TRANS MOUNTAIN PIPELINE ULC SECTION 52 OF THE NATIONAL ENERGY BOARD ACT APPLICATION FOR

TRANS MOUNTAIN EXPANSION PROJECT NEB FILE OF-FAC-OIL-T260

FILED APRIL 10, 2014 OH-001-2014 !

NOTICE OF MOTION !Name of Person Bringing Motion !This Motion by the Intervenor, Marc Eliesen, is made pursuant to Hearing Order OH-001-2014 (the Hearing) and Section 35 of the National Energy Board Rules of Practice and Procedure, 1995. SOR 195-208. !Decision or Order Requested !

(a) The question of reasonable apprehension of bias by Panel Chair, David Hamilton, be referred to the National Energy Board for determination or be referred to the Federal Court of Appeal for hearing and determination; and !

(b) Pending the determination of the question of reasonable apprehension of bias by Panel Chair, David Hamilton that the Panel stay the continuation of this Hearing. !

Statement of Facts !1. On January 8, 2014, the National Energy Board announced through e-mail, the

appointment of a Panel to consider the Application of the Trans Mountain Pipeline ULC, regarding the Trans Mountain Expansion Project, and make a recommendation to the Government of Canada on whether or not it should be approved. The e-mail stated, The Panel is composed of Panel Chair, David Hamilton, Lyne Mercier and Don Young. The Alternate Panel Member is Allison Scott, who will step in if one of the Panel Members is unable to continue. 1!

2. Panel Chair, David Hamilton was appointed to the Board as a Temporary Board Member by Governor in Council in 2004 and has been reappointed subsequently. His current three-year term ends June 30, 2015. !

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It should be noted that a subsequent e-mail from the National Energy Board of April 1, 2014, indicated 1that one of the Panel Members, Mr. Don Young, had resigned from the Board and would be replaced by Mr. Philip Davies.

3. Over the past year Panel Chair, David Hamilton participated and formulated judgments as NEB Panel Chair or Member regarding a number of important issues related to the current application of the Trans Mountain Expansion Project. These are: !a) Chevron Canada Limited, Application for a Priority Destination of the

Burnaby Refinery, pursuant to Section 1.58 of the Tariff of Trans Mountain ULC (MH-002-2012) Reasons for Decision July 2013. !

b) Kinder Morgan Cochin ULC, Application pursuant to Section 58 of the NEB Act, to reverse the Cochin Pipeline System for the transportation of light condensate from the International Border near Elmore, Saskatchewan to Fort Saskatchewan, Alberta, Letter Decision June 13, 2013; and !

c) Trans Mountain Pipeline ULC, Application pursuant to Part IV of the National Energy Board Act for approval of the transportation service to be provided and the toll methodology to be applied on a future expanded Trans Mountain Pipeline System, (RH-001-2012), Reasons for Decision May 2013. !!

4. Chevron Application: !On the matter of Board Hearing, MH-002-2012 dated August 21, 2012, regarding the application by Chevron Canada Ltd. for Priority Destination designation, David Hamilton chaired the Panel. !Priority designation under Section 1.58 of the Tariff of Trans Mountain Pipeline, means that a refinery that is unable to meet or is at a substantial risk of not meeting its minimum run rate, and therefore cannot ensure its long-term viability, can be given priority allocation of crude oil supply under the rules and regulations of the NEB. !Chevron Canada Ltd. had stated that, the Application was brought in response to significant and continuing apportionment of nominations on the pipeline, which imperils Chevrons ability to obtain sufficient feedstock for the Burnaby refinery. !The Panel announced on July 13, 2013 that it denied Chevron Canada Ltd.s Application to designate the Burnaby refinery as Priority Destination. The Trans Mountain Pipeline was originally built to transport crude oil for domestic British Columbia consumption as opposed to the current and expanding practice of shifting to export to the US and other countries. !

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Chevron has been relying upon the Trans Mountain Pipeline as its primary source of supply for over 60 years. Denying Chevrons Burnaby refinery the right of first call on crude oil flowing through the Trans Mountain Pipeline System means that an important judgment has been made directly related to the purpose of Trans Mountains Expansion Project. !It should be emphasized that the issue related to this motion is not whether one is in favour or against the Chevron Application, but that mainly, a judgment has already been made by the Panel Chair on a matter which obviously needs to be determined objectively in the Trans Mountain Expansion Project Application. !!

5.Cochin Reversal: !On August 17, 2012, Kinder Morgan Cochin filed an Application to the NEB to reverse the flow to westbound service from the International Border near Elmore, Saskatchewan to Fort Saskatchewan, Alberta and to change the product type from propane to light condensate. !Panel Member, David Hamilton was among the Panel members who agreed on June 13, 2013 to change the export propane pipeline to the United States to a condensate import pipeline from the United States. !The Trans Mountain Expansion Project is an Application requesting approval for primarily a heavy oildiluted bitumenexport pipeline. Bitumen is heavy, like tar and cannot move through a pipeline unassisted. The diluent of choice to facilitate bitumens flow through a pipeline is condensate. Canada is a net importer of condensate since its ability to produce sufficient condensate for diluent blending purposes was exceeded beginning in 2005. !In an effort to meet growing diluent demand of Alberta bitumen producers, pipeline operators have requested approval for pipeline reversals enabling the importation of condensate from the US. The need for condensate imports is why the Northern Gateway project includes an oil export line and a condensate import line. !Trans Mountains equivalent to the Northern Gateway twin pipeline project being advanced by Enbridge is the Cochin reversal. Should the Panel recommend against approval of the Trans Mountain Expansion Project the commercial and financial viability of the Cochin project is quite likely compromised. !

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When a party to the Cochin decision is also a Chair of the Trans Mountain Expansion Project recommendation, as is Mr. Hamilton, then it places Mr. Hamilton clearly in a reasonable apprehension of bias situation. !!!

6.Trans Mountain Toll ApplicationPart IV NEB Act: !The NEB Panel, which included Mr. Hamilton as a Member, approved the principles of the tolls and the methodology proposed by Trans Mountain. Trans Mountain Pipeline has recognized the significant relationship between the decisions made during the Part IV Toll Application and their bearing on a recommendation for approval of the Part III Application. !In its evidence filed before the Panel, Trans Mountain is relying on this inter-relationship to expedite the Panels findings by suggesting that the findings in the Toll Application can be carried over to the findings of the Part III Application. The ability of Trans Mountains argument to hold sway is supported because of the role Panel Chair, David Hamilton played on the NEBs earlier conclusions respecting the financial and commercial viability of the proposed project within the confines of Part IV. The Part III Application is currently before the Panel for non-biased and critical review that should not be unduly influenced by decisions made in previous hearings, particularly since some intervenors to the current process wished to intervene in the Part IV Application, but were denied. !In particular, Volume 2, Appendix C evidence of Trans Mountain expert witness John J. Reed clearly expands on the importance of the decisions already made in determining the outcome of the current Application. Mr. Reed, on Trans 2Mountains behalf, argues that Part IV decisions satisfy findings required during the Part III hearings. Trans Mountain also recognizes that a Part IV Application and approval in advance of a Part III Application is an unusual approach for major projects, but undertook this approach in an effort to facilitate the Part III Application. !Mr. Reed explains that the purpose of his, direct evidence is to address two major areas: 1) a review and assessment of whether the Trans Mountain Expansion

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Trans Mountain Expansion Project Application, Direct Evidence of John J. Reed of Concentric Energy 2Advisors, Inc. to the National Energy Board, Volume 2, Appendix C-1. https://docs.neb-one.gc.ca/ll-eng/llisapi.dll/fetch/2000/90464/90552/548311/956726/2392873/2385938/V2_4of4_PROJ_OVERVIEW_%2D_A3S0R1.pdf?nodeid=2392869&vernum=-2

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Project (TMEP or the Project) meets the Boards standards for economic and financial feasibility, which are important criteria for the determination of whether a project is in the public interest; and 2) an overview of the benefits of the Project, in terms of energy industry benefits and economic benefits. !Mr. Reed continues his evidence stating that, !

Unlike many other large proposed pipeline projects before the Board, TMEP has fully addressed all of the matters regarding Section IV of the NEB Act in a separate proceeding filed in 2012. In its May 16, 2013 decision, the Board found both the tolling principles and the terms and conditions in the Facilities Support Agreements (FSAs) and TSAs pertaining to TMEP to be appropriate.

ARE THE BOARDS FINDINGS IN THE TMEP TOLLING PROCEEDING RELEVANT TO AN ASSESSMENT OF THE PROJECTS FINANCIAL VIABILITY? I believe they are. While there are no open issues regarding the tolling principles or the terms and conditions of the FSAs and TSAs that the Company and its shippers have signed, it is appropriate to consider many of the Boards findings in that proceeding, since those matters relate to the financial feasibility of the Project. In the tolling proceeding, the Board found that: (i) the proposed tolling principles were just and reasonable as well as non-discriminatory; (ii) the terms and conditions of the FSAs and TSAs were appropriate; and, (iii) the open season process was fair and transparent.

During the Part III Hearings now before the Panel, it will be exceedingly difficult for any Intervenor to bring forward evidence, or test the evidence before the Panel respecting the commercial or financial viability of the Project if the Chair, David Hamilton already has a vested interest in the findings of the Part IV Application. !!!

Legal Jurisprudence !It is suggested that the test for apprehension of, or reasonable likelihood of bias, has been determined from the judgment of the Supreme Court of Canada in Committee for Justice and Liberty, et al. vs. National Energy Board et al. (1978) S.C.R. 369. 3!As referenced in the Court majority decision it was held that: !

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http://scc-csc.lexum.com/scc-csc/scc-csc/en/item/2574/index.do 3

In dealing with applications under s. 44 of the National Energy Board Act, the function of the Board is quasijudicial, or, at least, is a function which the Board must discharge in accordance with the rules of natural justice: and if not necessarily the full range of such rules as would apply to a Court (though the Board is a court of record under s. 10 of the Act) certainly to a degree that would reflect integrity of its proceedings and impartiality in the conduct of those proceedings. A reasonable apprehension of bias arises where there exists a reasonable probability that the judge might not act in an entirely impartial manner The test of probability or reasoned suspicion of bias, unintended though the bias may be, is grounded in the concern that there be no lack of public confidence in the impartiality of adjudicative agencies, and emphasis is added to this concern in this case by the fact that the Board is to have regard for the public interest. !

Furthermore: !When the concern is, as here, that there be no prejudgment of issues (and certainly no predetermination) relating not only to whether a particular application for a pipeline will succeed but also to whether any pipeline will be approved for a certificate of public convenience and necessity, in my opinion, cannot but give rise to a reasonable apprehension, which reasonably well-informed persons could properly have, of a biased appraisal and judgment of the issues to be determined on a s. 44 application.

There has been extensive judicial scrutiny on the first principle of natural justice that no man should be a judge in his own case (audi alteram partem). However, as noted in a review of this Supreme Court of Canada decision, there has been limited judicial scrutiny on the second principle of natural justice, the concept of attitudinal bias (nemo judex in usa causa debet esse). 4

Chief Justice Laskin's judgment for the majority of the Court clearly articulates the policy underlying this second principle of natural justice: that justice must not only be done, but must manifestly and undoubtedly be seen to be done. Given this rationale, the Chief Justice held that a breach of the rule occurs whenever there is a reasonable apprehension of bias, and that it is unnecessary to show any likelihood of bias. 5

The issue that has been raised is:

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The National Energy Board Case and the Concept of Attitudinal Bias, David Phillip Jones. http://4lawjournal.mcgill.ca/userfiles/other/8159871-jones.pdf

Ibid, page 4635

whether a decision-maker can be disqualified - not because of his previous words or actions as they relate directly to the facts of the case before him - but rather because he might be perceived to be "attitudinally biased", that is, predisposed by reason of previously expressed views on a subject to decide consciously or un- consciously, that matter in a certain way. 6

It is maintained that the facts disclose a reasonable apprehension of bias on behalf of Panel Chair, David Hamilton. His participation in, and decisions on, three specific NEB Applicationswhose reasons for decisions were released in May, June and July 2013are directly related to the current hearing and are attitudinally biased on important and significant issues that impact the Trans Mountain Expansion Project recommendation. Therefore he should be disqualified from ruling on the current Application. !!Decision or Order Requested !

(a) The question of reasonable apprehension of bias by Panel Chair, David Hamilton, be referred to the National Energy Board for determination or be referred to the Federal Court of Appeal for hearing and determination; and

(b) Pending the determination of the question of reasonable apprehension of bias by Panel Chair, David Hamilton that the Panel stay the continuation of this Hearing. !!

All of which is respectfully submitted this 10th day of April, 2014. !!!!!Marc Eliesen 9294 Emerald Drive Whistler BC V0N 1B9 604-962-4160

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Ibid, page 463.6