|
Harper avoids raging pipeline debate Canadian PM goes silent while B.C., Alberta, clash over revenue-sharing from Northern Gateway, debate spreads to other pipelines Gary Park For Petroleum News
Earlier this year, Canadian Prime Minister Stephen Harper was vigorously beating the drum in support of opening new markets for oil sands crude, above all in Asia.
These days, with the bitumen battle flaring up all over Canada, he seems to be avoiding the topic.
The only official word from the upper ranks of government has come from Natural Resources Minister Joe Oliver who said only that Ottawa will “fulfill our obligations” relating to pipeline safety and maritime environmental protection.
But the Harper administration shows no desire to become entangled in the brawl between Alberta and British Columbia, two of its political strongholds, especially when it comes to meeting British Columbia’s demand for a reallocation of revenues from oil sands pipelines.
“The economic benefits are, in fact, already shared across the country,” Oliver contended. “I just don’t want to get into that issue at this time.”
Andre Plourde, an energy economist and dean of the faculty of public affairs at Carleton University in Ottawa, said the Harper government is smart to remain on the sidelines and “coax, smile and gently hope the two provinces can come to terms on this.”
If the federal government did intervene and “actually do something, you’re going to have all kinds of interprovincial issues come up.”
But observers believe that a hands-off approach will only last so far if Harper is truly determined to secure access in Asia for Enbridge’s Northern Gateway, especially as the public mood swings dramatically against Northern Gateway, Kinder Morgan’s planned expansion of its Trans Mountain system, and efforts by Enbridge and TransCanada to open new markets in the United States and Eastern Canada.
Enbridge getting hammered With Enbridge being cast in the role of Public Energy No.1 in the U.S. and Canada, it is getting hammered from all sides and now faces a threat from First Nations in British Columbia of prolonged court challenges if it gets regulatory approval for Northern Gateway.
And, if the legal action fails, aboriginal leaders are warning they will resort to direct civil disobedience to block pipeline construction.
Enbridge, bothered by the refusal of its opponents to participate in moderate discussion, is now being pushed to a point where it must decide whether the C$6 billion venture can proceed at all.
Kinder Morgan is getting backed into the same corner, with British Columbia Environment Minister Terry Lake stressing that the same environmental and revenue-sharing conditions his government wants from Northern Gateway apply equally to the proposed Trans Mountain expansion to 750,000 bpd from the current 300,000 bpd.
That includes a demand that British Columbia must receive a “fair share of the fiscal and economic benefits” of heavy crude pipelines that match the environmental risks facing the province.
The Clark administration is growing bolder and more assertive as polls show public opinion in British Columbia is shifting against Northern Gateway, while James Moore, a senior federal cabinet minister from British Columbia, is raising serious doubts that the project can survive.
5 to 1 against Gateway A survey of British Columbians by the firm of Angus Reid showed Northern Gateway is opposed by a five-to-one margin, although half were ready to change their minds if the province could extract commitments on improved fiscal benefits and cutting-edge spill response measures.
A second poll by Forum Research found 65 percent outright opposition to the pipeline, up from 59 percent a month earlier.
Moore said the project will “not survive scrutiny unless Enbridge takes far more seriously their obligation to engage the public,” to which Enbridge President Al Monaco said the company has held about 17,000 meetings or consultations with the public since the pipeline was first proposed 13 years ago.
Alberta Deputy Premier Thomas Lukaszuk said his government is open to talks, but will not negotiate a “fair share” of royalties and taxes.
“It is abundantly obvious that if we compete domestically, we cannot compete internationally,” he said. “There will be no one-off discussions. That is very clear.”
A spokesman for Kinder Morgan, which expects to file its application with the National Energy Board in late 2013, said the company will consider improvements to pipeline safety and spill response procedures.
But he said Kinder Morgan does not view oil sands crude as “any more dangerous” than the light crude it has shipped on Trans Mountain over recent decades.
Resolute stand in B.C. British Columbia Premier Christy Clark’s resolute stand was bolstered by a new report from the highly respected Canadian Energy Research Institute, which estimated Alberta could receive about C$556 billion in taxes between 2011 and 2035 from three oil sands pipelines — Northern Gateway, Trans Mountain and Keystone XL. British Columbia would collect only C$8 billion.
The report did not estimate the benefits related to construction and operation of the three pipelines. Those details will be released later in August.
Meanwhile, the flames from Northern Gateway, Keystone XL and Enbridge pipeline spills in the United States have spread to Ontario and Quebec, where environmental organizations have gone on the offensive against Enbridge’s plans to move greater volumes of oil sands crude to refineries in those provinces.
The National Energy Board gave approval for Enbridge to start the first phase by reversing the flow of Line 9 in Ontario, targeting 152,000 barrels per day, expandable to 250,000 bpd, but limited the pipeline to carrying only light crude.
The federal regulator said that if Enbridge wants to deliver heavy crude from the oil sands it will have to apply for a change.
“If Ontario is to facilitate expansion of the oil sands, then let’s have an open, public debate and proper public scrutiny,” said Albert Koehl, an attorney for Ecojustice.
Steven Guilbeault, with Quebec’s-based Equiterre, said plans by Enbridge and TransCanada to use existing lines to ship oil sands crude are “not a slam-dunk.”
He said the Enbridge line is 40 years old and wasn’t built to handle oil sands crude, which is more corrosive than conventional light crude.
“It is important to protect waterways, wetlands and drinking water sources,” said Quebec Environment Minister Pierre Arcand. “Environmental issues remain central to our concerns.”
Outrage amped by policy debate Monaco and outgoing Chief Executive Officer Pat Daniel suggested the public outrage over Enbridge pipeline spills in the past two years — one each in Michigan, Wisconsin and Alberta — has been “amplified” by the policy debate in North America over the pace of oil sands development and the shipment of crude bitumen into the United States.
But they welcomed a decision by Canada’s National Energy Board that it was stepping up safety audits of the company’s pipelines and reviewing improvements at the Edmonton control center which the U.S. National Transportation Safety Board identified as a major reason for Enbridge’s slow response to its Michigan rupture.
Monaco said Enbridge has “made excellent progress in terms of enhancing our systems and processes” since the Michigan event and demonstrated that in its response to the Wisconsin spill.
He said a new Operational Risk Management Plan covers six areas of safety, avoidance, detection and incident response gives Enbridge hope that it can achieve its goal of “zero leaks.”
| 