EDMONTON - Hearings into the Northern Gateway project enter the critical question-and-answer phase Tuesday, with both builder Enbridge (TSX:ENB) and the Alberta government promising to make their case to build the controversial $6-billion pipeline.
Both the province and Enbridge are among many groups that will present experts to take questions from the three-member joint review panel and from interveners on the economic benefits of the project and whether the 1,170-km dual line is worth the environmental risk.
"The province has always been an advocate for getting our products to the west coast and the importance of all of Canada realizing the net benefit of a strong Alberta and a strong Canada," said Mike Deising, press secretary for Alberta's Energy Department.
"The province will now have an opportunity to send two technical experts in front of the panel to take questions relating to a written submission that talks about the importance of west coast access for Alberta energy products and the benefits that can be realized through energy corridors in getting our natural resources to tidewater."
The panel — mandated by the federal government and the National Energy Board — has been travelling around British Columbia and Alberta this year hearing submissions and concerns on the proposed pipeline, which would ship oilsands crude to terminals at Kitimat, B.C., to then be loaded on supertankers bound for new markets in Asia, particularly China.
Kristen Higgins, with the National Energy Board, said the stretch run has begun.
"All the oral evidence and written evidence that is on the record, this is the opportunity for people to test that evidence," said Higgins.
The stakes are high.
The line has become a political staring contest over profits between Alberta Premier Alison Redford and B.C. Premier Christy Clark.
B.C. has intervener status at the hearings, and Clark has said the line as proposed is a one-sided deal that effectively asks B.C. to assume the majority of the risk for little reward.
While not giving a specific dollar figure or percentage, Clark has said she wants a larger share of profits from Alberta before B.C. will consider signing on. Redford has rejected oil royalty sharing, saying it would go against the principles of Confederation.
A study commissioned by British Columbia estimates $81 billion in tax revenue will be accrued by the pipeline over 30 years, with $36 billion going to the federal government, $32 billion to Alberta and just $6 billion to B.C.
It's also projected to spur $270 million of GDP growth to B.C. over that period.
Alberta, in a research paper submitted to the hearings, reports that additional export capacity is critically needed as oilsands production continues to grow, that Asia is a rapidly growing market and that there will be a high price to pay for not acting.
"Canadian producers not having sufficient access to premium heavy crude refining markets could lose about US$8 a barrel for every Canadian heavy crude barrel, with a revenue impact averaging $8 billion per year from 2017 to 2025," said the report, completed for the province by Wood Mackenzie.
Enbridge plans to have its experts address the financial questions surrounding the pipeline — the economic impact along with the toll and tariff structure — at the Edmonton hearings.
The more contentious issues will be addressed at upcoming hearings in B.C.
At Prince George, it will have its team take questions on the design and safety of the pipeline.
At Prince Rupert, it will discuss the shipping aspect and the measures it will take to prevent accidents and spills on the water and keep safe the tributaries of the Fraser, Skeena and Kitimat rivers.
"This (Edmonton on Tuesday) will be the first opportunity for Northern Gateway to lend its own voice to this important proceeding," said Janet Holder, Enbridge's executive vice president in charge of western access in a news release Friday.
"Enbridge Northern Gateway believes that the concerns expressed by Canadians to date, and particularly those living in British Columbia, can be addressed in a reasonable and responsible way."
There have been protest rallies and demonstrations against the project in B.C., with naysayers pointing to this summer's U.S. National Transportation Safety Board report on the Enbridge pipeline spill in Michigan in 2010 as smoking-gun proof the company cannot do what it promises.
In the report, the U.S. safety board likened Enbridge to bumbling "Keystone Kops" for first failing to properly detect the Michigan line break, then compounding the mistake by pumping more oil through the breach rather than shutting it down.
More than 20,000 barrels of oil were spilled, fouling 50 kilometres of waterways and wetlands in and around the Kalamazoo River.
Following that report, Enbridge announced another $500 million in safety improvements for Northern Gateway, including more shut-off valves, thicker pipe and more people staffing remote monitoring stations.
Prime Minister Stephen Harper's government is endorsing the need for infrastructure to get oil to the growing Asian market, but has said the Northern Gateway decision will be based on science, not politics.
The panel must file its report to the federal government by the end of next year.
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Northern Gateway President John Carruthers
(Sept. 4) - Northern Gateway president John Carruthers argues the pipeline is just as important to Canada as the St. Lawrence Seaway and the Canadian Pacific Railway..."when constructed, [they] laid the foundation for significant benefits for generations of Canadians. Our project is no different."
Robert Mansell, U of C School of Public Policy
(Sept. 4) - Robert Mansell, academic director of the University of Calgary School of Public Policy, argued the benefits the pipeline could have for Canada. "Just imagine a situation where, if not for Northern Gateway, you had shut in 525,000 barrels per day for one year. That loss works out to $40-million a day, or $14.4-billion per year," he said.
Leanne Chahley, lawyer for the Alta. Federation of Labour
(Sept. 4) - Leanne Chahley, a lawyer for the Alberta Federation of Labour, questioned the estimated economic gains. "It's still a social science that you're involved in, economics. How much degree of certainty should we give it?"
Gil McGowan, Alta. Federation of Labour President
(Sept. 4 ) - Albert a Federation of Labour argues the $6-billion line would mean 5% less refinery in Alberta and the loss of 8,000 jobs. "China is in the midst of a building boom in terms of refineries and refining capacity, so our fear is that if our policymakers allow this pipeline to be built we'll end up in a situation where our own homegrown refineries are no longer economic and they'll close down," federation president Gil McGowan said. "We'll end up in a situation where we're sending our raw bitumen oil to China and then buying back the refined product."
John Carruthers, Northern Gateway President
(Sept. 4) - Northern Gateway president John Carruthers on the Enbridge's committment to environmental responsibility: "It involves assessing, in the same objective fashion, and according to the same standards, the information or evidence that has been presented by those who are opposed to the development of our project. And it culminates in approving the project under a framework of conditions that will promote reconciliation over division, and fact over rhetoric."
John Risdale, B.C. First Nations Chief
(May 2012) - B.C. First Nations leaders travel to the step of the Alberta Legislature to voice their concerns on the environmental damage. "The pipeline route that they have proposed is following the most major river system that we have and when the river is ruined, the people are ruined, the land is ruined," said Hereditary Chief John Ridsdale of the Wet'suwet'en First Nation.
Terry Lake, B.C. Environment Minister
(Sept. 4) - B.C. Environment Minister Terry Lake on how Enbridge plans to exceed world standards in spill prevention. "We certainly want to clarify with Enbridge some of the comments made over $500-million more of safety improvements and what exactly will that mean," Lake says. "In terms of monitoring, in terms of response capability, how can we ensure that any proponent would have to live up to what we consider world class response and mitigation measures."
Economist Robert Mansell, U Of C School Of Public Policy
(Sept. 5) - <strong>On the chance that the proposed Nothern Gateway pipeline would have a negative effect on central Canada's manufacturing sector</strong>: "It is not credible that one could argue this would cause Dutch disease." "Would it do, as has been alleged -- cause the rate of inflation to go up and then force the monetary authorities to tighten the money supply and thereby shrink the economy? The answer is no. "Monetary policy is based on what's called the Core Inflation Rate, which excludes the price of food and energy."
Texas-Based Energy Consultant Muse Stancil
(Sept. 5) - <strong>In a report submitted to the hearing, Texas-based energy consultant Muse Stancil said the Northern Gateway will have an effect on oil pricing in North America:</strong> "It can be expected to have a material effect on the distribution patterns and pricing dynamics for Western Canadian crude, as crude producers for the first time will have a high-volume alternative to their historical markets within North America," said the Muse Stancil report. "Northern Gateway allows the Canadian crude producers to both stop selling to their least attractive refiner clients (from a pricing prospective) and reduces their need to ship heavy crude via comparatively expensive rail transport."
Richard Johnston, UBC Political Scientist
Sept. 5 - <strong>On the chance the federtal Tories could lose ground in B.C. due to unfriendly policies such as support of pipelines to the west coast:</strong> "Among the risks to their base, I would put Northern Gateway highest," Johnston said. "The risk/benefit ratio (for B.C.) is massively unfavourable in itself and if the government were to force the issue pre-emptively, they would add an additional dimension to the debate, singling out one province for ill-treatment, rather like the NEP and Alberta. I expect Conservative MPs are worrying about this aloud."
Elisabeth Graff, B.C. government lawyer
(Sept. 7) - "Are you willing to acknowledge this is a complex organizational structure that limits the liability of a corporate giant that definitely would have sufficient funds?" she asked. "What we're left with is an entity which you tell us has the financial resources necessary to cover any type of spill, but we're still doubting whether that is possible." "No, I just fundamentally can't accept that," replied Mr. Carruthers. "Because of the investment, everyone would want to make sure there's proper funding available in case of a spill," he said.
Janet Holder, Enbridge senior executive
(Sept. 7) - "We're doing everything in our power to mitigate against a spill." "Believe me, Enbridge doesn't want a spill. It's not what we're in the business for. We're in the business of moving very safely, environmentally sound and in a sustainable way, product from one spot to another."
Geoff Plant, B.C.'s head lawyer for the hearings
(Sept. 7) - "The question [is] whether Enbridge is actually capable of getting the kind of insurance to ensure against the risk of liability," on whether the insurance is there should an oil spill happen.
Barry Robinson, lawyer for three environmental organizations
(Sept. 8) - "If free market economies aren't at play, where's the economic benefit?" asked Robinson about the economic effects of the hypothetical possibility of Chinese interests buying control of the Northern Gateway pipeline.
Kelowna resident James MacGregor
(Spet. 6) - The Avaaz petition <a href="http://www.avaaz.org/en/petition/Stop_Enbridges_Northern_Gateway_pipeline/?whtizcb" target="_hplink">"No Enbridge Tankers/Pipeline in BC Great Bear Rainforest"</a> was started by James MacGregor and has since passed 10,000 signatures. "BC's entire Great Bear Rainforest, its wildlife and the livelihoods of coastal First Nations are all at great risk if Enbridge's Northern Gateway pipeline is approved," he said. "I know I'm not the only one out there speaking up about the pipeline, but I felt like I couldn't sit back and do nothing." (Source: <a href="http://www.vancouverobserver.com/blogs/earthmatters/petition-opposing-northern-gateway-pipeline-clears-10000-signatures" target="_hplink">Vancouver Observer</a>)
Hana Boye, lawyer for Haisla First Nation
(Sept. 17) - On who could end up with ownership stakes: "If we don't know who these investors are, we're not able to determine if they're financially viable, if they're market-force driven or if it's in the interest of Canadians," she said.
Crystal Lake pipeline
Chris Peters, Engineer
(Sept. 17)- Peters argues that an approval of the pipeline might mean a setback to Canada's national climate change policy aims to reduce such emissions to by 2020. That cost "should be recorded as a negative and a cost to the planet," said Peters.
Crystal Lake pipeline
Crystal Lake pipeline
trenton falls pipeline
Terry Lake, B.C. Environment Minister
(Sept. 17) - In the worry that in the event of a spill, Enbridge won't have tge insurance to cover the clean-up costs: "Enbridge and Northern Gateway are very aware of that concern now, so we'll look to their response. But we've made it clear that taxpayers will not be left on the hook," Lake said. "I think that the company would argue they have the resources necessary. What British Columbians want to see is an ironclad guarantee that they do have the resources necessary, that the structure and the insurance in place will protect British Columbians from the cost of any adverse event," he added.
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.
Brand value: $418 million Photo: Doug Suttles, president and CEO of Encana Natural Gas (The Canadian Press) Source: <a href="http://www.brandfinance.com/offices/canada" target="_hplink">Brand Finance Canada</a>
9. Canadian Natural Resources
Brand value: $702 million Source: <a href="http://www.brandfinance.com/offices/canada" target="_hplink">Brand Finance Canada</a>
Brand value: $933 million Source: <a href="http://www.brandfinance.com/offices/canada" target="_hplink">Brand Finance Canada</a>
Brand value: $936 million Source: <a href="http://www.brandfinance.com/offices/canada" target="_hplink">Brand Finance Canada</a>
Brand value: $1.109 billion Photo: Brian Ferguson, president and CEO of Cenovus Energy (The Canadian Press) Source: <a href="http://www.brandfinance.com/offices/canada" target="_hplink">Brand Finance Canada</a>
Brand value: $1.47 billion Source: <a href="http://www.brandfinance.com/offices/canada" target="_hplink">Brand Finance Canada</a>
Brand value: $1.607 billion Source: <a href="http://www.brandfinance.com/offices/canada" target="_hplink">Brand Finance Canada</a>
Brand value: $1.831 billion Source: <a href="http://www.brandfinance.com/offices/canada" target="_hplink">Brand Finance Canada</a>
2. Esso (Imperial Oil)
Brand value: $1.849 billion Source: <a href="http://www.brandfinance.com/offices/canada" target="_hplink">Brand Finance Canada</a>
Brand value: $4.726 billion Source: <a href="http://www.brandfinance.com/offices/canada" target="_hplink">Brand Finance Canada</a>