By Derrick Penner, Vancouver Sun, December 31, 2011
Final call on proposal expected at end of 2013, following multitude of hearings and reviews
Enbridge Inc.'s Northern Gateway pipeline project began life nearly a decade ago as a market study on how to open up Alberta's oilsands resources to ocean trade with Asia.
And now, public hearings on the $5.5-billion dual-pipeline proposal are set to begin Jan. 10.
The company and the federal government are pushing for approval, characterizing the project as a national imperative worth $270 billion to the Canadian economy over its lifetime.
In the eyes of many environmentalists and first nations communities, however, the project represents the risk of a major oil spill - either from pipeline rupture or a tanker accident off British Columbia's pristine north coast.
Aboriginal concerns are a key issue in the project's progression, with 130 first nations vowing to block the development, including a large number whose land claims cover a huge swath of the pipeline route.
"[Enbridge's] objective is to outline the credibility of the application," company spokesman Paul Stanway said in an interview.
"We have detailed engineering and environmental studies to prove [the pipeline] can be operated safely, and we're confident at this point we can make a very good argument," for its regulatory approval, Stanway said.
Bitumen from the oilsands near Fort McMurray is now shipped through a network of pipelines to Bruderheim, Alta. Enbridge's Northern Gateway bid is to build two pipelines from Bruderheim, 60 kilometres northeast of Edmonton, along a 1,172-kilometre route to Kitimat on the B.C. coast.
One would be a 36-inch pipe, which would deliver to Kitimat for export up to 525,000 barrels per day of mostly diluted bitumen - the raw product extracted from oilsands - or synthetic crude oil - the product produced after the first stage of refining bitumen.
The other would be a 20-inch pipe that would carry up to 193,000 barrels a day of imported condensates - a kerosene-like fluid used to dilute bitumen so it flows more easily - back in the opposite direction.
The pipeline's route travels through Alberta, over the Rocky Mountains just east of Tumbler Ridge, then takes a path across B.C.'s northern interior through Fort St. James, Burns Lake and Houston before piercing the Coast Mountains with two six-kilometrelong tunnels before reaching the Kitimat terminus.
The condensate and bitumen will be imported and exported by giant tankers, between 190 and 250 per year, which will dock at Kitimat.
And while Enbridge initially had difficulty securing firm commitments from potential users of the pipeline, the company has enlisted a roster of 10 supporters, each of which has put up $10 million to back its development during the regulatory process.
So far, the only named supporter is state-owned Sinopec, China's second largest oil producer and refiner. Enbridge has not identified the others, though in August announced it had reached commercial agreements with shippers that want to use the pipeline.
Stanway said Enbridge has also committed $100 million to developing the project's design and carrying it through the regulatory process, the price of which could rise to $300 million before it is over.
The job of weighing the project's benefits and risks is about to hit the public phase. The National Energy Board - which has been charged with conducting a joint review of the project under NEB regulations and the Canadian Environmental Assessment Act - is holding community hearings in the Haisla First Nation of Kitamaat Village on Jan. 10, near the project's proposed terminus on the Douglas Channel on British Columbia's north coast.
Under NEB rules, the review will determine Canada's need for the project and decide whether it is in the national interest, while the CEAA review will assess environmental safety.
The three-member joint review panel that will conduct the assessment will be chaired by Sheila Legget, a biologist and the NEB's vice-chairwoman. The other two are energy lawyer and NEB member Kenneth Bateman, and geologist Hans Matthews, who is also experienced in aboriginal community development and consultation. Matthews is a member of the Wahnapitae First Nation of Ontario.
Minister of Natural Resources Joe Oliver, in an emailed statement to The Sun, has said the federal government is "committed to a thorough environmental assessment and consultation with aboriginal groups," about the project.
However, in recent months Prime Minister Stephen Harper has made it clear the federal government considers it a priority to break Canada's dependence on the United States market for oil exports, something Oliver repeated in his statement.
The project has the potential to generate "hundreds of thousands of new jobs, trillions [of dollars] in economic benefits," as well as billions of dollars in taxes and royalties to support government services, Oliver said.
The NEB anticipates the public process will run through 2012 and end in June 2013 while it considers oral submissions from 53 of the 216 registered interveners to the project and more than 4,000 public comments.
CEAA spokeswoman Annie Roy said most of the interveners giving evidence are first nations communities, and the initial community hearings give their members a chance to present evidence that doesn't lend itself to written submissions, such as traditional stories spoken by elders.
Interveners range from the Canadian Association of Petroleum Producers to environmental organizations such as ForestEthics and aboriginal communities to individual citizens.
After Kitamaat Village, the first round of community hearings picks up in Terrace then moves to Smithers, Burns Lake, Prince George, Edmonton, Fort St. James, Bella Bella, Prince Rupert, Masset and Queen Charlotte City on Haida Gwaii, Grand Prairie and Courtenay.
Dates for hearings in Hartley Bay, the Gitga'at First Nation community at the mouth of the Douglas Channel, Bella Coola, Kitkatla and Klemtu have yet to be finalized, but the NEB expects to complete the hearings by mid-March.
Then, Roy said, there will be another round of community meetings expected to last until mid-July, allowing some of the 4,000 members of the public who have registered to make public statements to the panel.
Enbridge's Stanway said the company won't play a role in those initial rounds, "except to listen, and we'll be there listening to what people have to say."
Interveners will have a chance to cross-examine Enbridge representatives or others who have presented evidence, in formal hearings scheduled for September and October.
"We'll be required to provide panels of technical people who can be crossexamined under oath," Stanway said. "So it is extremely rigorous."
Stanway said Enbridge has already responded to almost 4,000 written questions through two rounds of written requests.
Stanway said the company fully supports the process.
"We want to deal with it in a very respectful way," he added.
"The bulk of interveners in this first round will be first nations and Metis organizations. That's something we take very seriously and want to listen to what they have to say."
Haisla First Nation Chief Councillor Ellis Ross said his group's evidence will focus on demonstrating how their people still use the land and harvest wildlife resources, and how the consequences of an oil spill would interfere with that.
"We have had enough of environmental degradation at the expense of the Haisla," Ross said, referring to the effects from industrial development on the Kitimat River Valley, including the original Alcan aluminum smelter, a now-closed pulp and paper mill and defunct methanol production plant.
From the Haislas' perspective, there is enough future development, in the form of natural gas pipelines and natural gas liquefaction plants, destined for the West Coast that they don't need to risk an oil spill which would be difficult to clean up.
"I don't think they can justify the infringement to our rights and title, based on what I've read through the [joint review panel]," Ross said.
Infringement of aboriginal title is a cornerstone of the opposition voiced by more than 130 first nations communities.
Environmentalists are somewhat skeptical of the NEB process, according to Nikki Skuce, senior energy campaigner for the group ForestEthics.
"The process is biased toward approving this project," Skuce said in an interview.
Skuce said that assumption is based on the NEB's past record with similar reviews and the makeup of the three-member panel, which has no representation from the Canadian Environmental Assessment Agency and no members from B.C.
"However, I do think that it offers a process that allows for community participation and for people to vocalize alternative points of view," she added.
ForestEthics will be out to prove Northern Gateway "is not in the national interest" by highlighting the effect oil exports could have on climate change, and by arguing that Canada's existing pipeline network has enough capacity to handle planned expansions in oilsands production without any new routes.
Skuce said ForestEthics has spent decades working to preserve the central coast region known as the Great Bear Rainforest, the area where Northern Gateway's shipping routes would carry tankers, and she doesn't want to entertain any possibility of an oil spill.
"This is an incredible area that is not worth the risk, no matter what it is," she said.
Stanway said it is wrong for project opponents to talk about the inevitability of a major pipeline rupture or tanker spill.
"Those things are not inevitable," Stanway insisted, "and we need to explain why that's the case and the safety measures that we have in place."
In 2010 an Enbridge pipeline ruptured in Michigan, spilling 23,000 barrels of oil into the Kalamazoo River, but Stanway said the company "[takes] lessons from that situation and [will] use that information to ensure nothing similar to it can happen again."
The U.S. Transportation Safety Board has not yet released the results of its investigation into the cause.
Stanway added that the proposal has a strong economic case to make, starting with an estimated $2.4-billion-per-year increase in revenue to Canada's oil industry through higher prices producers would be able to generate from selling into wider markets.
"The real driving force behind Northern Gateway is the strategic argument for Canada having access to world markets for its most valuable export product," Stanway said.
In its application, Enbridge noted that existing production from Alberta's oilsands totalled about 1.3 million barrels per day of oil, with an additional 2.1 million barrels per day of production in some form of development or planning.
The company estimates Northern Gateway would create about 3,000 jobs at the peak of its construction, then support 1,150 jobs - including 560 in B.C. - over an anticipated 30-year period after completion.
Enbridge is also forecasting an $81-billion boost over 30 years to provincial and federal coffers through resource royalties and taxes.
Canada does ship a small amount of oil off B.C.'s coast through Vancouver via Kinder Morgan Canada's Trans Mountain pipeline, noted David Collyer, president of the Canadian Association of Petroleum Producers (CAPP), so "it's not a brand new idea."
CAPP is an official intervener to the Northern Gateway regulatory process, but Collyer said the organization, which represents Canada's oil producers, is only doing so to speak generally in support of expanding West Coast exports.
"The importance, or significance of West Coast market access is going to continue to grow," Collyer added.
The National Energy Board panel has a long way to go before completing its assessment of all the evidence and arguments. On the schedule as it exists now, the joint review panel will not hear the final arguments from Enbridge, government departments and interveners until April 2013, and it doesn't anticipate releasing its environmental assessment report until that fall, with a final decision due by the end of the year.
A nine-part series examining Enbridge's Northern Gateway project, the regulatory process surrounding the $5.5 billion dual-pipeline design and those who have the most to gain or lose.
Today: An overview of the players, the issues and the public process.
Jan. 2: About Enbridge.
Jan. 3: The impact on the First Nations.
Jan. 4: Environmentalists weigh in.
Jan. 5: The business community.
Jan. 6: The risk of pipeline spills.
Jan. 7: The risk of tanker spills.
Jan. 9: The politics of the project.
Jan. 10: The view from Kitimat
Online: Read the entire series at vancouversun.com
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