Northern Gateway gets shopping list

Canadian regulatory panel attaches 199 potential conditions to pipeline project, including C$1.05B in insurance, ‘ready cash’

Gary Park

Petroleum News

A Canadian government review panel has laid out 199 conditions Enbridge will have to meet if it gets approval later this year for its disputed Northern Gateway project.

Although the panel emphasized it has not decided “whether or not to recommend approval” of the project, the release of conditions “is a standard step in the hearing process that is mandated by the courts.”

The panel which has been conducting public hearings in British Columbia and Alberta over the past 15 months has been jointly appointed by Canada’s National Energy Board and the Canadian Environmental Assessment Agency.

It said the conditions “address all aspects of the proposed project including engineering, spill response, socio-economic and environmental requirements.”

High on its list of potential conditions is C$1.05 billion in proposed liability coverage for pipeline spills or tanker accidents on the British Columbia coast.

That includes C$950 million in insurance to cover cleanup, remediation and damages from project operations and unfettered access to C$100 million that would be made available within 10 business days of a large spill to cover immediate costs while insurance claims were processed.

In addition, the 50-page document has called for Enbridge to help fund heavy oil spill research program, to be developed in consultations with First Nations, that examines “the behavior of heavy oils spilled in freshwater and marine aquatic environments.”

Comments due May 31

The panel is expected to deliver its verdict later this year and the Canadian government’s final decision is expected by mid-2014.

Northern Gateway is a C$6 billion twin-pipeline proposal to connect the Alberta oil sands with a deepwater port at Kitimat to export 525,000 barrels per day of crude bitumen to Asia and California and import 193,000 bpd of condensate.

In its most recent major project approvals, the NEB had attached 264 conditions to its formal approval in late 2010 of the Mackenzie Valley natural gas pipeline to deliver up to 1.8 billion cubic feet per day of Arctic gas to southern Canadian and U.S. markets, and 22 conditions in its approval of the Canadian portion of the Keystone XL pipeline.

Enbridge spokesman Todd Nogier said in a statement that release of the Northern Gateway list provides “ample and appropriate opportunity for all regulatory participants to provide their comments before the final argument hearings in June.”

Other conditions

•A wide range of requirements that are specific to First Nations, which have mounted some of the strongest opposition to Northern Gateway. They would entitle aboriginal communities to know a year before construction of a pipeline started what regional training and education would be available to their residents and what contracting and procurement opportunities would be offered.

•That laden tankers in the confined Douglas Channel from Kitimat would have two escort tugs, one of them tethered.

•Specific inspections of the pipelines, including an investigation of “all dents greater than 2 percent of pipe diameter to ensure they are free of gouges and not associated with a weld.”

•Three months before the pipe is manufactured, Enbridge should give the National Energy Board a detailed performance of the materials it intends to use.

Ben West, a spokesman for ForestEthics Advocacy, said the conditions will not sway project opponents.

“I take it as a sign that the (National Energy Board) is getting the message that people are really concerned about this pipeline,” he said. “The safest option we have is just not to build this pipeline.”

Keith Stewart, a campaign coordinator with Greenpeace Canada, said the final license must still be approved by the Canadian government, which has abandoned or watered down many regulatory recommendations for past projects.