Native opposition builds
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First Nations across Canada attempt to stall Northern Gateway, Kitimat, Enbridge
For Petroleum News
A wave of aboriginal attempts to disrupt major energy projects is spreading across Canada.
A little-known First Nations community in northwestern British Columbia evicted surveyors who were working on a pipeline linked to the Kitimat LNG project, while activists from a First Nation in southern Ontario have threatened to stage protests against Enbridge plans to move more crude from Western Canada and the Bakken to refineries in Ontario and Quebec.
The ability of First Nations to slow progress on projects has become evident this year as communities across northern British Columbia have mounted their case against Enbridge’s Northern Gateway plan during an environmental review.
Partly because of the efforts to hijack those hearings, the joint panel of the National Energy Board and the Canadian Environmental Assessment Agency has been forced to extend the hearings by another 10 weeks.
The public hearings that started in January were supposed to have ended in mid-November, but will now resume in Prince Rupert on Dec. 10, followed by oral statements in Victoria, Vancouver and Kelowna in the new year before returning to Prince Rupert on Feb. 4.
The panel is scheduled to release its findings in the last week of December 2013, a deadline set by the federal government.
Whatever action neededAlong with their participation in the hearings, many First Nations have vowed to take whatever action is needed to prevent construction if Northern Gateway is approved and to take their fight to the courts.
A taste of what could be in store surfaced Nov. 21 when a handful of members from a First Nation evicted surveyors working on the C$1 billion Pacific Trails Pipeline, a key link in the planned Apache-operated Kitimat LNG project, then seized equipment.
The group identifying itself as the Unis’tot’en clan of the Wet’suwet’en Nation said the equipment will be held until Apache agrees to introduce “appropriate lines of communication.”
“The Unis’tot’en clan has been dead set against all pipelines slated to cross through their territories, which include (Pacific Trails Pipeline), Enbridge’s Northern Gateway and many others,” Freda Huson, speaking for the group, said in a statement.
“As a result of the unsanctioned PTP work …. the road leading into the territory has been closed to all industry activities until further notice,” she said.
No public negotiationsApache Canada spokesman Paul Wyke told Petroleum News that some surveyors complied with a request by a “small group of members from the Unis’tot’en” clan to leave the traditional territory.
He said the pipeline project is supported by 15 of the 16 aboriginal groups along the pipeline route and consultations are ongoing with those communities.
But Wyke said Apache did not intend to seek a resolution of the problem by negotiating in public.
The eviction took place on land northwest of a deepwater port at Kitimat, where Kitimat LNG plans to build a liquefaction plant and tanker terminal. It is also the proposed site of a tanker port for Northern Gateway.
The Pacific Trails Pipeline received environmental approval in 2008 and was expected to be operational by 2015, but faces delays if Kitimat partners Apache, Encana and EOG Resources are unable to secure long-term sales contracts and find a new equity partner.
Wyke said a final investment decision on Kitimat LNG will occur after a number of milestones have been passed, including the settlement of sales contracts.
He said the partners have been “very encouraged” by the way the project is “moving forward.”
Heated confrontations avoidedSo far, the various LNG proposals have avoided the heated confrontations with First Nations that are dominating plans to ship oil sands crude from Alberta by Enbridge for Northern Gateway and Kinder Morgan for expansion of its Trans Mountain system.
Many aboriginal groups are basing their case on a benchmark ruling by the Supreme Court of Canada, requiring federal and provincial governments to engage in meaningful negotiations with First Nations before major industrial projects are allowed to proceed on Native lands.
First Nations dissent has now extended to southern Ontario, where two activists from the Six Nations group told the city council in Hamilton they are ready to engage in violent protest to block Enbridge’s plan to carry 300,000 barrels per day of crude on Line 9 to refineries in Montreal and Quebec City.
“We are paying attention to what Enbridge is doing and we don’t like it,” said one of the activists, Wes Elliott. “If you think we can’t do anything about it, you’re badly mistaken.”
Enbridge officials said the company has learned a lot and taken proactive safety and emergency response measures since one of its pipelines spilled 200,000 barrels of crude into Michigan’s Kalamazoo River in 2010.
Enbridge advancing plansMeanwhile, despite the fierce resistance to Northern Gateway and the looming challenge to Line 9, Enbridge is wasting no time advancing plans for other pipelines to get crude bitumen out of the Alberta oil sands.
It has announced an agreement with shippers to add another 570,000 bpd link within Alberta by constructing a 36-inch line between Edmonton and a pipeline hub at Hardisty in Alberta, plus more tankage and terminal facilities at Edmonton, downstream from the oil sands region, at a cost of C$1.8 billion.
The new line will cover 110 miles, is scheduled for an in-service date of mid-2015 and will have the design potential for expansion to 800,000 bpd, Enbridge said.
An application is expected to be filed with Canada’s National Energy Board later this year, targeting a construction start in the first quarter of 2014.
Stephen Wuori, Enbridge president of liquids pipelines, said Enbridge’s objective is to ensure it offers facilities and services to “maximize their value of shippers’ crude oil.”
The proposed link is part of Enbridge’s wider strategy to deliver rising volumes of oil sands crude to refineries in Ontario and Quebec as well as U.S. markets on the Texas Gulf Coast, the Midwest and refineries in the eastern U.S.
Additional capacity on Line 9Enbridge also announced it is filing with the National Energy Board to raise capacity to 300,000 bpd on its reversed Line 9 to carry crude from Western Canada and the Bakken into Quebec.
Vern Yu, vice president of business and market development for liquids pipelines, said the initial proposal to transport 240,000 bpd from Nanticoke, Ontario, to Montreal was “significantly oversubscribed,” and has prompted Enbridge to consider a further expansion of Line 9 to 340,000 bpd.
He said the initial shipments would be primarily light crude to refineries owned by Suncor Energy and Valero in Quebec City, neither of which is designed to process heavier crudes.
He said Valero is considering moving crude by rail or barge from Montreal, but has asked Enbridge to consider extending the pipeline to Quebec City.
Yu said Enbridge has also filed an application with the U.S. Federal Energy Regulatory Commission seeking approval for the commercial underpinnings of its proposed Sandpiper project out of the North Dakota Bakken to carry 250,000-300,000 bpd from Fort Berthold to Superior, Wis. — a plan he said has solid backing from 20 shippers.
Enbridge is hoping to get a FERC go-ahead in the first quarter of 2013 and bring Sandpiper into service by late 2015 or early 2016.
Yu said Enbridge aims to build volumes on its total network to 3 million bpd from about 2 million bpd currently once its current basket of expansions, including increases to Alberta Clipper and Southern Access, and reduced bottlenecks in the Chicago area, is completed.
The consulting firm of Deloitte has estimated that Canadian producers are losing C$25 billion a year from transportation bottlenecks.