|
New projects, old story as Kinder Morgan, TC fight familiar foes
As they push ahead with plans to move oil sands bitumen out of Alberta, TransCanada and Kinder Morgan, proponents of the Energy East and Trans Mountain Expansion projects, are starting to encounter the same headwinds that have stalled progress on Keystone XL and Northern Gateway.
For TransCanada, Energy East is the chance to avoid repeating the mistakes made in handling the Keystone XL file, while Kinder Morgan can learn from the missteps taken by Enbridge in dealing with opponents of Northern Gateway.
But the hard reality for both is that the same pattern of resistance is unfolding, especially among environmentalists and aboriginal communities, only now it is more sophisticated, shows a harder edge and has attracted stronger public and political support.
The opposition forces are so formidable that they show every sign of cancelling out some of the regulatory gains made by the industry since Keystone XL and Northern Gateway entered the regulatory stream.
Topping the list of Canadian government efforts to facilitate regulatory approval is legislation that sets a 15-month timeline on a review and National Energy Board decision for a major resource project.
In addition, the new legislation requires those seeking intervener status to demonstrate they face a direct impact from the project.
Formal expansion application When Kinder Morgan submitted its formal application to the NEB to expand Trans Mountain from 300,000 barrels per day to 890,000 bpd — the bulk destined for the Asia-Pacific basin — the company’s Canadian President Ian Anderson said he was confident the process would “fully address the needs and interests of British Columbia and its residents.”
He said the filing included the “views, concerns and observations” gathered by Kinder Morgan during meetings with First Nations, affected residents and other stakeholders over 18 months, along with a pledge to continue holding public forums and workshops.
The company said it has held discussions with more than 100 aboriginal communities and reached 46 agreements that set the stage for “explicit letters of support for the project,” reinforcing Anderson’s view that the company has a long history of building stewardship in communities along the pipeline right of way.
In the meantime, Kinder Morgan has reached tentative shipping deals with nine oil sands producers and gone to work on adding 3.6 million barrels of storage capacity at Trans Mountain’s terminal near Edmonton.
More significantly, the NEB sided with Kinder Morgan in a corporate feud with Suncor Energy by allowing the pipeline company to raise the tolls of shipping crude from Alberta to the British Columbia cost.
Suncor accused Kinder Morgan of leveraging its position as owner of the only Pacific export point for Canadian crude to earn an “excessive” return on equity.
Kinder Morgan countered that it needed a higher return in exchange for carrying the risks of potential costs increases during construction and operation of the C$5.4 billion expansion.%
Late EPA intervention rejected But now the crunch point is taking shape, with more than 2,300 applicants — similar to the final count for Northern Gateway — seeking NEB permission to participate in the regulatory review. And a lengthening list of prospective interveners has asked to file late applications, although some have already been turned down by the NEB.
Notable among those rejected is the U.S. Environmental Protection Agency which requested dispensation because it was unaware of the Feb. 12 deadline for filing and said it needed more time to “follow through with agency protocols and procedures” before it could apply.
The NEB said it had set “deadlines to ensure a fair and efficient process and is not persuaded, based on the request, to grant the extension sought by the EPA.”
The EPA and Washington state Department of Ecology are both disturbed that an additional 350 tankers a year leaving the Kinder Morgan dock in Port Metro Vancouver increase the danger of a spill that would affect waters on both sides of the international border.
Dale Jensen, program manager with Washington’s Department of Ecology, said the state was eager to “share its perspective and inform the decision-making process.”
Letter from Kinder Morgan Kinder Morgan has disturbed those who hope to participate in the Trans Mountain review by sending them a 15-page legal letter indicating it wanted the NEB to impose strict conditions on those who should be granted intervener status.
It said those participants should have to qualify as experts with both information and expertise and be able to make a unique submission.
The company also urged the NEB to reject arguments on climate change and the impact of Alberta’s oil sands on carbon emissions, while insisting it wants a “fair, reasonable and efficient review process.”
Energy East project description Meanwhile, TransCanada has taken the first formal step into the regulatory process by filing a project description of Energy East with the NEB and underscoring the efforts it has made to consult with a full range of stakeholders.
A full regulatory application is expected to be filed by mid-2014, while the in-service date for the pipeline is set at late 2018.
TransCanada is also voluntarily submitting to a review by the Quebec government’s environmental bureau, but it requesting that the bureau’s recommendations should be known before the NEB starts its hearings.
The company said that over the last seven months it has held 60 open houses in the six provinces affected by the pipeline, met with 5,500 landowners in about 500 communities, and held discussions with 155 First Nations and Metis communities and organizations, obtaining 56 letters of support from them.
The project is designed to ship 1.1 million bpd of oil sands and conventional crude from Western Canada more than 2,800 miles to refineries in Ontario, Quebec and New Brunswick and tanker terminals in the latter two provinces.
Conversion of some 1,800 miles It involves the conversion of about 1,800 miles of existing, underutilized TransCanada natural gas pipe from Alberta to Ontario.
Philippe Cannon, a spokesman for Energy East, told a webcast that TransCanada’s efforts reflect the “strong relationships” it has built over the years with 60,000 landowners in North America — an apparent rebuttal of claims from the U.S. that the company does not treat landowners with respect.
He also noted that Energy East is projected to contribute C$10 billion during the construction phase and C$25.3 billion during its operating life to Canada’s Gross Domestic Product, plus C$10 billion in tax revenues.
Ontario would lead the major provincial recipients of that GDP at 37 percent, followed by Alberta at 22 percent, Quebec at 18 percent and New Brunswick at 8 percent.
But those numbers are not expected to deter environmentalists, First Nations, landowners and local governments from raising concerns and possibly mounting outright opposition to the project.
—Gary Park
| 