HOME PAGE SUBSCRIPTIONS, Print Editions, Newsletter PRODUCTS READ THE PETROLEUM NEWS ARCHIVE! ADVERTISING INFORMATION EVENTS PETROLEUM NEWS BAKKEN MINING NEWS

Providing coverage of Alaska and northern Canada's oil and gas industry
October 2010

Vol. 15, No. 41 Week of October 10, 2010

Gateway turning into a wall

Stiff opposition to Enbridge’s plan for pipeline to carry crude to Kitimat, and to tankers which would be required to move oil

Gary Park

For Petroleum News

Enbridge’s hopes of opening a door to Asia for crude from the Alberta oil sands are encountering increasingly stiff resistance.

The latest to join the movement against the Northern Gateway Project is the Union of British Columbia Municipalities, representing villages, towns and cities across the province, adding to a formidable list that already includes First Nations, environmentalists and landowners along the proposed pipeline route.

In a show of hands Oct. 1, an estimated 70 percent of about 600 delegates to the annual UBCM convention passed two motions urging the Canadian government to legislate a ban on bulk crude oil tanker traffic through the Queen Charlotte Sound, Dixon Entrance and Hecate Strait and the British Columbia government to oppose the pipeline.

The votes are not binding on the governments, but they add weight to the campaign against Northern Gateway that has gathered momentum since the Enbridge pipeline rupture in Michigan spilled 19,500 barrels.

Line to Kitimat

The C$5.54 billion project includes a 670-mile, 36-inch pipeline to carry 525,000 barrels per day of crude from Alberta to the deepwater port of Kitimat on the northern British Columbia coast and a parallel 20-inch line to import 193,000 bpd of condensate to dilute bitumen from the oil sands. The project is scheduled to come onstream in 2016.

Enbridge has estimated that about 220 double-hulled oil and condensate tankers would use the Kitimat terminal each year, including 50 very large crude carriers, 120 Suezmax and 50 Aframax tankers. The plans include the use of local pilots to board and assist all incoming and outgoing tankers.

A 21,000-page application has been submitted to regulators and a federally appointed Joint Review Panel is expected to start an environmental and socioeconomic review later this year, taking 18 to 24 months to complete its work.

British Columbia Energy Minister Bill Bennett said he was well aware of the challenges facing Northern Gateway.

He said the UBCM opposition shows the Canadian and British Columbia governments have a tough job ahead of them to convince opponents the project can be safe.

However, Bennett said oil sands producers need access to Asian markets as a hedge against the prospect of shrinking exports to the United States, or bans on the use of oil sands-source fuels in the Lower 48.

Kitimat neutral

Even the delegation from Kitimat (which stands to gain the most of any municipality in jobs and revenues from Northern Gateway) did not participate in the UBCM voting, opting to await the outcome of the regulatory review.

Kitimat Councillor Rob Goffinet said his delegation was “officially taking a position of neutrality,” adding the council will have ample time to await the outcome of the federal regulatory review, expected in 2012, before making up its mind.

Mayor Dan Rogers of Prince George, a city of 70,000 along the pipeline route, said his council has yet to take a stand for or against Northern Gateway.

“We know there are risks associated with this project, but we also understand, as a resource community, that there are benefits as well,” he said.

Carole James, leader of British Columbia’s opposition New Democratic Party — which has previously denounced the project — said Enbridge should have an opportunity to address the “huge, valid concerns” about Northern Gateway so that the province could determine whether the related jobs could be created in a sustainable way.

Apache, EOG on sidelines

Watching from the sidelines are Apache and EOG Resources, who have a joint proposal to deliver gas from northern British Columbia to Kitimat for conversion to LNG and export to Asia.

The partners have indicated they do not expect shipments to start before 2015, pending regulatory approval and contracts with Asian buyers.

Meanwhile, the British Columbia government has rolled out new oil and gas regulations it claims will move its regime into the 21st century, updating a framework that is more than 50 years old.

The energy industry is now a vital cog in the province’s economic machine, having surpassed the forestry sector as the leading revenue generator.

Bennett said the changes will ensure the industry “continues to prosper and create jobs, while enhancing our world-class environmental standards.”

The new legislation includes more comprehensive and “consistent” environmental standards, giving local communities and First Nations more input into oil and gas exploration and development in their areas.

David Pryce, vice president, operations, with the Canadian Association of Petroleum Producers, said the regulations “reflect the increased importance of the environment, regular communication with stakeholders and a renewed commitment to safety.”






Petroleum News - Phone: 1-907 522-9469 - Fax: 1-907 522-9583
[email protected] --- http://www.petroleumnews.com ---
S U B S C R I B E

Copyright Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA)©2013 All rights reserved. The content of this article and web site may not be copied, replaced, distributed, published, displayed or transferred in any form or by any means except with the prior written permission of Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA). Copyright infringement is a violation of federal law subject to criminal and civil penalties.