Enbridge’s Northern Gateway pipeline proposal, along with other projects to export crude bitumen and LNG, got a wake-up prod from a former Canadian diplomat who called on the Canadian, British Columbia and Alberta governments to redouble their efforts to gain public and First Nations support for the C$6.5 billion venture.
In a paper for the Macdonald-Laurier Institute, a conservative think-tank, Robert Hage was adamant the pipeline to export 525,000 barrels per day of oil sands crude to Asia can be kept alive if the three governments tackle the concerns raised by opponents.
He said in the paper that the project is “fraught with contradictory questions and contradictory answers, with economic needs but environmental misgivings, with public scrutiny by lack of public awareness, with careful planning but missed opportunities.”
Hage said Northern Gateway negotiated an “extraordinary consultative process” before the Canadian government last year accepted 209 conditions recommended by a regulatory panel.
Enbridge agreed to the conditions, but, from outward appearances, nothing has been accomplished.
Opposition compounded by government
Extensive opposition from aboriginal, environmental and public activists has been compounded by the British Columbia government’s insistence on Enbridge meeting five demands, led by a call for First Nations support and participation and for fiscal benefits that would reflect the “level and nature of the risk” carried by the province.
Hage, who represented Canada on a global basis over 38 years, said the task ahead of the three governments is to find a way to “overcome the mistakes or oversights of the past and to build public awareness and engage in collaborative regional planning among themselves, First Nations and local communities.”
Provinces must agree
Accomplishing that job faces one considerable barrier - agreement between British Columbia and Alberta.
Even a reaching-out by Alberta’s recently elected Premier Jim Prentice - acclaimed as the most B.C.-congenial Alberta premier in memory - has failed to make headway on Northern Gateway and Kinder Morgan’s plan to expand its Trans Mountain system.
Prentice told a gathering of conservative politicians in Ottawa earlier in March that the oil sands industry is drawing closer to gaining B.C. sanctioning of the pipelines - a claim that gained a barely lukewarm response from B.C. Premier Christy Clark.
Prentice said the inability to provide new pipelines out of Alberta for oil sands producers, especially to gain access to world oil prices in markets beyond North America, cost his province C$4 billion last year and the federal government C$2 billion in royalties and direct taxes.
“This is not a sustainable situation,” he told delegates. “We need pipelines.”
Prentice, who had been hired by Enbridge to seek First Nations support before he became premier last year, said that remains the toughest challenge.
He said some incremental progress has been made, adding that there are a “lot of things going on behind the scenes and I think we are further along than we have ever been.”
Speaking at the same conference, Clark said there has never been an Alberta premier “who understands British Columbia better than Jim Prentice.”
But, when asked if there has been clear evidence of progress, she said that could only be answered by Enbridge and Kinder Morgan.
Clark said she has a “sense” that some headway has been made in meeting her government’s conditions, but there is a “long way” to go before the Canadian government can deliver on ensuring world-class environmental and safety standards, especially the world’s best spill response in coastal waters.
Independent advisory council recommended
To pick up the pace of negotiations, Hage recommended the appointment of an independent citizens’ advisory council to deal with the safe operation of both oil and LNG terminals and tankers.
He said there is a successful working model in Alaska, where pipeline and terminal operators fund such a council.
Hage also said jobs for aboriginals must be guaranteed along the pipeline routes, in terminals and as part of oil-spill prevention and response facilities, suggesting project backers must work with a First Nations financial management board to ensure an equity stake in Northern Gateway and other projects.
As well, he urged a review to assess the costs and benefits of two crude oil refineries proposed for the British Columbia coast by Pacific Futures and Eagle Spirit Energy Holdings, which the industry has been too quick to dismiss on economic grounds.
Finally, Hage argued that, despite objections to pipeline projects in British Columbia there should be some acknowledgement that what is good for Canada should outweigh regional interests.
