EMERA BRUNSWICK PIPELINE COMPANY LTD.

NATIONAL ENERGY BOARD BRUNSWICK PIPELINE APPLICATION HEARING ORDER GH-1-2006

EMERA BRUNSWICK ARGUMENT-IN-CHIEF

DECEMBER 1, 2006

TABLE OF CONTENTS 1. INTRODUCTION ...... 1 2. BACKGROUND ...... 3 3. PURPOSE, NEED AND JUSTIFICATION OF THE PROJECT ...... 4 3.1 "C ANADA NEEDS THE BRUNSWICK PIPELINE "...... 4 3.1.1 Replacement Supply...... 5 3.1.2 Demand Growth...... 6 3.2 IMPACT ON OTHER PIPELINES AND SHIPPERS –COMMERCIAL STAKEHOLDERS ...... 7 3.3 ECONOMIC FEASIBILITY - MARKETS & SUPPLY - ALTERNATIVES ...... 8 3.4 TIMING ...... 15 3.5 THE PROJECT MAKES GAS AVAILABLE TO THE MARITIME CANADA MARKET ...... 15 3.6 OTHER PROJECT BENEFITS ...... 16 4. SAFETY ...... 17 4.1 THE BRUNSWICK PIPELINE IS STATE -OF -THE -ART AND MEETS OR EXCEEDS CODE ...... 17 4.2 RISK – PROBABILITY & CONSEQUENCE ...... 17 4.3 COMPARABLE PIPELINES ...... 22 4.4 CONCLUSION ...... 23 5. CONSULTATION ...... 23 5.1 INTRODUCTION ...... 23 5.2 LANDOWNERS ...... 24 5.3 THE GENERAL PUBLIC ...... 25 5.4 GOVERNMENTS ...... 26 5.5 ABORIGINAL GROUPS ...... 26 5.6 REGULATORY AGENCIES ...... 27 5.7 OTHER INTERESTED PARTIES ...... 28 5.8 CONCLUSION ...... 28 6. ENGINEERING AND CONSTRUCTION...... 30 6.1 IMPACTS ON CITY OF SAINT JOHN INFRASTRUCTURE ...... 30 6.2 BLASTING DISTURBANCES AND DAMAGE ...... 30 6.3 CONCLUSION ...... 30 7. OPERATIONS...... 31 7.1 EMERGENCY RESPONSE ...... 31 7.1.1 General ...... 31 7.1.2 Areas with Limited Access Points ...... 32 7.2 CLOSURE OF LINE BLOCK VALVES ...... 32 7.3 SECURITY MANAGEMENT ...... 32 7.4 SYSTEM INTEGRITY – IN-LINE INSPECTION FREQUENCY ...... 33 7.5 ATV ACCESS CONTROL MEASURES ...... 34 7.6 GAS QUALITY ...... 35 7.7 CONCLUSION ...... 35 8. ENVIRONMENT...... 35 8.1 CONSIDERATION OF ALTERNATIVES ...... 35 8.1.1 "Alternatives To"...... 35 8.1.2 "Alternative Means"...... 36 8.2 ENVIRONMENTAL ASSESSMENT ...... 40

8.3 ENVIRONMENTAL MITIGATION ...... 42 8.3.1 Introduction ...... 42 8.3.2 Archaeology ...... 42 8.3.3 Air Quality ...... 42 8.3.4 Blasting ...... 42 8.3.5 Contaminated Sites...... 43 8.3.6 Noise...... 43 8.3.7 Watercourse Crossings...... 44 8.3.8 Wetlands and Rare Species...... 44 8.4 CONCLUSION ...... 45 9. ROCKWOOD PARK ...... 45 10. CORRIDOR SELECTION ...... 46 11. PART IV MATTERS ...... 47 11.1 GROUP 2 STATUS ...... 48 11.2 PRECEDENT AND TOLL AGREEMENTS ...... 48 11.3 ACCESS – INTERCONNECTION POLICY ...... 49 11.4 CONCLUSION ...... 50 12. LANDS ISSUES...... 50 13. IRRELEVANCE AND LACK OF PROBATIVE VALUE OF ANADARKO’S EVIDENCE ...... 51 14. COMMENTS ON DRAFT CERTIFICATE CONDITIONS (EXHIBIT A-40)...... 54 14.1 DRAFT CONDITION 1 – GENERAL ...... 54 14.2 DRAFT CONDITION 2 – GENERAL ...... 54 14.3 DRAFT CONDITION 3 – ENVIRONMENTAL PROTECTION PLAN ...... 54 14.4 DRAFT CONDITION 4 – ENVIRONMENTAL FOLLOW -UP PROGRAMS ...... 54 14.5 DRAFT CONDITION 5 – TRADITIONAL ECOLOGICAL STUDY RECOMMENDATIONS .....54 14.6 DRAFT CONDITION 6 – CONSTRUCTION SCHEDULE ...... 54 14.7 DRAFT CONDITION 7 – CONSTRUCTION INSPECTION PROGRAM ...... 54 14.8 DRAFT CONDITION 8 – ARCHAEOLOGICAL STUDIES AND MONITORING PLANS ...... 55 14.9 DRAFT CONDITION 9 – ACCESS MANAGEMENT PLANS ...... 55 14.10 DRAFT CONDITION 10 – CONSTRUCTION MANUALS ...... 55 14.11 DRAFT CONDITION 11 – INFRASTRUCTURE FACILITIES ...... 55 14.12 DRAFT CONDITION 12 – CONSTRUCTION PROGRESS REPORTS ...... 55 14.13 DRAFT CONDITION 13 – HDD NOISE MANAGEMENT PLAN ...... 55 14.14 DRAFT CONDITION 14 – SAINT JOHN RIVER CROSSING ...... 55 14.15 DRAFT CONDITION 15 – ARCHAEOLOGICAL OR HERITAGE RESOURCE DISCOVERY ...... 55 14.16 DRAFT CONDITION 16 – EMERGENCY PROCEDURES MANUAL ...... 55 14.17 DRAFT CONDITION 17 – CONSULTATION ON EMERGENCY PROCEDURES MANUAL ..56 14.18 DRAFT CONDITION 18 – CONDITION COMPLIANCE BY A COMPANY OFFICER ...... 56 14.19 DRAFT CONDITION 19 – EMERGENCY RESPONSE EXERCISE ...... 56 14.20 DRAFT CONDITION 20 – EMERGENCY RESPONSE EXERCISE PROGRAM ...... 56 14.21 DRAFT CONDITION 21 – POST -CONSTRUCTION ENVIRONMENTAL REPORTS ...... 56 14.22 DRAFT CONDITION 22 – ENVIRONMENTAL FOLLOW -UP PROGRAM REPORTS ...... 56 14.23 DRAFT CONDITION 23 – CERTIFICATE EXPIRATION ...... 56 15. CONCLUSION ...... 56

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1 EMERA BRUNSWICK PIPELINE COMPANY LTD. 2 GH-1-2006 3 ARGUMENT-IN-CHIEF 4 1. INTRODUCTION

5 Emera Brunswick Pipeline Company Ltd. (“Emera Brunswick”) applies for the following:

6 (i) a Certificate of Public Convenience and Necessity under s. 52 of the 7 National Energy Board Act (the “NEB Act”) authorizing it to construct and 8 operate the Brunswick Pipeline;

9 (ii) an Order under Part IV of the NEB Act approving the tolls for the 10 Brunswick Pipeline and the negotiated toll agreement between Emera 11 Brunswick and its sole shipper; and

12 (iii) an Order designating Emera Brunswick a Group 2 company.

13 The proposed Brunswick Pipeline is a new 762 mm (30 inch) stand-alone cross-border 14 pipeline extending 145 km from the Canaport TM LNG Terminal at Mispec Point, New 15 Brunswick to a new crossing of the international border where it will interconnect with 16 the Maritimes & Northeast Pipeline LLC ("M&NP LLC) system, which will be expanded 17 to accommodate the incremental volumes from the Brunswick Pipeline.

18 Commercial agreements between Emera Brunswick and Repsol Energy Canada Ltd. 19 ("Repsol"), guaranteed by their respective parent companies, are the foundation for the 20 proposed Brunswick Pipeline. Under these agreements, Repsol provides all of the pre- 21 approval and construction funding and, in addition, will pay the entire fixed costs of the 22 Brunswick Pipeline for the first 25 years of its operation, regardless of its throughput. 23 The proposed Brunswick Pipeline is a commercially “at risk” pipeline. 1

24 In a Ruling on November 17, 2006 2, the Board issued directions to the following effect:

25 (i) the scope of these proceedings is confined to an exploration of the 26 benefits and burdens of the applied for Brunswick Pipeline as currently 27 framed;

28 (ii) an exploration of the benefits or burdens of a project which is not before 29 the Board is a matter which lies outside the scope of these proceedings;

30 (iii) more particularly, the benefits or burdens of a different project built by a 31 different company involving altering of the Maritimes & Northeast Limited 32 Partnership ("M&NP") system in Canada to transfer the supply from the 33 Canaport TM LNG Terminal, the cost for doing so and other matters such as 34 the ability of Nova Scotia’s future potential supply sources to access the 35 market are outside the scope of this proceeding;

1 NEB Reasons for Decision – EnCana Ekwan Pipeline Inc. GH-1-2003; Ladyfern Pipeline GH-3-2000. 2 11T17126-35.

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1 (iv) spending time in exploring speculative and remote alternative projects is 2 not of sufficient probative value to the Board in determining whether the 3 Brunswick Pipeline is in the public interest;

4 (v) alternatives to the project raised in the context of the Canadian 5 Environmental Assessment Act (“CEAA”) should not be used to delve into 6 a detailed economic analysis of the benefits and burdens of that 7 alternative as it is outside the scope of the Board’s considerations under 8 the CEAA; and

9 (vi) discussions of an alternative or hypothetical project which is neither 10 proposed nor before the Board and how that hypothetical project could 11 potentially serve incremental natural gas supply for the region or affect 12 future tolls on other pipelines is irrelevant to an assessment of the benefits 13 and burdens of the proposed Brunswick Pipeline.

14 A Ruling to a similar effect was made by the Board on September 20, 2006 3 where the 15 Board found that, “…the outcome of commercial arrangements that are neither in place 16 nor are expected to be in place in the foreseeable future…” are of no probative value 17 with respect to the issues which the Board is to determine in this proceeding.

18 Pursuant to Section 43 of the CEAA, the NEB process in this proceeding is a substitute 19 for an environmental assessment by a Review Panel required under the CEAA.

20 In its Environmental Assessment Scoping document issued on June 23, 2006 4, the 21 Board excluded the Canaport TM LNG Terminal and LNG tanker activity (other than 22 cumulative effects) from the scope of the environmental assessment required under the 23 provisions of the CEAA.

24 Having regard to these Rulings, Emera Brunswick submits that the Board’s 25 consideration of matters pertaining to the nine issues identified in the Board’s List of 26 Issues in this proceeding is confined to matters pertaining to the commercially at risk 27 cross-border stand-alone Brunswick Pipeline, and only to that particular pipeline project 28 proposal.

29 Emera Brunswick’s responses to each of the issues the Board has listed for 30 consideration in this proceeding are more fully developed in the sections of this 31 Argument-in-Chief which follow. At the conclusion of the Argument-in-Chief, Emera 32 Brunswick urges the Board to approve the Application in its entirety.

33 Emera Brunswick submits that the Brunswick Pipeline will be used at reasonable levels 34 over its economic life and that the relevant fixed charges will be paid by its sole shipper, 35 Repsol. The record supports the conclusion that the preferred corridor is the right route 36 for the Brunswick Pipeline and that significant adverse environmental effects are 37 unlikely to result from construction, operation and maintenance of the pipeline. 38 Moreover, the evidence amply supports the conclusion that the construction, operation

3 Exhibit A-26, NEB Ruling No. 6. 4 Exhibit A-3.

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1 and maintenance of the pipeline within the preferred corridor will be done safely and 2 with minimal inconvenience to the public.

3 In support of these conclusions, Emera Brunswick respectfully submits the following.

4 2. BACKGROUND

5 A great deal of detailed evidence has been presented by the Applicant and by 6 intervenors on the issues of concern. Emera Brunswick replied to all intervenor 7 evidence which the Board had found to be relevant or of sufficient probative value to 8 warrant further examination at the hearing 5. Emera Brunswick supplemented its Reply 9 Evidence 6 with its specific reply to further intervenor evidence admitted late by the 10 Board (Reply Evidence respecting the "Impact of the Proposed Brunswick Pipeline on 11 Municipal Infrastructure Maintenance" 7). The practical effect of the intervenor evidence 12 and the Applicant's Reply Evidence was to sharpen the focus of the public hearing upon 13 issues of continuing concern to intervenors.

14 In addition, Emera Brunswick was successful in working with a number of stakeholders 15 and intervenors prior to the hearing to further narrow the range of contentious issues 16 remaining to be discussed at the public hearing 8. The effect of those efforts was to 17 settle many opposing views by satisfying their concerns with additional information and 18 with commitments to work cooperatively on any outstanding matters. The Applicant 19 secured the support of critical intervenors such as existing shippers on the M&NP 20 system, including Heritage Gas, Enbridge Gas New Brunswick ("EGNB") and Nova 21 Scotia Power as well as other key stakeholders such as New Brunswick Power 22 Transmission Corporation which indicated it was not opposed to the Brunswick Pipeline 23 corridor which parallels its right-of-way for a considerable distance.

24 Similarly, agreements reached with the umbrella organizations for federally recognized 25 First Nations Bands within New Brunswick – the MAWIW and the UNBI – ensure that 26 the continued traditional use of land and resources will be respected through the 27 appropriate environmental protections and archaeological protocols as well as by 28 promoting participation in the Project. Emera Brunswick was also successful in gaining 29 the support of the co-stewards of Rockwood Park as evidenced by the fact that the 30 Saint John Horticultural Association and the City of Saint John provided letters of 31 support on the record 9. In addition, it is significant that Emera Brunswick's extensive 32 consultation with the City was not restricted to the preferred corridor through Rockwood 33 Park. Emera Brunswick spent considerable time with the Fire Chief, other City officials 34 and with the Common Council of the City of Saint John to answer concerns with respect 35 to public safety, emergency response and potential impacts with municipal 36 infrastructure. That exchange of information concluded with an expression of the City's

5 Exhibit A-26, NEB Ruling No. 6; see also Rulings at 1T1132-34; 11T17126-36; and Exhibit B-40-a, Reply Evidence, pages 19-20. 6 Exhibit B-40. 7 Exhibit B-59. 8 12T18586-89; 12T19640-47. 9 Exhibit C-3-2; Exhibit C-67-6.

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1 support for the Project and the preferred corridor and the City's withdrawal from active 2 participation at the hearing 10 .

3 In its Argument-in-Chief, therefore, Emera Brunswick will attempt to respond to the 4 significant issues of concern which became apparent during the course of the public 5 hearing. Rather than repeating in detail what is already set forth in the two pieces of 6 formal Reply Evidence 11 , Emera Brunswick would simply adopt them for the purposes of 7 its Argument-in-Chief.

8 While this Argument-in-Chief is not structured to address sequentially each of the List of 9 Issues which appear as Appendix I to Hearing Order GH-1-2006 12 and each of the 10 Factors to be considered in the context of the Board's "Brunswick Pipeline Project – 11 Environmental Assessment Scoping Document" which was attached to its letter dated 12 June 23, 2006 13 , it will indicate throughout the Argument-in-Chief where these matters 13 are addressed.

14 3. PURPOSE, NEED AND JUSTIFICATION OF THE PROJECT

15 This section addresses the NEB List of Issues 1, 4, 5 and Factors 5, 6, 9 and 10 of the 16 Scoping Document. Broadly, these issues and factors relate to the need for the 17 proposed facilities, their economic feasibility, any potential commercial impacts, the 18 alternatives which were considered in carrying out the Project and the broader public 19 interest which favours approval of the Application. It should be noted, however, that a 20 formal consideration of "alternatives to" and "alternative means" in the context of the 21 CEAA will be discussed as part of the Argument-in-Chief dealing with Environmental 22 Matters in Section 8.1. Under this section of the Argument-in-Chief, the discussion 23 relates to why approval of the Project best serves the broader Canadian public interest.

24 3.1 "Canada Needs the Brunswick Pipeline"

25 Maritime Canada urgently needs the Brunswick Pipeline. The evidence is clear and 26 uncontradicted that existing offshore supplies can no longer provide any assurance to 27 Canadian and export customers that their long-term supply needs can be met. As both 28 Mr. Knoll and Mr. Reed stressed 14 , and as the Reply Evidence demonstrated, the 29 original 3.5 Tcf upon which the Sable Project was based was later revised downwards 30 to only 1.4 Tcf based on production experience, of which approximately 1 Tcf has now 31 been produced leaving behind only 400 bcf for future requirements 15 . While the new 32 compression deck will restore lost deliverability to some degree, it will not increase 33 reserves 16 . The potential adverse impact upon those shippers, LDCs and users who 34 invested in reliance upon the original supply evidence is of serious concern.

10 Exhibit C-67-6. 11 Exhibits B-40 and B-59. 12 Exhibit A-2. 13 Exhibit A-3. 14 12T19131-46; 7T8874. 15 Exhibit B-40-a, page 2, line 34 to page 3, line 1; 12T19656. 16 12T19654.

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1 From a public interest perspective, there was no expert evidence adduced to suggest 2 that Canada does not need the Brunswick Pipeline. Many intervenors had sought to 3 characterize the project as a "bullet line" or as an export only pipeline 17 . However, as 4 EGNB itself conceded, it cannot access this critical new gas supply source if the 5 Brunswick Pipeline is not approved 18 . Under cross–examination, its witness clarified 6 that EGNB's concern about an assured source of gas supply should not result in a 7 denial of the Brunswick Pipeline application.

8 3.1.1 Replacement Supply

9 The evidence discloses that the Sable gas supplies could reach non-economic 10 production levels in between 3 and 6 years 19 . Moreover, the Sable supply source may 11 be unable to meet contracted levels of Canadian demand (i.e. at 170 mmcfd) as early 12 as 2 to 3 years from now 20 . Most telling in this regard are the actions taken by the 13 Sable producers. The evidence is clear that in response to a mandatory reverse open 14 season requirement for any facilities expansion in Canada and the United States, the 15 Sable producers took the opportunity to relinquish most of their transportation 16 obligations in the United States (260 MDth per day of an initial contract quantity of 360 17 MDth per day on M&NP LLC) 21 . Such action by the producers themselves, who own 18 and operate the Sable Project, corroborates the view that the offshore supplies will be 19 unable to assure existing customers, much less future customers, that long-term reliable 20 gas supplies will be available to Maritime Canada in order to promote growth.

21 No one appeared to take issue with the conclusion expressed in the Reply Evidence 22 22 that the only other supply developments on the horizon would not be sufficient to fill the 23 gap created by the Sable gas production declines. Neither Corridor (at 30 mmcf per 24 day commencing in 2007) nor the potential re-start of the development a much reduced 25 Deep Panuke Project can alone provide those vital assurances 23 . Accordingly, approval 26 of the Brunswick Pipeline application appears critical to the Canadian public interest and 27 is urgently required given the rate of production decline from existing sources and the 28 paucity of near term alternatives.

29 Indeed, against this backdrop, it would be contrary to the needs of gas customers in the 30 Maritimes to accept any recommendation that the Emera Brunswick application be 31 denied. Such a result interferes with market choice and the timely availability of a new 32 gas supply source in the region via the Brunswick Pipeline. Quite simply, the Maritime 33 Canada market cannot run that risk, nor can it sustain the delays which a decision not to 34 approve the applied for corridor would occasion.

17 11T17551-55; Ex. C-4-0-b, page 15 18 13T20658-59. 19 7T8874; 12T19656. 20 12T19651-64. 21 Exhibit B-40-a, page 3. 22 Exhibit B-40-a, page 3, lines 8-16. 23 7T8870-82.

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1 3.1.2 Demand Growth

2 To this point, the Argument-in-Chief has focused solely upon replacement supply to 3 offset decline in existing supply sources to the Canadian market. As Mr. Reed 4 indicated, however, just as significant is the importance of this new supply source to 5 grow the existing Canadian market 24 . The evidence is clear that it is difficult to invest in 6 the necessary infrastructure to grow the Canadian market when there is no certainty 7 about the availability of long-term gas supplies to use those facilities 25 . As the Joint 8 Panel recognized in approving the original Sable/M&NP projects, their primary benefit 9 lay in the access they created to natural gas for the Maritime Canada market 26 . 10 Unfortunately, experience with Sable offshore production casts serious doubt over the 11 ability to actually utilize Maritime Canada gas infrastructure over the long term.

12 The Nova Scotia Department of Energy, in its Information Requests to Emera 13 Brunswick 27 , quoted extensively from the Board's June, 2003 Overview and 14 Assessment of the Maritimes Natural Gas Market 28 . Counsel for Anadarko also 15 referenced this market assessment in his cross-examination of Mr. Reed 29 . It is notable 16 that one of the findings of that assessment is that the most important issue for the 17 Maritime Canada market in the future, is the uncertainty surrounding the timing of the 18 development of additional supply 30 .

19 The NEB's market assessment also noted that a lack of storage capacity in the 20 Maritimes makes it more difficult to manage gas purchase and transportation 21 commitments and that if storage existed, this issue could be alleviated 31 . Finally, the 22 assessment noted a lack of liquidity in the Maritimes gas market that creates gas 23 management challenges for domestic users 32 . The introduction of the significant 24 incremental Repsol supply will help to alleviate both of these storage and liquidity 25 challenges. With respect to storage, as Mr. Reed noted, there will be storage on the 26 Canaport TM LNG site in addition to linepack on the pipeline 33 . With respect to liquidity, 27 Mr. Reed testified: 28 29 7T8771. MR. REED: …I don't think that what we're talking about in 30 this application, the addition of the Brunswick Pipeline and 730,000 of 31 supply into the Maritime system can in any way be viewed as being 32 detrimental to the economics of gas supply access for Canadian 33 consumers.

34 8772. Fundamentally, in economics, adding an enlarged amount of 35 supply is going to drive the price down, not up. Providing additional 36 access to a long-term source of supply is also alleviating a constraint

24 7T8821-25. 25 7T9065-70; Exhibit B-40-a, page 3. 26 Exhibit B-40-a, page 2; GH-6-96 NEB Reasons for Decision, page 7; Sable Joint Panel Report, page 56. 27 Exhibit C-71-2. 28 The Maritimes Natural Gas Market - An Overview and Assessment, NEB, June 2003. 29 7T8653. 30 The Maritimes Natural Gas Market - An Overview and Assessment, NEB, June 2003, page 2. 31 The Maritimes Natural Gas Market – An Overview and Assessment, NEB, June 2003, page 2. 32 The Maritimes Natural Gas Market – An Overview and Assessment, NEB, June 2003, page 2. 33 7T8921.

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1 that right now is very much binding on the development of additional 2 markets in Canada.

3 8773. So my view, both with regard to availability and with regard to price, 4 is that the addition of the supply through Brunswick is very favourable for 5 Canadian consumers across the board.

6 While Anadarko insists on referring to the Brunswick Pipeline as a “bypass” pipeline, 7 Emera Brunswick submits that this is not a reasonable characterization. As noted 8 below, in the Economic Feasibility section of this Argument, the cross-border design of 9 the Brunswick Pipeline is critical to the viability of the Canaport TM LNG Terminal as a 10 new supply source. Regardless of the label one uses to describe the cross-border 11 stand-alone Brunswick Pipeline, the issue for the Board to determine is whether this 12 particular pipeline should be approved because it is in the overall public interest.

13 Maritime Canada is fortunate to have the opportunity to access the significant new 14 supply source offered by Repsol and the Brunswick Pipeline. Emera Brunswick's 15 willingness to provide direct connections, as well as exchanges and backhauls, will 16 provide Maritime Canada gas customers access to this gas and the concomitant supply 17 diversity and reliability it affords the market. The availability of a 25 year gas supply 18 with an internationally recognized, investment grade company will allow existing and 19 new gas customers to invest in the necessary infrastructure to increase their use of a 20 fuel source widely recognized to be environmentally friendlier than the other main 21 energy supply sources available 34 .

22 3.2 Impact on Other Pipelines and Shippers–Commercial Stakeholders

23 End users are also shippers on the M&NP system. This new, long term gas supply 24 source is a means by which they can mitigate demand charges by simply utilizing 25 certain existing delivery points as receipt points for the Repsol gas supplies and then 26 utilizing their existing Canadian capacity to exchange or physically haul the same 27 amount of gas in the opposite direction to where it might be actually consumed or 28 possibly resold 35 .

29 The NEB has defined bypass as "A delivery of natural gas to an end-user directly off a 30 transmission pipeline without moving the gas through the end-users traditional local 31 distribution company" 36 . The NEB reference to delivering gas through the end-users 32 traditional local distribution company assumes the same source of gas is involved in the 33 bypass. In contrast, the Brunswick Pipeline relies on a supply from a different, 34 significant and diverse supply source which is then made available in the same markets 35 which existing supply sources currently serve. All key stakeholders -- existing gas 36 users, existing shippers on the M&NP system and M&NP itself -- support the Brunswick 37 Pipeline as a means by which to access this critical new source of gas supply.

34 7T8816-17. 35 11T17420. 36 The Maritimes Natural Gas Market – An Overview and Assessment, NEB, June 2003, page 44.

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1 As Mr. Reed observed, any adverse effect upon M&NP's existing tolls are the result of 2 the rapidly declining levels of Sable gas production rather than any alleged "bypass" 3 effect:

4 7T8765. MR. REED: It is certainly possible that tolls can go up if the 5 level of contracted activity goes down. If the Sable producers don’t get 6 replaced by Panuke production or by onshore production, then tolls 7 could go up if the market will support that. I would say that that would 8 be a consequence of the drop in Sable production, not a consequence 9 of building Brunswick , and it’s a function of the fact that there would be 10 a substantially lower demand over which the cost of service of the 11 pipeline can be recovered. (emphasis added)

12 Moreover, the evidence discloses that existing contractual commitments on the M&NP 13 system will be honoured 37 . Speculation about renewal of those commitments remains 14 just that, though the continued dramatic decline in the Sable offshore gas supplies is 15 anything but speculative. Mr. Knoll confirmed that the Sable producers have entered 16 into backstop arrangements with M&NP to compensate M&NP if capacity on that 17 system drops below a certain figure 38 . Those Sable producers have not registered an 18 objection to the Brunswick Pipeline Project. Rather, the Project will provide those 19 producers with the benefit of being able to release capacity on the M&NP LLC system. 20 From the perspective of impact upon existing participants in the Maritime gas market, 21 therefore, the commercial impacts of the Brunswick Pipeline are favourable.

22 Despite its reservations about the lack of a signed gas supply contract, EGNB's witness 23 agreed that it was "…in Enbridge Gas New Brunswick's interest; my customer's 24 interests" to actually get the gas supply into the region so that EGNB could access it 39 . 25 Denial of the Brunswick Pipeline application would not accomplish that goal 40 . Indeed 26 the EGNB witness praised Emera Brunswick’s efforts to ensure EGNB's access to the 27 Brunswick Pipeline 41 .

28 Anadarko stands alone among industry stakeholders in opposing the Brunswick 29 Pipeline application. Existing Maritime Canadian gas users, existing M&NP shippers, 30 and M&NP itself have all indicated that access to this new source of gas supply is 31 important.

32 3.3 Economic Feasibility - Markets & Supply - Alternatives

33 As noted below, the project proponents considered a range of alternatives to ensure the 34 economic feasibility of the Project and ultimately make a new gas supply available in 35 both the Maritime Canada and the U.S. Northeast market. Similar to the Sable/M&NP 36 application, a large diverse anchor market was required to support a project of this 37 scope and scale 42 . The analysis conducted by Concentric Energy Advisors was not

37 Exhibit C-11-3-d, Irving Oil Response to EGNB IR No. 3(h). 38 12T19483-86. 39 13T20658-59. 40 13T20655-57. 41 13T20687-89; 13T20513. 42 Exhibit B-40-a, page 4.

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1 contested in any way. Very few information requests were posed and no contrary 2 evidence was presented. Cross-examination, in Emera Brunswick's respectful 3 submission, only reinforced its conclusions.

4 The Jensen Associates analysis concluded that LNG supply was available to utilize the 5 Brunswick Pipeline 43 ensuring its use at reasonable levels over its economic life. The 6 Repsol specific supply and market demonstrations corroborate these findings and 7 provide assurance that the facility will be used at the high load factors which Mr. 8 Ribbeck discussed with Board Counsel 44 . Once again, few information requests, no 9 contradictory evidence and little cross-examination challenged the Applicant's macro 10 and project-specific supply and market evidence at the hearing.

11 Some intervenors have raised the issue of security of the LNG supply in a global market 12 that is subject to political risk. Mr. Reed commented:

13 6T8919. MR. I. COURT: Okay. The next question deals with the 14 stability or security of supply. Can any company guarantee a supply 15 when it's coming from – for example, the pipeline is resting on the fact 16 that it's being built, they're guaranteed a certain amount of money and 17 so on, but the product itself, can any company guarantee a stable 18 supply of product if the product is coming from foreign countries?

19 8920. MR. REED: We have a lot of experience with that in the US, 20 especially in New England where there is an LNG receiving facility 21 right in downtown Boston. That supplier has been a very reliable 22 supplier across the last almost 40 years, notwithstanding the fact that 23 that supply for the longest time was sourced exclusively out of Algeria 24 from Sonatrach.

25 8921. And even though there were at times supply disruptions, 26 there is storage on the site. Storage is the first line of defence against 27 supply disruptions. And then there's the back- up of the pipeline line fill 28 -- line pack, it's called -- and the other sources connected to the 29 pipeline. So I would say even in less favourable circumstances in the 30 US where the District Gas facility in Massachusetts was sourced from 31 one source, not multiple sources, not a portfolio, as Repsol is using, 32 District Gas has proven to be a reliable supplier there.

33 Mr. Jensen noted the flexibility which has developed in the global LNG market. The 34 modern LNG market has been able to handle any disruptions that might occur:

35 11T16420. I suppose the concern looming over everything is the idea of 36 a political disruption. And you know, that sort of sits out there as a risk, 37 but at this point, I think that again the system can take some pretty 38 deep disruptions without really getting too badly out of whack, and you

43 Exhibit B-1-d, Appendix A6. 44 12T19531-38.

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1 have to envision a really bad disaster that has international geo- 2 political concerns before you think the system might break down. But I 3 mean, clearly something might happen. I doubt it, but it might. 4 5 ….. 6 7 16612. And so far, the political events, when they've occurred in the 8 modern world, which is bigger and more flexible, the system's been 9 able to handle it, so. And I'm not sure I can envision any other class 10 that isn't circumscribed by those definitions. 11 12 With respect to political risk affecting the Repsol supply specifically, the following 13 question was posed: 14 15 11T17377. THE CHAIRPERSON: Ms. Debly, the Board is interested in 16 learning a little more on this subject, as it might relate to security of 17 supply. So, if you could address your line of questioning towards 18 security of supply that would be useful for he Board.

19 17378. MS. DEBLY: Again, this is to Repsol. If you do not have 20 such a policy for gas coming to the Brunswick Pipeline, do you not run 21 the risk of a wide range of risks, including legal action, negative media 22 coverage, protests, shareholders' actions and boycotts, with all the 23 reputational and financial costs that these can bring, such as Repsol 24 Matta?

25 …..

26 With respect to security of supply, Mr. Ribbeck responded:

27 17381. With respect to the places where we're bringing gas -- or 28 where we expect to bring gas, Trinidad and Tobago, we feel -- in fact, 29 you've got to look at Trinidad/Tobago, it's a place -- I think you heard 30 earlier Mr. Jensen had indicated that they have four trains there, and I 31 can attest to that -- I've been involved in those – four trains of liquefied 32 natural gas production.

33 17382. Those facilities are project-financed, so the banks looked at 34 the political risk of those particular projects and the banks have worked 35 with the Royal Bank and others to ensure that things are done 36 appropriately and, therefore, we can count on our investments in those 37 types of countries and the products that we expect to get there, being 38 returned to us and coming -- and the products coming to the United 39 States or to Canada from there, would be more or less secure as a 40 result of the work that we’ve done, the work the banks have done, the 41 work the Royal Bank has done and many others, in those instances.

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1 17383. With respect to Algeria, Algeria is also engaged in 2 international trade and I’m not aware of any instance, not one instance 3 in which Algeria actually has reneged on a contract, but I am aware of 4 instances in which other entities have reneged on the contracts with 5 the Algerians.

6 17384. So you know -- and again, we look at these things and we 7 look at the countries in which we’re involved in, and we look at them, 8 as well, because we're spending so much money and investing so 9 much money in those places. We won’t go to a place if we don’t feel 10 comfortable that that is going to be safe with respect to LNG exports, 11 especially since we’re going to have a considerable commitment on 12 our backside to the marketplaces.

13 Emera submits that the project-specific supply and market evidence in this proceeding 14 is more than adequate to satisfy the supply and market requirements for a commercially 15 "at risk" pipeline.

16 In response to a different line of questioning, Mr. Ribbeck made clear the genesis of the 17 "stand-alone" Brunswick Pipeline. Paramount in its development was the determination 18 to ensure the long-term economic viability of a delivery system to its anchor markets in 19 the United States Northeast. As the Project was initially developed, consideration was 20 given to the use of existing pipeline systems and, briefly, to other means by which the 21 re-gasified LNG might be brought to market.

22 The evidence is clear that by the spring of 2005, Repsol had identified a cross-border, 23 stand-alone pipeline as the means for achieving the transportation cost objectives which 24 are critical to the viability of the Terminal as a new supply source 45 . Repsol requested 25 service from M&NP on a new cross-border pipeline on March 30, 2005 46 . Repsol was 26 not precluded from seeking service from M&NP on a new cross-border pipeline 27 operating under the auspices of its own stand-alone tolls. Part of the Open Season 28 documentation which Mr. Roth did not cite in his cross-examination of Panel No. 5 29 states as follows 47 :

30 “or such other NEB approved toll as may be appropriate for the requested 31 service”.

32 The uncontradicted evidence indicates that a new stand-alone cross-border pipeline 33 operating under the auspices of its own tolls was a fundamental term of the agreements 34 Repsol negotiated with M&NP Canada in July 2005 48 . That Repsol had negotiated 35 agreements with M&NP for the construction of a new pipeline was evident from 36 Repsol’s Press Release dated July 15, 2005 49 . That a new stand-alone cross-border 37 pipeline was contemplated by these Agreements was also evident from the Project

45 Ex. B-15-a. 46 Ex. B-15-b. 47 Ex. B-17-b; 11T16787-16840. 48 Ex. B-15-a pages 9-12, and in particular item (d) 8. 49 Ex. B-15-c.

Emera Brunswick Pipeline Company Ltd. December 1, 2006 GH-1-2006 Argument-In-Chief Page 12

1 Description filed by M&NP on January 6, 2006 with the NEB 50 . The cross-border stand- 2 alone nature of the pipeline was confirmed, once again, by M&NP in its letter to the New 3 Brunswick government officials dated March 27, 200651 . In that letter, M&NP made 4 clear the following:

5 "Second, as discussed at our meeting in Fredericton last January, we 6 expect that the formal entity applying for a NEB Certificate of Public 7 Convenience and Necessity will not be Maritimes & Northeast Pipeline 8 Management Ltd. ("M&NP"). Instead, a separate corporate entity will be 9 created for that purpose. It was always intended that the Brunswick 10 Pipeline would be separate and distinct from the M&NP mainline for tolling 11 and operational purposes. This approach also affords flexibility in terms of 12 the ownership of the Brunswick Pipeline which will transport re-gasified 13 LNG supplies as distinct from the offshore and, in future, onshore 14 Canadian gas production which will be transported by the M&NP mainline . 15 A letter dated March 14, 2006 was sent to the NEB and the Canadian 16 Environmental Assessment Agency which clarified that issue, a copy of 17 which was provided to you" (emphasis added) 52

18 That letter was copied to the NEB and the letter dated March 14, 2006 referred to in the 19 quotation forms parts of the record marked as Exhibit G-17.

20 These documents fully support other materials on the record including correspondence 21 by the Applicant and by M&NP to the effect that the Brunswick Pipeline was always 22 intended to be separate and distinct from the M&NP mainline 53 . It further corroborates 23 the evidence of Repsol that the economic feasibility of its project could not be secured 24 through the integration with or reliance upon another existing pipeline system 54 . In sum, 25 the stand-alone nature of this cross-border undertaking, separate and distinct from the 26 M&NP mainline, was always fundamental to the Project's economic viability.

27 Pursuant to its agreements with M&NP, Repsol retained the option to terminate the 28 arrangements and request M&NP to convey to Repsol or its assigns, all rights 29 associated with the stand-alone cross-border pipeline project. Repsol insisted on these 30 termination rights to assure that it achieved the transportation cost objectives upon 31 which the economic viability of the Canaport TM LNG Terminal depends. Repsol 32 exercised its termination rights and engaged in discussions with others to take over the 33 project. In these ensuing discussions, Emera Brunswick emerged as the party willing 34 and able to construct the pipeline and to provide transportation service thereon on terms 35 and conditions acceptable to Repsol 55 .

50 Ex. G-1-(a). 51 Ex. G-21, page 1. 52 Exhibit G-21, page 1. 53 Ex. B-15-a, IR 1.3; Ex. C-13-3, page 4. 54 11T17864. 55 Ex. B-15-a.

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1 As Repsol's termination of the M&NP arrangement attests, project viability was 2 dependent upon Repsol securing the most economic means possible to access its 3 critical anchor markets.

4 Integration of the Brunswick Pipeline with another pipeline system or reliance solely 5 upon existing infrastructure were quickly determined to be deficient in securing the 6 Project's business objectives. As both Mr. Blair and Mr. McLelland testified, existing 7 infrastructure alone in the form of the Saint John Lateral could never fulfill the Project's 8 objectives. Mr. Blair indicated that:

9 1T883. MR. BLAIR: There would be a requirement to develop new 10 infrastructure in order for that alternative to the project to be feasible" 56

11 As both Mr. McLelland and Mr. Blair further testified, utilizing existing capacity on the 12 Saint John Lateral was never a viable alternative to the Brunswick Pipeline 57 .

13 Later, Mr. McAdam responded to Ms. Eldridge-Thomas as to "why the use of the Saint 14 John lateral was not a feasible alternative to the project" as follows:

15 11T17785. MR. MCADAM: The Saint John lateral doesn't connect Mispec 16 Point to the U.S. border and it's too small and the pressure is too low within 17 the City."

18 Mr. McAdam subsequently made clear to Mr. Thompson the "alternatives to" the 19 Brunswick Pipeline which Emera Brunswick examined:

20 12T17993. MR. MCADAM: When we became involved with the project, 21 you know, as the project proponent, we had to be comfortable that 22 there had been appropriate analysis of alternatives to the project. We 23 understand the regulatory requirements of the process that were 24 involved here.

25 17994. And there's been quite a bit of discussion of the alternatives 26 that were examined already, but doing nothing wouldn't have moved 27 the amount of gas that we needed to move from Mispec Point to the 28 U.S. border.

29 17995. We looked at whether there was existing infrastructure that 30 would move the gas from the location of Mispec to the U.S. border.

31 17996. And it's pretty obvious that we needed to build a new 32 pipeline to meet the project purpose that the Saint John lateral is – and 33 I think I had this discussion yesterday, the Saint John lateral was too 34 small and operating at too low of pressure while it was in the City to be 35 a suitable alternative.

56 1T883; see also IT850-52. 57 1T885-86; 1T906.

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1 17997. And so, there were other options, in terms of pipe sizing that 2 were assessed as well.

3 Repsol's evidence is clear that it remains fully committed to utilize the proposed facilities 4 at a high level over their economic life and to pay the monthly fixed charges associated 5 with its use. The evidence is clear that the payment of the fixed charges does not 6 depend upon actual utilization. Rather, the commitment which Repsol has made in 7 return for access to the entire system capacity is in no way dependent upon the actual 8 level of throughput 58 .

9 On that basis, the project proponents considered alternative means of carrying out the 10 Project from its point of receipt from Mispec Point to the new crossing of the 11 international border at the St. Croix River. From an economic feasibility standpoint, 12 consideration of alternative means of carrying out the Project also had implications for 13 the overall project viability. The Application presents a preferred route and two Variants 14 which Emera Brunswick has indicated it is prepared to build and for which it has 15 customer support 59 .

16 There are no other alternatives which are supported by Emera Brunswick's sole 17 customer. Mr. Ribbeck testified that Repsol does not see any other reasonable option 18 to proceed with at this point in time 60 . As Mr. McAdam noted: "…we're not going to 19 build a pipeline without a customer" 61 . In that regard Mr. Ribbeck also provided some 20 useful context in his discussion with Mr. Ruffman:

21 12T18087. We're sad that we can't come to terms with respect to an 22 understanding of why we wouldn't proceed with the marine route under 23 the Bay of Fundy. We entered that into evidence and I won't repeat 24 those things. It would take a while, but we entered those things into 25 evidence.

26 18088. And we wish we could do a marine route, to be quite honest 27 with you. We initially set out to try to do that. We did. And we – we 28 worked with the folks from St. Clair to assess that and assess it 29 properly because we can't undertake a project that doesn't meet all of 30 the criteria, the screening criteria for a pipeline to proceed. And safety 31 is one of the most critical elements of that – of any pipeline project.

32 18089. The reason why we support the proposed route is that we 33 know that it can be done very safely. Without safety in any pipeline 34 project, you don't get a license to operate, and therefore, we couldn't 35 conduct our business. And if that was the case, if we didn't think that it 36 could be done safely, we wouldn't be here today supporting this 37 pipeline. We'd be some place else in North America supporting some 38 other projects. So we do feel that it can be done safely.

58 Ex. B-21-a; Ex. B-21-b. 59 12T18104-07. 60 12T18123. 61 12T18105-07.

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1 3.4 Timing

2 In further response to Mr. Ruffman, Mr Ribbeck went on to testify that the ability to serve 3 the market in a timely matter is critical:

4 12T18115. People talk all the time about windows opening and windows 5 closing, and really there is – what people are perceiving in the industry 6 today is that there is a window that is open right now to serve a market 7 need. Once that market need is served, then that window closes and 8 effectively everyone starts lining up for development of the next 9 project.

10 18116. The market has spoken with respect to its need, and that 11 need was to fulfill a need in the winter season '08/'09. That's the time 12 frame that the market foresee that they had to have natural gas 13 delivered into their communities.

14 18117. ….

15 18118. So the race is really to fill a market need at that point in time. 16 And if you don't meet what the market needs at that point and other 17 projects proceed – as I said yesterday, you can't – you can't force the 18 market to take gas. The market drives you to bring projects forward to 19 satisfy their needs. Once those needs are satisfied, you're done. You 20 don't have the ability to serve that need any longer.

21 In this regard, Mr. Ribbeck echoed Mr. Reed's conclusion about competitive projects 22 seeking out the same market opportunity 62 . From the perspective of the Project's 23 economic viability, delay is not an option. Canada needs the gas. So does the U.S. 24 Northeast market.

25 3.5 The Project Makes Gas Available To The Maritime Canada Market

26 As noted above, Emera Brunswick has satisfied concerns with respect to access to the 27 Brunswick Pipeline 63 . In that regard, it has done all that a pipeline company can do in 28 the context of a Certificate Application. Brunswick Pipeline is not in the business of 29 buying and selling gas.

30 Repsol Canada has committed to make available up to 250,000 MMBtu/d on 31 competitive terms and conditions to a Canadian market (Irving Oil) both for its own 32 proprietary uses and for the purpose of re-marketing to other Canadian buyers 64 . The 33 record discloses that there have been discussions amongst Repsol Canada, Irving Oil, 34 EGNB and a number of other potential buyers for purchase of those gas supplies 65 . In 35 that sense, Repsol testified that it was making much more gas available to the

62 7T9921-35. 63 13T20687-89; 13T20513. 64 11T17184; 11T17203; 11T17257-59. 65 Ex. C-11-2-a, page 3; Ex. C-11-3-c, IR 3; 11T17219; 13T20536-37; 13T20541-42; 13T20933-34.

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1 Canadian market – up to 250,000 MMBtu/d – than the 10,000 MMBtu/d which EGNB 2 wanted set aside for a particular customer 66 . Indeed, as Mr. McAdam noted, Repsol 3 has a substantial economic incentive to sell gas in Canada 67 .

4 The Repsol 250,000 MMBtu/d of gas supply to Irving Oil alone represents substantial 5 Canadian access to the new source of gas supply. There is no basis for concluding 6 Canadians do not have access to that gas. EGNB and others, however, also will have 7 access to that 250,000 MMBtu/d through Irving Oil’s re-marketing efforts, as its own 8 witnesses as well as Repsol’s witnesses affirm 68 . There is simply no need for a 9 Certificate condition to assure Canadian access to the gas supply. It is neither 10 appropriate nor necessary, therefore, to condition the Certificate upon a sale of a 11 stipulated quantity of gas to a particular Canadian buyer. As Mr. Ribbeck observed, 12 letting the market work is the right approach where a supplier has committed, under 13 oath, to making an unrestricted amount of gas supply available to any Canadian buyer 14 under competitive terms and conditions 69 .

15 3.6 Other Project Benefits

16 The Brunswick Pipeline brings significant benefits to New Brunswick and Saint John in 17 addition to incremental natural gas supply. The Brunswick Pipeline is a cornerstone 18 infrastructure investment that supports Saint John's "energy hub" industrial development 19 strategy as described by both the Atlantica Centre for Energy and the Saint John Board 20 of Trade. Accordingly, the City and Region should realize spin-off benefits in terms of 21 jobs and investment from further industrial growth made possible by the availability of 22 reliable long term gas supply. Emera Brunswick also pays significant taxes in New 23 Brunswick: $3.3 million annually in municipal property taxes and a further $2 million of 24 capital and income taxes on average. An additional $2 million in taxes will be paid at 25 the federal level. This results in a total annual tax contribution by the Project in the 26 order of $7.3 million 70 . Emera Brunswick provides a significant economic impact during 27 the construction phase which has been estimated at $137 million in GDP for New 28 Brunswick and $210 million for the rest of Canada 71 . The annual GDP impact from 29 operation and maintenance activities is estimated at $2 million for New Brunswick and 30 $2 million for the rest of Canada.

31 Canada and Maritime Canada, in particular, have been presented with a critical choice 32 to approve or deny the preferred corridor. Emera Brunswick submits that the preferred 33 corridor is clearly the right corridor on an objective review of the evidence. Granting the 34 Certificate for the preferred corridor answers the increasing concern about replacement 35 supply and existing supply reliability in order to provide for the first time in recent years 36 a real opportunity for significant market growth. Denial of the Brunswick Pipeline 37 application or any material delay in its approval directly threatens its economic viability. 38 It also renders uncertain any prospect of its revival in the future.

66 11T17317-24; 11T17289-324. 67 11T17291-92. 68 11T17289; 11T17311; 11T171317-21; 13T21000-01; 13T21050. 69 11T17298-300. 70 Exhibit B-1-a, page 54. 71 Exhibit B-1-a, page 54.

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1 In Emera Brunswick's respectful submission, this Board should approve the Application 2 as proposed without delay. More than enough evidence of economic feasibility exists 3 on the record to support the preferred route and to reject the options others have 4 volunteered.

5 4. SAFETY

6 This section of the Argument-in-Chief addresses Issues 3, 4 and 6 and Factors 1, 2, 3 7 and 4.

8 4.1 The Brunswick Pipeline is State-of-the-Art and Meets or Exceeds Code

9 The Brunswick Pipeline will be a state-of-the-art natural gas pipeline, incorporating the 10 latest in corrosion protection technology and built to standards often exceeding Code 11 requirements 72 . As the evidence shows, pipeline construction and maintenance 12 practices are constantly reviewed and monitored for improvements. This accounts for 13 the superior safety record of the kinds of facilities Emera Brunswick proposes to install 14 relative to others involved in the incidents cited by intervenors.

15 In addition, the high grade of steel together with the thicker wall pipe that will be used in 16 built-up areas as proposed in this Application (design parameters exceed Code 17 requirements in many areas) combine to give the Brunswick Pipeline a safety factor 18 greater than that required by applicable Codes. The Kiefner & Associates analyses 19 discussed below, provide a detailed explanation of pipe toughness and resistance to 20 third party damage to virtually any piece of excavation equipment likely to operate along 21 the pipeline route within the City.

22 As noted in the Emera Brunswick Reply Evidence, the pipeline industry is rigourously 23 regulated and the principal safeguards the public can rely upon are reflected in the 24 various Codes, rules and regulations, which govern the construction and operation of 25 such facilities 73 . The effectiveness of these Codes, rules and regulations is manifest in 26 the fact that there has never been a public fatality from an incident on an NEB regulated 27 gas transmission pipeline in Canada.

28 4.2 Risk – Probability & Consequence

29 While interveners filed technical evidence ostensibly speaking to "risk", their focus 30 appeared to be almost exclusively upon "consequence" rather than "risk". Emera 31 Brunswick expended considerable effort to provide every day examples of why fears 32 premised solely upon "consequence" were unfounded and more particularly why such a 33 uni-dimensional analysis is a serious disservice to the general public. As Dr. Bercha 34 stressed "risk" is a compound measure of probability and of consequence 74 , a 35 conclusion echoed by Mr. Drake 75 .

72 Exhibit B-40-a, page 6. 73 Exhibit B-40-a, page 5. 74 10T14776. 75 8T12195.

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1 In its Reply Evidence 76 , Emera Brunswick made reference to the every-day use of 2 hazardous substances in the household. It spoke too of the role played by Industry 3 Codes for the design and operation of appliances which could pose serious threats to 4 life and property if the Codes themselves did not exist. Many examples of high 5 pressure pipelines coexisting in urban settings across North America were provided as 6 an illustration of the efficacy of these Codes. Those picture boards remained on display 7 in the hearing room throughout the proceeding. With respect, intervenors' never 8 seriously challenged the Applicant's assertion that the "….close proximity of such 9 facilities to schools, churches, hospitals, refineries, residential, commercial and 10 industrial facilities across North America is irreconcilable with the dire consequence 11 assessments offered by Messrs. Kuprewicz, Tracey and Wreathhall." 77 . Instead, the 12 focus of intervenor cross-examination at the hearing continued to be upon 13 "consequence" rather than "risk".

14 In a sense, there is no disagreement between the intervenor witnesses and Emera 15 Brunswick's safety witnesses – the worst-case scenario consequences of a rupture of a 16 high pressure 30 inch gas transmission line are unacceptable. The exact nature and 17 extent of those consequences can be debated but, from a normative perspective, all are 18 agreed that the consequences are unacceptable 78 . But what the intervenors appear to 19 ignore is that the probability of such a failure is so "infinitesimal", as a result of the 20 multiple layers of safeguards employed, that the risk is generally acknowledged 21 nationally and internationally to be acceptable from a public interest perspective 79 . That 22 explains why the presence of large diameter high pressure natural gas transmission 23 pipelines is commonplace in urban settings across North America. That includes many 24 existing pipelines, which have long been under the direct jurisdiction of the National 25 Energy Board.

26 The incomplete nature of the intervener analysis in terms of true "risk" assessment is as 27 misleading as it is deficient. As Mr. Drake explained to Mrs. Perry, consequences may 28 be unacceptable while risk is acceptable.

29 8T12191. MR. DRAKE: If I could, just for a second. I think that's a 30 very pertinent question that you're asking and it may be worth a while 31 just to slow down for a second here.

32 12192. What is acceptable? That question is actually quite germane 33 and it's not an unusual question. It's a question that all of these 34 communities, behind us on these photographs, have wrestled with. 35 And I think it is a question that the national consensus standards and 36 the international standards have wrestled with at great length. I think 37 the term "acceptable" is, has the risk been bridled?

38 12193. Certainly the consequences are unacceptable and very high 39 and I think the question that's really germane here is the level of effort.

76 Exhibit B-40-a, page 10,. 77 Exhibit B-40-a, page 5. 78 For example, see 8T12193; 10T14822. 79 10T14816-18; 10T14776-83.

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1 Has a level of effort been marshalled that's diligent to protect that 2 consequence? And the national standards have wrestled with that at 3 great length.

4 12194. And the point is that when you come into a consequence 5 environment, such as this, which certainly is a high consequence 6 environment that you must step up your level of diligence. You must 7 match that consequence with a commensurate or greater level of effort 8 and I think that is a part of the conversation here as well. Is that the 9 standards organizations have gone to great length to provide 10 significantly greater levels of protection to the public because the 11 consequence is quite unacceptable.

12 12195. When we look at that, I think you see the risk - - if you look 13 mathematically, as many here at the table might agree, would be, risk 14 is a product of the likelihood of an event and the consequence, well the 15 consequence is going quite high. Are you offsetting that consequence 16 with a commensurate or greater level of reduction in the likelihood? 17 And I think that is - - that is the measure of diligence here that we are 18 looking for.

19 12196. So when the term "acceptable" comes up, it's not is it okay 20 that someone is injured. It's in the net effect of are you marshalling 21 more than a commensurate level of diligence as measured by these 22 consensus standards to offset that consequence?

23 12197. I think - - I'm sure that as the questioning goes on here we'll 24 get into very specific kinds of things about third-party damage and 25 corrosion and all these kind of defects and things that cause pipelines 26 to be compromised and I'm glad to talk to those things at length about. 27 We're not only meeting those national standards, we're exceeding 28 them, and that is to accord you the greatest possible level of 29 confidence that we can that this pipe is protected. And that you, 30 commensurately, are protected."

31 With Ms. Eldridge-Thomas, Mr. Drake went on to indicate that failures of large diameter 32 gas transmission pipelines in urban environments are "almost non-existent". 80 Dr. 33 Bercha reinforced the point with Mr. Gould:

34 10T14776. DR. BERCHA: And as I've said a number of times, but it's 35 an important concept, risk is a compound measure of - - on the one 36 hand, the probability of occurrence of an event, and on the other hand, 37 the severity of the consequences.

38 He went on to discuss the relative risk of distribution and transmission lines including, 39 with respect to the latter, the following:

80 9T13518.

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1 14779. DR. BERCHA: Whereas for the proposed transmission line, 2 the probability of failure is infinitesimally small. And this is something 3 that hasn't really been dealt with, because it's shall we say on the 4 favourable side of the equation.

5 14780. It's been attested to by Mr. Drake and by myself that we 6 have many layers of protection to avoid any sort of failure of the 7 transmission line.

8 14781. And, as has certainly been amply brought out by Mr. 9 Ruffman, beside you and others, the consequences in the instance of 10 a failure of a transmission line are significantly larger, yeah, for sure. 11 That has been amply discussed.

12 He concluded as follows:

13 14782. But the resultant risk, nevertheless, is extremely low…"

14 It is abundantly clear that to arrive at a proper and reasoned conclusion, one must 15 acknowledge the compound nature of "risk" assessment. In assessing risk, it is also 16 important to recognize the multiple layers of protection that have been built into the 17 construction and operation of large diameter high pressure natural gas pipelines in 18 urban settings.

19 The Emera Brunswick witnesses were very open and transparent about the multiple 20 layers of defence against any of the suggested threats to prevent them from ever 21 surfacing 81 . Mr. Drake and Dr. Kiefner discussed that with Mr. P.B. Court first, in terms 22 of the location of such pipelines in and around railway operations 82 and, later, in the 23 context of anaerobic corrosion 83 . Dr. Kiefner testified that it would take an excavator in 24 excess of 109 tons to puncture the proposed pipeline given its wall thickness 84 .

25 Dr. Kiefner also had a related discussion with Mr. Burgess respecting the Gas Research 26 Institute study conducted in the 1980s relating to railroads and gas transmission lines 85 . 27 In terms of the puncture resistivity, Dr. Kiefner's studies are attached to the Reply 28 Evidence 86 . Both Dr. Kiefner and Mr. Drake afforded Mr. Burgess some perspective on 29 the likelihood of a third party puncture in light of the wall thickness and pipe toughness 30 criteria selected for the Brunswick Pipeline. As Dr. Kiefner indicated, there is no 31 backhoe in common use in Saint John which could puncture the Brunswick Pipeline.

81 8T11792. 82 8T11574-621. 83 8T11781-94. 84 8T11924. 85 9T13372 – 73. 86 Exhibit B-40-a, Attachments 4, 5 and 6.

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1 In fact as Mr. Drake observed, to puncture this pipeline it would take an earth excavator 2 "…much bigger than a house" something more typically found "…in a mining operation. 3 It is that big". 87

4 That kind of perspective helps to make clear why the pipe proposed to be used by 5 Brunswick Pipeline within Saint John "…can prevent puncture from 99.5% of available 6 track equipment in North America". 88 The potential for a third party puncture causing 7 the failure of the Brunswick Pipeline within Saint John, therefore, might only be of 8 concern if a mining excavator bigger than a house was discovered within the Saint John 9 City limits operating near the pipeline…a circumstance which could not occur 10 unobserved due to the daily patrols of the pipeline conducted by the Emera Brunswick 11 staff 89 .

12 When questioned about "acceptable" individual risk levels to members of the public, Dr. 13 Bercha was clear that no fatalities are acceptable. The term "acceptable" is simply 14 used to reflect societal norms for activities that entail some risk. Indeed, virtually any 15 human activity entails risk. As Dr. Bercha testified: “the risk of any fatalities are 16 extremely low. The number is a very, very low number. The pipeline is a very safe 17 system. So no fatalities are acceptable by any means, but the risks of the fatalities are 18 within levels that are generally deemed to be acceptable". 90

19 Dr. Bercha summarized the concept of risk acceptability as follows:

20 10T14816. DR. BERCHA: Briefly then, acceptable risk levels are levels 21 that have generally been accepted by various regulators nationally and 22 internationally. And in the case of third party facilities and risk to -- 23 essentially involuntary risk to the members of the public, generally a 24 risk of casualty -- an annual probability of casualty to persons that are 25 actually exposed, which is at a level of one in one million per year or 26 less is considered insignificant, and that's really the level to which I 27 refer.

28 14817. On the other end, in the second point, we've indicated a level 29 that's intolerable, and that would be a level generally agreed to be one 30 in 10,000 per year of a specific individual casualty. That -- anything at 31 or above that would be considered intolerable. Between the one in a 32 million and one in 10,000 is what is kind of called the grey region, and 33 that is certainly a region of debate.

34 14818. However, all the risks we've quantified here fall below that 35 one in a million level, so our -- you know, in most jurisdictions, they 36 would be considered insignificant." 91

87 9T13397 – 98. 88 9T13390 89 9T13486. 90 8T12189. 91 10T14816-18.

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1 Emera Brunswick has made many commitments to meet the greater level of effort 2 required in areas of high consequence. These are the multiple layers of protection to 3 which the witnesses referred in evidence including:

4 1. Exceedance of Onshore Pipeline Regulations and CSA Design Code 5 requirements 92 6 2. Integrity Management Plan 93 7 (i) free locate service 8 (ii) 24 hour per day, 7 days per week monitoring 9 (iii) line marker signs 10 (iv) aerial patrol 11 (v) leakage surveys 12 (vi) corrosion protection systems 13 (vii) inline inspection 14 3. Security Management Plan 94 15 4. Public Awareness Program 95 16 5. Gas Odorization – adding Mercaptan to the natural gas to provide citizens 17 with an olfactory warning of any gas release 96 18 6. Immediate closure of Line Block Valves on rapid pressure loss without 19 prior field confirmation 97

20 A number of these layers of protection are discussed in Section 7 "Operations" of this 21 Argument-in-Chief.

22 4.3 Comparable Pipelines

23 As stated in the Reply Evidence 98 , there are many examples of large diameter, high 24 pressure pipelines located in urban areas and in close proximity to critical infrastructure, 25 residential and commercial developments, schools, hospitals, shopping malls and other 26 public facilities. Indeed, the high pressure Saint John Lateral has been operating 27 incident free in the City of Saint John since 2000.

28 Questions were raised by the intervenors regarding the comparability of these examples 29 to the Brunswick Pipeline. As stated during cross-examination, these examples are 30 very comparable because they could, in the case of a full rupture, produce similar mass 31 flow rates 99 . The mass flow rates are directly related to the amount of gas escaping

92 8T12197;10T15000; 10T16002;10T16083. 93 9T12691; 9T13804. 94 9T13414. 95 9T13804. 96 Exhibit B-40-a, page 7. 97 Exhibit B-40-a, page 7. 98 Exhibit B-40-a, Attachment 2; Exhibit B-40-b, Maps. 99 10t14324; 10T14480-99; 10T15624.

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1 from a ruptured pipeline over time. Both the QRA 100 and the Accufacts Report 101 note 2 that the consequences of the rupture event are directly related to the mass flow rate.

3 Since the cited examples are sited in similar locales and would have similar failure 4 consequences, there can be no argument that they are comparable to the proposed 5 Brunswick Pipeline.

6 4.4 Conclusion

7 The evidence demonstrates that the Emera Brunswick Pipeline will be a safe, state-of- 8 the-art pipeline. While much attention in the hearing was focused on the consequence 9 of a pipeline failure, the record reflects the care and attention that has gone into 10 preventing such a consequence. As such, the risk (a compound measure of probability 11 and consequence) of the Brunswick Pipeline is well within societal norms. Emera 12 Brunswick respectfully submits that the Brunswick Pipeline will not pose a significant 13 risk to the citizens of Saint John. While Emera Brunswick understands their concerns, 14 perceptions that the pipeline is unsafe cannot be supported by the facts, including 15 decades of experience across Canada and North America.

16 5. CONSULTATION

17 This section of the Argument-in-Chief addresses Issues 6 and 7 and Factors 1-10.

18 5.1 Introduction

19 An extensive consultation was conducted, commencing in mid-2005. It is important to 20 note that Emera Brunswick's consultation efforts will also continue through the 21 construction and operation phases. As discussed below, a variety of consultation 22 methods were used, according to the specific audience being reached. A significant 23 amount of hearing time was devoted to discussions on the methods of consultation 24 used by Emera Brunswick.

25 Some sections of the NEB Act 102 identify prescriptive measures for public consultation. 26 Actual notice is not a requirement at the certificate stage, inside or outside the corridor. 27 Section 3.3 of the NEB Filing Manual does not identify how the proponent must carry 28 out consultation, but specifically states that: “Applicants are responsible to justify the 29 extent of consultation carried out for each application.” The Filing Manual provides 30 further guidance, which Emera Brunswick followed in its consultation efforts. 31 Nevertheless, the Applicant exercised considerable efforts to ensure that all those 32 located within the corridor were contacted directly, while those located beyond the 33 corridor would receive general public notification, including open houses, mailings and 34 other commonly used means of notification 103 .

100 Exhibit B-1-d. 101 Exhibit C-23-12. 102 See, for example, Section 34. 103 3T2908-11; 4T4340-41; 4T4855-56; 5T6251; 5T6275; 5T7261.

Emera Brunswick Pipeline Company Ltd. December 1, 2006 GH-1-2006 Argument-In-Chief Page 24

1 A number of corridor changes were undertaken based on the initial consultation 2 efforts 104 . Emera Brunswick has committed that consultation will not stop with the 3 selection of the corridor or filing of the Application 105 , but that it will continue through the 4 development of the Detailed Route within the preferred corridor, and the Operations 5 phase of the Project.

6 The general description of the Consultation Program Principles and Goals are identified 7 in the Application 106 . Emera Brunswick utilized many methods to provide information to 8 interested parties, and to gain input from those parties. The methods consisted of:

9 • open houses; 10 • newspaper advertisements; 11 • radio spots; 12 • 1-800 phone number; 13 • email address; 14 • project website; 15 • newsletters, including a corridor map delivered to every mailing address in 16 Saint John and the communities along the proposed corridor; 17 • site visits; and 18 • one-on-one and group meetings.

19 All of the above are listed as examples in the Filing Manual as potential consultation 20 methods. These methods have also successfully been used in Maritime Canada by 21 M&NP on the Mainline and the various laterals and expansion projects, including the 22 Saint John Lateral.

23 The Filing Manual also suggests distinct consultation methods and practices are 24 required to deal with different groups such as landowners, the general public, 25 governments, Aboriginal groups, regulatory agencies and other interested parties. It is 26 clear that the consultation program was successful based on the results to date 107 , but 27 Emera Brunswick’s consultation efforts for each of the above groups are presented 28 below to further illustrate the comprehensive nature of its efforts.

29 5.2 Landowners

30 Right of Way ("RoW") staff has contacted landowners within the preferred corridor. The 31 majority of those landowners (approximately 89%) after having talked to RoW staff and 32 having any questions answered, provided the proponent and its consultants with 33 permission to allow further technical studies on their properties 108 . Emera Brunswick

104 2T1920-22; 2T1932. 105 4T5048-49. 106 Exhibit B-1-a, page 23, Section 3.1. 107 3T2908-11; 3T2966-69; 8T11202; 8T11205-07. 108 3T2961-63.

Emera Brunswick Pipeline Company Ltd. December 1, 2006 GH-1-2006 Argument-In-Chief Page 25

1 has opened 717 individual landowner files including both landowners directly or 2 indirectly affected by the Project. 109

3 5.3 The General Public

4 The Brunswick Pipeline staff held a series of three open houses in September 2005 to 5 introduce the public to the preliminary preferred corridor. These open houses were well 6 advertised and well attended. The open houses were staffed with project team experts 7 who had a wide variety of mapping available to show the public where the proposed 8 corridor was located, including high resolution photographs showing streets and building 9 locations 110 . These open houses took place within approximately two months of the 10 contract being signed between Repsol and M&NP, which formally kicked off the Project. 11 Following the open houses, the project team received significant feedback through its 12 project email address, 1-800 phone line, letters and phone calls to the general company 13 line 111 . In response to this input, the project team hosted a supplemental open house in 14 Saint John in December 2005 to bring forward potential route Variants around 15 Rockwood Park, to provide further project information to the public on the Project in 16 general, and to gain additional feedback from the public. This open house was again 17 well advertised and well attended.

18 Consultation meetings continued following the filing of the Application in May, 2006, and 19 through the summer of 2006. Brunswick Pipeline staff have also participated in local 20 community open houses in Millidgeville, Milford and Champlain Heights, and has 21 attended three meetings of the Canaport TM LNG Liaison Committee in the Red Head 22 area. Project Team members also have conducted site tours along the preferred 23 corridor with members of the public and their elected representatives.

24 A number of intervenors suggested there was conflicting information, or that affected 25 parties were not being properly notified. However, it should be noted that little, if any, 26 evidence was provided to back up these claims. It was clear from testimony that the 27 witnesses were not able to comment on some of the allegations of conflicting 28 information as the full context of discussions was not provided 112 . The allegations 29 regarding non-intervenors who may or may not have been affected by the preferred 30 corridor should be given little weight as Emera Brunswick could not properly respond to 31 such allegations without having prior knowledge of the details of the concerns. Emera 32 Brunswick notes that to the extent the public sought further information on the Project, 33 Emera Brunswick was at all times available to answer any further enquiries and 34 encouraged such feedback through its website and 1-800 number. Emera Brunswick 35 will continue to apply this 'open door' policy to its consultation efforts during construction 36 and operation of the Brunswick Pipeline.

109 4T3904. 110 5T7273-74; 5T7278. 111 1T1244-46. 112 5T7071-72; 8T10835-36; 10T15143.

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1 5.4 Governments

2 Emera Brunswick contacted all the Maritime Provinces (New Brunswick, Nova Scotia 3 and Prince Edward Island) to make them aware of the Project 113 . A copy of a typical 4 presentation was provided in the evidence 114 . The Nova Scotia Department of Energy 5 was an active intervenor in the hearing. From its information requests and cross- 6 examination, Emera Brunswick understands that its main interests related to the Project 7 are in the areas of access to gas and transparency. Emera Brunswick has addressed 8 access issues as discussed in Section 11.3 of this Argument-in-Chief. Transparency 9 has been addressed by the full disclosure of the toll arrangements between Emera 10 Brunswick and Repsol.

11 As noted above, extensive consultations took place with The City of Saint John and, 12 with respect to Rockwood Park specifically, the Saint John Horticultural Association. 13 Both of these groups withdrew from active participation at the public hearing, based on 14 the meetings held with Emera Brunswick and the commitments made with respect to 15 construction, operation and maintenance of the pipeline within their direct areas of 16 responsibility. In the context of The City of Saint John, Emera Brunswick's consultations 17 about safety and impacts within the municipality with the Fire Chief and others were 18 detailed and productive. These consultations concluded with the City passing a 19 resolution expressing its support for the Application and the preferred corridor 115 .

20 Meetings were also held with officials from the Town of St. Stephen; and project staff 21 have maintained contact with representatives of the Town of St. Stephen and the Town 22 of St. George, following delivery of community newsletters in the area.

23 5.5 Aboriginal Groups

24 Throughout project development, there were consultations regarding the Brunswick 25 Pipeline with all New Brunswick First Nation organizations and communities recognized 26 by the Government of Canada 116 . The engagement of an Aboriginal Relations Manager 27 and organization liaison staff facilitated the consultation, which included extensive direct 28 meetings with the aboriginal organizations and public open houses 117 .

29 To augment information gathered during the Aboriginal open houses regarding the 30 traditional use of lands and resources within the preferred corridor, an Aboriginal firm, 31 Aboriginal Resource Consultants, was contracted to carry out a Traditional Ecological 32 Knowledge (“TEK”) study. This study gathered Maliseet and Mi'kmaq historical 33 knowledge of land, water and resource uses by Aboriginal people for traditional 34 purposes in the Project area.

35 The TEK Study recommends continued site visits and continued communication of 36 project information with First Nations Leadership and community members. Emera

113 Exhibit B-17-l, Response to EGNB IR No. 1.3(c)(d). 114 Exhibit B-17-m. 115 Exhibit C-67-6; Exhibit C-3-2. 116 8T11170; 8T11172. 117 Exhibit B-1-a, Section 3.2.3.

Emera Brunswick Pipeline Company Ltd. December 1, 2006 GH-1-2006 Argument-In-Chief Page 27

1 Brunswick Pipeline has stated on the record that it will do so. An update on the 2 implementation of the TEK study recommendations was provided in response to NEB 3 IR No. 2.19 118 .

4 As a result of these consultations, Emera Brunswick was able to conclude formal 5 agreements with both the UNBI and MAWIW 119 . The agreements include provisions for 6 environmental monitoring and protection of Aboriginal heritage and cultural resources. 7 They also encourage capacity building within First Nations through training, 8 scholarships, and organizational development funding. Aboriginal inclusion 9 commitments made by Emera Brunswick will lead to contracting opportunities for First 10 Nation businesses. The agreements also contain provisions for the continued 11 engagement of liaison staff, oversight committees, and ongoing meaningful dialogue.

12 The conclusion in the Brunswick Pipeline EA, that there will not be any direct interaction 13 between the Brunswick Pipeline Project and areas of traditional land and resource use 14 that cannot be mitigated, has been confirmed through the First Nation consultation 15 program and the TEK Study. Therefore, it is anticipated that there will be no significant 16 adverse environmental effects to current use of land and resources for traditional 17 purposes by aboriginal persons located in the area to be traversed by the pipeline.

18 This conclusion applies to all aboriginal persons. While the Passamaquoddy Tribe is 19 not recognized under the Indian Act in New Brunswick, and therefore, were not included 20 in the formal consultation process, should any of its members carry out traditional use 21 activities in the preferred corridor, they would be similar uses, with similar resources, as 22 the Mi’kmaq and Maliseet People of New Brunswick. There would not be significant 23 adverse effects to current use of lands and resources for traditional purposes, if any, by 24 members of the Passamaquoddy 120 .

25 5.6 Regulatory Agencies

26 Emera Brunswick has had, and will continue to have, numerous consultations with 27 provincial and federal agencies including the New Brunswick Departments of 28 Environment, Transportation and Natural Resources, Environment Canada, Department 29 of Fisheries and Oceans, Health Canada, and Natural Resources Canada 121 . These 30 consultations included meetings, teleconferences and letter correspondence to address 31 various issues regarding the Project. Emera Brunswick will continue to consult with 32 provincial and federal agencies in the course of developing additional project 33 information (e.g. Environmental Protection Plan) and various permit approvals for site- 34 specific work (e.g. watercourse crossing approvals). Emera Brunswick has addressed 35 the comments and concerns of a number of agencies, including the New Brunswick 36 Technical Review Committee 122 , as well as Environment Canada, Health Canada and 37 Natural Resources Canada 123 .

118 Exhibit B-23. 119 Exhibit B-45; Exhibit B-40-a, page 16. 120 EH-2-2002, Comprehensive Study Report, at Section 2.2, subsection 6.2.1.2.1 and Appendix C. 121 5T7126-27; 7T10319; 7T10322; 7T10435; 8T11197-99. 122 Exhibit B-32-b. 123 Exhibit B-44-a, Response to NEB IR No. 3.1.

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1 5.7 Other Interested Parties

2 Emera Brunswick contacted at least thirteen industry stakeholders, including Sable 3 producers, M&NP shippers, and the two Maritime local distribution companies (LDCs) 4 (Heritage Gas (N.S.) and EGNB (N.B.)) to make them aware of the Project 124 . A copy 5 of a typical presentation was provided in the evidence 125 . A number of these 6 stakeholders were active intervenors in the hearing. Heritage Gas "supports the Emera 7 Brunswick Application to bring this critical new long-term source of gas supply to the 8 Region." 126 In doing so, Heritage Gas notes the opportunity the Project presents for 9 Heritage Gas to grow its franchise and introduce more Nova Scotians to the benefits of 10 a clean burning, safe, reliable and reasonably priced new fuel source 127 . The results of 11 Emera Brunswick's consultations with EGNB are addressed in Section 7.1 of its Reply 12 Evidence 128 and in Section 11.3 of this Argument-in-Chief.

13 Two industry stakeholders having a significant interest in the Project are New Brunswick 14 Power and JD Irving and its affiliated companies. New Brunswick Power confirmed 129 15 that the issues of concern to it are being addressed in consultation with Emera 16 Brunswick and withdrew from active participation in the public hearing. JD Irving and its 17 affiliated companies own 54 properties within the preferred corridor. Emera Brunswick 18 has had numerous meetings with this group and is working to address any concerns or 19 issues 130 .

20 5.8 Conclusion

21 The record reflects the significant time and attention spent, and which will continue to be 22 spent, on consultation efforts. The success of these efforts is reflected in the 23 agreements reached with many and diverse stakeholders on issues directly affecting 24 them.

25 When Madame Chair asked Mr. McAdam if he would have carried out the consultation 26 program differently had he the chance to do it again, Mr. McAdam was unequivocal:

27 12T19640. MR. MCADAM: No. I stand by our consultation process.

28 19641. We became involved in this project in May and have worked 29 very diligently to reach out to the public and a number of project 30 stakeholders.

31 19642. We set up a project website, re-established the 1-800 32 number, have issued a variety -- well, two different community 33 newsletters to the entire community as well as – the entire community 34 of Saint John.

124 Exhibit B-17-l, Response to EGNB IR No. 1.3(c)(d). 125 Exhibit B-17-m. 126 Exhibit C-9-2. 127 Exhibit C-9-2. 128 Exhibit B-40-a, pages 18-19. 129 Exhibit C-14-2. 130 5T7131-32.

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1 19643. We held open houses in response to sensing that there was 2 site-specific or sort of neighbourhood-specific concerns to give people 3 the opportunity to, you know, further voice those concerns and make 4 sure we understood them. We did kind of neighbourhood route walks 5 with specific individuals.

6 19644. And at the same time as we were undergoing that sort of 7 broader public work, we had consultations with other stakeholders that 8 would include potential shippers, pretty much every significant party 9 who is a gas consumer or shipper in the region, with the governments, 10 with the municipal government, with the First Nations groups in the 11 province, and I'm very pleased with the success of our results in 12 coming to terms with the number of parties that we've talked about.

13 19645. NB Power, a critical stakeholder, a number of other 14 intervenors in the run- up to the hearing, in the run-up to this hearing, 15 indicated that they were satisfied with how things were going and our 16 relationship and decided not to actively participate in the hearing, and 17 that includes the City of Saint John, includes the Horticultural Society, 18 another key stakeholder, as well as parties like Nova Scotia Power and 19 Heritage Gas New Brunswick.

20 19646. And I'm pleased with the progress we made with Enbridge 21 who expressed in their evidence that they wanted to see this additional 22 supply reach the market.

23 19647. So, you know, we did a lot of work that certainly went well 24 beyond the required public notice and public meeting requirements of 25 the National Energy Board. We will continue to work in partnership 26 with this community and we're very pleased with the progress we've 27 made to date.

28 Emera Brunswick’s corporate commitment to the community is clear, as Mr. McAdam 29 indicated to Ms. Higgins:

30 12T18799. MR. MCADAM: I think I can only say that Emera takes its 31 reputation and its commitments very seriously and is cognizant that 32 this is its first significant business in New Brunswick and intends to be 33 in New Brunswick for a long time, build a productive partnership with 34 this community and other communities in New Brunswick, and we have 35 a full understanding of what kind of behaviour it’ll take to achieve that.

36 Emera Brunswick respectfully submits that the Proponent’s consultation process was 37 comprehensive and inclusive and will continue to be so.

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1 6. ENGINEERING AND CONSTRUCTION

2 This section of the Argument-in-Chief addresses Issues 2, 3, 6 and 7 and Factors 1-4 3 and 6. Environmental mitigation of construction impacts, including noise and blasting, 4 are discussed in Section 8.3 of this Argument-in-Chief.

5 6.1 Impacts on City of Saint John Infrastructure

6 The proponent stated that “The pipeline is expected to have no significant impact on the 7 city’s infrastructure 131 . Any construction-related effects will be short-lived and 8 remediated”. Exhibit B-59 shows how any minor financial burden that may be imposed 9 on the City pales in comparison to the anticipated additional municipal taxes. Moreover, 10 the City of Saint John has now indicated its support for the preferred route which 11 suggests any potential impacts on its infrastructure have been mitigated to the City's 12 satisfaction 132 .

13 The proponent has committed to working with the City of Saint John to ensure the 14 design, construction and operation of the proposed pipeline do not impinge on the 15 existing infrastructure 133 . Allowances are made for future infrastructure if it can be 16 identified in advance so as not to hamper the installation of that infrastructure 134 . 17 Discussions with the City and owners of private infrastructure are now taking place as a 18 component of the detailed routing process 135 .

19 6.2 Blasting Disturbances and Damage

20 Panel 4 explained the process for blasting bedrock to remove sharp grades and to 21 prepare the trench for excavation. They also explained the process for ensuring that 22 vibrations given off by the blasting do not cause damage to homes and other 23 structures 136 and how these homes and structures are surveyed before and after 24 blasting to determine if damage was caused 137 . They also explained the process by 25 which a home-owner could bring suspected blasting damage to Emera Brunswick’s 26 attention 138 .

27 The proponent demonstrated the commitment and means to mitigate blasting damages. 28 The proponent made further commitments to respond to blasting damage should it 29 occur.

30 6.3 Conclusion

31 Construction concerns raised during the hearing focused on potential impacts to City 32 infrastructure and potential impacts of blasting activities. Emera Brunswick has 33 addressed these concerns in its evidence and commitments. Emera Brunswick submits

131 Exhibit B-17-h, Response to Ivan Court IR No. 1.11. 132 Exhibit C-67-6. 133 8T11390; 9T12874; 9T13768. 134 8T11542. 135 8T12147; 9T13768. 136 8T11957; 9T12595-96. 137 8T11492. 138 8T11469.

Emera Brunswick Pipeline Company Ltd. December 1, 2006 GH-1-2006 Argument-In-Chief Page 31

1 that the record demonstrates that the Brunswick Pipeline will be constructed in a 2 prudent manner, properly addressing potential impacts to the affected public.

3 7. OPERATIONS

4 This section of the Argument-in-Chief addresses Issues 2, 3, 6 and 7 and Factors 1-4, 6 5 and 7.

6 7.1 Emergency Response

7 7.1.1 General

8 With respect to public notification in the event of an emergency, Emera Brunswick will 9 work with first responders and EMO’s to adopt, promote, or help develop methods to 10 notify the public 139 . Emera Brunswick will be part of any such initiative, and would 11 promote and encourage it but, as is generally the case with public emergency, primary 12 responsibility lies with first responders 140 . These public notification measures will be no 13 different than for an emergency or incident related to other infrastructure within a 14 municipality.

15 The Emergency Response Plan (ERP) will be a collaborative effort and its development 16 will start early in 2007 141 . The ERP will be developed and filed with the NEB well in 17 advance of obtaining final leave to open 142 .

18 The process will be to establish a detailed route, do a risk study to establish the size of 19 the Emergency Planning Zone (EPZ) and then develop a database of parties within the 20 EPZ 143 . The EPZ is the area around an incident where public protection activity is 21 directed or employed 144 . The size of the EPZ is determined through a technical study, 22 not through community involvement 145 .

23 Evacuation plans are typically led by first responders and EMO’s 146 . Administration of 24 the ERP and continuing education for first responders and EPZ residents is at the cost 25 of the operating company 147 .

26 Although an ERP has no direct relationship to the failure mechanisms of a pipeline 27 incident, and is a tactical response to the consequence, it has the benefit of ongoing 28 education for EPZ residents and first responders148 .

139 8T11674. 140 8T11675; 9T13239. 141 8T11988. 142 8T12053. 143 8T12068-69; 9T12282. 144 9T14187. 145 10T14904. 146 8T12000. 147 8T12051; 9T13723. 148 10T14534.

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1 7.1.2 Areas with Limited Access Points

2 Evacuation is often not the best course of action in response to a pipeline incident. 3 Often, the safest option is for people to remain sheltered in their homes and 4 businesses 149 . If there were a need for first responder access to attend to an 5 emergency not associated with the pipeline incident, Emera Brunswick fully expects the 6 first responders would use alternate means of access 150 . Although Emera Brunswick 7 would work collaboratively with first responders to identify these limited access areas 8 and consider alternate routes, this is a first responder led responsibility 151 . Neither the 9 NEB's own Onshore Pipeline Regulations nor the Industry Codes have seen the need to 10 restrict construction of a pipeline in areas where there is limited access 152 . Emera 11 Brunswick also notes that first responders have the ability to access property in 12 emergencies in ways that would not normally be available to the public 153 . The 13 arrangement reflected in the letter with J.D. Irving, for example, ensures that should City 14 of Saint John fire trucks, police cars or emergency vehicles appear at the J.D. Irving 15 plant gate urgently seeking access to the Milford area, they will be able to readily 16 access that community 154 .

17 7.2 Closure of Line Block Valves

18 Gas Control would be alerted of an issue by a rate of pressure change alarm 155 . It 19 would realistically take five to six minutes to detect a rapid pressure drop on the SCADA 20 system, make a decision to shut in the line, and initiate closure passwords 156 . This 21 initial estimate is somewhat subjective 157 .

22 To ensure that loss of power or communications does not impact control center 23 response, back up power and communications systems ensure that pressure and flow 24 monitoring at value sites and related communications to transmit system information 25 can continue. This is often referred to as “redundancy” 158 .

26 7.3 Security Management

27 Emera Brunswick will ensure that its Pipeline Security Management Plan meets the 28 requirements of the amended OPR-99 regulations and associated guidance notes. The 29 current security plan has many of the components that Emera Brunswick anticipates will 30 be part of the future rule making 159 .

149 8T11997; 9T12792; 9T13044-47. 150 9T12793. 151 9T12798. 152 9T12792; 9T12798-99; 9T13044; 10T15195. 153 9T12792 154 Exhibit B-44-a, Response to NEB IR No. 3.5. 155 8T11700. 156 9T14194-217. 157 9T14204. 158 8T11926; 8T12090. 159 9T13414-17; 10T14972.

Emera Brunswick Pipeline Company Ltd. December 1, 2006 GH-1-2006 Argument-In-Chief Page 33

1 The proponent does not dismiss the security threat 160 even though it is very low 161 . 2 Indeed, the expert hired by the Friends of Rockwood Park noted, in a paper he authored 3 and referenced in his evidence, that pipelines are not generally terrorism targets 162 .

4 Emera Brunswick essentially has double coverage on the security file. Emera 5 Brunswick takes advantage of the support and expertise that it has available to it 6 through St. Clair Pipelines and its affiliates within the Duke family of companies in the 7 US, as well as the work that it does in liaison with Canadian federal and provincial 8 departments 163 .

9 7.4 System Integrity – In-Line Inspection Frequency

10 To address the suggestion that pipeline defects could go unnoticed before they cause 11 pipeline failures, Panel 4 pointed out that by the time the pipeline is first put into 12 operation, it will have been thoroughly checked for defects in the pipe body, coating and 13 welds. Further, following construction, pressure testing and a full visual inspection, in- 14 line inspection tools will be used to locate construction related defects such as dents 15 and ovalities 164 . The proponent will run the first operational in-line inspection tool 16 roughly three years after the pipeline is put into operation 165 . Ongoing in-line inspection 17 will be consistent with industry standard, approximately every seven to ten years 166 .

18 Supported by Dr. Kiefner’s evidence 167 , Mr. Drake stated that the most credible 19 accelerated corrosion growth scenario would not lead to corrosion related failure for 15 20 to 20 years 168 .

21 As part of the construction and commissioning of the pipeline, Mr. Mayer discussed with 22 Mr. Ruffman the considerable efforts expended to baseline or benchmark the pipeline's 23 condition in order that subsequent changes, if any, can be monitored and, as 24 necessary, corrected:

25 9T13995. MR. MAYER: Well, let me help you there just to make sure 26 we get the record clear as far as the baseline surveys go.

27 13996. At the end of the hydrostatic testing portion of our 28 construction program we would run a calliper tool looking for dents, 29 ovalities, any kind of features like that in our pipe.

30 13997. This is shortly after we've basically visually inspected the 31 whole pipe for gouges, metal loss, et cetera.

160 10T15516. 161 9T12369. 162 9T12371; 9T13432; 10T14976. 163 10T15533-36. 164 9T13995-9T14002. 165 9T13700. 166 8T11734. 167 Exhibit B-40-a, Attachment 6. 168 10T14411; 10T15413-15.

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1 13998. It's all new material, it's all there open and visual to us. So, 2 we don't have to look for external metal losses, internal metal loss. 3 That's all been checked out in the factory, et cetera, just a few months 4 before we welded it all together.

5 13999. And so from a baseline perspective there's no metal loss, 6 we've done --by that time we would have done one hundred percent of 7 non-destructive examination of the welds, so, you know, we've picked 8 up any cracks or any problems there are with the welds.

9 14000. We run a calliper tool looking for dents, ovalities, things that 10 are stressing the pipe, and we'll repair anything along the line, you 11 know, during the course of construction so that when we're putting it 12 into service it's -- basically its baseline is right there. Day one when it 13 goes in service it's already had its baselining.

14 14001. And I know the operations group always talk about a 15 baseline survey as being their first true operational pig run, but let's not 16 forget that when it goes in service on day one it's really a baseline, 17 defect- free pipeline right from that point.

18 14002. And I'm just reminded that we also do coating checks as well 19 as far as survey, the construction program, coating checks when the 20 pipe is still above ground before we lower it in the ground, and after we 21 backfill it like one of the first things we do after it goes in operation is 22 do a check of the coating through Pearson Survey or other means like 23 that.

24 Accordingly, there are detailed baseline reference points from which the multiple tools 25 and techniques can be used to detect changes. As such, the proposed in-line 26 inspection frequency is properly established to detect corrosion well before a pipeline 27 failure might occur.

28 7.5 ATV Access Control Measures

29 Emera Brunswick will employ a variety of ATV access control measures. Such 30 measures are typically tailored to the specific site conditions, are often very much 31 dependant on the preference of the landowner, and often depend on the nature of the 32 traffic and the persistence of the riders in the area. It must be remembered that Emera 33 Brunswick must respect private property rights of landowners in dealing with the 34 easements held on their property.

35 Specific measures employed in the past include page wire fences, heavier gauge chain 36 link fences, steel pipe fences, guardrail material, concrete median material, boulders, 37 and large timber. These measures have had varying levels of success.

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1 Emera Brunswick continues to consult with landowners and other pipeline companies to 2 develop access control measures that make sense and are effective 169 .

3 Emera Brunswick will respond to complaints from landowners related to ATV access 4 and other issues such as illegal dumping 170 . Each scenario will be reviewed on a case- 5 by-case basis to determine whether or not it is directly related to the pipeline and to 6 determine liability 171 . Emera Brunswick, however, should not be expected to remedy 7 conditions which existed prior to its coming into the area 172 .

8 Emera Brunswick has committed to:

9 1. address the issue of unauthorized ATV right-of-way access; 10 2. reassess the effectiveness of the initial response; and 11 3. refine its approach on an as-needed basis.

12 Based on the commitments made in this regard, and in light of Draft NEB Conditions 1 13 and 2, Emera Brunswick believes that Draft NEB Condition 9 is duplicative and 14 unnecessary.

15 7.6 Gas Quality

16 Gas quality parameters will be defined in a transportation tariff and Emera Brunswick 17 will have gas monitoring equipment at the meter station to continuously monitor these 18 parameters 173 . The pipeline is thus protected from the unlikely possibility that inferior 19 quality gas could enter and cause a failure.

20 7.7 Conclusion

21 Operational concerns raised during the hearing focused on emergency response, 22 security, integrity management and ATV RoW access. Emera Brunswick submits that 23 the record supports the conclusion that the Brunswick Pipeline will be operated in a safe 24 and reliable manner.

25 8. ENVIRONMENT

26 This section of the Argument-in-Chief addresses Issues 6 and 7 and Factors 1-10.

27 8.1 Consideration of Alternatives

28 8.1.1 "Alternatives To"

29 In Exhibit A-3, the Board outlined the scope of the Project and the factors to be 30 considered as part of the environmental assessment of that Project. In accordance with

169 9T13447-50. 170 9T13469. 171 10T15350. 172 10T15345-54. 173 9T13687.

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1 Section 16 of the Canadian Environmental Assessment Act , the Board mandated the 2 consideration of alternatives to the project. "Alternatives to" a project are defined as 3 functionally different ways to meet the project need and achieve the project purpose. 4 As noted in the Canadian Environmental Assessment Agency’s Operational Policy 5 Statement EPO/2 - 1998, Addressing “Need for”, “Purpose of”, “Alternatives to” and 6 Alternative Means” under the Canadian Environmental Assessment Act (OPS), the level 7 of assessment of alternatives to the project should reflect the more conceptual nature of 8 the "alternatives to" at this stage of the process.

9 As noted by Mr. McAdam during his testimony, Emera Brunswick considered doing 10 nothing or using existing infrastructure that would move gas from Mispec to the U.S. 11 border. Emera Brunswick's Panel 1 acknowledged that there were no other 12 economically or technically feasible alternatives other than pipeline alternatives, but that 13 no existing pipeline alternative connected to Mispec Point 174 . Emera Brunswick's Panel 14 5 stated that, while it is possible to transport LNG supply by ship, truck or train, such 15 options did not compare to the cross-border pipeline option in terms of economic 16 feasibility and environmental appropriateness 175 . Further, as Mr. Ribbeck testified, at 17 this point in time Repsol would not be willing to pursue any other transportation 18 proposal 176 .

19 Utilizing the existing M&NP Saint John Lateral for transporting gas from the Canaport TM 20 LNG facility to the M&NP U.S. Interconnect was not a technically or economically viable 21 option. It was too small and the pressures within the City were too low to accommodate 22 the flows proposed for the Project 177 . It must be noted that the Repsol contract 23 requirement of 750,000 Dth/d is more than four times the capacity of the Saint John 24 Lateral 178 . Moreover, there is no pipeline whatsoever between the terminus of the Saint 25 John Lateral and Mispec Point. In addition, an outage related to replacing the existing 26 M&NP Saint John Lateral with a larger pipeline could have a significant impact on 27 M&NP's customers 179 . The existing Saint John Lateral, therefore, was not a viable 28 means of meeting the Project's objectives.

29 8.1.2 "Alternative Means"

30 In addition, in its Project scoping document, the Board mandated that alternative means 31 of carrying out the Project that are technically and economically feasible and the 32 environmental effects of any such alternative means be considered. The Board also 33 stated that the environmental assessment must demonstrate the consideration of 34 alternative means including an alternative marine route for the pipeline south of Saint 35 John that may necessitate a disposal at sea permit 180 .

36 The OPS defines "alternative means" as the various ways, that are technically and 37 economically feasible, that can be implemented or carried out, including alternative

174 1T850-51; 1T859. 175 12T18461-62. 176 12T18485-88. 177 11T17785; 12T17993-97. 178 Exhibit C-13-3, page 2. 179 Exhibit B-1-a, page 31. 180 Exhibit A-3.

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1 locations, routes and methods of development, implementation and mitigation. 2 Consistent with its obligation to provide information with respect to alternative means of 3 carrying out the Project, Emera Brunswick evaluated "alternative means", including 4 various potential corridors and pipeline diameters.

5 In addition to the substantial amount of written evidence submitted in relation to the 6 corridor selection process, a significant portion of the hearing was devoted to the cross- 7 examination of Emera Brunswick witnesses on the selection of the preferred corridor 8 versus other potential options, such as the marine alternatives and the Rockwood Park 9 variants.

10 A number of alternative pipeline corridors were considered, including four main urban 11 corridor alternatives and three main rural corridor alternatives. Both the Application and 12 the Environmental and Socio-Economic Assessment outline corridor selection process 13 in detail 181 and Emera Brunswick's Panel 1 repeatedly described the corridor selection 14 process during the oral portion of the public proceedings 182 . The preferred corridor was 15 selected on the basis of safety, constructability, minimizing project cost, impacts to 16 project schedule and environmental constraints.

17 The environmental constraints used to select the preferred corridor for the Brunswick 18 Pipeline are similar to constraints used previously in corridor selection studies for the 19 M&NP Mainline and Lateral projects and are consistent with the environmental and land 20 use features to be considered in route selection studies for linear facilities, as 21 recommended by the New Brunswick Department of Environment. As was repeatedly 22 indicated by Emera Brunswick's Panel 1, the corridor selection process involved a 23 balancing of all of the criteria in determining the preferred corridor 183 .

24 In response to concerns expressed during public consultation with respect to the 25 preferred corridor through Rockwood Park, Emera Brunswick identified two possible 26 Variants to the preferred corridor that would, to the greatest extent possible, avoid 27 Rockwood Park. While both of the Variants around Rockwood Park are acceptable 28 based on a preliminary environmental and constructability review, in comparison to the 29 preferred corridor, each would impact approximately 50 additional properties and a 30 number of residents. As well, the Variants are each longer than the section of the 31 preferred corridor through Rockwood Park and would be either creating new right of 32 way or potentially paralleling existing and future roads. The proposed corridor through 33 Rockwood Park is preferred because:

34 • it is along the existing electric transmission right-of-way; 35 • it avoids impacts to residences; 36 • it does not alter the existing land use; and

181 Exhibit B-1-a, Section 4.3; Exhibit B-1-f, Section 2.0. 182 1T133-34; 2T1725-27; 3T3317-18; 4T4081-83; 4T4102-03; 5T5630; 5T6465; 5T7224-30; 8T10840-41. 183 2T1725-27.

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1 • it is the shortest option which would result in the least temporary 2 construction impact 184 .

3 The witnesses for Environment Canada agreed that using existing linear corridors will 4 reduce environmental impacts 185 :

5 1319862. DR. HANSON: I won't dispute your figures but I actually 6 think that the amount of proposed -- routing of the proposed corridor is 7 greater than 30 per cent, which would be on existing corridors, whether 8 they be the Saint John Lateral or the International Power Line, and it's 9 Environment Canada's perspective that any time you can route or 10 place the new pipeline contiguous or parallel with an existing linear 11 right-of-way, that the environmental impacts are reduced.

12 Further, as Mr. McLelland testified:

13 4T5073. MR. McLELLAND: I think what we've said, sir, is that we'll 14 be taking a 30 meter wide easement for the pipeline. We fully expect, 15 and through our current negotiations with New Brunswick Power, who 16 owns the power corridor through Rockwood Park, that we'll be able to 17 overlap our easement with theirs, thereby minimizing the amount of 18 actual clearing that is required, to something less than 30 meters.

19 It is notable, that the two thirds of the preferred corridor follows existing or planned 20 RoW's (95 km out of 145 km) and approximately one quarter (35 km) runs along New 21 Brunswick Power RoW's 186 .

22 Marine corridor alternatives were also investigated. The corridor selection team first 23 identified a broad corridor starting at Mispec Point on the east side of Saint John with an 24 area starting at Saints Rest Marsh down to Coleson Cove as the west boundary. From 25 this broad corridor, two marine corridor alternatives were identified. The multi- 26 disciplined corridor selection team assembled to evaluate corridor alternatives included 27 support by specialized consultants in horizontal directional drilling and marine pipeline 28 engineering and construction 187 .

29 Project Consulting Services, Inc. ("PCS") performed a feasibility study of a proposed 30 crossing of the outer Saint John Harbour. PCS concluded that, while it might be 31 possible to construct a pipeline across the outer Saint John Harbour from a marine 32 construction standpoint, it might not be practical given the higher costs, risks and longer 33 project durations. PCS further concluded that the marine project would be of very high 34 risk in an extremely hostile marine weather environment where no other pipelines of a 35 similar nature exist 188 . Similarly, AK Energy Services evaluated the feasibility of various 36 HDD crossings, including marine HDDs related to the marine alternatives (i.e., HDDs

184 Exhibit B-1-a, Section 4.3.2.2. 185 13T19862-64. 186 Exhibit B-1-a, Table $-1, page 39. 187 Exhibit B-1-a, Section 4.3.2.3.1. 188 Exhibit B-1-d, PCS Study, page 5 of 37.

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1 #4, 5, and 7 in the AK Feasibility Assessment of Horizontal Directional Drills for Duke 2 energy's M&N LNG #4 Project ). Each of these marine crossings, and associated 3 alternate routes, were viewed as being extremely challenging with the potential to 4 encounter cost overruns, schedule delays and possible failure 189 . The Jacques 5 Whitford Environmental Assessment also noted potential environmental effects related 6 to a marine crossing 190 . As outlined in Emera Brunswick's Reply Evidence, the 7 incremental hazards associated with a marine crossing included: construction risks; 8 safety risks; environmental risks; schedule risks; and cost risks. Additional pipeline 9 operation risks and commercial risks were also identified 191 .

10 The marine corridor was rejected as it would not be practical due to the higher safety, 11 technical, cost, schedule and environmental risks as compared to the preferred corridor. 12 The corridor selection team concluded that the difficulties associated with the marine 13 crossing of the harbour made the marine crossing an impractical alternative. The team 14 reached this conclusion despite Mr. Proper's observation that:

15 4T5227. From a business perspective, our firm is in the business of 16 assisting clients to develop pipelines. The majority of our business is 17 in the development of marine pipelines, so it's not common for us to 18 recommend not to build marine pipelines.

19 As noted in Emera Brunswick's Reply Evidence at page 12, the likely costs and 20 scheduling delays associated with a marine crossing were intolerable. That is, the 21 marine pipeline was not economically feasible. The preferred corridor has significantly 22 lower safety risk, has minimal technical challenges, is less costly, has minimal schedule 23 risk and has no significant, adverse, long term environmental impacts, which cannot be 24 mitigated with known technology and methods 192 .

25 Mr. Horst Sauerteig introduced evidence challenging Emera Brunswick's assessment of 26 the marine option. In addition to answering Mr. Sauerteig's Information Requests 27 regarding the marine alternatives 193 , Emera Brunswick submitted a Reply to Intervenor 28 Marine Crossing Evidence, which included a technical response to Mr. Sauerteig’s 29 critique of Emera Brunswick’s evidence with respect to a potential marine corridor 194 . 30 Furthermore, Emera Brunswick's Panel 1 testified that the team evaluated Mr. 31 Sauerteig's suggested corridor and that the applied-for corridor remained preferable. It 32 should be remembered that there is an inherent flexibility in assessing alternative 33 means in relation to a project; while the consideration of factors listed in Section 16 34 must be meaningful, there is no duty to study all alternative methods of carrying out a 35 project: Alberta Wilderness Association v. Express Pipelines Ltd. (1996), 137 D.L.R. 36 (4 th ) 177 (F.C.A.) at para. 12. Nevertheless, it was evident from the testimony of Emera

189 Exhibit B-1-d, AK Study, pages 10, 17 and 26. 190 Exhibit B-1-f, pages 12-14. 191 Exhibit B-40-a, pages 12-14. 192 Exhibit B-1-a, pages 35-36; Exhibit B-40-a, pages 11-14. 193 Exhibit B-17-qq. 194 Exhibit B-40-a, Attachment 12.

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1 Brunswick's Panel 1 that Emera Brunswick had reviewed Mr. Sauerteig's proposal and 2 determined that it was not preferred over the applied-for corridor 195 .

3 The evidence is clear that even if the costs and schedule were more favourable, the 4 basic risk and uncertainty involved, combined with the significance of the related effects 5 upon project viability dictated that a viable marine option simply did not exist. The minor 6 issues raised by Mr. Sauerteig were not critical to the review of risk, uncertainty and 7 effects nor were they determinative of the result.

8 In addition to considering various corridors, the proponent considered the use of NPS 9 24, NPS 30 and NPS 36 pipe. The NPS 24 and NPS 36 options were eliminated after 10 considering the necessary contract flow rate and MOP as well as the associated 11 costs 196 .

12 For environmental assessment purposes, the proponent properly discharged its 13 responsibilities with respect to the consideration of "alternative means" of carrying out 14 the Brunswick Pipeline Project.

15 8.2 Environmental Assessment

16 The Environmental Assessment (EA) 197 is comprehensive and complete 198 . It 17 concludes that the Project is not likely to cause significant adverse environmental 18 effects199 . The scope of the Project was to construct a stand-alone pipeline from the 19 Canaport TM LNG Terminal to the Canada/US border with a new border crossing 200 . The 20 scope of the Project was defined in the NEB Scoping Document 201 as was the scope of 21 the factors to be considered, and this scope was appropriate 202 . Potential socio- 22 economic effects in Nova Scotia relating to the availability of gas in Nova Scotia as a 23 result of the Project do not meet the definition of an “environmental effect” under the 24 CEAA and therefore do not warrant consideration within the EA 203 . Rather, these 25 broader effects and the significance of access to a new source of gas supply are 26 discussed in Section 3 "Purpose, Need and Justification" of this Argument-in-Chief.

27 In accordance with the NEB Filing Manual (Section 4.2.2), alternatives to the Project 28 were considered within the EA and no technically and economically feasible alternatives 29 to the Project were identified 204 . Alternative means of carrying out the Project in the 30 form of alternative urban and rural corridors were evaluated and documented in the EA. 31 A more detailed discussion of "alternatives to" and "alternative means" appears above 32 in Section 8.1 in light of the extent of the related discussion at the hearing. It is 33 important to note, however, that that discussion takes place in the context of CEAA, as 34 opposed to the NEB Act.

195 7T9971-72. 196 Exhibit B-1-a, page 31. 197 Exhibit B-1-f. 198 7T10241. 199 Exhibit B-1-f, page 490. 200 1T877-80; 1T926. 201 Exhibit A-3. 202 7T10610; 7T10612; 7T10614-17; 7T10621-22. 203 8T10692-95. 204 1T850.

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1 The cumulative environmental effects section of the EA is comprehensive and 2 complete. The assessment of cumulative environmental effects included, among the 3 other projects and activities as listed in the EA, the Canaport TM LNG Facility and 4 associated shipping. Emera Brunswick is not aware of any proposed changes to the 5 design or capacity of the Canaport TM facility as a result of the Brunswick Pipeline 6 Project 205 , and thus the proposed Brunswick Pipeline project itself will not result in 7 increased shipping or emissions. Dr. Thomas' concerns about cumulative effects and 8 LNG tanker traffic were predicated on a faulty factual premise. Dr. Thomas contended, 9 without evidentiary support, that tanker traffic would increase as a result of the Repsol 10 contracted throughput on the Brunswick Pipeline. Since there is no evidence of 11 increased tanker traffic beyond that already considered in the Canaport TM LNG 12 Environmental Impact Statement, it is submitted that LNG tanker-traffic can have no 13 incremental or cumulative environmental effect on the environmental assessment of the 14 Brunswick Pipeline 206 .

15 Just prior to the commencement of the hearing, Irving Oil announced it was considering 16 a feasibility study for a second refinery in the Saint John area. Consideration of a 17 possible new oil refinery within the cumulative environmental effects section of the 18 Brunswick EA is not appropriate as the CEAA only requires that an EA consider projects 19 that have been or will be carried out, and at this time the refinery is only an idea 207 . If 20 the refinery does continue through an environmental review process, it will be the 21 responsibility of the proponent of the refinery project to consider potential emissions 22 from the Brunswick Pipeline within the cumulative environmental effects section of its 23 environmental assessment.

24 The significance criteria for each valued environmental component ("VEC") (e.g., 25 noise 208 , as well as other VECs) have been developed in consultation with regulatory 26 authorities 209 , have been used by Jacques Whitford in previous CEAA-based projects 27 and EAs and New Brunswick based environmental assessments, and are acceptable to 28 regulatory authorities.

29 The 2006 detailed field surveys outlined in the EA have been completed for all field components 30 except archaeology, and the results of these surveys will be submitted to the NEB and 31 appropriate regulatory authorities prior to January 2007 210 . The archaeology surveys are ongoing 32 and will be completed this year or in the spring of 2007. It is anticipated that the results of these 33 surveys will be submitted to the NEB and Archaeological Services Unit of New Brunswick prior 34 to April 2007 211 . Archaeological work undertaken in the spring of 2007 will be reported as it is 35 completed.

205 4T4997; Exhibit B-17-rr, Response to Leland Thomas IR No. 1.43. 206 13T19869-86; 4T4978-5040; Ruling at 4T5408-27. 207 3T2666. 208 8T11119. 209 7T10233. 210 8T11193-97. 211 8T11067-75.

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1 8.3 Environmental Mitigation

2 8.3.1 Introduction

3 Emera Brunswick has consulted, and will continue to consult, with the appropriate 4 regulatory authorities within the context of the EA and associated mitigation measures 5 to be implemented for the Project 212 . Emera Brunswick will follow up on its 6 commitments with respect to mitigation and environmental effects and follow-up 7 monitoring in the EA, as well as those made throughout this hearing process, and is 8 accountable to the NEB and regulatory authorities in this respect 213 .

9 8.3.2 Archaeology

10 The archaeological survey work outlined in the EA is underway. One archaeological 11 site has been recorded to date and the mitigation of that site has been initiated, in 12 consultation with the Archaeological Services Unit ("ASU") of the Province of New 13 Brunswick. This site, at Dennis Stream, has been visited by members of the MAWIW 14 Environmental Response Team 214 , who actively participated in the excavations. 15 Further, reports of a Native burial ground at Point Pleasant were noted and this area 16 was identified for archaeological testing. Testing is ongoing and results will be 17 reported 215 to the UNBI, MAWIW, the NEB and ASU. To date, no evidence of any 18 burials has been encountered 216 .

19 8.3.3 Air Quality

20 Emissions of conventional air contaminants, greenhouse gases and ozone associated 21 with Project construction, and operation and maintenance are minimal 217 , and mitigation 22 will be implemented to address issues such as dust 218 . The amount of trees and other 23 vegetation to be cleared during Project construction is minimal and any loss of carbon 24 sequestration will be not significant 219 . It has also been acknowledged by regulatory 25 authorities that the removal of vegetation through Rockwood Park will not affect air 26 quality 220 .

27 8.3.4 Blasting

28 The potential environmental effects of blasting will be mitigated through a variety of 29 measures, such as the use of blast mats to prevent flying debris 221 . Pre-blast surveys 30 will be conducted for structures such as homes 222 and cemeteries 223 within a 200 m

212 5T7126-7; 7T10319; 7T10322; 7T10435; 8T11197-99. 213 5T6812-4; 7T10247; 7T10252. 214 8T11093. 215 7T10068-9; 7T10073; 8T11091-92; 8T11096-97. 216 8T11096. 217 5T6738-54. 218 5T6793-94. 219 5T6779-80. 220 13T20080. 221 5T5658-59. 222 5T7360-61. 223 5T7319.

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1 radius of planned blasting activities to ascertain baseline conditions and verify, with 2 post-blast review, that blasting does not adversely affect these structures.

3 8.3.5 Contaminated Sites

4 Detailed field studies will be undertaken for areas in which the potential to encounter 5 contaminated soils exists as part of the detailed route process. In the event that 6 contaminated sites are identified, comprehensive mitigation will be implemented to 7 ensure no residual adverse environmental effects, as has been demonstrated through 8 past pipeline construction through the City of Saint John 224 . In addition, the presence of 9 any contamination is not anticipated to adversely affect the structural integrity of the 10 pipe 225 .

11 8.3.6 Noise

12 Comprehensive noise mitigation for the Saint John River horizontal directional drilling 13 (HDD) activity 226 will be implemented as necessary to ensure no residual adverse 14 environmental effects and to minimize disruption to daily living for residents of Milford 15 and Pokiok 227 . Emera Brunswick has committed to undertaking a detailed noise 16 mitigation study and developing detailed noise mitigation and monitoring plans specific 17 to the areas potentially affected by the HDD activity, and will submit these plans to the 18 NEB and Health Canada at least 90 days prior to the commencement of the proposed 19 HDD activities 228 . A program will be in place for members of the public to contact 20 representatives of the company and express any concerns about noise, and Emera 21 Brunswick is committed to addressing those concerns229 . Emera Brunswick commits 22 that temporary relocation will only be offered as a means of mitigation as a last resort 230 .

23 Emera Brunswick has consulted with Health Canada regarding noise associated with 24 the HDD activity and is in agreement with Health Canada’s comments and 25 recommendations on this issue 231 .

26 Emera Brunswick is confident that its mitigation measures will ensure its operations do 27 not conflict with the standards reflected in the applicable bylaws within the context of the 28 construction of the Project 232 . Emera Brunswick notes that the Board has extensive 29 experience with HDD operations and, together with the input provided by Health 30 Canada, has established acceptable standards governing this activity in draft Condition 31 13. (See comments below).

224 5T7283-86. 225 5T7027-29. 226 Exhibit B-1-f, pages 234-35; Exhibit B-11-cc. 227 3T3001-05; 4T4736-39; 7T9407. 228 8T11102-06. 229 4T4740; 5T7356-57. 230 7T9318-20. 231 Exhibit E-2-6; 8T11157. 232 7T9275-80; 7T9282-83.

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1 8.3.7 Watercourse Crossings

2 All watercourses intersected by the Project will be protected through the implementation 3 of comprehensive mitigation appropriate to the crossing method 233 , and the appropriate 4 permits will be obtained from federal and provincial government authorities 234 . Emera 5 Brunswick has consulted with the Atlantic Salmon Federation regarding the presence of 6 Atlantic salmon spawning and rearing habitat in watercourses intersected by the Project 7 and will continue to work with the Federation to ensure the protection of this species 235 . 8 An environmental assessment of a contingency crossing method with a mitigation plan 9 will be developed for the Saint John River crossing and submitted to the NEB at least 90 10 days prior to the start of the HDD activity proposed for this crossing 236 .

11 8.3.8 Wetlands and Rare Species

12 Emera Brunswick will consult with Environment Canada, as well as provincial regulating 13 agencies, regarding mitigation of potential project interactions with wetlands 237 . The 14 detailed routing process will attempt to avoid open water wetlands 238 . Emera Brunswick 15 will undertake to rectify any damage to wetland habitat for species of concern as a 16 result of unauthorized ATV access 239 . Based upon previous pipeline experience with 17 both the Saint John Lateral and the Mainline, Emera Brunswick considers the 5 year 18 monitoring program to be adequate 240 . Following the completion of this monitoring, a 19 wetland compensation plan 241 will be developed in consultation with Environment 20 Canada and the Province of New Brunswick 242 . Emera Brunswick also notes, in this 21 regard, Environment Canada's evidence that previous pipeline trenching construction in 22 wetlands in this region have given rise to only "…localized, short-term effects" 243 .

23 The environmental studies to date have revealed no limiting habitat for rare species 24 within the preferred corridor 244 . A mitigation and monitoring plan for rare species for the 25 construction phase of the Project will be prepared 245 , following the completion of the 26 detailed route process. Environmental personnel on the RoW during clearing activities 27 will monitor for rare species and additional mitigation will be implemented if 28 necessary 246 . Emera Brunswick will work with Environment Canada regarding 29 mitigation measures for specific species247 including the avoidance of nesting birds 248 .

233 5T6818-25; 5T6828-34; 5T6870. 234 5T6848-55; 5T6859. 235 5T6826-27. 236 5T6897-98; 5T6900-01; 5T6926-29. 237 7T10390. 238 7T10412. 239 7T10417. 240 7T10420-22; 7T10424. 241 7T10430; 7T10432-33. 242 7T10435. 243 13T20164-72. 244 7T10204; 7T10178. 245 7T10303-7; 7T10309. 246 7T10301. 247 7T10283; 7T10319; 7T10322. 248 7T10326-28.

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1 8.4 Conclusion

2 Alternatives to the Project, and alternative means of carrying out the Project, including a 3 marine route, were fully and properly assessed by Emera Brunswick. An in-depth EA 4 was carried out for the Project that concluded the Project is not likely to cause 5 significant adverse environmental effects. Mitigation techniques for potential 6 environmental effects have been carefully considered and appropriate commitments 7 have been made. Emera Brunswick respectfully submits that the Application and 8 supporting evidence have addressed all environmental issues and concerns in a 9 complete and responsible manner.

10 9. ROCKWOOD PARK

11 Detailed field studies for the proposed corridor have been undertaken within Rockwood 12 Park249 . Further, through a comprehensive review of existing documentation, as well as 13 consultation with City of Saint John Park officials, the stewards of the Park and 14 members of the public, Emera Brunswick and its consultants have developed a 15 thorough knowledge of the Park 250 , in particular the activities that take place in the area 16 of the proposed corridor. The area of the proposed corridor sees limited use by the 17 public, with only a few paths crossing the proposed pipeline corridor.

18 Emera Brunswick has committed to developing a specialized construction plan for the 19 Park in collaboration with the stewards of the Park and other stakeholders 251 . Based on 20 a thorough knowledge of pipeline construction methods, it has been determined that 21 construction, including blasting, within the Park can take place with no significant 22 adverse environmental effects to its many features (e.g., lakes, wildlife habitat, caves, 23 and zoo) 252 . It is anticipated that there will be no interaction with dragonfly habitat 253 or 24 rare species 254 within the Park. The potential environmental effects of the Project were 25 considered in great detail in the EA, and it was determined that the potential 26 environmental effects on species within the Park, including plant, animal and insect, are 27 not significant255 .

28 The environmental studies and mitigation 256 regarding the protection of the 29 environment, as well as the protection of members of the public using Rockwood Park, 30 further the preservation of the current activities within Rockwood Park. The pipeline will 31 not change the current use of the Park 257 . As well, participation of the Park 32 stakeholders regarding the restoration of the proposed RoW in Rockwood Park 258 may 33 serve to enhance the current activities taking place within the Park.

249 5T7004-05; 7T10077-80. 250 7T10095-96. 251 2T1612-15; 4T5083-85; 5T6303; Exhibit B-40-a, page 15, Section 5.2.2. 252 5T7116-19; 7T10207; 7T10209; 7T10184-89; 7T10192. 253 7T10211-12. 254 7T10178. 255 4T4431. 256 7T10083. 257 5T6320. 258 7T10082.

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1 10. CORRIDOR SELECTION

2 This section of the Argument-in-Chief addresses Issues 6 and 7 and Factors 1-10.

3 The Preliminary Preferred Corridor was selected in the summer of 2005 259 based on 4 specific selection criteria 260 , and finalized prior to submitting a Project Description to the 5 NEB. The criteria are 261 :

6 1. safety; 7 2. constructability; 8 3. minimizing project cost; 9 4. impacts to project schedule; and 10 5. environmental constraints.

11 The Preferred Corridor follows good planning practices in paralleling existing utility 12 corridors 262 which allows for the overlapping of easements, thus reducing the need to 13 clear 30 m of easement in all areas 263 . Environment Canada supports such an 14 objective since it reduces environmental impacts 264 . The corridor was selected for one 15 natural gas pipeline, with no provision for additional pipeline or other infrastructure 265 . 16 Emera Brunswick submits that an objective review of all routing evidence points to the 17 clear conclusion that the preferred corridor is the right route for the Brunswick Pipeline.

18 Emera Brunswick has proposed two Variants around Rockwood Park, but believes that 19 the corridor as submitted through Rockwood Park following the existing utility corridor is 20 the Preferred Corridor 266 . Further submissions on the Preferred Corridor appear above 21 in Section 8.1.

22 As part of its due diligence work, Emera Brunswick commissioned a Risk Analysis on 23 the Preferred Corridor. The results of the Risk Analysis were that risks to the individual 24 are in the insignificant risk region 267 , thus confirming that the Corridor selection was 25 appropriate and prudent. More detailed submissions on pipeline safety appear above in 26 Section 4.

27 As detailed in Section 8.1 above, a decision not to pursue the marine crossing was 28 made at an early stage in the corridor selection process. Despite the fact it might 29 technically have been constructible, the combined effect of the many safety, schedule, 30 cost, environmental and technical challenges, which are detailed in Emera's evidence, 31 made clear it was not viable. For example, the high currents and low visibility in the 32 Saint John Harbour represent significant risk for divers engaged to install and/or

259 1T1244-46. 260 2T1721-23; 5T7224-30. 261 Exhibit B-1-a, Sections 4.3.2.1.2 and 4.3.3.1.2. 262 2T1549; 4T4972; 13T19862-64. 263 2T1563-65; 4T5081-87. 264 13T19862-64. 265 2T1547; 4T4969-70. 266 1T1299-1302. 267 4T4043-44.

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1 maintain the pipeline. The marine crossing, in fact, continued to be looked at as the 2 project developed, from the perspective of both the pipeline owner and the shipper, but 3 the same challenges remained confirming the prudence of the initial decision. Updated 4 information on costs, schedule and the like only confirmed that decision. Emera 5 Brunswick, supported by its sole shipper Repsol Canada, has made the decision that it 6 will not build the pipeline across Saint John Harbour. 268 There are simply too many 7 risks involved with significant consequences that could seriously damage the project's 8 viability.

9 In its analysis, the proponent had the benefit of the extensive experience of the Duke 10 Energy Gas Transmission staff and their consultants (including Project Consulting 11 Services, Inc., AK Energy Services, and Jacques Whitford). Their operating experience 12 in North America and internationally should provide the Board with considerable comfort 13 as to their cost estimates and their feasibility assessments. Emera Brunswick questions 14 whether the intervenor witnesses suggesting a marine crossing have sufficient 15 experience with the realities of the present market for marine pipeline installation. 269

16 The evidence of intervenors suggesting a marine crossing appears to assume that the 17 pipeline and its shipper face no cost or scheduling constraints. This is an incorrect 18 assumption. The success of the Canaport TM LNG Terminal is very dependent upon the 19 commercial arrangements between Repsol Canada and Emera Brunswick, and 20 achieving a timely in-service date in accordance with the current land route construction 21 schedule for completion of the Brunswick Pipeline. As the evidence discloses, a 22 conclusion was reached early on that the risks associated with a marine crossing in this 23 case, including the likely costs and scheduling delays associated therewith, were 24 intolerable 270 .

25 In a competitive marketplace, certainty of costs and timing are both crucial 26 considerations. As noted in Attachment 12 of Emera Brunswick's Reply Evidence, the 27 costs associated with such a crossing would be significantly in excess of those for the 28 onshore preferred corridor. Beyond the higher cost estimate is a greater risk of 29 significant cost overrun. The scheduling challenges and risks of considerable delay 30 associated with a marine crossing were also not consistent with the Project's key 31 objectives.

32 Detailed Route selection within the Preferred Corridor, if the project receives 33 certification, will follow subject to the normal NEB process for that phase of the 34 Project 271 . The corridor is wider than 100 m in some of the urban areas to allow for 35 increased flexibility in detailed routing 272 .

36 11. PART IV MATTERS

37 This section of the Argument-in-Chief addresses Issue 8.

268 Ex. B-40, pages 11-14. 269 Ex. B-40-a, Attachment 12. 270 Ex. B-40-a, pages 11-14. 271 1T1322; 2T2014-16; and 4T4313-14. 272 4T5382.

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1 11.1 Group 2 Status

2 Emera Brunswick's application for Group 2 status was not challenged by any intervenor 3 evidence. This is consistent with the reality that the Brunswick Pipeline is a prime 4 candidate for Group 2 status. Emera Brunswick respectfully submits that, as testified by 5 Messrs. McAdam and Knoll 273 , the fact the Brunswick Pipeline has one shipper, with a 6 25 year negotiated toll agreement in place with that shipper, makes Group 1 toll 7 regulation unnecessary and inappropriate for the Brunswick Pipeline. Regulatory and 8 cost efficiencies, both for Emera Brunswick and the Board, clearly support the 9 designation of Emera Brunswick as a Group 2 Pipeline. Group 2 status only confers 10 light-handed financial regulation. It does not impair or diminish the Board oversight of 11 the safe construction and operation of the pipeline in any way.

12 11.2 Precedent and Toll Agreements

13 The 25 year precedent and negotiated toll agreements between Emera Brunswick and 14 its sole shipper, Repsol, were filed unredacted with the Board and interested parties 274 . 15 The terms of these Agreements attracted little attention from intervenors, although the 16 Province of Nova Scotia and the Board explored some of the toll agreement's provisions 17 with respect to potential future service to third parties. Emera Brunswick explained that 18 it would offer transportation services to bona fide customers under mutually agreeable 19 terms and conditions 275 . Any such customers would know the toll and terms of service 20 applicable to Repsol, as they have been disclosed in full. While the toll may be adjusted 21 should the final Project capital cost fall outside of certain negotiated levels 276 , Emera 22 Brunswick indicated that it would be agreeable to publicly filing the final Project capital 23 cost with the Board 277 .

24 Questions were asked under cross-examination respecting the Rockwood Park 25 mitigation terms in the negotiated toll agreement. The clause in the negotiated toll 26 agreement ties in to a clause in Section 9B(i) of the Precedent Agreement. Together, 27 the two clauses require Repsol to reimburse Emera Brunswick for any costs associated 28 with Rockwood Park mitigation and further for Repsol to carry that cost directly as 29 opposed to having Emera Brunswick "buy it out" and have it included in the capital cost 30 for toll determination purposes. The two clauses only apply in the event that a 31 Rockwood Park mitigation expense is incurred during the reimbursement phase of the 32 Precedent Agreement. To date no expense of that type has been incurred. The $5.35 33 million endowment committed to the City of Saint John and the Saint John Horticultural 34 Society for the benefit of the Saint John and area community at large is not Rockwood 35 Park mitigation. The endowment is payable after the reimbursement phase of the 36 Precedent Agreement and thus the cost would simply become part of the cost base for 37 the toll calculation 278 .

273 12T18256-64. 274 Exhibit B-21-a; Exhibit B-21-b. 275 Exhibit B-17-ff, Response to Nova Scotia IR No. 13.1. 276 12T19222-28. 277 12T19297-98. 278 12T19591-609.

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1 Mr. McAdam testified that as Repsol will fully pay for the Brunswick Pipeline, Repsol 2 has purchased all of the Brunswick Pipeline's initial capacity 279 . He confirmed three 3 options for third parties seeking service on the Brunswick Pipeline: (i) negotiate with 4 Emera Brunswick for capacity not required by Repsol; (ii) negotiate with Repsol for an 5 assignment of Repsol service; or (iii) negotiate with Emera Brunswick for expansion 6 capacity 280 .

7 While it is difficult to contemplate all potential future scenarios for service, the bottom 8 line is that should any potential shipper be unable to reach agreement with Emera 9 Brunswick over the applicable tolls or terms of service, it would have the right to have 10 the Board adjudicate the matter 281 . Indeed, it is for this very purpose that the Board's 11 Group 2 Guidelines require all Group 2 companies to include in their tariffs an 12 explanatory note advising potential shippers of their ability to bring a complaint to the 13 Board should they be unable to resolve toll and tariff issues with the pipeline 14 company 282 .

15 With the full disclosure of the toll and terms of service between Emera Brunswick and 16 Repsol, Emera Brunswick submits the Board, and interested parties, have access to all 17 the information they may require to exercise their rights with respect to a Group 2 18 transmission service provider. Further, the 25 year negotiated toll agreement provides 19 for the full recovery of the costs of the Brunswick Pipeline as well as a reasonable rate 20 of return. It is the negotiated toll agreement and associated firm service agreement, 21 guaranteed by Repsol's parent company, Repsol YPF, S.A. 283 , that make the Brunswick 22 Pipeline economically feasible. Emera Brunswick respectfully requests the Board's 23 approval of the negotiated toll agreement as it results in just and reasonable tolls.

24 11.3 Access – Interconnection Policy

25 Some intervenors, in particular the Nova Scotia Department of Energy ("Nova Scotia") 26 and EGNB, explored the terms under which Emera Brunswick would interconnect with 27 other customers and systems. Nova Scotia has indicated in its discussions with Emera 28 Brunswick that its concerns with the Brunswick Pipeline centred on access to the gas 29 supply and toll transparency 284 . As noted in Section 5.4 above, transparency has been 30 addressed by the full disclosure of the toll arrangements between Emera Brunswick and 31 Repsol.

32 Emera Brunswick has responded to EGNB's specific concerns regarding third party 33 access by providing certain assurances regarding EGNB's ability to interconnect with 34 the Brunswick Pipeline 285 . Mr. McAdam confirmed that such assurances would apply to 35 third parties, beyond EGNB 286 . Emera Brunswick's position is clear, it stands ready and 36 willing to accommodate requests from the Canadian market to interconnect directly with

279 12T19253. 280 12T19245-47. 281 12T19240. 282 NEB Memorandum of Guidance, Regulation of Group 2 Companies, Schedule B, page 1 of 2. 283 Exhibit B-21-a, Precedent Agreement, Schedule "C". 284 12T19148-49. 285 Exhibit B-40-a, pages 17-18. 286 12T19360-63.

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1 its system 287 . Indeed, Emera Brunswick welcomes such opportunities to enhance 2 access to gas for the Maritime Canadian market.

3 11.4 Conclusion

4 Emera Brunswick's request for Group 2 status and approval of its negotiated toll 5 agreement were not challenged in the hearing. The Brunswick Pipeline is an 6 appropriate candidate for Group 2 regulation in light of the fact that it has a single 7 shipper and a long-term negotiated toll agreement is in place with that shipper. Further, 8 Emera Brunswick has provided full transparency with respect to that tolling 9 arrangement. Emera Brunswick respectfully requests Board designation as a Group 2 10 company and approval of its negotiated toll agreement with Repsol.

11 12. LANDS ISSUES

12 This section of the Argument-in-Chief addresses Issues 6 and 7 and Factors 1-4.

13 Several residents requested that Emera Brunswick provide independent assurance 14 regarding the impact the presence of a natural gas transmission pipeline might be 15 expected to have on residential property values. There is no impact to property values 16 of homes adjacent to pipelines 288 , as confirmed by the study of Maritime specific areas 17 conducted by deStecher Appraisals 289 . It has also been confirmed that there is no 18 impact on insurance rates due to the presence of pipelines 290 . Indeed, Ms. Dawn 19 Baldwin contacted her own insurance company to test Emera Brunswick's evidence to 20 the effect that property insurance rates will not be affected by the presence of a nearby 21 natural gas pipeline. Ms. Baldwin's insurance company confirmed the company's 22 findings 291 .

23 The deStecher Appraisals study provides the most localized evidence of the lack of 24 impact natural gas pipelines have on property values. The study included a review of 25 properties in two residential areas near the M&NP Saint John Lateral and one near the 26 M&NP Halifax Lateral. With respect specifically to Saint John, the study reviewed 27 properties in the Bentley Crossing area that are encumbered by an easement for the 28 Saint John Lateral 292 . Further, the study notes that the development of the Bentley 29 Crossing subdivision in Saint John and the Miller Lake West subdivision in Halifax, 30 Nova Scotia both occurred after the pipelines were installed 293 . The conclusions of the 31 deStecher study were based, therefore, upon actual experience with high pressure gas 32 pipelines in Maritime Canada, and in the City of Saint John itself.

33 Emera Brunswick set forth its landowner commitments in its Letter of Commitments that 34 was filed as Exhibit B-10. Emera Brunswick will have a complaint resolution system in

287 Exhibit B-17-l, Response to EGNB 1.8. 288 4T4585; 4T5307. 289 Exhibit B-41-a; 5T6506-07. 290 3T3378-81; 3T3383-87; 3T3391. 291 Exhibit C-29-4;, page 6, item III. 292 Exhibit B-41-a, pages 20-22. 293 Exhibit B-41-a, page 20.

Emera Brunswick Pipeline Company Ltd. December 1, 2006 GH-1-2006 Argument-In-Chief Page 51

1 place to address any issues that are raised by landowners or the general public 294 . The 2 complaint resolution system and other land matters raised by intervenors are fully 3 addressed in the Letter of Commitments.

4 13. IRRELEVANCE AND LACK OF PROBATIVE VALUE OF ANADARKO’S 5 EVIDENCE

6 In pith and substance, the Anadarko evidence argues that the Board should deny the 7 Brunswick Pipeline application and force M&NP to hold an Open Season at which 8 M&NP would be required to negotiate a market-based (as opposed to a cost-based) 9 rate to support an expansion of the M&NP pipeline system 295 . The Anadarko corporate 10 evidence complains that M&NP has not granted it market-based tolls which are low 11 enough to compete with Repsol/Emera Brunswick. It also maintains that the Board 12 should confirm Anadarko’s qualification for a special toll that would recover incremental 13 M&NP costs and would make a contribution to existing system costs sufficient to allow 14 Anadarko to compete, presumably, with the rate it requests the Board to require M&NP 15 to negotiate with Repsol 296 .

16 In the Board’s Rulings 297 , it was made clear that there are no commercial arrangements 17 in place nor expected to be in place in the foreseeable future between Repsol and 18 M&NP which would underpin such an arrangement. The entire set of arrangements 19 contemplated by the Anadarko evidence, therefore, are hypothetical. The facilities and 20 related costs which would result from such an arrangement are also hypothetical. The 21 special toll Anadarko asks the Board to direct M&NP to negotiate with Anadarko is also 22 hypothetical.

23 The Board has previously determined that there was insufficient probative value to be 24 gained by requiring the other pipeline, M&NP, to provide such information. As the 25 Board stated in Ruling No. 6, “…the test for determining whether to compel a party to 26 answer IRs is whether the information is relevant, significant and is a reasonable 27 request in the context of the particular proceeding” 298 . In this case, the Board 28 determined that the hypothetical information Anadarko is seeking to prove its case, 29 failed that test.

30 The Board subsequently affirmed that, “…we are not assessing the relative economics 31 of the proposed project against any hypothetical project” 299 .

32 Several days later, the Board made clear what it considered relevant in terms of its 33 review of the burdens and benefits of the Brunswick Pipeline project and what it 34 considered to be outside the scope of this proceeding. The pertinent excerpt of that 35 Ruling appears below:

294 5T7343-52. 295 Exhibit C-4-9-b, page 21. 296 Exhibit C-4-9-a, pages 7-8. 297 Exhibit A-26, Ruling No. 6; 11T17126-36; 1T1134. 298 Exhibit A-26, page 2. 299 1T1134.

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1 11T17131. However, exploration of the benefits or burdens of a project, 2 which is not before the Board, is outside the scope of this proceeding; 3 that is, what the benefits would be of a different project, built by a 4 different company, involving altering of the M&NP Canada System to 5 transfer the supply from Canaport, the cost for doing so and the 6 benefits or burdens of such other project on other matters, such as the 7 ability of Nova Scotia's future potential supply sources to access the 8 market, are outside the scope of this proceeding.

9 17132. The speculative impact on the levels of tolls, on M&NP 10 Canada, if such a project were to be constructed are also not of 11 probative value to the Board, in assessing the benefits and burdens of 12 this Brunswick Pipeline Project.

13 17133. There is no evidence submitted that any such speculative or 14 hypothetical project would be constructive. Spending time exploring 15 these speculative and remote alternative projects is not of sufficient 16 probative value to the Board, in determining whether this project is in 17 the present and future of public convenience and necessity.

18 17134. Alternatives to the project raised, in the context of CEAA, 19 should not be used to delve into a detailed economic analysis of the 20 benefits and burdens of that alternative, as it is outside of the scope of 21 the Board's considerations under CEAA.

22 17135. Accordingly, a discussion of whether an alternative or 23 hypothetical project, which is not proposed before the Board, and how 24 that hypothetical project could potentially serve incremental natural gas 25 supply for the region, or affect future tolls on other pipelines is not 26 sufficiently tied to an assessment of the benefits and burdens of the 27 Brunswick Pipeline Project, and will not be permitted.

28 17136. With this direction, Mr. Roth, you may ask any further 29 questions that fall within this framework.”

30 In Emera Brunswick’s respectful submission, all of the Anadarko evidence falls outside 31 the scope of this proceeding. While limited portions of the evidence deal with Bear 32 Head LNG updates and a brief discussion of Anadarko’s version of “bypass”, all that 33 evidence is integral to its recommendation that the Board should force M&NP to 34 conduct Open Seasons, negotiate special tolls and alter the M&NP Canada system – to 35 have a different project constructed, built by a different company. Such a proposal is 36 speculative, hypothetical and remote.

37 The Board’s determination of what appears relevant to it in a review of the benefits and 38 burdens of the Brunswick Pipeline project clearly does not include the speculative tolls 39 and costs of the different hypothetical project Anadarko would have a different company 40 (M&NP) build for Repsol (…and Anadarko).

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1 The Anadarko corporate evidence describes a hypothetical project not before this Board 2 for consideration. It requests toll relief (despite the absence of a transportation 3 agreement), on a different pipeline than the one before the Board in this proceeding. 4 With respect, any M&NP toll related issues should be pursued in a proceeding properly 5 constituted to deal with such matters – not this one.

6 The Milne characterization of “bypass” is incorrect for the reasons outlined above. The 7 benefits and burdens of this Brunswick Pipeline project as currently framed and its 8 impact upon current pipelines, current tolls and demand/market issues, is discussed in 9 Section 3 “Purpose, Need and Justification” above.

10 Having regard to the Board’s Rulings on the scope of this proceeding, the rest of the 11 pre-filed evidence submitted by Mr. Milne, on behalf of Anadarko, is irrelevant and of no 12 probative value:

13 • his evidence with respect to the tolling of the M&NP system 300 lies outside the 14 scope of this proceeding;

15 • his consideration of a hypothetical pipeline from Mispec Point to Dracut 301 on 16 M&NP tolls and markets is irrelevant and lies outside the scope of this 17 proceeding;

18 • his analysis of the impact on M&NP tolls and markets if the Brunswick Pipeline 19 were hypothetically not a cross-border pipeline 302 is irrelevant and beyond the 20 scope of this proceeding; and

21 • his recommendations that certification of the Brunswick Pipeline be denied so 22 that the Board can direct M&NP to hold another open season and direct Repsol 23 and Anadarko to negotiate with M&NP 303 is out of scope and has no relevance 24 whatsoever to the Board’s evaluation of the public interest benefits of the 25 Brunswick Pipeline.

26 The recommendations of Anadarko, whose status as a prospective shipper on any 27 pipeline system in Canada, is speculative, are a transparent attempt to interfere with 28 market choice and the timely availability of the new Canaport TM LNG supply source. 29 Anadarko’s recommendation that the Application be denied pending the 30 commencement of some unsponsored process on a different pipeline designed solely to 31 enhance Anadarko’s ability to attract the LNG supplies it has been unable to secure to 32 date, is a request for relief which lies outside the scope of this proceeding.

33 Given the serious supply uncertainty in the Sable offshore, it would appear to be 34 contrary to the Canadian public interest to deny this opportunity to bring a new diverse, 35 long term supply to Maritime Canada by late 2008. Any delay would risk losing the

300 Ex. C-4-9-b pages 5-9. 301 Ex. C-4-9-b pages 9-11. 302 Ex. C-4-9-b pages 11-20. 303 Ex. C-4-9-b pages 20-21.

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1 window of opportunity in the anchor market and would risk the ability to supply Maritime 2 Canada demand in the near term.

3 Accordingly, Emera Brunswick notes that none of the Anadarko evidence falls within the 4 List of Issues or the Factors outlined as applicable to this Application.

5 14. COMMENTS ON DRAFT CERTIFICATE CONDITIONS (EXHIBIT A-40)

6 This section of the Argument-in-Chief addresses Issue 9 and Factors 1-10.

7 As a general comment, Emera Brunswick respectfully submits that the Board should 8 preface its conditions with the usual proviso: " Unless the Board otherwise directs…". 9 This provides the Board and the Applicant with the necessary flexibility to address any 10 unexpected circumstances that may arise.

11 14.1 Draft Condition 1 – General

12 This condition is acceptable to Emera Brunswick.

13 14.2 Draft Condition 2 – General

14 This condition is acceptable to Emera Brunswick.

15 14.3 Draft Condition 3 – Environmental Protection Plan

16 Emera Brunswick notes that a Saint John open cut contingency plan would likely not be 17 included in the EPP.

18 14.4 Draft Condition 4 – Environmental Follow-Up Programs

19 This condition is acceptable to Emera Brunswick.

20 14.5 Draft Condition 5 – Traditional Ecological Study Recommendations

21 This condition is acceptable to Emera Brunswick.

22 14.6 Draft Condition 6 – Construction Schedule

23 This condition is acceptable to Emera Brunswick.

24 14.7 Draft Condition 7 – Construction Inspection Program

25 Emera Brunswick submits that Condition 7(a) is unduly restrictive given the likelihood 26 that construction inspection staffing levels, duties and responsibilities must be adjusted 27 to accommodate the work flow which is impacted by weather, landowner requirements, 28 certain site-specific environmental matters and other unforeseen conditions. In Emera 29 Brunswick's opinion, based on experience, if it were to table a detailed list of the number 30 and type of each inspection position, including job descriptions, qualifications, roles, 31 responsibilities and decision-making authority 30 days in advance of construction, the

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1 submission would be out of date before the construction commenced. To proceed on 2 the basis of such a detailed pre-construction filing could be detrimental to the 3 environment, the public, landowners and construction worker safety.

4 For the above reasons, Emera Brunswick would recommend that Condition 7(a) be 5 removed from Condition 7.

6 Condition 7(b) is acceptable to Emera Brunswick.

7 14.8 Draft Condition 8 – Archaeological Studies and Monitoring Plans

8 This condition is acceptable to Emera Brunswick.

9 14.9 Draft Condition 9 – Access Management Plans

10 Emera Brunswick submits that this condition is duplicative and unnecessary given the 11 commitments of Emera Brunswick on the record and in light of Conditions 1 and 2. See 12 Section 7.5 above.

13 14.10 Draft Condition 10 – Construction Manuals

14 This condition is acceptable to Emera Brunswick.

15 14.11 Draft Condition 11 – Infrastructure Facilities

16 This condition is acceptable to Emera Brunswick.

17 14.12 Draft Condition 12 – Construction Progress Reports

18 This condition is acceptable to Emera Brunswick.

19 14.13 Draft Condition 13 – HDD Noise Management Plan

20 This condition is acceptable to Emera Brunswick.

21 14.14 Draft Condition 14 – Saint John River Crossing

22 Emera Brunswick would suggest that the application for approval of an alternative 23 crossing technique be submitted no later than six (6) months prior to the start of the 24 alternative crossing technique start date if necessary.

25 14.15 Draft Condition 15 – Archaeological or Heritage Resource Discovery

26 This condition is acceptable to Emera Brunswick.

27 14.16 Draft Condition 16 – Emergency Procedures Manual

28 This condition is acceptable to Emera Brunswick.

Emera Brunswick Pipeline Company Ltd. December 1, 2006 GH-1-2006 Argument-In-Chief Page 56

1 14.17 Draft Condition 17 – Consultation on Emergency Procedures Manual

2 This condition is acceptable to Emera Brunswick.

3 14.18 Draft Condition 18 – Condition Compliance by a Company Officer

4 This condition is acceptable to Emera Brunswick.

5 14.19 Draft Condition 19 – Emergency Response Exercise

6 Emera Brunswick has discussed draft condition 19 with first responders. The 7 consensus of all parties is that an emergency response exercise should be conducted 8 within six months of commencement of operation of the Project but the exercise should 9 be a table top exercise with the objectives of:

10 • verification of respective roles and responsibilities; 11 • verification of notification matrix; and 12 • verification of practices and procedures.

13 As such, Emera Brunswick requests that draft condition 19(a) be amended in line with 14 the above.

15 14.20 Draft Condition 20 – Emergency Response Exercise Program

16 This condition is acceptable to Emera Brunswick.

17 14.21 Draft Condition 21 – Post-Construction Environmental Reports

18 This condition is acceptable to Emera Brunswick.

19 14.22 Draft Condition 22 – Environmental Follow-Up Program Reports

20 This condition is acceptable to Emera Brunswick.

21 14.23 Draft Condition 23 – Certificate Expiration

22 This condition is acceptable to Emera Brunswick assuming its applied-for corridor is 23 approved.

24 15. CONCLUSION

25 Emera Brunswick submits the record in this proceeding demonstrates that:

26 • Canada, and Maritime Canada in particular, needs the Brunswick Pipeline;

27 • the 25 year commitment from an investment grade entity to pay all costs, 28 including a reasonable rate of return, supports the economic feasibility of the 29 Brunswick Pipeline;

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1 • there is sufficient market and supply to ensure the use of the commercially “at 2 risk” Brunswick Pipeline at reasonable levels over its economic life;

3 • the preferred corridor is the right route for the Brunswick Pipeline;

4 • the Brunswick Pipeline will be a safe, state-of-the-art pipeline;

5 • the Brunswick Pipeline will be constructed and operated in a manner that 6 considers and appropriately mitigates impacts on affected parties;

7 • significant adverse environmental effects are unlikely to result from the 8 construction and operation of the Brunswick Pipeline;

9 • the negotiated toll agreement is acceptable to Emera Brunswick's sole shipper, 10 recovers all costs of the Brunswick Pipeline including a reasonable rate of return, 11 and provides for a just and reasonable toll; and

12 • Emera Brunswick's position as a pipeline with a single shipper, and a pipeline 13 that holds a 25 year negotiated toll agreement with that shipper, along with 14 regulatory and cost efficiency considerations, support the designation of Emera 15 Brunswick as a Group 2 company.

16 For all of the above reasons, and the totality of the evidence presented in this 17 proceeding, Emera Brunswick submits that the Brunswick Pipeline is and will be 18 required by the present and future public convenience and necessity.

19 Emera Brunswick respectfully requests approval of the Application at the Board's 20 earliest convenience.