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Gateway critical test Enbridge export pipeline about to start two years of hearings and deliberations Gary Park For Petroleum News
What the Canadian government views as vital to the “national interest,” with an estimated C$270 billion in taxes and royalties and thousands of jobs on the line, is on what could be the ultimate collision course for an energy project within Canada.
The curtain on the showdown will be raised Jan. 10 in the Haisla First Nation of Kitamaat Village near Enbridge’s proposed Northern Gateway terminus on the Douglas Channel of British Columbia’s north coast.
From there the initial public hearings will fan out across northern British Columbia and Alberta — a process the National Energy Board or NEB expects to complete by mid-March, followed by a round of community meetings expected to last until mid-July when more than 4,000 individuals and organizations will make public statements to a joint review panel of the NEB and the Canadian Environmental Assessment Agency.
Interveners will then have a chance to cross examine Enbridge’s technical experts and others who have presented evidence in formal hearings scheduled for September and October.
Decision by end of 2013 The NEB anticipates the complete public process will last until mid-2013, followed by the release of an environmental assessment report in fall 2013 and a final regulatory decision by the end of that year.
Even before the hearings start, that schedule is at odds with newly available public documents that show the Canadian government expected the process to be completed by mid-2012.
Natural Resources Minister Joe Oliver said in late December that while the government respects the process it is “concerned about excess delays,” noting that “consultations with aboriginal and other organizations have been ongoing since 2008.”
But Oliver said that although it is “very important” for Canada to diversify its energy export markets beyond the United States, he will respect the regulatory process.
Whether that means waiting until late 2013 for a decision is not clear.
Opposition to pipeline Equally, there is little doubt that various activists, environmental groups, First Nations and local governments — drawing strength from the success of opponents in delaying TransCanada’s Keystone XL pipeline — are just as determined to make their case against shipping oil sands crude by pipeline and tanker, building much of their case around the 1989 Exxon Valdez spill in Alaska and the 2010 Macondo well blowout in the Gulf of Mexico.
Linda Duncan, an Edmonton Member of Parliament from the opposition New Democratic Party, said that if the government of Prime Minister Stephen Harper has “not figured out yet that this project cannot be rubber-stamped, then they better wake up,” warning Oliver against trying to fast-track the approval.
A spokeswoman for the Canadian Environmental Assessment Agency said there is “no real timeline” for hearing all of the evidence on Northern Gateway, but the joint review panel “wants to hear from everyone … who has valuable information.”
Enbridge focused on credibility Enbridge has declared its objective through the hearings is to “outline the credibility of the application” confident it has the engineering and environmental studies to prove the pipeline and tankers can be operated safely.
But it’s far from clear that Enbridge has been able to win over the bulk of First Nations, especially those along the pipeline route who have been offered a 10 percent equity stake in the project.
A briefing note to federal Aboriginal Affairs Minister John Duncan said that even if Enbridge receives a “favorable” environmental ruling, unresolved Native land claims in British Columbia pose a “major obstacle,” given that the pipeline crosses about 1,000 rivers and streams that are salmon spawning grounds.
A broad-based coalition of environmentalists and 130 First Nations has warned it will use legal challenges and, if necessary, civil disobedience to prevent construction of Northern Gateway.
To that threat, Oliver and others in government have confined themselves to saying that Canada will observe the rule of law.
Enbridge enters the hearing phase claiming it has reached commercial, but nonbinding agreements with unnamed producers and refiners who have “fully subscribed for long-term service and capacity” on both lines — the 525,000 barrels per day oil sands crude export pipeline and the parallel 193,000 bpd condensate import line.
The company said it has enlisted 10 supporters, each of which has contributed C$10 million towards Northern Gateway’s design and the regulatory process, although so far only China’s Sinopec has publicly disclosed it is one of the parties.
However, FirstEnergy Capital analyst Steven Paget said the deals give some assurance to the joint review panel that the project is commercially viable and supported.
The terms of reference require the joint review panel to weigh the public interest on behalf of “all Canadians” balancing “economic, environmental and social considerations,” embracing more than Canada’s traditional regulatory focus on just an environmental assessment.
Jolan Bailey, speaking for the environmental group ForestEthics, said the project has clearly “struck a public nerve. This is really a wall of public opposition.”
The New York-based Natural Resources Defense Council, a leading opponent of Keystone XL, has joined the campaign by mobilizing its members to send 60,000 emails to British Columbia Premier Christy Clark.
Enbridge Chief Executive Officer Pat Daniel said that if U.S. charitable foundations try to derail Northern Gateway they may discover “most people think it’s more important to have security of oil supply and alternative markets.”
He said the joint review panel faces two key decisions: Is Northern Gateway in Canada’s national best interest and can it be built in an environmentally sound and effective way?
The challenge for the joint review panel will be to keep its hearings within those confines and for the Canadian government to deal with the potentially explosive issues that are unrelated to the regulatory terms of reference.
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