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Facing off over pipelines in Canada Clashes over plans to get crude to new markets intensify on both Enbridge’s Line 9 and Kinder Morgan’s Trans Mountain expansion GARY PARK For Petroleum News
The arm-wrestling between Canada’s largest oil pipeline operators and their array of opponents continues unabated with Enbridge insisting it will meet regulatory deadlines for Northern Gateway, while facing a showdown in the Supreme Court of Canada over the reversal of a line in Ontario and Quebec, and Kinder Morgan reeling from a high-level blow to its proposed Trans Mountain expansion.
Northern Gateway, which most observers have consigned to the scrap heap, has less than a year to start construction before a National Energy Board approval expires.
But Enbridge said it is determined the C$7.9 billion twin pipeline to export 525,000 barrels per day of oil sands bitumen and import 193,000 bpd of condensate will meet the 209 conditions imposed by the NEB, as well as providing signed commitments before construction starts from shippers representing 60 percent of the export capacity to Asian markets.
An Enbridge spokesman said Enbridge’s commercial funding partners and aboriginal equity stakeholders are still committed to Northern Gateway, while the company is “satisfied with the progress we are making” on other issues, notably benefits and land access deals with aboriginal communities.
Enbridge said that despite stiff resistance from coastal and north-central British Columbia First Nations, it has strong backing from other First Nations in British Columbia and Alberta.
However, the environmental group Dogwood Initiative said the pipeline’s demise is in sight, largely because the company has yet to sign final shipping contracts with oil producers.
A Dogwood spokesman said 19 lawsuits have now been filed against the project and the new Canadian government is preparing legislation to ban oil tankers from operating off the northern coast.
“No oil producer will stick his neck out and pay for shipping capacity on a pipeline that will never be built,” he said.
Enbridge said it has retained the backing of Cenovus Energy, MEG Energy, Nexen, Suncor Energy and Total E&P Canada, most of the leading oil sands players.
New Line 9 legal battle On another front, Enbridge is facing a new legal battle over the reversal of Line 9 to replace imported crude with 300,000 bpd of oil from Western Canada and the Bakken to Ontario and Quebec refineries.
In taking its case to the Supreme Court, the Thames First Nation of Ontario is pitting itself against Enbridge, the NEB and the attorney general of Canada, arguing that the federal government failed to honor its obligations to consult with First Nations over concerns about Line 9’s affect on aboriginal and treaty rights.
A spokesman for Enbridge said the line has recently undergone a series of major upgrades to make it “even safer,” while three years of consultations on the project were the “most extensive in the company’s history,” resulting in “considerable enhancements” to emergency response capabilities.
The Thames nation, despite losing a case in the Federal Court of Appeal to reverse the NEB approval of Enbridge’s plan, said it has backing from regional, provincial and national assemblies of first nations.
Provincial opposition The battlefront over pipelines has widened with the British Columbia government formally declaring its opposition to Kinder Morgan’s proposal to almost triple capacity on its Trans Mountain system to 890,000 bpd to open export markets in the Pacific Rim region.
Environment Minister Mary Polak said the province believes Kinder Morgan has failed to provide the NEB with an adequate plan to prevent or respond to an oil spill.
She said no evidence has been presented to meet her government’s insistence in 2012 that all new pipelines crossing the province would have to demonstrate they have “world-leading” prevention and response plans if oil was spilled on land or into rivers, lakes or the ocean.
Although most of the responsibility for dealing with marine spills is shouldered by the federal government, companies should still provide some of the resources to handle a spill and Kinder Morgan has failed to “step up” to that job.
In addition, Polak said Kinder Morgan has failed to meet other conditions, such as obtaining First Nations support and providing British Columbia with a fair share of economic benefits.
Kinder Morgan said it has received letters of support from 30 aboriginal communities in Alberta and British Columbia, indicating they are satisfied with the consultation provided and have acceptable mitigation measures to handle spills.
But Ruben George of the Tsleil-Waututh First Nation, which claims lands at the terminus of the pipeline in Port Metro Vancouver, said “we are going to rely on the Canadian constitution to protect our indigenous rights. We are relying on the courts. No matter what it takes we are going to stop this project.”
Seven other First Nations are among those who claim the regulatory review, which requires an NEB panel to deliver its recommendation to the Canadian government in May, is “fatally flawed.”
However, Canada’s new Natural Resources Minister Jim Carr said that projects in the review phase will “not have to go back to square one” regardless of a promise by Prime Minister Justin Trudeau to change the environmental assessment process.
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