EDMONTON - Lawyers for environmental groups have pressed Northern Gateway pipeline representatives about the hypothetical possibility of Chinese interests buying control of the project.
Barry Robinson, one of the lawyers who represents three different environmental organizations, raised the issue on Saturday during federal review hearings into the proposed $6-billion line.
Enbridge's (TSX:ENB) line would ship Alberta's crude to the B.C. coast where it could be loaded onto tankers.
Robinson told the hearings being held in Edmonton that Chinese companies already own oilsands resources in Canada.
He asked if the pipeline project's proponents have considered the economic effect if Chinese companies buy a share of ownership in the pipeline as well.
Paul Fisher, a vice-president of the company set up to build the Northern Gateway project, replied that the idea of Chinese investment has not been a consideration.
Supporters of the pipeline have argued it's needed to give Canada an alternative to the U.S. as a market for its oil, which in turn would result in higher prices. Enbridge estimates that reaching markets in Asia via Northern Gateway would boost Canada's GDP by $312 billion over 25 years.
But Robinson suggested that advantage could be eroded if China gains control of pipeline as well as the supply.
"If free market economies aren't at play, where's the economic benefit?" Robinson questioned after the hearings adjourned on Saturday afternoon.
China's state run National Offshore Oil Corp's was to buy Calgary-based oil and gas producer Nexen Inc. (TSX:NXY) in a $15.1-billion deal, something the federal government is reviewing.
The hearing's three-member panel is to make a recommendation to the federal government by the end of next year on whether the pipeline is needed given oil supply and demand, and whether the line can be built and sustained safely.
The Edmonton hearings are focusing on finances and economics. An upcoming panel in B.C. will hear evidence about pipeline safety and emergency preparedness
Robinson was at the hearings along with Tim Leadem on behalf of Forest Ethics Advocacy, Living Oceans Society and Raincoast Conservation Foundation, which have intervener status.
At Saturday's hearings, they challenged economists who appeared on behalf of Northern Gateway on subjects such as their estimates for carbon offset costs for the pipeline and the potential for changes in U.S. environmental regulations.
Robert Mansell, a University of Calgary economist who prepared a report on the economic effects of the line, had warned that a change in U.S. perception of the oilsands could result in import restrictions on Canadian crude.
Robinson pressed Mansell on whether the warning meant he believed higher U.S. emissions standards would be detrimental to Canada's oilsands.
"I don't think higher emissions standards are in anyone's interests," Mansell answered.
Mansell noted that he felt healthier economies, rather than tighter standards, generally lead to better environmental behaviour. He also told the hearing that while some Californian oil production was more environmentally harmful than the oilsands, it didn't always matter.
"That's politics," he said.
Leadem, meanwhile, quizzed Northern Gateway consultant Roland Priddle, a former chair of the National Energy Board, about a report he was involved with writing in 2004 for the federal government about whether a moratorium on oil and gas development in the Queen Charlotte Islands in B.C. should be lifted.
One of the conclusions of that report was that it didn't appear likely that the effects of a spill in the area could be adequately mitigated by the available resources.
Priddle downplayed that conclusion on Saturday, noting that the panel that produced the report wasn't the same as a regulatory hearing. While it heard testimony from stakeholders, he said it didn't have the ability to call expert witnesses.
Priddle also said the resources available to deal with a spill may also have changed.
The hearings are to resume in Edmonton on September 17.
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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.
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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.
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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.
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