The B.C. government wants to renegotiate a "fair share" of the benefits from Enbridge's Northern Gateway Project as one of five new requirements all new pipeline projects will be required to meet for provincial approval.
Under the current terms, Environment Minister Terry Lake said, British Columbia would get only eight per cent of the pipeline revenue while assuming 100 per cent of the marine risk for the port terminal and tanker traffic on the West Coast, and 58 per cent of the land-based risk for the pipeline.
"We do not feel the current approach to sharing these benefits is appropriate," Lake said Monday in Vancouver
The province would seek to renegotiate the project with the federal government, Lake said, but would not put a dollar figure on the amount of revenue it was seeking. When asked whether it was within the province's power to stop the pipeline if it gets federal approval, Lake said the project needs more than 60 permits from B.C. before it could go ahead.
Lake also said B.C. has "insufficient" information to support the Enbridge pipeline at this time, and the province would exercise its right to cross-examine Enbridge at upcoming federal hearings on the proposed pipeline.
B.C. Minister for Aboriginal Relations and Reconciliation Mary Polak said she was unaware of any First Nation in B.C. that supported the project and that the province had a duty to consult and accommodate First Nations.
"We believe the benefits to First Nations from major pipeline proposals must be clearly identified, along with the measures that will help protect against environmental impacts," Polak said.
In another development, Alberta Premier Alison Redford issued a terse statement calling for greater co-operation from B.C. to access new energy markets, calling it a “national imperative” that is “essential for the economic benefit of Canada.”
“Leadership is not about dividing Canadians and pitting one province against another," Redford said. "Leadership is about working together."
Conditions for approval
Lake laid out the five new requirements all new crude oil pipelines will have to meet before they get provincial approval:
- Completing the environmental review process. In the case of Enbridge, that would mean a recommendation by the National Energy Board Joint Review Panel that the project proceed.
- Deploying world-leading marine oil-spill response, prevention and recovery systems for B.C.'s coastline and ocean to manage and mitigate the risks and costs of heavy oil pipelines and shipments.
- Using world-leading practices for land oil-spill prevention, response and recovery systems to manage and mitigate the risks and costs of heavy oil pipelines.
- Addressing legal requirements regarding aboriginal and treaty rights, and ensuring First Nations provided with the opportunities, information and resources necessary to participate in and benefit from a heavy-oil project.
- Ensuring British Columbia receives a fair share of the fiscal and economic benefits of a proposed heavy oil project that reflects the level, degree and nature of the risk borne by the province, the environment and taxpayers.
The criteria will apply to the controversial Northern Gateway project and any other new crude oil pipeline in B.C., Lake said.
Upgrading spill capacity
Lake detailed several of the changes the province would like to see in the federal government's capacity to handle a marine spill, noting several requirements are much more stringent in Alaska and Norway.
"For example … Alaska requires planning for 300,000 barrels. In Canada, response organizations are only required to maintain response plans for spills up to approximately 70,000 barrels," a statement released by Lake said.
"Further, Alaska allows responders 72 hours to reach the spill site, while Canada allows 72 hours plus travel time, which can sometimes add days to the response."
Lake also called for a review of the amount of insurance the industry is required to carry to finance a cleanup.
"Currently, the total amount of ship owner insurance and industry funding available for spill response is $1.3 billion. By comparison, the U.S. federal government maintains a spill fund that is forecast to grow to nearly $4 billion by 2016."
Lake said the province would look at implementing its own industry-funded spill management program for land-based spills, since a spill on land would largely fall under provincial jurisdiction.
The new clean-up criteria and the proposed changes to spill preparation were quickly denounced as inadequate by Karen Wristen, the executive director of the Living Oceans Society.
“World-leading marine oil spill response and recovery systems will do nothing for us in the event of a spill of tarsands bitumen,” Wristen said.
The diluted crude oil or bitumen that would be carried in the pipeline contains a much higher proportion of heavy asphaltenes and resins than conventional oil. Diluted bitumen does not float on water and is highly resistant to dispersant chemicals, making cleanup nearly impossible, Wristen said.
“By the time people could actually get close enough to deploy any kind of surface-cleaning technology, any oil remaining on the surface would be widely dispersed by the action of currents, wind and waves."
"If a spill were to happen in sensitive near-shore environments, such as the Douglas Channel route into Kitimat, it would impact the entire local ecosystem for decades, perhaps centuries, to come," Wristen said.
Alberta orders pipeline review
The new criteria are just the latest challenges for Enbridge's proposed $5.5-billion pipeline to link Alberta's oilsands with a West Coast tanker port, which is already facing stiff opposition from First Nations, environmentalists and B.C.'s opposition New Democrats.
The B.C. government has yet to take a formal position on the pipeline, but Premier Christy Clark has been critical of Enbridge in light of a U.S. report that lambasted the Calgary-based company over its handling of an oil spill in Michigan.
"British Columbians are fair and reasonable. We know we need resource and economic development, but we also expect that risks are managed, environmental protection is uncompromised and that generations will benefit from the decisions we make today."
Just last week, Enbridge announced plans to spend up to $500 million to improve Northern Gateway's safety features. But First Nations quickly dismissed the plan, saying they have no trust in Enbridge given the company's poor record when it comes to handling spills.
Clark held unannounced, private meetings with both Saskatchewan Premier Brad Wall and Alberta Premier Alison Redford on Thursday. She also spoke to Prime Minister Stephen Harper over the telephone on Thursday.
Meanwhile, Alberta Energy Minister Ken Hughes is defending the Northern Gateway project, saying the pipeline review he ordered on Friday should take care of any safety concerns around the proposal.
"If we're going to move oil and gas products from the Prairies through British Columbia to the coast, it should be done in a way that absolutely protects the environment and human safety as much as possibly can be done," said Hughes.
Hughes has asked an outside company to study pipeline integrity, water crossings and spill response plans.
10. Oil And Gas Accounts For 4.8 Per Cent Of GDP
The oil and gas industries accounted for around $65 billion of economic activity in Canada annually in recent years, or slightly less than 5 per cent of GDP. Source: <a href="http://www.ceri.ca/docs/2010-10-05CERIOilandGasReport.pdf" target="_hplink">Canada Energy Research Institute</a>
9. Oil Exports Have Grown Tenfold Since 1980
Canada exported some 12,000 cubic metres of oil per day in 1980. By 2010, that number had grown to 112,000 cubic metres daily. Source: <a href="http://membernet.capp.ca/SHB/Sheet.asp?SectionID=9&SheetID=224" target="_hplink">Canadian Association of Petroleum Producers</a>
8. Refining Didn't Grow At All As Exports Boomed
Canada refined 300,000 cubic metres daily in 1980; in 2010, that number was slightly down, to 291,000, even though exports of oil had grown tenfold in that time. Source: <a href="http://membernet.capp.ca/SHB/Sheet.asp?SectionID=7&SheetID=104" target="_hplink">Canadian Association of Petroleum Producers</a>
7. 97 Per Cent Of Oil Exports Go To The U.S.
Despite talk by the federal government that it wants to open Asian markets to Canadian oil, the vast majority of exports still go to the United States -- 97 per cent as of 2009. Source: <a href="http://www.nrcan.gc.ca/statistics-facts/energy/895" target="_hplink">Natural Resources Canada</a>
6. Canada Has World's 2nd-Largest Proven Oil Reserves
Canada's proven reserves of 175 billion barrels of oil -- the vast majority of it trapped in the oil sands -- is the second-largest oil stash in the world, after Saudi Arabia's 267 billion. Source: <a href="http://www.ogj.com/index.html" target="_hplink">Oil & Gas Journal</a>
5. Two-Thirds Of Oil Sands Bitumen Goes To U.S.
One-third of Canada's oil sands bitumen stays in the country, and is refined into gasoline, heating oil and diesel. Source: <a href="http://www.nrcan.gc.ca/statistics-facts/energy/895" target="_hplink">Natural Resources Canada</a>
4. Alberta Is Two-Thirds Of The Industry
Despite its reputation as the undisputed centre of Canada's oil industry, Alberta accounts for only two-thirds of energy production. British Columbia and Saskatchewan are the second and third-largest producers. Source: <a href="http://www.nrcan.gc.ca/statistics-facts/energy/895" target="_hplink">Natural Resources Canada</a>
3. Alberta Will Reap $1.2 Trillion From Oil Sands
Alberta' government <a href="http://www.huffingtonpost.ca/2012/03/27/alberta-oil-sands-royalties-ceri_n_1382640.html" target="_hplink">will reap $1.2 trillion in royalties from the oil sands over the next 35 years</a>, according to the Canadian Energy Research Institute.
2. Canadian Oil Consumption Has Stayed Flat
Thanks to improvements in energy efficiency, and a weakening of the country's manufacturing base, oil consumption in Canada has had virtually no net change in 30 years. Consumption went from 287,000 cubic metres daily in 1980 to 260,000 cubic metres daily in 2010. Source: Source: <a href="http://membernet.capp.ca/SHB/Sheet.asp?SectionID=6&SheetID=99" target="_hplink">Canadian Association of Petroleum Producers</a>
1. 250,000 Jobs.. Plus Many More?
The National Energy Board says oil and gas employs 257,000 people in Canada, not including gas station employees. And the Canadian Association of Petroleum Producers says the oil sands alone <a href="http://www.capp.ca/aboutUs/mediaCentre/NewsReleases/Pages/OilsandsaCanadianjobcreator.aspx" target="_hplink">will grow from 75,000 jobs to 905,000 jobs by 2035</a> -- assuming, of course, the price of oil holds up.