Dr. Robert Steedman, Chief Environment Officer of the National Energy Board, releases their report on the Trans Mountain pipeline expansion project are seen in Calgary, Thursday, May 19, 2016.THE CANADIAN PRESS/Jeff McIntosh

VANCOUVER - The National Energy Board says the contentious $6.8-billion Trans Mountain pipeline expansion is in Canada's best interests, despite increased greenhouse gas emissions and threats to killer whales off British Columbia's coast.

The federal regulator issued its long-awaited report on Thursday after a two-year debate that cost millions and galvanized aboriginal and environmental protests. The board recommended Ottawa approve Kinder Morgan Canada's proposal subject to 157 conditions.

"Given that there are considerable benefits nationally, regionally and locally, the board found that the benefits of the project would outweigh the residual burdens," Robert Steedman, the board's chief environmental officer, told a news conference.

"Accordingly, the board concludes that the project is in the Canadian public interest."

Kinder Morgan wants to triple the capacity of its existing Trans Mountain pipeline, which carries diluted bitumen from oilsands near Edmonton to Burnaby, B.C., for export. The expansion would bring capacity to 890,000 barrels a day and increase tanker traffic in Burrard Inlet seven-fold.

The positive recommendation has cleared a major hurdle for the project, with Prime Minister Justin Trudeau's cabinet set to make a final decision by the end of the year.

But Kinder Morgan would have to address 157 environmental, safety and financial conditions, including holding $1.1 billion in liability coverage and detailing plans to protect grizzly bears and caribou. The board said the project is the first to be required to have plans to offset emissions.

Kinder Morgan said in a statement it is pleased with the board's recommendation, describing the 157 conditions as rigorous and achievable.

"Now, more than ever our project makes sense for Canada," said president Ian Anderson.

"Building this pipeline will bring both dollars and many thousands of jobs for communities in B.C. and Alberta at a time when our economy needs it most."

The company said it still expects the project to be completed by the end of 2019.

The energy board spent 25 months deliberating the Trans Mountain expansion application. In addition to evidence from Kinder Morgan, the board heard from 35 indigenous groups, 400 interveners and 1,250 other parties with letters of comment.

The project and the streamlined review process attracted fierce opposition, including from the British Columbia government and the cities of Vancouver and Burnaby. The Tsleil-Waututh Nation in North Vancouver has a case before the Federal Court that argues the process was unlawful.

After promising a "new open process" on the campaign trail, Trudeau's government announced deeper aboriginal consultation and an assessment of upstream greenhouse gas emissions in January.

Environment and Climate Change Canada released its draft assessment on Thursday, opening a 30-day public comment period. It concluded upstream emissions from the completed project could be between 20 and 26 megatonnes of carbon dioxide-equivalent per year.

Vancouver Mayor Gregor Robertson said the city has no faith the board's conditions will prevent the "inevitable catastrophe" of an oil spill.

"We see this as window dressing on a recommendation that is effectively a rubber stamp," he said. "None of us had any confidence in this process all along."

B.C. Environment Minister Mary Polak said some of the board's recommendations overlap with the province's five conditions for the project, such as the requirement of a navigation safety plan, a risk assessment for the pipeline, and an emergency preparedness and response training program.

Polak said more work needs to be done by the federal and provincial governments on marine spill response and preparedness.

The board said it concluded a very large spill would be unlikely given the mitigation and safety measures being implemented, but nonetheless would have a significant effect if it happened.

It also said it considered how the project and related tanker traffic could impact indigenous interests. Should the project proceed, Kinder Morgan would be required to continue consultation with affected aboriginal groups throughout the life of the project.

Rueben George of the Tsleil-Waututh Nation said he believes indigenous opposition will derail the project regardless of the federal cabinet's decision. He said dozens of legal victories have been won by First Nations on resource extraction.

"I totally have 100-per-cent faith that we will continue to have veto power over projects like this."

Some adverse impacts remain even with conditions, the board noted. For example, it found marine vessels related to Trans Mountain would further contribute to cumulative effects that are already jeopardizing the recovery of the southern resident killer whale population off B.C.'s coast.

The board also said future vessel traffic would contribute to an increase in Canadian greenhouse gas emissions. While emissions from project-related vessels would encompass a small percentage of the country's overall emissions, the board concluded they would likely be "significant."

But ultimately the board concluded the risks were outweighed by the economic benefits, including increased access to diverse markets for Canadian oil, thousands of construction jobs, hundreds of long-term jobs and considerable government revenues.

Alberta has been a strong proponent of the pipeline expansion. Energy Minister Marg McCuaig-Boyd said she was pleased with the decision, adding that market access is critical to Alberta and to the rest of Canada.

"We hope that at the end of the day these projects will be evaluated on their merit and not their emotion," she said.

Earlier this week, the federal government announced an environmental panel to review the project that will report in November to Natural Resources Minister Jim Carr. He said the panel cannot override the energy board's decision but will consult, particularly with indigenous people.

— With files from Tamsyn Burgmann and Camille Bains in Vancouver, and Dean Bennett in Edmonton.

— Follow @ellekane on Twitter.

News from © The Canadian Press, 2016