|
Northern Gateway pipeline battle builds Labor, aboriginal coalition girds for legal action against ‘bullying, intimidation’; producers waiting for pipeline congestion relief Gary Park For Petroleum News
Warnings are piling up on either side of the Northern Gateway pipeline, with British Columbia aboriginal and labor groups threatening civil disobedience and legal action if the project is approved, while an energy analyst estimates that unless the bottlenecks to Asia and the United States from the Alberta oil sands are unclogged producers could give up C$18 billion in annual revenues.
The building showdown against the Enbridge scheme intensified when a coalition of labor unions and First Nations said an “unprecedented bullying and intimidation campaign by the oil industry and its friends in government … has only strengthened and broadened the alliance of people who are determined to oppose the project.”
The anger spilled over after the groups failed to get meetings with federal cabinet ministers involved in various aspects of Northern Gateway — Natural Resources Minister Joe Oliver, Environment Minister Peter Kent and Aboriginal Affairs and Northern Development Minister John Duncan.
However, they briefed Members of Parliament from the Liberal, New Democratic and Green parties, but met with only one government MP, Randy Kamp, from the Vancouver area, who refused to say whether he supports Northern Gateway.
Alberta pricing disadvantage Separately, Andrew Potter, an analyst with CIBC World Markets, said congestion on existing pipelines out of Alberta and delays in Northern Gateway and TransCanada’s Keystone XL project have placed Alberta crude at a pricing disadvantage, with US$30 per barrel discount to benchmark West Texas Intermediate likely to be the norm rather than the exception.
He the discount, resulting from congestion on U.S. pipelines and competition for access to U.S. refiners and markets, means Canadian producers will lose about C$18 billion a year revenue into 2014 and possibly beyond.
“The message is, directionally, (the discount) is going to be a lot wider than people are expecting and it’s going to last a lot longer and it’s going to be hugely volatile,” he said.
Potter said the existing infrastructure is incapable of handling growing supplies, with output from the oil sands and the Bakken play expected to add 650,000 bpd to the system by the end of 2013.
Synthetic crude and Bakken light oil from North Dakota are selling for about US$16 per barrel and more below WTI and US$34 under the international Brent marker.
Refining, Seaway offer hope Suncor Energy, the leading oil sands producer, said the best hope it can hold out is that the discount to WTI will narrow by mid-2012 when 350,000 bpd of U.S. refining capacity comes back into service around the same time the Seaway pipeline, run by Enbridge and Enterprise Products Partners, starts shipping 150,000 bpd from the oversupplied Cushing hub to the Texas Gulf Coast.
Bentek analyst Adam Bedard said that as refiners shift to heavier slates and Canada’s combined conventional and unconventional production rises about 30 percent to 4 million bpd by 2016, discounts to WTI could average about US$27 per barrel in 2014.
He said the only answer is for another 500,000 bpd of pipeline capacity to balance the market, close to the capacity proposed for Northern Gateway, which is due on stream in 2017.
But Chief Jackie Thomas of the Saik’uz First Nation in British Columbia made it clear she will not be swayed by industry arguments, declaring her community will “use every means available under international, Canadian and aboriginal law” to block the project, adding that “civil disobedience is not out of the question.”
She said land claimed by the Saik’uz and other First Nations account for more than 25 percent of the proposed Enbridge right of way
David Coles, president of the Communications, Energy and Paperworkers Union said his union does not endorse violence, although “civil disobedience is an absolute possibility.”
The union is “diametrically opposed” to the project because of the loss of jobs associated with the export of raw bitumen.
Multiple legal issues Information obtained under freedom-of-information showed the Canadian Environmental Assessment Agency, which is working with the National Energy Board in a joint regulatory review of the Northern Gateway application, said the federal government could face “adverse legal consequences” if it refused to help finance participation by First Nations in the process.
The agency said that denying First Nations the opportunity to “reasonably and meaningfully participate” would result in a “moderate to high risk that the courts would find the consultation process to be unreasonable.”
A spokesman for Vancouver-based Westcoast Environmental Law said Northern Gateway faces a multitude of legal challenges if it is approved and “could be tied up in the courts for a long time.”
Further inflaming project opponents is the claim by a former federal scientist, Otto Langer, who disclosed confidential documents showing the government is trying to avoid regulating fish habitats to allow for speedier approval of projects such as Northern Gateway.
He said the government wants to remove a requirement in the Canada Fisheries Act to protect any fish that does not have “economic, cultural or ecological value.”
A spokeswoman for Fisheries Minister Keith Ashfield said a final decision has yet to be taken, but federal fisheries policies designed to protect fish are “outdated and unfocused in terms of balancing environmental and economic realities.”
In addition, a parliamentary committee has recommended 20 changes to the Canadian Environmental Assessment Act that can cause delays in regulatory approvals and result in lost economic opportunities.
| 