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Salon article calls Northern Gateway Keystone’s “evil twin”, asserts pipeline will never be built

Energy Environment Commentary

Michael Byers, the Canada Research Chair in Global Politics and International Law at UBC, writes about the proposed Northern Gateway pipeline in Salon.com, largely for an American audience, calling the pipeline The evil twin of the Keystone XL oil pipeline

U.S. opponents of the proposed Keystone XL oil pipeline should take take note: One of the greatest weaknesses of the proposed 1,980 mile-long pipeline from Canada’s tar sand fields to refineries in Texas actually lies in British Columbia on Canada’s west coast.

That’s where a second pipeline (“Northern Gateway”) could link the tar sands of central Canada to coastal British Columbia.

The U.S. State Department has accepted assertions that the production of heavy oil will increase regardless of whether Keystone XL is built, because the Northern Gateway pipeline would bring oil for shipment to China. Denying permission for Keystone XL would not promote the U.S. national interest in reducing greenhouse gas emissions, the State Department says, because China will use the energy anyway.

Byers then goes on to describe in great detail the opposition to the pipeline in British Columbia from First Nations and residents of the northern part of the province. He also describes growing opposition to the expansion of the Kinder Morgan pipeline to Vancouver. (See today’s story Kinder Morgan buys natural gas pipeline) especially the hazards of sending tankers through Second Narrows.

From all that Byers concludes:

In short, there’s a bit of snake oil in the pipeline-to-China assumptions. The U.S. State Department must assess the full environmental impact of Keystone XL. It cannot ignore the carbon footprint of Canada’s tar sands because of an alternative pipeline to China that does not exist and will likely never be built.

It seems that Byers is certainly jumping to conclusions that the Northern Gateway will never be built, especially since Prime Minister Stephen Harper, and cabinet ministers John Moore and Joe Oliver has said it is in the national interest that the Northern Gateway should proceed.

Kinder Morgan buys US natural gas pipeline company in $21 billion dollar deal

Kinder Morgan, the giant oil pipeline company, which has proposed building a second bitumen pipeline from Alberta to Kitimat, Sunday announced it was buying El Paso Corp, America’s largest natural gas pipeline operator.

The Associated Press says the deal is worth $20.7 billion, Bloomberg says it is worth $21.1 billion.

Kinder Morgan already operates a pipeline from Alberta through British Columbia to the port of Vancouver and there are plans to expand that pipeline.

Kinder Morgan’s move comes after Enbridge also said it was interested in moving into the natural gas pipeline business. Both companies are moving to take advantage of the natural gas found in shale deposits and the growing demand for natural gas in both North America and Asia.

Bloomberg says:

The takeover is the largest ever proposed of a pipeline company, surpassing the 2007 leveraged buyout of Kinder Morgan itself by a group including Richard Kinder and Goldman Sachs Group Inc. The combined company would have 67,000 miles (107,000 kilometers) of gas lines and eclipse Enterprise Products Partners LP as the biggest U.S. pipeline operator.

“This once in a lifetime transaction is a win-win opportunity for both companies,” Kinder, who will be chairman and chief executive officer of the combined company, said in the statement. He said the deal, once closed, would create immediate shareholder value because of its cash flow.

The Associated Press says

Kinder Morgan will more than double the size of its pipeline network by purchasing El Paso. The new pipeline system would stretch 80,000 miles — long enough to wind around the globe three times. Kinder Morgan’s pipelines in the Rocky Mountains, the Midwest and Texas will be woven together with El Paso’s expansive network that spreads east from the Gulf Coast to New England, and to the west through New Mexico, Arizona, Nevada and California.

“We believe that natural gas is going to play an increasingly integral role in North America,” said Richard Kinder, Kinder Morgan Inc.’s chief executive, said on Sunday when the deal was announced.

Robert McFadden, a Houston-based natural gas pipeline consultant, said the expanded network will make it easier to move natural gas from new fields that have mushroomed across the U.S. in the past few years.

The take over deal came on the same weekend that the “Occupy” movement was demonstrating around the world against the greed of financial institutions.

Reuters reports that:

The investment banks advising on Kinder Morgan Inc’s $21 billion purchase of El Paso Corp are set to rake in a total of $100 million to $145 million in M&A fees, according to Freeman & Co on Sunday.

Evercore Partners and Barclays Capital , which are advising Kinder Morgan on the deal, would earn $45 million to $65 million in fees, Freeman estimates show.

Morgan Stanley and Goldman Sachs , which are on El Paso’s side, would split another $55 million to $80 million in fees, depending on the role they played, the estimates show.

Northern Gateway Pipeline will benefit all Canadians, Daniel says

Energy Link

Enbridge CEO Patrick Daniel, writing on the Troy Media site says Northern Gateway Pipeline will benefit all Canadians

With the second largest proven
petroleum reserves in the world, Canada may like to flatter itself that
it is a global energy superpower, but it’s not true.

It could be. One day it might be. But it is not an energy superpower yet…

The Enbridge Northern Gateway
pipeline project, which will run from Edmonton, Alberta, to Kitimat,
British Columbia, is one step on the road to Canada becoming an energy
superpower. With Northern Gateway we will be able to safely move energy
to the West Coast, open new markets for Canadian petroleum and create
thousands of construction and supplier jobs as well as significant
permanent employment right across Canada.

Washington Post editorial argues that Northern Gateway will go ahead

Energy Link (Editorial)

An editorial in the Oct. 10, 2011 issue of the Washington Post argues that it is realistic that the Northern Gateway pipeline (without actually mentioning the name) will go ahead.

In Keystone XL pipeline is the wrong target for protesters

The Post takes aim at the protestors who oppose the Keystone pipeline, seeing it as a passionate fight against fossil fuels. The editorial then goes on to say

True, the petroleum that comes from Alberta’s “tar sands” isn’t very clean; it produces more carbon emissions than light sweet crude. And, true, pipelines can leak, as recent ruptures in Michigan and under the Yellowstone River demonstrate.

But rejecting the pipeline won’t reduce global carbon emissions or the risk of environmentally destructive spills.

Canada’s government — and rising world petroleum prices — guarantee that the country will extract the oil from its tar sands, and that Asia will take it if America doesn’t. That means using pipelines to transport Canada’s heavy crude hundreds of miles to the West Coast and then shipping it abroad, burning fossil fuels and risking ocean spills along the way. China already has a large stake in Canadian oil production. Plans are already in the works to build the necessary pipelines.

The Post notes the allegations that the bitumen sands crude, once refined will not benefit the US but will be exported through the Gulf Coast. Then adds, “But if export markets are that attractive, Canadian crude will reach them without transiting the United States, and American refineries will get their low-grade crude from somewhere else.” For the Post the bottom line is American security, preferring low-grade crude form Canada rather than from hostile Venezuela or the volatile Middle East.

The Post concludes:

Producing energy is a dirty business, and it will remain so for a long time, even with the right policies. Part of facing this reality is admitting that how the world produces energy must change over time. But another part is accepting that oil production will continue for decades and clear-headedly managing the risks — not pretending we can wish them away

The online comments, as you might expect, are about one third in favour (jobs and the economy), one third opposed (climate change, oil spills) and the rest the usual nasty diatribes.

Editors note: Whether or not one supports or opposes the Northern Gateway pipeline, the editorial is a prime example of arm chair rhetoric probably composed by a writer comfortably living in a Georgetown brownstone who will never come within 1000 kilometres of Douglas Channel. It is well known that The Washington Post is not the paper it was 20 years ago. The muddled talk about “clear-headedly managing the risks” shows how the once-great paper has declined. The editorial is actually insulting to both sides, since it is obvious that the Post editorial board have no knowledge of the thousands of pages filed by Enbridge that outline the risks of the Northern Gateway and the company’s contingency plans nor the reservations about the pipeline outlined by the environmental movement, First Nations and local residents.

But then not many news organizations these days bother to assign reports to actually come to the scene of any story. In recent months, just three, Alberta Oil, The Calgary Herald and The Globe and Mail have come here. The rest are content to sit at their desks and work on, as one former managing editor of a major Canadian daily put it, “telephone-assisted reporting.”

US Coast Guard seizes “stateless” drift net boat off Alaska: AP

Fishery

Associated Press reporter Becky Bohrer in Juneau reports on the Bangun Perkasa a rat-infested illegal fishing boat with a 10 mile long drift net seized off Alaska.

Seized Vessel Shines Light on Illegal Fishing

The recent seizure of a stateless ship in international waters 2,600 miles off Alaska’s coast has spotlighted the challenge that the U.S. and other nations face in trying to crackdown on illegal fishing, an activity that accounts for up to $23.5 billion a year in global economic losses.

Finding rogue vessels in the vast, open ocean can be like finding a needle in a haystack. But U.S. officials and some environmentalists say progress is being made, including multinational patrol and enforcement agreements and the potential for sanctions against countries that engage in illegal, unreported and unregulated (or IUU) fishing.

Enbridge buys natural gas plant from Encana

Energy

Canadian Press reports that Enbridge has bought a natural gas plant from Encana, one of the partners in the Kitimat LNG project.

Enbridge buys stake of Cabin Gas Plant in British Columbia from Encana

Encana Corp. has sold its stake in the Cabin gas plant in B.C. to Enbridge Inc…

Enbridge …will buy Encana’s 52 per cent interest in the plant, plus additional holdings from other partners for a total 57.6 per cent stake….

“Northeast B.C. is going to be a very important source of growth long-term for natural gas out of Western Canada, so it makes a lot of sense for us to build a position there,” Al Monaco, who is in charge of Enbridge’s natural gas business, said in an interview…

“We believe there is going to be the need for LNG exports off the West Coast, and that’s simply because the value of world gas prices, especially in Asia, far exceeds North American prices,” Monaco said.

The purchase announcement comes a day after Enbridge CEO Pat Daniel told Reuters that an LNG pipeline to the west coast is priority for the company.

Marketwatch (news release) Encana agrees to sell interest in Horn River Basin’s Cabin Gas Plant for approximately C$220 million
Enbridge news release: Enbridge Enters Canadian Midstream Business with $900 Million Investment in Cabin Gas Plant Development

A window of opportunity opens in Japan for Canadian LNG: Alberta Oil

Energy

Alberta Oil magazine says in A window of opportunity opens in Japan for Canadian LNG

Nuclear outages in Japan continue to stoke demand for delivering Canadian gas to the Far East. Look for oil- and natural gas-fired generation to offset a precipitous drop in atomic capacity as maintenance work at plants, combined with public safety pressures, keeps a fleet of 54 reactors from running at full capacity, the International Energy Agency (IEA) says. Japan’s nuclear reactors normally account for 27 per cent of the country’s electricity demand, but only 16 were online in August, five months after a massive earthquake rocked the coastal city of Sendai and sent officials scrambling in search of alternatives to the atom.

The country is one of several potential sales destinations for a suite of liquefied natural gas (LNG) terminals taking shape on Canada’s West Coast at Kitimat, British Columbia. Two of the most advanced proposals, including a 10-million-tonne capacity project led by Apache Canada Ltd. and another, smaller co-operative that would ship 1.8 million tonnes abroad annually, are both seeking 20-year export licenses from the National Energy Board….

Not enough bitumen production to support both Northern Gateway and Keystone XL consultant says

Energy

Bloomberg news reports that a Calgary based energy research company believes Enbridge’s Oil Sands Project Is Years Early

Enbridge Inc., Canada’s largest pipeline operator, wouldn’t need to build the Northern Gateway project to export Alberta’s oil-sands crude for almost a decade if TransCanada Corp.’s Keystone XL is approved this year, according to IHS CERA, an energy research company.

The 732-mile (1,177-kilometer) Northern Gateway pipeline would pump 525,000 barrels a day from near Edmonton, Alberta, to the port of Kitimat, British Columbia, where crude would be loaded on tankers bound for Asia. The line, scheduled to start in 2017, would reduce Canadian dependence on U.S. markets and compete with the Keystone XL, designed to pipe 700,000 barrels a day to refineries in Texas along the Gulf of Mexico by 2013.

Jackie Forrest, a director of global oil at IHS CERA, said there won’t be enough oil sands production to support Northern Gateway’s launch even if, as she expects, Keystone XL approval helps the output double in 10 years to 3 million barrels a day.

The Bloomberg article goes on to quote one analyst who believes the Northern Gateway fight will get a lower profile than the Keystone XL.

Northern Gateway faces opposition from environmentalists and Indian groups because it passes through the Great Bear Rainforest and raises the risk of supertanker oil spills in the Douglas Channel. However, the Canada-only route may make the project less prominent than Keystone XL, which has drawn protests from celebrities such as Daryl Hannah and Margot Kidder, who played Lois Lane in several Superman movies.

“Northern Gateway would be an all-Canadian fight and thus perhaps could be less sensational and muscular, think Canadian Football League vs. U.S. NFL, but nonetheless might get very contentious,” Judith Dwarkin, chief energy economist for ITG Investment Research, wrote in an e-mail from Calgary.

Approval of the Keystone XL may not be the slam dunk that some in the Calgary oil patch believe. As Konrad Yababuski reports in The Globe and Mail in Keystone XL: More about the politics than the petroleum

Proponents of the TransCanada Corp. project, which would double the amount of Alberta crude flowing south, now fear that President Barack Obama will give in to pressure from the base of the Democratic Party to nix the pipeline.

With Mr. Obama’s approval rating sliding to a record low – leading more than half of Americans to think for the first time that he will be a one-term President – the White House needs to bring every stray Democrat it can find back into the fold before the 2012 election.

The progressive wing of the Democratic Party has been feeling particularly unloved by this White House. Killing the Keystone XL project would be a powerful way for the administration to show its renewed affection.

Which means of course if President Barack Obama does kill Keystone XL to keep his base happy, there will be more than enough bitumen sands for the Northern Gateway pipeline.

Editor’s note: Disclosure. I have always liked the CFL game, with three downs and the bigger field over the NFL, so the analogy is probably apt in describing the contentious Northern Gateway debate, a more wide open and interesting struggle.

Seattle cod trawler wastes 114 tons of Alaska halibut: Alaska Dispatch

Environment Fishery

The Alaska Dispatch reports that a Seattle cod trawler wastes 114 tons of Alaska halibut

The Seattle-based trawler Alaska Beauty recently had a great week of halibut fishing… Only one problem: Alaska Beauty wasn’t supposed to be fishing halibut; it was supposed to be fishing cod.

Despite that, 43 percent of its catch was halibut. All of that halibut, by law, must be dumped back into the sea. Most of it goes back dead. Some Alaskans are starting to get angry at this sort of large “by-catch” of halibut by Pacific Northwest and Kodiak-based trawlers at a time when the species’ stocks are declining, and Alaska charter and commercial longline fisheries are locked in a bitter battle over every flatfish.

An anonymous blogger who goes by the name of Tholepin says “228,800 pounds of halibut wasted by draggers just last week,” Tholepin notes in the latest post. “Value? In cash terms to longliners, about $1.6 million. In lost reproductive potential, in lost growth potential, in long-term resource damage; all unknowns ..

Enbridge says it is joining LNG export rush

Energy links

Reuters and the energy media are reporting that Enbridge told an investor conference call this morning the company is joining the liquified natural gas export rush.

In Enbridge eyes Canada LNG exports, Reuters reports:

Enbridge Inc said on Tuesday it is in talks with potential producers to export overseas liquefied natural gas from Canada, joining a lengthening list of North American companies looking to tap thirsty markets in Asia.

Enbridge would be interested in existing projects being developed in Canada, executive vice president Al Monaco said at a presentation, just as ample supply pushes North American natural gas prices to 11-month lows.

“We would certainly be interested in LNG exports, right from the midstream pipeline side, right up to the LNG export facility itself,” Monaco said at the company’s investor day in Toronto, which was webcast.

“We are in discussions with potential producers. That is probably a little bit longer term,” he added.

Both Reuters and the industry news site Upstream Online report that Enbridge would consider buying into an existing project.

Heavy oil pipeline in Columbia

Upstream Online also reports that Enbridge is considering a heavy oil pipeline from the interior of Columbia to the Pacific coast of South America.

“Over the past few months we’ve been discussing a possible project to access tidewater off the western coast,” Monaco said. “The line would provide direct access to the Pacific markets which have an appetite for heavy crude and provide takeaway capacity for the growing volumes that are coming from central Colombia.”

Monaco said the producers have confirmed their interest in the project, dubbed Oleoducto al Pacifico, and provided Enbridge with the money to carry out a feasibility review to determine the line’s route, capacity and costs.

Kitimat is the terminal point for the KM LNG and BC LNG points as well as the proposed Enbridge Northern Gateway project that would carry bitumen from Alberta to the terminal. All project contemplate exporting to the hungry markets of Asia.