UPDATE 2-Canadian regulator recommends expanding oil pipeline, urges whale protections

Canada's National Energy Board (NEB) regulator recommended on Friday that Ottawa approve expansion of the government-owned Trans Mountain oil pipeline, but made new, nonbinding recommendations to mitigate harm to Pacific Ocean killer whales. The pipeline is in the national interest as it will create jobs and allow Canadian oil to reach more markets, the NEB said in a report.

But expanding it is likely to significantly harm the killer whale population off the coast of British Columbia and increase greenhouse gas emissions from ships, the board said in its report. A "worst-case" spill, while unlikely, would also be damaging, it said. The NEB made 16 new recommendations, ranging from offsetting increased underwater noise to reducing greenhouse gas emissions from ships. The recommendations are nonbinding and constitute advice to the government, it noted.

The Canadian government in September directed the board to conduct a new review of its application to nearly triple the capacity of Trans Mountain, which the government bought last year from Kinder Morgan Canada to ensure it gets built. The move came after Canada's Federal Court of Appeal overturned the Liberal government's 2016 approval to expand the pipeline, which runs from Alberta's oil heartland to the British Columbia coast.

Canada's oil production has expanded faster than pipeline capacity, causing a glut in Alberta last year that depressed prices. The situation has stirred anger in Western Canada against Prime Minister Justin Trudeau's government ahead of a fall election, and he also faces pressure from environmentally minded voters who do not want pipelines built. The NEB's report now goes to Trudeau and his Cabinet, which by law has 90 days to respond. It has indicated, however that it will take the time necessary to consult with indigenous groups, the board's chief environment officer, Robert Steedman, said.

The Southern Resident killer whale population is already under threat, and even the pipeline's "relatively minor" impacts would cause additional harm in various ways, including potential strikes by ships, Steedman said. The NEB's recommendation to approve the pipeline came after government officials publicly signaled it will be built, said Tzeporah Berman, international program director at environmental group Stand.earth. Berman said the board also failed to address the project's climate impacts. (Reporting by Rod Nickel in Winnipeg, Manitoba; editing by Jonathan Oatis)