I assume he would agree with this, will adopt his evidence and speak to these matters.

222

And with the indulgence of the Board, I've asked Mr. Vincent, who was on a previous panel, to sit as a member of this panel not for the purposes of giving any evidence initially but to be available to Board counsel and yourselves should you wish to have any questions concerning Imperial Oil policy or matters in that regard, and he would be the person who can answer those questions in this situation which is a role that Mr. Parks would have played.

223
I don't have any other way of dealing with it and we're not -- Mr. Williams is an employee of Imperial Oil but has not been as directly involved in the land issue as Mr. Vincent has. So with the indulgence of the Board, I would propose to proceed that way.

224
MS. HALLADAY: That's fine. Thank you, Mr. Hunter.

225
MR. HUNTER: In that regard --

226
MS. HALLADAY: Excuse me. Then perhaps we should swear the new witness panel.

227
MR. HUNTER: Yes, I was just going to ask if Mr. Sommerville could swear the panel in.

228
R.Inwood; Sworn.

229
D.Williams; Sworn.

230
D.Wesenger; Sworn.

231
P.Prier; Sworn.

232
B.Vincent; Resumed.

233
MR. HUNTER: Mr. Sommerville, excuse me, I presume that Mr. Vincent is still sworn for the purposes of this panel? Thank you.

234
EXAMINATION BY MR. HUNTER:

235
MR. HUNTER: I'm going to ask Mr. Wesenger and Mr. Prier -- Mr. Prier is immediately here. Mr. Wesenger. I failed to point out the witnesses the last time.

236
Gentlemen, do you adopt the prefiled evidence, "Environmental and Socioeconomic Impact Assessment," section 5, including the schedules; section 6, including the schedules; interrogatories, 14, 15, 17, 18, 20, 21, 22, 23, and 24; supplemental interrogatories 6, 7, 8, and 9; and supplemental filing B-2?

237
MR. PRIER: I do

238
MR. WESENGER: I do.

239
MR. HUNTER: Mr. Inwood, who is sitting at the far end, and Mr. Inwood, do you adopt interrogatories 16, 17, 25, 26, 29 and 30; supplemental interrogatories 10 and 11; supplemental filings B-3, B-4, B-5; and the evidence of Mr. Parks' prefiled evidence, section 7, including schedules; interrogatories 27 and 28; and supplemental filing B-8?

240
MR. INWOOD: I do

241
MR. HUNTER: Thank you, sir.

242
And Mr. Williams, who is sitting immediately next to Mr. Inwood and next to Mr. Wesenger, sir, do you adopt prefiled evidence section 4-4; 4-5; section 4, schedule 1; schedule 4 section 2; section 8, including schedules; interrogatories 5, 6, 7, 10, 12, 15, 17, 18, 19, 20; and supplemental interrogatories 3 and 6? And I think I forgot to mention interrogatories 29. Do you adopt that as your evidence, sir?

243
MR. WILLIAMS: I do.

244
MR. HUNTER: Thank you, sir.

245
MS. HALLADAY: Excuse me, Mr. Hunter. Before we proceed, could you confirm that there is no evidence, answers to interrogatories, supplemental evidence, that has not been adopted by one of your witnesses here today?

246
MR. HUNTER: To the best of my knowledge, Madam Chair, no, but -- there is no evidence that has not been adopted.

247
MS. HALLADAY: Thank you very much.

248
MR. HUNTER: But I was -- I've always lived with the terror when you go through that someone's going to actually say no, I don't adopt it, but fortunately not.

249
MS. HALLADAY: Thank you, Mr. Hunter.

250

MR. HUNTER: Mr. Prier.

251
MR. PRIER: Thank you.

252
I will be speaking to the environmental assessment study process and public consultation program and I will be highlighting some of the key findings throughout that.

253
I begin on page 4. This information, this table is presented in the prefiled evidence Exhibit 1.1, schedule 5-1, and Exhibit 9.10.

254
This first table outlines the five-phase study process we followed and it's important to understand how each phase builds on the previous phases that arose out of this study process, and also to appreciate how the level of detail as you move through each phase increases from phase 1 to 2 and through on to 5.

255
This study process that we've followed is widely accepted and commonly used for environmental assessments and it also reflects the requirements of the Ontario Energy Board's environmental guidelines. But in terms of that level of increasing detail, as an example, phase 1 would be a commenced process in November of 2000, and we relied primarily on published information such as existing maps and reports at a relatively small scale to establish the study area boundaries. In terms of consultation, we published a notice of commencement in local newspapers and sent a letter and map out to government and non-government organizations known at the time to potentially have an interest in the project.

256
We invited anyone who might have an interest to become involved in the development of EA at that time. By the end of phase 1, as an example, we knew where the wood lots were but we did not know their species composition. However, by the end of phase 4, through the input of the public and collection of more detailed information, which included field surveys, we knew precisely where the wood lots were and what species were in them.

257
We had also identified, throughout the process, additional government agencies, landowners and interest groups that might have an interest or had expressed an interest in the project. This increasing level of detail and knowledge, as we move through the process, and the greatly expanded involvement and input of interested parties, allowed us to make better decisions about the alternate routes, about the preferred routes selection process in phase 4, and ultimately some of the minor adjustments that we made on the referred route before we finalized the EA.

258
Perhaps most importantly, this phased approach built a level of trust in landowners and interested parties that had come to the meetings, that had expressed and interest and that we had communicated with.

259

In addition, the input they provided was valuable in our decision-making process and was incorporated wherever possible. Even when some of the interested parties may have disagreed with our product decision-making, trust and transparency in the process are the reasons why there's no interveners here to oppose us or express concern with the project.

260
The consultation and level of information collection, the level of detail of that information has continued after the environmental assessment was completed and distributed for comment through the legal surveys and consequent route adjustments of plus or minus 50 metres based on a feature that was identified and the knowledge of a landowner/tenant, along the whole length of the preferred route.

261
Imperial Oil has committed to continue the involvement of landowners directly affected as well as tenants and government agencies throughout the construction and operation process.

262
If you turn to page 5 of the presentation, the alternate routes, this slide illustrates the final study area boundaries used, and three alternate routes were evaluated in phase 3.

263
Three alternate routes, from left to right - and they're a bit hard to see here - became known as the western, which is on the left-hand side of the page, the central route, and the eastern route. The western route -- I just want to tell you a little bit about them.

264
The western route was the longest at 73 kilometres and it did not parallel an existing easement or right-of-way for about 28 kilometres of its length.

265
The eastern route paralleled the Hydro One right-of-way at the north end, which is at the top of the page, but moved off of a Hydro One right-of-way to parallel an existing utility corridor about a quarter of the way down the route, and it pulled away from that Hydro One corridor to the east, as I say, parallel to another utility corridor. It paralleled that corridor back to a point to rejoin the Hydro One corridor just south of the Grand River and continued on down to Nanticoke refinery.

266
The central route paralleled the Hydro One right-of-way in its entirety. We took these routes to the first meetings in phase 2 of the EA process to solicit input on the study area boundaries, the accuracy and completeness of our environmental features mapping, the public's opinions on features of most importance, and also which route they felt was the best.

267
From a public consultation perspective, invitations and newsletters were sent to about 593 government organizations and non-government organizations, and as well we contacted landowners on each of those alternate routes as well as the properties abutting those alternate routes. There was about 1,348 landowners identified through that process. That totalled about 1,940 invitations and information packages sent out. It was a very large undertaking, but it allowed us to make better decisions on selection of the preferred route. We found out what was important to the public and the government agencies. We found out how to refine the mapping, whether we had missed a feature. We found out that the study process, the study area boundaries and the alternate routes were acceptable.

268
Significantly, we also found out at and after the public meeting that the western route was not desirable. That was the route that didn't parallel any kind of a right-of-way for about 40 percent of its length. In fact, we received a petition with 568 names on it so that pretty clearly told us that that was not the route.

269
Following the meetings, ESG and Imperial assessed each route and the impact and established a preliminary preferred route. That became known as the central route and is the route that's the subject of that application.

270
We took this preliminary preferred route to a second set of public meetings and we invited the same 1,941 people that we invited to the first set of meetings and anyone else who had expressed an interest since that first set of public meetings.

271
If you can move to page 5 now -- sorry, page 6. I just also want to mention that following the second set of public meetings, we found that the preliminary preferred route was widely supported, even by directly affected landowners and tenant. It became the preferred route. It parallels Hydro One in its entirety. It's approximately 61 kilometres in length, crosses the Grand River upstream and west of Caledonia.

272
I also want to mention the route selection process was conducted on the basis of the central route being adjacent to but not within the Hydro right-of-way, and based on that comparison, the central route clearly still came out as a preferred alternative.

273
Following completion of the EA, we predicted effects of construction and operation of the pipeline were further reduced through negotiations with Hydro One that allowed us to locate the preferred route entirely within the Hydro One right-of-way for about 98 percent of the its line. This allows for pipeline construction and operation to occur, to a very large extent, in an area previously disturbed by Hydro One when they established that right-of-way.

274
The input we received from the public and landowners strongly recommended the route be located within the Hydro One right-of-way and not outside, and so they were very pleased to hear this as well.

275
This move to within the Hydro right-of-way is probably one of the significant reasons why no landowners are here to oppose the routing of the pipeline.

276
If you turn to page 7, the impact assessment. In phase 4 of the environmental assessment, we conducted an impact assessment along the preferred route. Some of the primary features along this route include the Grand River, a designated heritage waterway, and its watershed and tributaries to it; as well, the national heritage features including aquatic and terrestrial habitats and species along and near the route and prime agricultural land.


277
The objective of the impact assessment was to protect these features during construction of the pipeline. Mitigation measures were developed based on the principles of environmental protection that have been widely accepted and tested, and these include avoidance through routing, avoiding sensitive features, and also scheduling; for example, the constructing period during the driest time of year to protect agricultural land.

278
Secondly, or the second principle, minimization, by design and by using practices that reduce impacts, such as a horizontal directional drill proposed for the Grand River.

279
And finally, the compensation, where impacts could not be avoided or minimized, such as the temporary crop loss associated with the year of construction of the pipeline.

280
Just for clarification here, I should also mention that the impact assessment measures have been refined since the EA was completed through environmental surveys. These are on-the-ground surveys conducted along the line once we had property access through the agreement with Hydro One. These environmental surveys will be referred to by Mr. Wesenger in his presentation.

281
And if you could turn to page 8, the environmental protection plan. As part of the environmental assessment, an environmental protection plan has been prepared. The intent of the plan is to provide a reference guide to construction personnel that highlights issues that could arise during construction and provide recommendations for their management and their resolution. The environmental protection plan also consolidates a number of measures and includes measures for monitoring, contingency, and emergency response plans during construction and operation.

282
Finally, to conclude, we feel that the goals of the environmental assessment and public consultation program have been achieved; and secondly, most importantly, that the PRISM pipeline can be constructed and operated with no significant adverse effects. Thanks.

283
MR. HUNTER: Mr. Wesenger. Thank you.

284
MR. WESENGER: Thank you.

285
I'm going to speak to matters relating to the acquisition of the environmental permits and approvals as well as the environmental surveys. My presentation begins with environmental permits and approvals which can be found on page 10 of the handout.

286
With regard to environmental approvals, there are four areas which I wish to address. Those include water course crossings, hydrostatic testing, tree clearing, and general construction matters.

287

With regard to water course crossings, the permitting agencies that we are dealing with include the Ministry of Natural Resources, the Grand River Conservation Authority, the Hamilton Region Conservation Authority, the Long Point Region Conservation Authority, the Department of Fisheries and Oceans, as well as the Canadian Coast Guard.

288
The specific requirements of the Ministry of Natural Resources include a work permit under the Lakes, Rivers, and Improvement Act. Specifically, that permit is required for any activity that increases the flow, holds back, or diverts water.

289
The second work permit required from the public -- from the MNR is a work permit under the Public Lands Act, and that permit is required for any project work which involves a bed of rivers.

290
We are anticipating these applications for permits be submitted to the Ministry of Natural Resources in the first week of April. We've been advised by the Ministry that it requires approximately six to eight weeks to process and review the application, and we do not anticipate any problem obtaining that permit sometime around the first week of June.

291
The second agency that we are dealing with regarding water course crossings and permitting are the conservation authorities, and as I mentioned earlier, that includes Hamilton Region, Long Point Region, as well as the Grand River Conservation Authority. Permits are required under the Fill, Construction and Alteration to Waterways regulation of the Conservation Authorities Act.

292
In addition, through an agreement with the Department of Fisheries and Oceans, each of these conservation authorities review applications under section 35 of the Fisheries Act, and where fish habitat will not be harmfully altered, disrupted or destroyed, as is the case with the PRISM pipeline and the water course crossings, no Fisheries Act authorization is required. And in this case, the conservation authorities will provide the necessary permits on behalf of the Department of Fisheries and Oceans.

293
Through our discussions with the conservation authorities, we've been advised that if we do submit our application as planned during the first week of April, they also require approximately six to eight weeks, and that an approval would be granted sometime during the first week of June.

294
The last agency that we're dealing with regarding water course crossings is the Canadian Coast Guard under the Navigable Waters Protection Act. On February 20th, we contacted the Canadian Coast Guard to determine if water courses traversed by the PRISM pipeline are considered navigable waterways under the Navigable Waters Protection Act. We also requested the Canadian Coast Guard to inform us of what their permit requirements would be if, in fact, they determined these waters were -- or advised these water courses were navigable.

295
The Coast Guard, on March 8th, verbally advised us that they do not anticipate the project will substantially interfere with navigation, and they anticipate to provide us with a response in writing by April 1st.

296
With regard to the hydrostatic test, a permit to take water is required from the Ministry of the Environment if the water is withdrawn from a natural source such as the Grand River and if the volume of water required exceeds 50,000 litres per day. That would be the case, too. If the Grand River is used, we would require a volume that exceeds that amount.

297
We applied on February 21st, 2002, to the Ministry of the Environment for such a permit to take water. We were advised on March 6th in their response that our application was premature and that they directed us to resubmit that application approximately one month prior to determining the actual date of withdrawing the water to the hydrostatic test. We don't anticipate needing that water until sometime in September or October, so we agreed that we were premature making the application and they assured us that they only required two weeks to process it. So we have confidence that we can submit that after construction has commenced and acquire the permit.

298
The next issue to turn up is page 10 of the presentation, sorry, page 11, with regard to tree clearing. We have contacted the county of Brant, the city of Hamilton, and the county of Haldimand regarding their woodland preservation bylaws to remove trees to accommodate the construction of the pipeline.

299
On February 28th, 2002, the city of Hamilton advised us in writing that we are exempt from the municipal woodland preservation bylaw. On February 20th, 2002, the county of Brant advised us in writing that we were exempt as well from the woodland preservation bylaw. The county of Haldimand has advised Imperial that an application for a minor exception to the bylaw in that municipality is required for 14 wood lots that are traversed by the path of the present pipeline. The applications for those wood lots was submitted on March 6th. Those applications are presently in public -- are posted for public review. We have been advised by the county that we should anticipate a decision in early April.

300
With regard to general construction matters, we also contacted each municipality - Hamilton, Brant and Haldimand - regarding municipal noise bylaws. We were advised by each of those municipalities that the pipeline construction facilities do not require applications for exemptions to the applicable noise bylaws. Any violation to the bylaw will be enforced on a complaint basis and Imperial Oil must ensure that their contractor complies with the municipal noise bylaw.

301
Finally, with regard to permitting, regulation 558 of the Ontario Environmental Protection Act addresses the transportation and disposal of contaminated materials. This is required only if contaminated materials are encountered during construction. If materials are encountered, authorization or exemption to regulation 558 will be required prior to transporting or disposing of the contaminated waste.

302
With regard to all of the permits which I just discussed, we do not anticipate any problems in securing the necessary permits or approvals.

303

I can next get you to turn to page 12. This page addresses the environmental surveys that were recommended in the environmental assessment document, which is schedule 5-1. The fish habitat survey was completed, the field work was completed in the fall of 2001. One-hundred and seventy-nine water courses were inspected for fisheries and habitat. We determined that 24 water courses do have fish habitat and those water courses will be the subject of the application to the Conservation Authority under section 35 of the Fisheries Act.

304
All of the water courses traversed by the PRISM pipeline are warm water and no rare species were identified in the fish habitat survey.

305
The topsoil depth survey was conducted in the fall of 2001. The field work is complete. That survey determined the depth of topsoil across all agricultural fields traversed by the PRISM pipeline. The information gathered in that survey will be used during construction to determine the depth of topsoil stripping across each agricultural field traversed.

306
The Soybean Cyst Nematode survey was also completed in the fall of 2001. The field work is complete. The soil samples were collected from all agricultural fields traversed by the PRISM pipeline. Samples were submitted and analyzed to a laboratory and the laboratory's results determined or confirmed that no fields traversed by the PRISM pipeline are presently infested with slug and cyst nematode.

307
The terrestrial ecology survey has two components. The fall 2001 survey was completed in the fall of 2001. There were no rare species identified in that survey which included a characterization of vegetation communities, a botanical inventory, as well as a habitat assessment for significant wildlife species through the entire PRISM pipeline route.

308
A spring 2002 survey which looked at the same components will be completed in May 2002.

309
With regard to the stage 2 archaeological assessment, that work is presently in progress. Wooded areas are scheduled to be completely assessed by the stage 2 assessment by the end of March. Cultivated lands will be assessed likely in late May, once the farmers have had an opportunity to go out on the fields and do some plowing and allow that material to weather. At this time of year, it's simply too wet to complete the survey on those fields.

310
The final survey mentioned is the water-well monitoring program. That is also presently in progress. At this point in time, Elexco's land agents are identifying wells that are -- all wells within 100 metres of the PRISM pipeline alignment. Once those wells are identified, they are meeting with the well owner, collecting background information regarding the location of the well; the use of the well, whether it's potable or non-potable; the yield of the well, whether there's any seasonal variation in the yield of that well, as any historical analysis information that the well owner may be able to provide to Imperial for background information.

311

Prior to construction, a sample will be collected from each well within 100 metres of the PRISM pipeline alignment and submitted to a laboratory for analysis. That same procedure will be repeated following construction.

312
MR. HUNTER: Thank you, Mr. Wesenger.

313
Mr. Inwood, please.

314
MR. INWOOD: Thank you.

315
The land presentation begins on page 14. There are two components to Imperial's land objectives. The first of these is external, which is to satisfy land stakeholders and regulators that the compensation, easement terms, and construction provisions are reasonable and address the real impacts of pipeline construction and operations on the land stakeholder.

316
Secondly, to establish a long-term working relationship between the land stakeholder and Imperial.

317
And finally, their compensation easement terms and construction provisions are consistent with pipeline industry practice in southern Ontario.

318
In addition to those objectives, Imperial has internal objectives; that it needs land rights, appropriate land rights, to enable orderly and timely project execution and pipeline operation, and that there is a balance between costs and land stakeholder acceptance.

319
Turning to page 15. So within those objectives, we have the general requirement that practice is consistent with pipeline industry and that compensation methodology is the same and applied equally over the length of the pipeline. Also, that we engage in individual negotiations so that landowners have an opportunity to understand what document is being presented to them and that we respect their privacy.

320
There are three types of documents required, the first being a permanent easement, which on private lands is 15 metres wide; on Hydro One corridor lands is 10.5 metres wide. There are the -- the reason for the difference between the two widths is that the Hydro One corridor already exists and has several restrictions already placed upon those users within the Hydro One corridor.

321
Temporary working space is required by way of an agreement that would allow for the safe and efficient construction of pipeline operations. It's a temporary access only; the land to be restored and land rights relinquished after construction.

322

There is also a letter of understanding developed between Imperial and each landowner and title-1 tenant. This is to ensure that the landowner understands the method of construction, what issues the landowner may have, how to minimize the impact that the pipeline construction will have upon those lands, and provides a method of follow-up for Imperial Oil commitments to the land stakeholder.

323
After the pipeline is constructed, there will be continuing relationships with the landowners and the tenants within the Hydro One corridor which will be conducted out of the Sarnia Products Pipeline operation in Waterdown.

324
Turning to page 16, we have identified four types of land stakeholders. The first one is Hydro One, which is the owner of the utility corridor, as we've heard today, and has about 98 percent of the pipeline route. Imperial and Hydro One have reached an easement agreement that has been filed with this Board.

325
There is a requirement for easements with five private landowners where the design or the mounting of the pipeline meant that the pipeline came off the Hydro One route in those instances.

326
The third type of Hydro One tenant, Hydro -- the third type of agreement involves Hydro One and landowners who farm or otherwise occupy the corridor. We have met those tenants to arrange the understanding to minimize the impact on their tenancy and collect their input about construction considerations. And I will be talking about this further -- a little better further on.

327
And then there are the crossing stakeholders, being the utilities and transportation corridors in addition to the crossing of the Grand River. That ends the overarching principles that were applied to land.

328
And now I would like to direct your attention to page 18 where we can deal with the very specific matters.

329
There are four elements to that part of the presentation, the first being land matters, then our dealings with private landowners, then our dealings with Hydro One tenants, and then the specifics of other crossing agreements.

330
The first task was to conduct a title search of both the Hydro One lands to determine if there were other encumbrances and validity of title to Hydro One lands, and to identify all joining and abutting landowners.

331
There were two reasons for this. One was to ensure that we were able to comply with the Board procedural order effecting notice, and also to help us identify which landowners actually owned the property so the appropriate agreements and introductions could be made.

332

This was followed up with the publication of the notice of hearing. Six community newspapers were contacted, and it was determined that the Hamilton Spectator, with respect to a daily newspaper, and that the regional news out of Caledonia with respect to weekly circulation figures, met the requirement of the Board's objective of posting the notice in those publications having the highest circulation within the study area.

333
As Mr. Hunter pointed out, the affidavits of search, delivery, and publication have been filed.

334
Turning to page 19. Before beginning the discussion here, I would like to introduce the two posters behind me. These maps are an enlargement of map 7, found in the prefiled environmental and socioeconomic evidence at appendix A. I believe this has been Exhibit 1.3. You may find these maps to our advantage when referring to specific landowner and Hydro One tenants.

335
We have heard on numerous occasions and stated in evidence that Hydro One owns 98 percent of the lands through which the PRISM pipeline is located. There are five instances where the pipeline is located off the Hydro One corridor. I would like to point those out to you now.

336
On these maps, the southern portion map starts at the Imperial refinery, comes up past Davisville, up into Caledonia, crosses the Grand River, and goes slightly westward following the Hydro corridor until it intersects the Sarnia Products Pipeline.

337
Within that distance, we need to come off the Hydro corridor in five locations. Mr. and Mrs. Sharpe, having 137 metres of easement; Mr. Forth, 491 metres of easement; Mr. Smith, with 200 metres of easement; Mr. and Mrs. Park, with 44 metres of easement. And finally down at the bottom, a way to get from the Hydro One corridor into the Imperial plant, we would require 345 metres of easement from Mr. Mattice. Imperial requires easements from these five landowners.

338
In supplementary interrogatory response number 11, and I believe this is contained in Exhibit 8.2, we provided an update that stated that four of these five landowners have entered into an agreement to grant easement, a letter of understanding, and a temporary work space agreement.

339
The remaining unsigned landowner is Mr. Forth who is planning on developing a golf course. Several applicable discussions have been held with Mr. Forth and his golf course architect to work out the most efficient manner of coordinating construction activities and to develop a restoration compensation plan if needed.

340
Mr. Forth has advised me that we have an agreement in principle for which we have forwarded an offer of agreement to grant easement and a letter of understanding setting out the special conditions regarding the golf course development. We expect to conclude agreements in the very near future.


341
Turning to page 20. As originally aligned, the PRISM pipeline crosses 54 Hydro One tenants, holding 115 separate parcels. An update provided in Exhibit 9.10 as additional evidence, tab B-4 states that we now have 51 of those tenants out of 54 signed up to letters of understanding.

342
There are three remaining tenants that we have so far been unable to reach agreement with. I'll point these out. Mr. Bullock, Mr. Somerville, and Mr. Slack.

343
In Mr. Slack's case, he has issues relating to the impact the construction will have on trees that are adjacent to the right-of-way. These are trees on his private lands but that he feels may be impacted by the construction of the pipeline adjacent to his private lands. He has retained a forester to help him express his concerns. The principal issue is one of prepaid tree damage compensation. Mr. Slack has indicated that there are no other issues with respect to the letter of understanding.

344
We have held several meetings with Mr. Slack and Ms. Hart, the forester, in addition to compensations between Ms. Hart and the folks at ESG. Subsequently, Imperial developed a construction crew procedure and landowner letter setting forth Imperial's policy and that is filed in Exhibit 8.2, at tab 3A, I believe. This procedure was explained to Mr. Slack on Friday, the 8th of March. He rejected this option since it did not meet his objective of prepaid tree damages.

345
In our opinion, it is impossible to pre-assess tree damage, particularly as we don't expect any damage to his trees. Imperial Oil's commitment will be the same commitment offered to any other landowner or any other tenant, but so far none others have been identified.

346
With respect to Mr. Somerville, he has an issue with the depth of pipeline burial. Mr. Somerville insists on five feet of depth of burial for the pipeline across his entire farm of about 1,000 metres. He has expressed very strong views that the pipeline be below the four feet contained within Imperial Oil's construction procedures. He's claimed that he has two principal drains, deep drains crossing the pipeline. These are just simply crossings and they don't exist within the entire 1,000-metre route.

347
Mr. Williams will address the construction specifications regarding depth of burial. In addition, the landowner letter of understanding, found in the prefiled evidence at section 7, schedule 5, pages 7-18, clearly indicate that Imperial Oil burial will restore drainage to its pre-existing condition.

348
Since Mr. Somerville has no further plans to install additional tile, Imperial believes that its construction specification is adequate and in keeping with other tenant crossings who have not expressed any reservation regarding pipeline depth. There are no other outstanding issues with respect to Mr. Somerville.

349
MR. HUNTER: Mr. Inwood, perhaps you could just let me interrupt. Could you indicate to the Board and to Board counsel what the commitment is to Mr. Slack.


350
MR. INWOOD: Mr. Slack's -- the commitment to Mr. Slack can be found in Exhibit 9.1, section B. Yes, Exhibit 9.10, I'm sorry, under tab B-3-A.

351
Do we have that reference?

352
MR. HUNTER: There's a copy here.

353
Can we proceed? Mr. Inwood.

354
MR. INWOOD: The third unsigned Hydro One tenant is Mr. Forth, and his concerns as a tenant are exactly the same as his concerns as an owner. He is developing the golf course, and we expect to conclude a suitable arrangement with Mr. Forth in the very near future.

355
I include in the presentation, on page 20, a non-tenant issue, that of Mr. and Mrs. Lainson's water well. As the Board is aware, Mr. and Mrs. Lainson informed the Board of two issues that they had with respect to the pipeline construction; one, that the pipeline is less than 100 metres from their water well; and two, that there will be removal of trees from their property line.

356
Following several very cordial meetings with Mr. and Mrs. Lainson at their property, the outcome has been to move the pipeline to avoid the necessary clearance of trees on their property line and to give further assurances to Mr. and Mrs. Lainson that there is -- Imperial has established a well monitoring program to ensure that we establish baseline conditions with suitable follow-up with respect to their water well concerns.

357
The final letter that I delivered to Mr. and Mrs. Lainson last week can be found at tab 4, subtab A. Mrs. Lainson acknowledged receipt of that by e-mail and that receipt of that e-mail can be found also at subtab A.

358
Since we can remove the -- her concern that must be approved by them, being Hydro One, since Hydro One has now approved the location of the pipeline, I think we can say that the Lainson matter has been satisfactorily dealt with and we will continue to keep Mr. and Mrs. Lainson informed of construction throughout the construction period.

359
To finish on page 21, there are several crossing agreements required to preserve the integrity of the pipeline route.

360
There is an easement required from C -- from the Canadian National Railway, at a location south of Hagarsville. CNR owns the lands and so an easement will be require from CNR, but we will also require permits from the users of the railway, which is not CNR. We will obtain crossing agreements from all municipalities and provincial road authorities.

361
In addition, we have -- the Hamilton Region Conservation Authority has acquired an abandoned CN Railway, which I've identified on the map right here. We have applied for a two-year agreement to cross followed by an agreement to grant easement which will come into full force and effect following the expiry of the two-year temporary permit. That request was formally made of the Hamilton Regional Conservation Authority, and on Monday of this week their budget and administration subcommittee recommended approval to their full board that such an arrangement be put in effect, and that full board meeting is expected to pass that on April 4th.

362
There is one other unique agreement required and that is with the Ministry of Natural Resources for licence of occupation for water lot agreement crossing the Grand River. We have had discussions on form and style of that agreement with the Ministry.

363
Thank you. That's the end of the presentation.

364
MR. HUNTER: Thank you.

365
Mr. Williams.

366
MR. WILLIAMS: The previous presentations by the first panel and the earlier presenters on the second panel have described the overall system requirements, the effort that's gone into determining the routing and the environmental investigation, the public consultation that's taken place. In my portion of the presentation, I will be describing how all this work and effort is brought together into the design and execution plan for the PRISM pipeline.

367
To meet the pipeline system capacity requirements, in accordance with the recommendation of the environmental assessment and the agreements made with landowners and tenants, we will be designing according to these design specs, and I'm going to start by addressing page 23.

368
The pipeline will be designed to CSA Z662-99 as it has been modified and adopted by the TSSA in their code adoption document of June 2001. A couple of items within that to bring to people's attention.

369
The CSA code requirement is for 15 percent random radiography for low vapour pressure liquid line. We recognize that for other types of lines, high pressure natural gas or high vapour pressure lines, its common to use 100 percent radiography. More common anyway. In our experience and judgment, 15 percent random radiography plus complete radiography of crossing sections under roads, water crossings, railways and all tie-in wells, is an appropriate level for the PRISM pipeline and is consistent with industry practice for LVP lines.

370

The second item to bring to note is that as a -- again, this is a low vapour pressure line. The CSA design factor is one that is consistently applied for all class locations. As a matter of information, the PRISM pipeline is predominantly a class-1 location throughout its length with the exception of a short section of approximately 2 kilometres where the alignment is within the 200-metre proximity to the La Fortune Campground just east of Caledonia -- west of Caledonia, sorry.

371
In order to have capacity for the flow rates required, we have chosen a 12-inch, 323.9-millimetre pipeline. We have chosen to use a common, standard grade of steel pipe, grade 359, that is easily weldable using standard industry welding procedures. The minimum wall thickness that we could have used for this pipeline to be in accordance with the design pressure calculations in CSA could have been 5.6 millimetres to accommodate the greatest anticipated loading stress from agricultural vehicles, which we determine to be a single-axle grain cart, that -- the wall thickness would have to have been increased to 7.14. We've chosen to use a slightly more conservative general wall thickness of 7.92 millimetres. And as an additional conservative measure, we've chosen to use heavier wall pipe, the 9.53 identified here, for all road and water crossing.

372
Finally, there will be some 10.3-millimetre wall thickness pipe for uncased railway crossing, as per the CSA code. The CSA minimum is 2 feet or .6 metres for burial depth. We've chosen to set in our specifications a minimum burial depth of 1.2 metres below the depth affected by agricultural operations such as deep plowing.

373
To add further to Mr. Inwood's comments earlier on, in situations where we come across tile drainage, the typical response would be to bury the pipe a little bit deeper and ensure that there was not interference between the tile drainage system and the pipeline, typically by taking the pipeline below the tile drainage depth.

374
The design pressure, we've heard before, is 9,930 kilopascals and the pipe will be hydro tested to one and a quarter times the design pressure, although the operating pressure will be less than that. The operating pressure is 6,895 kPa, or a thousand pounds, and this is in accordance with the existing SPPL pipeline operation.

375
The final item on this slide to bring to the Board's attention is the external coating we've chosen for the PRISM pipeline. In our judgment, it's the best available technical coating to provide both initial constructability protection and long-term integrity for the system. It incorporates both a fusion-bond epoxy coating bonded to the steel and then a polyethylene outer coating, outer layer on top of the epoxy. Overall, we believe that the pipeline design is a conservative design that meets or exceeds all code and operating requirements.

376
Speaking to page 24 on construction. In accordance with the agreements signed with Hydro One, the overwhelming majority of the pipeline will be constructed within a 10.5-metre easement with an additional 12.5 metres of temporary working space. This will allow for safe and effective construction of the pipeline while providing space to properly store and segregate topsoils as required. Depending on the exact location within the Hydro One corridor, the exact arrangement of the easement and working space will vary.

377

The diagram shown in the presentation materials is typical of what we would use. There will be -- depending on the exact location, we might have more temporary working space on one side and less on the other or make those kinds of adjustments. The equipment layout would be essentially as shown here.

378
We will reduce the amount of clearing required through wood lots, where practical, to the minimum required to safely construct the pipeline. For short sections of pipe, we can reduce the amount of width required by doing various things within the equipment layout.

379
During construction, a team of qualified inspectors, both environmental and technical, will be on site monitoring construction activities to ensure compliance with safety, construction quality, and compliance with the design specs and all commitments made to regulators, permitting agencies, landowners and tenants.

380
One significant area of focus for this project will be the safe management of construction-related activities with respect to induced current mitigation, as much of the pipeline will be constructed in proximity to the high voltage Hydro One power lines. A specialized team of skilled individuals will be involved to ensure proper bonding and grounding is maintained at all times during the construction period, and there will be specific construction specifications as well in our tender package to address these.

381
Detailed construction specifications are still being developed at this time. We will submit those to the OEB at the time of tender which we anticipate to be in early April.

382
Safety and quality of the construction execution is heavily influenced by the capability of the contractor doing the work. The construction of the PRISM pipeline we will bid out only to qualified main-line contractors who will be selected from the bid list on the basis of demonstrated safety performance and proven capability.

383
On page 25, I've identified some of the significant points governing the project schedule. Again, these tie back to some of the information you've heard earlier. Construction is planned to occur during the drier summer construction season in order to meet the overall PRISM project requirements relative to the low sulphur gasoline. That means the pipeline construction must occur this summer.

384
One departure to the construction schedule that was filed earlier with the Board is with regard to winter tree clearing which was originally proposed to have occurred this past winter. Delays in obtaining our agreements and permits have resulted in clearing not being completed this year. Clearing is now planned to occur at the beginning of the main-line construction period, starting in July.

385

Constraints on various construction activities must be respected and play a strong part in determining the timing of construction. These constraints include timing of crossings within water crossing allowed windows during low flow periods, avoiding impacts on migratory and nesting birds, and minimizing impact on agricultural soils. And we have heard comments earlier on with regard to that.

386
Construction permitting, as we've heard, is currently under way and we expect to have all our permits completed and in hand in time to meet the construction time for this summer. Mechanical completion of the pipeline construction is expected in the late fall and the start-up of the pipeline in early 2005. Potential post-construction clean-up and restoration as well as follow-up monitoring will continue in 2003.

387
On the final page of my presentation, I'll describe our plans for water course crossings on the PRISM pipeline.

388
The most significant crossing is the crossing of the Grand River just upstream from the town of Caledonia. Horizontal directional drilling, or HDD, has been has been selected as the crossing technique for this river. HDD is a proven technology for crossing the rivers. It's been used by others to cross the Grand River in locations reasonably near our crossing, as well as by Imperial Oil and many others in river crossings elsewhere in Canada and around the world.

389
To maximize the probabilities of the success of the drill, we have concluded extensive geotechnical testing, which is the drilling of test holes down into the bedrock on both sides of the river to characterize the kind of rock we'll need to drill through. This work has been completed and, based on this geotechnical information, the detailed design of the actual drill path is being completed and it's currently underway.

390
Other streams, creeks, and tributaries to the creeks are planned to be crossed using the dam and pump method as per the recommendations in the environmental assessment. During low flows in the summer period, flow rates would be within the standard kind of ranges for application of this approach. By following sediment control plans, the mitigation measures, and the environmental protection plan, dam and pump is the reliable method with no significant environmental impact on either the creeks or the surrounding lands.

391
Water course crossing permits applications, as Mr. Wesenger identified, are currently being prepared for submission to the regulatory agencies and all other necessary permits for approval will be obtained.

392
In conclusion, I believe the PRISM pipeline has been conservatively designed, that our construction plans will ensure that the pipeline is installed in the best location and during the appropriate construction period, and that with the high level of front-end assessment and a proposed mitigation recommendation a pipeline will be installed safely and effectively.

393
MR. HUNTER: Madam Chair.

394

MS. HALLADAY: Mr. Moran, I assume you have some questions. I'm just wondering, how long do you think you will be?

395
MR. MORAN: I would probably be about 20 to half an hour.

396
MS. HALLADAY: Mr. Hunter, are you intending on making any final submissions or remarks?

397
MR. HUNTER: I would like to, yes, but I would think that my submissions would be no more than I would hope 10 to 15 minutes. So if you're comfortable proceeding with cross-examination by counsel, then we can take a break for lunch and then I can prepare some comments, if that's appropriate.

398
MS. HALLADAY: You would like some time between the cross-examination by Board counsel?

399
MR. HUNTER: No, subsequent to Mr. Moran's cross-examination.

400
MS. HALLADAY: I'm clearly trying to determine whether we should go for our lunch break now or go through the cross-examination first.

401
MR. HUNTER: My preference would be to press on and have Mr. Moran complete his cross-examination, if he thinks he's going to do it in 20 minutes to half an hour, and that gives us lunch to prepare any comments I can bring to the Board.

402
MS. HALLADAY: Is that satisfactory to you?

403
MR. MORAN: That's fine by me.

404
MS. HALLADAY: One moment please.

405
MR. MORAN: Just keep in mind the ability of counsel to estimate time.

406
MS. HALLADAY: I was thinking the same thing, Mr. Moran.

407
MR. HUNTER: He's an experienced counsel, I'm sure he'll be 20 minutes.

408
MS. HALLADAY: Fair enough.

409
Thank you. We've reached a consensus that now would be an appropriate time to break for lunch in light of the fact that Board counsel has questions and some members of the panel also have questions. So we think an appropriate time would be to adjourn until 1:30, so we will reconvene at 1:30. Thank you.

410
--- Luncheon recess taken at 12:20 p.m.
411
--- On resuming at 1:45 p.m.
412
MS. HALLADAY: Please be seated.

413
Before we begin this afternoon, are there any preliminary matters?

414
MR. HUNTER: No, Madam Chair.

415
MS. HALLADAY: Mr. Moran?

416
MR. MORAN: No, Madam Chair.

417
MS. HALLADAY: All right. Mr. Moran.

418
MR. MORAN: Thank you, Madam Chair.

419
CROSS-EXAMINATION BY MR. MORAN:

420
MR. MORAN: Mr. Prier, let me start with you.

421
With respect to the table that we see in the PRISM pipeline project binder, it's table 5-2, page 5-9.

422
MR. PRIER: Sorry, is that Exhibit 1.2 or 1.1?

423
MR. MORAN: 1.1.

424
MR. PRIER: Sorry, I misjudged. Will you give me the pages again?

425
MR. MORAN: It's table 5-2, behind -- in section 5. Page 5-9.


426
MR. PRIER: Yes.

427
MR. MORAN: Speaking of the headings there, the third heading there talks about potential litigation measures, and then in brackets underneath that it says: "Will be applied on a site-specific basis."

428
I wonder if you could just explain what you mean by that. Who decides when it should be applied, and so on?

429
MR. PRIER: I see. I'm sorry, I didn't have the right table. I see exactly where you're at now, though.

430
Well, some of those measures described in the table will have been decided before construction starts. But in the event that what we've previously expected to see or find at that location is different, then the environmental inspector on site, who is qualified academically and experience-wise, would make the decision to modify the mitigation technique.

431
MR. MORAN: So we can expect the environmental inspector to be in charge of the decisions to be made with respect to the mitigation measures that we see in that table.

432
MR. PRIER: Primarily, if it was -- I would say yes.

433
MR. MORAN: All right.

434
I want to talk about the issue of welding and weld inspection. I don't know who the best person is to ask. Perhaps it's you, Mr. Williams.

435
MR. WILLIAMS: Yes.

436
MR. MORAN: As I understand the proposal, under the standard, the TSSA-modified CSA standard, the overall requirement is to randomly inspect 15 percent of the welds; right?

437
MR. WILLIAMS: That is correct.

438
MR. MORAN: And with respect to what Imperial is proposing to do, it would inspect 100 percent of the welds where you were crossing a road, a railroad, or a river; right?

439
MR. WILLIAMS: Yes. Water course crossings.

440
MR. MORAN: All water course crossings.

441
MR. WILLIAMS: More than just the one river.

442
MR. MORAN: All water course crossings along the railroads and roads.

443
MR. WILLIAMS: Yes, that's correct.

444
MR. MORAN: And what's the rationale for doing 100 percent weld inspection for those kinds of crossings?

445
MR. WILLIAMS: It's a conservative measure due to the situation of if one ever had to go in and do anything further on those locations, they are very difficult to access.

446
MR. MORAN: All right. So part of the concern would be the potential for contamination of the water in the particular water course and the difficulty of getting at the pipe underneath the water course; is that what's behind it?

447
MR. WILLIAMS: Yes, primarily difficulty in access.

448
MR. MORAN: All right.

449
Now, with respect to the pipe itself, which is elsewhere in the ground and presumably potentially in contact with ground water, what was the rationale for sticking with 15 percent?

450
MR. WILLIAMS: The rationale is that the code requirement is 15 percent. We believe that what we are proposing meets or exceeds the code. And in conjunction with the overall design and the conservative nature of the design, we don't believe that it's warranted to go beyond the code requirements.

451
MR. MORAN: All right.

452
Now, what kind of cost is associated with doing weld inspections?

453
MR. WILLIAMS: The differential in cost between 15 percent and 100 percent we have estimated at approximately $300,000.


454
MR. MORAN: Now, Mr. Prier, in your work on other pipelines, what's your knowledge with respect to problems with welds and leaks into the ground?

455
MR. PRIER: Are you talking, now, low vapour pressure lines? Obviously, if it leaks into the ground --

456
MR. MORAN: Yes.

457
MR. PRIER: I can't say I've had enough experience to really say that a leak was caused by a weld. We may be involved in a clean-up or a spill response or something like that, but not in the actual cause of the leak.

458
MR. MORAN: All right. You've been involved in clean-ups of gasoline contamination?

459
MR. PRIER: Yes.

460
MR. MORAN: Is that a particularly easy thing to do?

461
MR. PRIER: That depends on the situation and depends on a whole lot of variables in terms of where the spill occurred, the nature of the soils where the spill occurred, the time of year. There's a whole variety of things. I couldn't say more than that, but it depends. It's very site-specific, how difficult the clean-up or containment might be.

462
MR. MORAN: The sooner you know about it the easier it is to deal with; right?

463
MR. PRIER: Yes.

464
MR. MORAN: I'd like to move on, then.

465
As I understand it, Mr. Williams, it's Imperial's expectation that blasting won't be required for this project.

466
MR. WILLIAMS: That's true. The previous pipelines that were installed down to Nanticoke were installed to the Hydro corridor without requiring blasting.

467
MR. MORAN: All right. Of course it's possible that, based on something specific in your particular route alignment, you might have to do some blasting; right?

468
MR. WILLIAMS: Yes, it's possible.

469
MR. MORAN: I take it you would agree that it would be appropriate to have a blasting specification in place for the contractors so that they'll know what to do if that --

470
MR. WILLIAMS: Yes, yes, we agree and that will be part of the construction specs.

471
MR. MORAN: With respect to the blasting issue, Exhibit 10.2 is the draft conditions of approval and I think you've already addressed an issue of -- included in the construction specifications, as you see it, in 6.1. A previous draft was sent to Imperial and a minor change was made to 6.3 of paragraph 1, Roman numeral I.

472
MR. WILLIAMS: Yes.

473
MR. MORAN: And the change, the original document said that "Imperial shall undertake to protect..." It now says, "Imperial shall take all necessary steps to protect..." Do you agree with that change?

474
MR. WILLIAMS: Yes, I agree.

475
MR. MORAN: And the rest of the condition is satisfactory?

476
MR. WILLIAMS: Yes.

477
MR. MORAN: All right.

478
Mr. Prier, with respect to the construction time line, as I understood your evidence, the schedule was picked on the basis of good weather being available in the summer months and therefore we can get the construction done with less impact. It's always possible, of course, that the summer might be a lot wetter than we expect, or there might be delays that take us into the autumn and the weather is wetter then. What would be the implications for this project if that were to happen, from an environmental impact perspective?

479
MR. WILLIAMS: As we have indicated in the prefiled evidence, we have developed wet soil shutdown procedure, and in the event that it has to be implemented with more frequency in the fall, the whole idea is to schedule construction in the driest months, typically the driest months of July, August, and complete, for the most part, the construction before you expect a wetter period in, say, October, November, that sort of thing.


480
MR. MORAN: Mr. Williams, how will the call be made with respect to wet weather shutdown?

481
MR. WILLIAMS: I'd like to ask Mr. Inwood, essentially on behalf of Mr. Parks, to address that.

482
MR. MORAN: Fair enough.

483
MR. INWOOD: The wet weather shutdown policy is contained in schedule -- Exhibit 1.1, section 7, schedule 7.5. This wet soil shutdown procedure is set forth in the LOU and has been discussed with all the landowners.

484
As part of that interview process with the landowners, we canvassed the landowners for a likely candidate to be the landowner representative to the wet weather shutdown committee, which will consist of the environmental inspector, the project manager, and the occupant picked by the landowners, and we broke the route into sections. We will then invite the recommended landowner to form part of the wet weather shutdown policy. The actual mechanics of it, I think, should be discussed by Peter or by Dave because it's really an environmental issue.

485
MR. PRIER: Yes. Typically, what -- how it's operated, the wet soil shutdown procedure, on other pipelines where we've gone with a committee approach to the decision-making, is that the night before construction or the night before the following day, if the weather forecast indicates there's going to be significant rainfall, there will be a meeting out on the right-of-way, probably 6:00, 6:30 in the morning, to do a survey with those three people that Mr. Inwood indicated would be on the committee. And at that time there would be an assessment made as to whether construction could occur on the easement or some activities could occur on the easement, the full easement, that is, or alternatively, limited activities on a limited part of the easement. So there's really three choices there to be made.

486
In terms of the environmental input into that decision-making, typically the soil scientist on the project would get a measure of the amount of ponding on the right-of-way from the rainfall, the depth of any rutting, potential for any mixing of topsoil and/or subsoil. And I should mention on that note that in terms of your earlier question about what soil and increased frequency of wet conditions in the fall, something we've done on the PRISM pipeline is recommended full easement stripping so that you eliminate the potential to mix topsoils and subsoils in wet conditions.

487
But at any rate, going back to the environmental input into that committee's decision-making, those are the kinds of things that we've anticipated and that our environmental inspector/soil scientist would be looking at to make his recommendation to the committee.

488
MR. MORAN: And this committee of three, is it a committee with somebody in charge or is it a decision made by the three people collectively?

489
MR. PRIER: Well, the way we've worked the -- worded the agreement, actually, it's a majority decision, so there's really no one in charge. If two out of three feel that it's too wet, then activities will be suspended in one of those three ways I previously described.

490
MR. MORAN: The environmental inspector that would be hired, is that an employee of Imperial Oil or would it be somebody independent?

491
MR. INWOOD: It will be someone independent.

492
MR. MORAN: Now, Mr. Prier, as you know, Union Gas is also involved in putting in a pipeline in this area and doing a number of water course crossings as well. Has there been any consideration with respect to cumulative effects or cooperation with respect to mitigation? Has that been looked at at all?

493
MR. PRIER: In our cumulative effects assessment described in the environmental assessment, what we did in that was define an area of 5 kilometres an either side of the PRISM pipeline route and we conservatively estimated that that would be the impact zone of the PRISM pipeline construction activities. Then we looked at other projects that might have an impact that -- where their impact zone overlapped our impact zone, and that's the area, the spatial area where we assessed cumulative effects.

494
The Union Gas pipeline project north of the -- particularly north on the Grand River is about 80 kilometres away so we don't anticipate any cumulative effects from that.

495
MR. MORAN: Mr. Williams, I take it there's no objection to advising the Board when the Grand River crossing construction commences, the date of construction?

496
MR. WILLIAMS: Yes, we will do so.

497
MR. MORAN: All right. I wonder if I could turn now to supplementary interrogatory number 6 from Board staff, attachment L. This is a letter from the Ministry of Natural Resources dated February 21st, 2002. Do you have that?

498
MR. WESENGER: Yes, we do.

499

MR. MORAN: In the second paragraph, you'll see that it says: "The environmental assessment identifies that horizontal directional drilling, HDD, will be used for crossing the Grand River but that 14 water courses will be crossed using the dam and pump approach. The EA does not appear to provide a rationale for this decision. We recommend that directional drilling be used as much as possible for the water course crossings for the primary reason that it is less invasive to the water course with less potential for ecological impact. We also note that the dam and pump approach would require permits under the Lakes and River Improvement Act while directional drilling would not. And then it goes on to talk about the timing of applications.

500
As we know from the evidence, the proposal here is to do the dam and pump for all of the water course crossings except for the Grand River. I wonder if you could provide the rationale for that choice.

501
MR. WESENGER: Yes, I can speak to that matter.

502
With regard to the letter, we really have no difficulty with the first two sentences in that paragraph that you spoke of. And our specific concern was with respect to the recommendation that directional drilling be used as much as possible for water course crossings for the primary reason that it's far less invasive to the water course, with less potential for ecological impact.

503
Our concern with that statement is its broadness and its generalness, and in fact the approval for the actual water course crossing technique and determination of the harmful alteration disruption or destruction of fishery habitat is determined by the conservation authorities, not the Ministry of Natural Resources.

504
In selecting the water course crossing techniques, Imperial Oil and ESG International considered the factors identified for the MNR in the letter, but we also considered other factors that they haven't mentioned in the letter; and those factors include the diameter of the pipeline, the water course crossing width, depth and flow, the navigability of the water course, the available work space at each particular water course crossing, substrate composition, hydrological data, equipment availability, contractor expertise, as well as the time of year that the water course crossing can be completed in.

505
ESG International is determined that the implementation of the dam-and-pump technique at all water courses other than the Grand River that do not have fisheries, that have fisheries habitat, will not result in harmful alteration, disruption or destruction of fish habitat.

506
With regard to the water courses traversed by the PRISM pipeline, other than the Grand River, we rarely see no significant benefit in using the dam-and-pump or using the horizontal directional drill technique over the dam-and-pump.

507
In the specific fishery habitat information and water course crossing, or data, water course data for each crossing which justifies the crossing technique that we're recommending will be provided to the water course -- with the water course permit applications that are submitted to those agencies. So they will be kept informed of how we do. It's just we have an issue with that particular statement.

508

MR. MORAN: You mentioned that there's a relationship with the conservation authorities on this issue as well. How was that factored into the decision to go with the dam-and-pump approach?

509
MR. WESENGER: The conservation authority, as I indicated in my presentation, at the beginning of my presentation, the conservation authority is reviewing the applications under an agreement with the Department of Fisheries and Oceans under section 35 of the Fisheries Act and they will be determining whether the dam-and-pump technique will be -- is appropriate or not, and whether or not that will result in HADD, the harmful alteration, disruption, and destruction.

510
MR. MORAN: All right.

511
I take it if they are of the view that you should go with horizontal drilling, then that's what you'll do; is that fair?

512
MR. WESENGER: We have replied. I'm not sure if you're aware -- Mr. Vincent has replied to the MNR letter that we just spoke of and that response can be found in Exhibit 9.10. Just bear with me. I'll pull out the appropriate tab. That is found behind part B, tab 2, subtab B. And it's a reply dated March 19th, to Mr. Ian Thorton, District Planner of Ministry of Natural Resources.

513
Basically, we have advised Mr. Thorton of the position that I just explained to the Board with regard to this matter. We have been in discussions with Mr. Thorton since receipt of the letter on February 21st, 2002, and he is well aware of our position. I really don't anticipate that he has any problem with our approach to this and will accept that dam and pump as the appropriate technique to cross the other water courses.

514
MR. MORAN: Thanks.

515
Would you turn now to the concerns that were raised by the -- or one of the concerns raised by the Hamilton Region Conservation Authority and that's with respect to the West Spencer Creek flood plain.

516
As I understand the issue, there's a concern about post-construction grading. If there's some subsidence where the pipe is put in, that might create some channelization effects in the flood plain; if there is a mound that's left, that might cause some interference with drainage. Could you advise us of the status of response to that concern?

517
MR. WILLIAMS: Yes, there was a response from Mr. Vincent that's filed under Exhibit 8.1, interrogatory 21, tab A.

518

MR. MORAN: I wonder if you could just describe briefly how the concern will be addressed.

519
MR. WILLIAMS: The undertaking in Mr. Vincent's letter of response is that we will minimize the amount of any mounding over the trench line to minimize any interruption or disruption of the water flows. The approach we would suggest there is balancing the desirability of not interrupting the flow with the initial backfilling and trying to balance that with the desire not to have to come back in and disrupt -- make further disruption at a later time if there was subsidence. So the undertaking we have made is to manage that carefully and minimize the amount of any mounding that we need to do over the trench line to try to achieve minimal disruption in the first year and not requiring further disruption in an ensuing year.

520
MR. WESENGER: If I could just add to Mr. Williams's answer, the location there that is identified there at West Spencer Creek is an area that is a regulated area by the conservation authority and will require permit application to them and that will be submitted to them and they will have to review the plan to construct through there, and we will be meeting with them, as indicated in the letter from Mr. Vincent, to discuss the matter further.

521
MR. MORAN: So to the extent there is a concern, they will have the ability to impose some conditions on that permit that you'll have to comply with?

522
MR. WESENGER: Yes.

523
MR. MORAN: Okay.

524
I'd like to turn to water well protection. I think in that initial table with respect to how to deal with environmental impacts, there was a proposal to monitor wells. I think that was subsequently elaborated upon in interrogatory response 15.

525
Mr. Prier, could you just confirm that, to the extent that that's been elaborated upon, you are adopting that as part of the recommendations that you would put into the environmental protection plan?

526
MR. PRIER: Yes, we are.

527
MR. MORAN: And Mr. Williams, I take it Imperial Oil adopts that recommendation for the -- for water-well monitoring?

528
MR. WILLIAMS: Yes, that's correct.


529
MR. MORAN: And as I understand it, this would include the concerns that were raised by the Lainsons, I believe it was?

530
MR. INWOOD: Yes, it does.

531
MR. MORAN: The Ontario Pipeline Coordinating Committee has, I guess, been involved in a review of this, and I wonder if you could tell me what the status is of the recommendations and issues that they've raised an your response to them. I think we already touched on one of them with respect to the horizontal drilling and water courses. And the other one is, I guess, welding. We've talked about that a little bit. Are there any other outstanding issues or concerns?

532
MR. WESENGER: Other than the MNR and the TSSA?

533
MR. MORAN: Yes.

534
MR. WESENGER: I think -- the answer is no, there are no other outstanding concerns.

535
MR. MORAN: Have you had responses from all the committee members to confirm that?

536
MR. WESENGER: With the exception of the TSSA and the MNR, yes, we have.

537
MR. MORAN: So when we look at draft condition 1.3, I take it you probably don't have any difficulty with the condition as it's phrased with the exception of those two issues, the welding issue and the MNR?

538
MR. WILLIAMS: That is correct.

539
MR. MORAN: Mr. Inwood, with respect to the Hydro One corridor tenants, there's been some minor route realignments since the original materials were filed. Has this changed the number of tenants that are affected by this proposal at all?

540
MR. INWOOD: Yes, it has. The 54 that I identified in my evidence in fact now involves only 49 parcels of land in tenant properties of which 46, therefore, have been signed because the original three unsigned remain so.

541
MR. MORAN: So there's only three remaining unsigned, despite the realignments.


542
MR. INWOOD: That is correct.

543
MR. MORAN: I think it is Mr. Somerville that has an issue with his tile drain and the depth of the pipe, and I guess I just want to clarify a couple of things.

544
As I understand it, the same offer is being made to him as to everyone else, that to the extent that there's interference with any drainage because of construction, it will be fixed after construction and restored; is that correct?

545
MR. WILLIAMS: That is correct.

546
MR. MORAN: And Mr. Williams, I also heard you say that where you can go a bit deeper to avoid particular drains, you will; right?

547
MR. WILLIAMS: That is correct, as typically what we would do.

548
MR. MORAN: So I'm just trying to get an understanding of how this works specifically for Mr. Somerville. Are you proposing to go a bit deeper so as to avoid the drains that he has there, but otherwise to -- help me understand what it is, how it applies to this situation.

549
MR. INWOOD: Yes.

550
There are two deep drains crossing the easement and the right-of-way to the pipeline. Mr. Williams has indicated that burial would go under the two houses, two deep drains, to maintain drainage flow. There's an awful lot of space on Mr. Somerville's land; it's 1,000 metres. And in being consistent with all the other landowners, Imperial proposes to maintain the 4-foot depth of cover for the balance of his lands.

551
MR. MORAN: Has Mr. Somerville told you of any specific plans for additional drains in his land?

552
MR. INWOOD: He has specifically said he has no further plans to add drainage.

553
MR. MORAN: Thank you.

554
With respect to Mr. Forth, I believe he's the person that's trying to develop a golf course. I take it that part of it is on the part where he's a tenant and part is on his private property. Could you just show us on the map roughly where we're talking about?

555
MR. INWOOD: Lots 27 and 28 in concession 1, Flamborough; it's approximately from here to here.

556
MR. MORAN: And as I understand it, you've reached agreement in principle, you just have to finalize the details; is that correct?

557
MR. INWOOD: That is correct. The relationships have been cordial with Mr. Forth throughout.

558
MR. MORAN: Mr. Prier, I think you're the right person for this question. The tree-clearing exercise, I guess, was delayed and is now going to happen -- could you just remind me when it's going to happen?

559
MR. PRIER: It's scheduled to occur sometime after July 15th. We're still talking about -- I believe it's --

560
MR. WESENGER: We're presently speaking to the city of Hamilton. Our correspondence is closed with them; we've received approval from them. The county of Brant, as well. And we're also speaking with Haldimand; we're awaiting a decision from them. As well as, we have comments from Environment Canada.

561
MR. MORAN: Does this have any fresh impacts with respect to migratory or nesting birds, something that was looked at when tree clearing was going to happen at a different time?

562
MR. WESENGER: The concern is that tree -- nesting activity will continue or occur between April 15th and July 15th. If there is any construction or tree clearing done during that period, then a nesting survey needs to be conducted to ensure that there is no incidental taking of migratory birds and that, in fact, Imperial would be in contravention of the Migratory Birds Act.

563
MR. MORAN: So this is something you'd have to work around to the extent that that was a problem; right? And you're prepared to do that, obviously.

564
MR. WILLIAMS: Yes, we would be prepared to do that.

565
MR. MORAN: And with respect to the tree clearing, you've updated us with respect to the municipal position on that. You're exempt from bylaws of two of the municipalities and one is requiring you to put in an application.

566

What about the Hamilton Region Conservation Authority and the Grand River Conservation Authority? Do they have any concerns or issues with respect to the tree-clearing operation?

567
MR. WESENGER: They haven't identified any specific concerns with regard to tree clearing other than their interests in the wetlands and environmentally that are traversed by the pipeline where obviously there are trees, but they haven't made any specific comments on that.

568
MR. MORAN: And with respect to the private landowners, are there any tree-clearing issues there?

569
MR. WESENGER: With the exception of Mr. Slack's trees on his private property, and of course we're not going on his private property, all of the landowners have given us instruction as to how they would like the tree issue, the tree-clearing issue to be dealt with. Most want to be able to use the better stands of timber for their own purposes, but for the most part there are no issues with the landowners.

570
MR. MORAN: So it's all been worked out except for --

571
MR. WESENGER: Most of it. The landowners do understand that this is Hydro One property and their tenant operations involved agriculture not trees.

572
MR. MORAN: Yes. Fair enough.

573
MR. WILLIAMS: If I may add a further comment. For the private landowners, where the easement is on private land, there will be no tree clearing required.

574
MR. MORAN: That was my next question so you've anticipated me quite nicely there.

575
And with respect to Mr. Slack, I take it that you are making him exactly the same offer to compensate and monitor as you are making to everybody else?

576
MR. INWOOD: That is correct.

577
MR. MORAN: One last question, then. I think this one will be to you, Mr. Williams. We haven't gone through each of the conditions of approval here. The one that we haven't touched on yet, can you indicate whether Imperial Oil accepts those remaining conditions of approval as proposed?

578
MR. WILLIAMS: Yes, we would be happy to accept the rest of the conditions.

579

MR. MORAN: Thank you very much. Those are all my questions.

580
MS. HALLADAY: Thank you very much, Mr. Moran.

581
Mr. Betts.

582
QUESTIONS FROM THE BOARD:

583
MR. BETTS: A few questions. Perhaps this is best addressed to Mr. Wesenger.

584
You referred to the volume of water -- I think it was you that referred to the volume of water for hydrostatic testing, that it exceeded a certain specification that therefore required some approvals. What is the actual volume that will be drawn for hydrostatic testing?

585
MR. WESENGER: If you just give us a moment. I believe that was a response to an interrogatory. We can pull that up collectively.

586
That's really a response --

587
MR. WILLIAMS: Approximately 4,500 cubic metres.

588
MR. BETTS: That's good enough for me.

589
One thing for clarification, too, and I recognize that this -- for Mr. Williams. I recognize your title as senior project manager, and in fact, for the record, you will be the project manager on this project?

590
MR. WILLIAMS: That is correct.

591
MR. BETTS: There were several items that I noticed in the construction schedule that were, in fact, supposed to be under way at this point and perhaps even completed. I recall there was material procurement and items like that. Can you tell me whether, in fact, those things have been started at least on time and are under way?

592
MR. WILLIAMS: Yes. The significant early item was -- is pipe procurement and a pipe was ordered last November and is -- currently the steel is being made.

593

MR. BETTS: And I seem to recall that another item was to establish at least a bidder's list for the major contractor and perhaps even to seek tenders. What's the status of that?

594
MR. WILLIAMS: We have issued proposals to a long list of contractors and are in the process of screening those contractors for safety performance and technical execution capability. We're in the middle of that process. We will have a final bidder's list by the end of this month and anticipate going out to tender shortly thereafter.

595
MR. BETTS: Thank you.

596
The last question I have -- I guess perhaps I thought I knew what the situation status was, and after some questioning from Mr. Moran, I'm perhaps a little bit confused and I would like to clarify it. It's with regards to the condition 1.3, I believe it was, regarding the OPCC recommendations or the list of recommendations and I certainly am aware that there is some -- certainly there are items that are unsettled at least between TSSA and Imperial Oil, as well as MNR and Imperial Oil. And I don't need to relate the exact nature of those, but I'm trying to understand whether or not -- first of all, have you received recommendations, a recommendation from TSSA?

597
MR. WILLIAMS: I believe that would be a matter of interpretation of the wording of the letters. I would view the wording in the letters from TSSA and follow-up conversations with Mr. Alonzo of the TSSA, I would believe those to be comments that we will continue to discuss with the TSSA.

598
MR. BETTS: So at this point, the way you've interpreted that particular document, you really haven't received a firm recommendation; is that a fair assessment of what you said?

599
MR. WILLIAMS: That's my interpretation, yes.

600
MR. BETTS: Okay. And with respect to MNR, and again now we're talking about the horizontal directional drilling, can you comment on that? Do you take that as being a recommendation from MNR?

601
MR. WESENGER: The wording of their letter specifically includes the word "recommend" so yes, I take that as a recommendation of the MNR. My difficulty with the recommendation is that the MNR is not the appropriate agency, in my opinion, to comment on that as we're going through the process with the conservation authorities that are undertaking that review under section 35 of the Fisheries Act on behalf of the Department of Fisheries and Oceans through the agreement that they have with them.

602
Notwithstanding that, we are -- we appreciate the comment of the MNR and we have been in discussions with Mr. Thorton, the author of the letter, and we fully intend to resolve his concern and address this concern and to provide him with copies of the applications.

603
MR. BETTS: I think with that clarification, I understand. I will leave it at that. Thank you very much. Those are all my questions.

604
MS. HALLADAY: Thank you, Mr. Betts.

605
Mr. Sommerville?

606
MR. SOMMERVILLE: I think just one question that relates to the same subject matter that my colleague just touched on.

607
In the event that the conservation authorities differed with the point of view that you've expressed as far as the pump-and-dam crossing technology is concerned, would you accept the judgment of the conservation authority with respect to any permits that they issue to you?

608
MR. WESENGER: You've raised a point that I haven't brought to anyone's attention, I guess, in my evidence. We have been in discussions with the conservation authorities about the techniques and we have no reason to believe that they aren't going to accept the recommendation for dam and pump as there will be no fisheries impact; however, I believe the question -- I can't reply to that question. I think it's more for Mr. Williams of whether or not the Ministry or the conservation authorities said you must do horizontal directional drill of whether or not he would accept that recommendation. As a consultant, I can't make that commitment for Imperial.

609
MR. SOMMERVILLE: I'll take that as a delegation to Mr. Williams.

610
MR. WILLIAMS: We would consult and we would use the services of Mr. Wesenger to work with the conservation authorities, and in the end, we would come to an agreement or an assessment that was acceptable to all parties and then we would comply with that, yes.

611
MR. SOMMERVILLE: Thank you.

612
That's the only question that I have, Madam Chair.

613
MS. HALLADAY: Thank you very much, Mr. Sommerville.

614
I'm just going to add to the confusion by adding in one more issue. As I understand it, you've agreed to obtain all necessary permits that are required for the construction of this project; is that correct?

615

MR. WILLIAMS: That is correct, yes.

616
MS. HALLADAY: So you are required to obtain permits through the conservation authorities and delegation -- Department of Fisheries with respect to water crossings; is that correct?

617
MR. WESENGER: With respect to the water course crossing technique and the determination of impact on the fishery habitat, that is correct.

618
MS. HALLADAY: Right. So the question is, in my mind, while the comments of the MNR official are well taken, if that directional drilling is less invasive than the dam and pump, there is an issue as to whether MNR is the appropriate agency to be making this recommendation because there are other agencies that are more closely connected with the issues, so to speak; is that a fair statement to say?

619
MR. WESENGER: That is a fair statement, yes.

620
MS. HALLADAY: And if the agencies, such as the conservation authorities, that are more closely connected with the water crossing issues required you to do directional drilling in order to obtain those permits, you would do it; is that fair to say?

621
MR. WESENGER: That is correct, yes.

622
MS. HALLADAY: However, you are concerned that you should not have to comply with all of the recommendations of the MNR because of this recommendation as far as the drilling method for water crossing is concerned; is that fair to say?

623
MR. WESENGER: Could you just repeat that.

624
MS. HALLADAY: I'm not sure that I could.

625
My question -- my question is basically, is that your -- is your concern with MNR that they have made recommendations with respect to you using directional drilling method for water crossing that you might not agree with, and that may not be required by conservation authorities, for example, and that is your concern; about agreeing to a condition where you would comply with all recommendations of MNR?

626
MR. WESENGER: Yes.

627

MS. HALLADAY: I understand that now. Thank you very much. Thank you very much.

628
It's now 2:30. Mr. Hunter, would you like a break before you make your submissions?

629
MR. HUNTER: I think I am okay.

630
MS. HALLADAY: Mr. Hunter, feel free to make your submissions.

631
MR. HUNTER: I'll try to be brief, Madam Chair, members of the Board.

632
CLOSING ARGUMENT BY MR. HUNTER:

633
First, at the outset, let me say we appreciate all of the courtesies extended to us by the Board staff, Mr. Moran, and the Board itself. This is not our usual metier; some of you come here every year or every week, so it's been an interesting learning process.

634
At the outset, I want to indicate that the purpose of this application to you for the PRISM pipeline, for leave to construct, is to achieve a very significant public policy objective, being the reduction of sulphur in gasoline over a period of the next three years. There is an undertaking of significant and environmental interest, and there's also a project of significant complex engineering and technical expertise and significant undertaking.

635
The evidence before you is that we wish to have a start-up date, and I'm not going to repeat the evidence that was put to you by Ian Howieson, but that we -- the proposed start-up date, the final start-up date of the new facility is October of '03 at Nanticoke, and we are working to try to advance that start-up date, preferably if possible, to July of '03. And accordingly we need to have this facility up and running and working by January -- sorry, January '03, in order that there be a start-up and testing period. So our hope is to complete or to start the construction in July this year and to carry that over into the fall and winter of '02 to '03.

636
From the perspective of the alternatives, again Mr. Howieson addressed this issue and I think he put it to you very simply. The choice to construct and operate the PRISM pipeline as the method to achieve the objectives of the regulations is clearly the best choice from the environmental and a project-management perspective in order to safely monitor and efficiently meet those objectives.

637

Mr. Prier identified the extents of public policy process in the material that he went through, and I think it is fair to say that Imperial took all reasonable steps, and perhaps more, to explain the project to individuals throughout the various routes; and even though at the end of the day the route was a Hydro One route, the lack of intervenors here, particularly in terms of either tenants or people whose lands are affected, I think, is testament to their understanding of the project. And I'd like to think due to the support of the public nature of this program and other than the three individuals who have been identified, we have no difficulties with any of the landowners.

638
In that regard, I think Mr. Inwood identified that Imperial has taken more than reasonable steps, certainly in our judgement, with Mr. Somerville and Mr. Slack and Mr. Forth to meet their concerns, and what has been put to them is a reasonable and fair method for trying to resolve their concerns, and I hope that we do.

639
The environmental component has been dealt with by Mr. Wesenger, Mr. Prier, and I think the key words were that this project can proceed without any significant consequences, environmental, given that Imperial Oil has stated that they will meet all of the mitigation requirements under the environmental assessment and the reports contained therein, and that there is full expectation that we will secure all necessary approvals in a timely fashion.

640
From the construction perspective, and this evidence is very fresh, Mr. Williams indicated that the approach is conservative. By that I suggest he means that we are meeting or exceeding expected customs or standards and that, again, there are no significant issues concerned with respect to construction and indeed the operation of this line.

641
And if I can circle back, we know that Imperial Oil is known as a producer and retailer of product. Less known, of course, is the fact that they have been a pipeline operator for a long period of time and come to the table with an excellent record, and have also been operating in this province since 1952.

642
Perhaps we could go, then, to the -- what is probably the central point before us which is the recommendations and the concerns expressed by Imperial Oil and the implicit concerns reflected in the questions by the Board and the Board counsel with respect -- principally with 1.3.

643
Before I get to my rationale, I would like to take this opportunity to simply propose some wording changes which reflects our concerns.

644
As you can appreciate, Madam Chair, I'm not in a position to discuss these with our witnesses. We could have taken a break and we could have, but I have conferred with Mr. Howieson and Mr. Brown and we are proposing the following as amendments to the terms of the conditions as proposed by the Board:

645
With respect to 1.3, there would obviously be no change with respect to the first sentence because we accept the recommendations of the OPC, so the phrase would read: "In addition, Imperial Oil shall implement all the recommendations and directives identified by the Ontario Pipeline Coordinating Committee (the "OPCC") review, other than the recommendation with respect to horizontal directional drilling for any river other than the Grand River crossing."

646

I think there are three fundamental points to be raised, counsel. One is the -- presumably it affects the jurisdictional basis of the MNR to try to secure that recommendation. That's been discussed by Mr. Wesenger. The second is the appropriateness. It is the recommendation which is vague and which is general. And thirdly, the responses prepared by Mr. Wesenger and particularly as contained in his letter to Mr. Thornton, which is referenced in Exhibit 9.10, clearly sets out the reasons as to why that might not be a very good idea. And so therefore, any suggestion that there was an obligation on the part of Imperial Oil to, in fact, adopt that methodology at least based upon generality of this recommendation, and presumably coming to the table with the force of this Board, might be very prejudicial in the sense that it would preclude, limit, any full, complete review of the appropriateness of that very general and vague recommendation.

647
And as it was pointed out to you by Mr. Wesenger, this is a matter which will presumably be an ongoing conversation as between Imperial Oil and the authorities with respect to the appropriateness of any particular methodology which would be used in the river crossing. But I must bring to the table one basic point which is a question of fairness.

648
We prepared an exhaustive environmental assessment. That assessment was sent around for wide distribution. That environmental assessment clearly recommended the damming method. There has been, from those agencies, based upon my knowledge, other than MNR, which may not be the appropriate reporting authority, no question about that. In other words, they have not come to the table and said, oh, by the way, we think it should be another method. And I think the proof is in the pudding that it does not seem to be on the table, at least from our perspective, substantive reason to raise a suggestion that that is a direction that might be taken, at least as it is recommended by this Board.

649
So I would urge you to accept the recommendation we put before you. The environmental concerns which we are here to address, which we are concerned about, shall be addressed in the ongoing discussions as between Imperial Oil and the conservation authorities, and we would urge you to let those discussions proceed on a level playing field, the most level playing field as possible.

650
With respect to the welding issue, we propose the following addition at 6.4.

651
Firstly, Mr. Williams was asked as to whether or not the comments in the letter with respect to this matter constituted a recommendation, and if I may comment on it. And we certainly don't think they are. There is a statement that was made. I don't think that constitutes the basis of a recommendation to begin with. And I think, secondly, if that organization, TSSA, was concerned about bringing this to the table, then perhaps a much fuller review and discussion ought to have taken place with what might be a very substantial policy issue.

652
In that context, we would propose, in addition to the terms and conditions, it would be 6.4. I think that's appropriate. I'm going to leave that obviously to Board staff, but this is the concept:

653
"Imperial Oil shall conduct a weld-inspection program consistent with CSA Z662-99 as modified by TSSA, the evidence presented in this hearing by Imperial Oil, and for greater specificity, with the specifications of 100 percent weld inspection, the water course crossing, railroads, and roads."

654
If I have omitted some words, I can repeat them. That, Madam Chair, would be how we would urge the Board to deal with the ambiguities of the comments with respect to this matter and to provide clear direction to Imperial Oil with respect to this matter.

655
It seems to me, as an issue of fairness, that if there are concerns about the CSA standard, and we haven't heard any concerns with respect to that, that Imperial Oil is entitled to rely upon that plus the commitments they have made to address this issue; and that if there is a concern with the appropriateness of that standard, then that issue should be raised in the appropriate forms of consultation with respect to standard setting between the province, the federal government and the industry and different standards being established if that's the real issue.

656
So again, with respect, I think that I've tried to keep my comments short to address the essential issues, and on that basis we would urge you to expedite, find it in -- give approval with respect to the PRISM pipeline project.

657
Once again, thank you for your indulgences.

658
MS. HALLADAY: Thank you, Mr. Hunter.

659
MR. SOMMERVILLE: One matter for clarification, Mr. Hunter. I think you referred to the reply to Mr. Thornton as issuing from Mr. Wesenger.

660
MR. HUNTER: Sorry, from Mr. Vincent, I apologize.

661
MR. SOMMERVILLE: Thank you, kindly. I just wanted to correct that.

662
MS. HALLADAY: Mr. Betts, do you have any questions?

663
MR. BETTS: No questions, thank you.

664
MS. HALLADAY: Mr. Hunter, perhaps you can help me with your suggested changes to condition 1.3.

665
MR. HUNTER: Yes, Madam Chair.

666
MS. HALLADAY: I wasn't fast enough in my taking of notes so I do apologize.

667

You will agree to implement all the recommendations and directives identified by the Ontario Pipeline Coordinating Committee, the OPCC review, other than the recommendation with respect to horizontal directional drilling with respect to --

668
MR. HUNTER: For any river.

669
MS. HALLADAY: Thank you.

670
MR. HUNTER: Sorry, I spoke too quickly. For any river other than the Grand River crossing.

671
MS. HALLADAY: Grand River crossing.

672
MR. HUNTER: Just to reiterate what I said, that's for clarity in terms of our responsibility.

673
MS. HALLADAY: Mr. Hunter, if, in the unlikely event, the conservation authorities did not agree with the environmental assessment and required directional drilling for river crossings other than the Grand River in order to obtain the necessary permits, would Imperial Oil be willing to comply with that requirement?

674
MR. HUNTER: I don't think it's my gift to answer that without conferring with the clients.

675
MS. HALLADAY: That's fair enough. I'm just --

676
MR. HUNTER: I think I would have to -- well, if one says it's one, well maybe you say okay. But if one says it's 24, then that's -- that's tough, in the context of the situation where we don't know what the criteria would be to do it or not to do it.

677
Could you give me two minutes, please.

678
MS. HALLADAY: Certainly.

679
MR. HUNTER: Madam Chair.

680
MS. HALLADAY: Thank you.

681

Mr. Moran, did you have something to say?

682
MR. MORAN: I think Mr. Hunter was going to come back to you with something. He needed a break for a second, and I have a very brief comment to make.

683
MS. HALLADAY: Mr. Hunter,

684
MR. HUNTER: Let me try to identify the analysis that I'm going through when I look at this from the legal point of view in a public policy.

685
First, it's clear that the client Imperial Oil is more than prepared to sit down and work these issues through with the Board to attempt to come to grips with the most appropriate methodology. I'm very confident in saying that if it could be shown from a technical and environmental objective that horizontal drilling was the best way to deal with it because of environmental concerns, then I don't have any problem with saying that that's what Imperial Oil is going to do. Let me finish. That's on this side.

686
And if the authority has legal capacity within its own -- within its own body, within its own legislature, the powers to engage in that kind of an exercise, then clearly we're going to abide by that process. That's easy. The hard part is, from what I understand, is a significant lack of any ground rules as to what that game is going to be or how it's going to be played out or what the terms and the conditions are or which one is going to make that decision. My concern for my client is an arbitrary decision made by a conservation authority which may not have a lawful basis to make that decision because -- or for any other reason it may be unlawful, that says we want you to do this. That's where I want protection from.

687
So we're left on one hand with words to the effect that Imperial Oil will sit down and work through these issues with the conservation authority, that's my preference, from my perspective and that's my option A. Option B is to simply say words to the effect "except to the extent that the authority," meaning the conservation authority, "which has the lawful authority or the lawful capacity to direct, that any particular methodology take place." Am I making myself clear? In other words, if the authority has the lawful capacity to at the end of the day say to Imperial Oil that's what you're going to do, then obviously that's what we're going to do.

688
Does that --

689
MS. HALLADAY: Mr. Hunter, are we not assuming that whenever the Board conditions an approval on obtaining all the necessary licences and approvals, permits, et cetera, that the authority granting those licences permits, approvals et cetera has legal authority to grant those and to require the conditions that are given?

690

MR. HUNTER: I assume we do. I just don't know in this instance, they do or under what terms and conditions they can do that, and if that's the case then my proposal, my second proposal works and that would be consistent with your -- I think with the suggestion that you're making. In other words, the words that we have proposed would be accepted and is qualified by except to the extent that it would be required by an authority to choose another method.

691
MS. HALLADAY: Mr. Somerville.

692
MR. SOMMERVILLE: I think, if I hear you correctly, what you want to preserve is the right to challenge the jurisdiction of a conservation authority to require you to do something that is beyond its lawful jurisdiction.

693
MR. HUNTER: Or the reasonableness, yes.

694
MR. SOMMERVILLE: So you want to preserve a right to review. I mean you cannot proceed with your project unless you have a permit to cross these water courses, so what you're looking to preserve, I take it in your language, is the right to challenge at some point the recommendation of the conservation authority. Were you to lose that challenge then presumably you would comply with the requirements.

695
MR. HUNTER: Obviously. And I'm not even thinking of that in the context of some form of legal challenge, it's just really the capacity to be able to have a level playing field in terms of dealing with this issue, that's all.

696
MR. SOMMERVILLE: I'm not sure that we can organize a condition that does that. I think what we can do is require that the permit be a lawful permit and that the requirement be a legal requirement.

697
MR. HUNTER: Yes.

698
MR. SOMMERVILLE: And I think that's the best that we could do under those circumstances.

699
MR. HUNTER: And I would be perfectly happy with that.

700
MS. HALLADAY: Mr. Moran.

701
MR. MORAN: Just very briefly, Madam Chair.

702

This is with respect to the original draft change that Mr. Hunter had proposed and the language was Imperial Oil shall implement all the recommendations and directives excepts for the recommendation that relates to horizontal directional drilling. And I think that, with the suggestion that he's making, to add to that again except to the extent that it's required by other regulatory authorities makes it at least a safe condition to impose. Before -- without that, I think the condition would say, you don't have to do it even if the proper permitting agency requires you to do it. I think what he's suggesting now resolves that problem. That's my only comment.

703
MS. HALLADAY: Thank you, Mr. Moran. One moment, please.

704
Before we continue, I forgot to excuse the witness panel with our thanks, so you -- feel free to sit down. We're almost through. But I do apologize for not doing that earlier.

705
Having said that, Mr. Hunter, the panel finds itself in a position, particularly in light of the confusion, I guess is the word I'll use, as far as the conditions of approval, to be able to render an oral decision this afternoon. However, that being said the panel is directing Board staff to work -- to revise the proposed conditions of approval to deal with the concerns raised by Imperial Oil as modified by the Board staff and to provide Imperial Oil with revised conditions later this afternoon for Imperial Oil's comments.

706
We will then reconvene tomorrow morning at 11:00. Hopefully we will have had your comments by then to continue the proceeding. I trust that is satisfactory to everyone. Are there any other comments before we adjourn for this afternoon?

707
MR. HUNTER: No, Madam Chair, thank you.

708
MS. HALLADAY: So we are adjourned for this afternoon and we'll reconvene tomorrow morning at 11:00.

709
--- Whereupon the hearing adjourned at 3:02 p.m.