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Vol. 23, No.24 Week of June 17, 2018
Providing coverage of Alaska and northern Canada's oil and gas industry

Tanker ban angers Alberta

Legislation in Canadian Parliament threatens jobs, Eagle Spirit plan for port at Hyder

Gary Park

for Petroleum News

Lost amid haggling over the Trans Mountain expansion project, the Canadian government has infuriated Alberta by advancing legislation that will impose a moratorium on shipments of condensate, bitumen and upgraded bitumen exceeding about 90,000 barrels through an area from the northern tip of Vancouver Island to the Alaska border.

The Alberta government estimates the sleight-of-hand will wipe out imports of Asian condensate, essential to the movement of oil sands bitumen through pipelines, threatening “thousands of jobs and billions of dollars of investment.”

Alberta Premier Rachel Notley, challenged June 5 by United Conservative Party leader Jason Kenney to pressure Prime Minister Justin Trudeau to withdraw the bill, said her government has complained to the Canadian government that “the tanker ban in its current iteration is too broad and may well limit opportunities.”

Alberta Energy Minister Marg McCuaig-Boyd, in an exchange of emails with federal Transport Minister Marc Garneau, effectively accused the Trudeau government of breaking faith with promises late in 2017 that the moratorium would exclude naphtha or condensate.

She said the “subsequent expansion of the list of products to include condensates is very concerning as it significantly jeopardizes our efforts to diversify our economy” and poses an economic risk to Canada “as a whole.”

McCuaig-Boyd warned the legislation, covered under Bill C-48, “will affect several future projects with the potential to reach new, high-value markets in Asia.”

“Prohibiting shipments from the strategic deep-water ports on the north coast of British Columbia, which can deliver products to Asian markets with a full-day advantage over other Pacific ports, will have profound and long-standing economic consequences (for Canada),” she wrote.

McCuaig-Boyd noted that Alberta’s progress in upgrading oil and gas is an “important development policy and because it will support our transition to a low carbon future.”

Although British Columbia has not publicly entered the debate, it also stands to lose offshore shipments of by-products from the Montney shale gas formation that covers both sides of the northern border between B.C. and Alberta.

There is little hope of Alberta bringing Bill C-48 to a halt now that it has passed third reading in the House of Commons and is before the Senate for any final recommended changes.

For environmentalists it’s a partial victory after they lost their attempt to sink the Trans Mountain expansion.

Bill C-48 is “a significant win for the coast that the oil tanker moratorium ... is a big step forward for keeping north coast ecosystems, communities and livelihoods safe from the risk of oil spills,” said Jessica Clogg, executive director of the West Coast Environmental Law Association.

Suit over Hyder project

But an aboriginal-owned company called Eagle Spirit, which hopes to build a C$17 billion, 900-mile pipeline that would carry more than 1 million barrels per day of oil sands bitumen to a tanker port at Hyder, Alaska’s southernmost community, has launched legal action in a British Columbia court to stall Bill C-48.

Eagle Spirit has signed a memorandum of understanding with Roanan Corp., a private landowner in Hyder for 40 years, to locate the pipeline’s endpoint at the head of the Portland Canal.

More than 30 First Nations across northern Alberta and British Columbia support a project along the corridor that would carry upgraded bitumen, synthetic crude, natural gas, power transmission and fiber optic lines.

Eagle Spirit has the support of major Canadian oil producers such as Suncor Energy, Cenovus Energy and MEG Energy.

“We absolutely do not support big American environmental (non-governmental organizations who are financed by opposing natural resource projects) dictating government policy and resource developments within our traditional territories,” said a council of chiefs opposing the legislation.

They declared their support for the Eagle Spirit energy corridor “because it would provide real-world sustainable benefits and own-source revenue and meaningful participation for the poorest communities in Canada.”

Randy Hoback, a Saskatchewan legislator in the Canadian Parliament, said Bill C-48 is “not a tanker ban ... this is to stop development in the resource sector.”

But Garneau said the bill accomplishes his government’s climate priorities and merely formalizes an existing voluntary tanker exclusion zone.

“We have an opportunity now to accomplish something of historic importance and we should grasp that opportunity,” he said.

Martha Hall Findlay, president of the independent Canada West Foundation, said Bill C-48 is “loaded with hypocrisy,” and has no parallel on any other stretch of Canadian coastline, least of all the southern portion of British Columbia’s coast which handles 95 percent of tanker traffic carrying crude.

“We must not pick and choose where and when we exercise our environmental conscience, particularly when doing so favors jobs in some parts of the country, but kills others,” she wrote in the Globe and Mail.

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