TransCanada got schooled at their recent Energy East pipeline open house in North Bay, Ontario. Mixed in amongst the crowd of several hundred who dropped by throughout the evening, a group of 50 concerned citizens came with more than just their questions; they came in outfits that intentionally resembled TransCanada's own.
Their shirts were branded "SaveCanada" with a strikingly similar logo to TransCanada's and at many points in the evening they outnumbered the plethora of company employees on the floor. The group had grave concerns about the implications of this pipeline conversion project but also about the format of the community consultation itself. These open houses, hosted by TransCanada, are making their way across the pipeline route and the trade-show style format allows the pipeline company to limit questions and conversations to an individual level.
"This open house format doesn't allow for actual community consultation, even though that is what they are required to do. So we had our presence, and the real information, but mostly were encouraging folks to have their concerns be recorded so that they may make their way to TransCanada's National Energy Board application," said a spokesperson for SaveCanada. "The slight confusion about who was TransCanada and who was SaveCanada really helped the attendees not feel so helpless with their concerns; everyone I talked to was against this project, they wanted our information and not TransCanada's half truths and gift bags."
The town of North Bay has seen an escalation in concern over this pipeline ever since the route was announced. The natural gas mainline that TransCanada plans on converting runs right through the watershed for Trout Lake, which supplies the municipal drinking water for 54,000 people.
The citizens are concerned that if this pipeline gets converted to transport diluted bitumen from the oil sands, when a spill happens, it would never be entirely cleaned up from their lake. Trout Lake exceeds 250 feet deep in some places and previous oil sands spills elsewhere have shown that bitumen sinks unlike regular crude (something TransCanada recently admitted). Built over a generation ago, the pipeline actually crosses the east end of the lake.
The "SaveCanada" group was diverse and included grandparents and young students, all coming together with specific local concerns about this pipeline and the broader ramifications on the environment and the national economy. The concerned citizens group even went as far to have their handout material designed exactly like the info sheets TransCanada was handing out.
TransCanada cooperated with the stunt for the most part, only making the group remove their lanyards which looked like the TransCanada employee name tags but had inviting questions on them instead; for example, "Ask me about bitumen," and "Ask me how old this pipeline is."
On the far end of the room TransCanada had a giant map of the route, and the SaveCanada group had sticky notes printed with graphics of oil spills and invited attendees to play the game "pin the bitumen spill on the pipeline."
If folks hit their own town they won a free glass of tap water, but TransCanada didn't allow this game for very long either. Several jokingly speculated it was because hosts TransCanada had no jugs of tap water available at the refreshment station, just plastic water bottles; which many locals took as an insult given the threat this pipeline would pose to their drinking water.
The Energy East pipeline would see the historic natural gas mainline being converted into a 1.1 million barrels per day pipeline to the East Coast where a new deepwater port has been announced on the Bay of Fundy to handle the world's larger tankers for servicing foreign markets.
Strong criticism has arisen from TransCanada's choice in converting an old pipeline currently servicing communities with natural gas. In addition to the concerns about the potential for pipeline incidents to increase as an old pipeline begins use for something other than what was originally intended, several Natural Gas suppliers in Ontario and Quebec have come forward recently warning that this conversion will affect their available supply and therefore could affect prices for customers.
This Energy East oil sands bitumen pipeline would be significantly larger than the contested Keystone XL pipeline and comes at a time of heightened public concern about the safety of transporting such large volumes of oil sands product.
Calgary-based TransCanada Corp., the company behind Keystone, plans to build a pipeline that would ship mostly light oil, but also heavy crude, from oil rich Western provinces across the country the East Coast. The Energy East Pipeline could have the capacity to transport as many as 850,000 barrels of crude oil per day beginning in 2017. The plan is to convert about 3,000 kilometres of an existing natural gas pipeline and add an additional 1,400 kilometres of new pipeline.
Oil from Western Canada is essentially landlocked, making it difficult to move to international markets, which drives down its price by as much as $40 a barrel compared to the world standard. It is also difficult to ship Western crude across the country to Atlantic Canada, which instead relies on foreign sources of oil, a situation that is less than ideal in a country that has so much of its own oil waiting to be sold. TransCanada says the pipeline could reduce the need to import foreign oil to process at refineries in Eastern Canada, while Natural Resources Minister Joe Oliver argues that the Energy East Pipeline could deliver Canadian oil to large energy consumers in Asia, in addition to making the country less dependent on foreign oil. In addition, a lack of pipelines to export oil has left a glut of oilsands crude sitting in a bottleneck in the U.S. Midwest, which has depressed Canadian oil prices compared to the U.S. benchmark, West Texas Intermediate, which in turn trades at a discount to the cost of Brent crude. Those low prices have cost the Canadian and Alberta governments millions in lost royalties.
(Pictured: Russ Girling, president and CEO of TransCanada Corp.)
TransCanada has launched a formal process to solicit long-term commitments from companies interested in having their crude shipped east. The process is open until June and will help the company determine the commercial viability of the project. It says it has already determined the project is technically and economically possible. The company plans to seek regulatory approvals later this year if the current phase is successful. If all goes according to plan, the pipeline is expected to ready for shipments by 2017.
The exact route will be determined after a public and regulatory review, but the starting point would be a new tank terminal in Hardisty, Alta. Three other terminals would be built along the line: one in Saskatchewan, another in the Quebec City area and a third near Saint John., N.B. The line would be about 4,400 kilometres long, including the segment already built for TransCanada’s natural gas line. New sections will need to be built in Alberta, Saskatchewan, Eastern Ontario, Quebec and New Brunswick.
Crude from the pipeline would be shipped to energy-hungry markets in Asia and elsewhere, as well as to refineries and eventually consumers in the Atlantic provinces. The proposed terminals in Quebec City and Saint John would include facilities for marine tanker loading for export. The project would also include delivery to existing Quebec refineries in the Montreal and Quebec City areas, as well as a large Irving Oil refinery in Saint John.
Environmentalists argue the pipeline could put waterways and communities along its route at risk as well as add the potential of a major oil spill on the east coast from export tankers waiting to take the crude abroad. Because oilsands product emits an estimated five to 15 per cent more carbon than conventional oil, refining more of it in Canada would likely increase the country's total carbon emissions. However, the U.S Defence department recently determined that emissions from transporting and using fuel from oil sands was not significantly different from those made with conventional oil.
Technical issues include relatively small refineries on Canada's east coast that have only limited capacity to refine tarry bitumen and a short-term potential overcapacity if all three proposed pipelines are completed on schedule between 2015 and 2018. But the more immediate obstacle is from environmentalists who warn, among other potential risks, that the plans to convert a gas pipeline to oil could pollute Canadian sources of waters. Vocal criticism from environmentalists and First Nations groups have held up the approval process for both Northern Gateway and Keystone. The project will be subject to public and regulatory reviews.
Politicians appear to be lining up behind the idea of a west to east pipeline. Potentially because 3,000 kilometres of the project is already in the ground, the proposal suggests refining at least some of the oil at home, which could reduce high gas prices in Atlantic Canada. The project has the support of the federal government as well as the provinces of Alberta and New Brunswick and support in principle from Quebec. Federal Liberals have also expressed support, and even NDP Leader Thomas Mulcair, who is staunchly opposed to Northern Gateway, has voiced support.
According to the industry, all three lines are necessary if Canada wants to meet its export potential in the coming decades. The west-east pipeline would complement, rather than replace, the other two pipelines and build capacity to ship oil west east and south, the industry argues.
Drivers in Atlantic Canada currently pay as much as 20 per cent more to fill up than those in the Western provinces. Among other factors driving prices higher, they are paying a premium to import foreign oil, while Canadian oil sits ready for use. Proponents say the pipeline will create a new domestic market for Western Canadian oil, as well as potentially open a new door for international export. In addition, the project could contribute to job creation and economic growth, with some estimates saying it has the potential to create thousands of jobs during construction and a few hundred permanent positions.
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