Peace overtures renewed
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Alberta once again reaches out to British Columbia on unresolved pipeline issues
Gary Park For Petroleum News
Alberta Premier Alison Redford made the first overture. “I know we can do more together,” she said.
Her Energy Minister Ken Hughes declared: “This is not a time for hard positions or difficult conversations. This is a time for all of us to reflect upon what we have in common ... and being open to how things evolve.”
Noble words that have Alberta’s oil sands producers and Canada’s energy pipeline companies holding their breath and crossing their fingers.
So far, the object of all these hopes, British Columbia’s newly elected Premier Christy Clark, is biding her time and she can afford to.
On the question of whether Enbridge and Kinder Morgan will be able to build pipelines from the oil sands to the British Columbia coast, Clark holds the sway.
Having overcome the pollsters and pundits and gained a strong mandate in British Columbia’s May 14 election, she has turned overnight from a political lightweight in her province to a heavyweight in Canada, especially when it comes to the energy export aspirations of the Canadian and Alberta governments.
In a self-assured post-election meeting with reporters Clark was transformed from glib into an assertive leader, focused on forging ahead with her economy-first campaign promise to create jobs and generate revenues.
LNG top of list Top of that list is her grand dream of turning British Columbia into a global LNG force.
That means taking a measured approach to advancing plans for up to nine LNG export projects, including four by Shell, Chevron, BG Group and Petronas to ship as much as 47 million metric tons a year of LNG to Asia, and carefully negotiating her own plans to introduce a new LNG tax and royalty regime.
In an intensely competitive global environment, the risk facing Clark is that she could alienate investors.
Equally important to the investment image she portrays is how she handles Enbridge’s Northern Gateway project and Kinder Morgan’s Trans Mountain expansion which could ship a combined 1.4 million barrels per day of crude bitumen to tanker ports on the Pacific coast.
That’s where a thaw in a year of cool relationships between British Columbia and Alberta is needed.
Alberta moves for meetings Redford, who had cause to be offended by Clark’s campaign statement that her province “does not need” Alberta to help develop British Columbia’s resources, took the first step in congratulating Clark on her election victory and setting the stage for an early meeting of the two leaders, possibly at a mid-June meeting of Western Canadian and territorial premiers.
Hughes called his British Columbia counterpart, Rich Coleman, and the pair also agreed to get in touch in the near future.
“As Canada moves to seize new opportunities and open new global markets, I look forward to renewing discussions with British Columbia about issues that affect our provinces,” Redford said.
“We need to work together on initiatives that will improve the quality of life for people living within our borders and ensure we’re doing everything we can to strengthen Canada for future generations.”
Clark adamant on pipelines But Clark has yet to shift from her stance on pipelines.
If anything she’s been just as adamant as previously that none will be able to cross British Columbia from Alberta unless they meet the conditions she laid out for approval, which basically require: Successful completion of current environmental reviews; world leading marine and land oil spill response, prevention and recovery systems; opportunities for First nations to participate in and benefit from heavy oil projects; and a “fair share” of the fiscal and economic benefits of the projects.
Clark said the conditions are “not going to change,” noting that Kinder Morgan and Enbridge are both “working hard” to comply with standards.
She also again endorsed plan by newspaper publisher David Black to build a refinery at Kitimat to convert crude bitumen into products for shipment to Asia.
Clark said that would ease concerns over the prospect of tanker spills in the Pacific.
CAPP: conditions ‘not unreasonable’ The most encouraging response to Clark’s demands has come from the Canadian Association of Petroleum Producers, whose leaders — despite being neutral on specific pipeline projects — have said Clark’s conditions are “pretty clear, not unreasonable, and (have) set the stage for discussions on how the projects can go forward.”
CAPP President David Collyer said sharing oil sands royalties is a “non-starter” unless it can be framed in the context of what benefits would accrue to British Columbia from pipeline development.
“We know what we are working with as far as the policy environment goes — it’s a government that has been largely supportive of oil and gas issues, like West Coast access for oil,” he said.
Even opponents of the Northern Gateway and Trans Mountain pipelines — notably Kennedy Stewart, a New Democratic Party member of the Canadian parliament from the Burnaby district in Metro Vancouver — said the defeat of provincial NDP leader Adrian Dix is a “big game changer ... and increases the odds of both pipelines going through.”
University of British Columbia political scientist George Hoberg, a specialist in resource management and a strong oil industry critic, called Clark’s victory a “major setback” for British Columbia’s environmental movement.
He issued an ominous warning that “an increasing number of environmentalists will choose to resort to civil disobedience when appropriate opportunities arise,” mirroring comments on social media that pipeline opponents may now have to take their fight “into the woods.”
First Nations issue Janet Holder, Enbridge’s executive vice president assigned to Northern Gateway, acknowledged that her company must “work with aboriginals and the communities along the right of way and the citizens of British Columbia to help them understand the value of this project and to help us understand how we can address their concerns.”
A hint of what might lie ahead occurred May 16 when members of the Gitga’at Nation evicted a Northern Gateway crew from their territory on the north coast as it tried to conduct oil spill response surveys, claiming Enbridge has “screwed up” relations with First Nations.
Art Sterritt of Coastal First Nations said Enbridge would be “sadly mistaken” to feel any confidence in the election result.
“As far as we’re concerned (Northern Gateway) is still dead,” he said.
Sterritt described Clark’s pipeline conditions as “fairly onerous,” especially as they relate to fiscal and economic benefits, and doubts Enbridge will ever be able to meet them.
He said Coastal First Nations will tell Clark it can support environmentally sound LNG development, but is unable to endorse the volume of tanker traffic Northern Gateway would generate.
But Ivan Giesbrecht, Enbridge communications manager in Vancouver, said the voters of British Columbia have “spoken quite clearly that economic development and economic prosperity is a priority, but not at the expense of the environment. That has been our message all along.”
If and when Redford and Clark get down to serious negotiations, the British Columbia leader will arrive with tough fiscal demands and burdened by First Nations and environmental issues that could still outweigh the pure economic argument.
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