Northern Gateway pipelines says the company will not appeal the Federal Court of Appeal decision that blocked the approval certificate by the Joint Review Panel and the National Energy Board because there had been insufficient consultation with First Nations.
OTTAWA — The federal government is joining Enbridge Inc. in not appealing a Federal Court of Appeal ruling quashing a 2014 Conservative decision to approve the $7.9 billion Northern Gateway pipeline, Postmedia has learned.
John Carruthers, President of Northern Gateway said in a news release, “We believe that meaningful consultation and collaboration, and not litigation, is the best path forward for everyone involved. We look forward to working with the government and Aboriginal communities in the renewed consultation process.”
Northern Gateway news release
VANCOUVER, Sept. 20, 2016 /CNW/ – Northern Gateway will not appeal a recent Federal Court of Appeal decision that reversed the project’s federal approval certificate. The Federal Court of Appeal found that the National Energy Board’s Joint Review Panel recommendation was acceptable and defensible on the facts and the law. The Court, however, concluded that further Crown consultation is required.
Northern Gateway supports the path outlined by the Federal Court of Appeal for the Federal Government to re-engage with directly affected First Nations and Métis communities to ensure thorough consultation on Northern Gateway is undertaken.
Statement from John Carruthers, President, Northern Gateway:
“We believe that meaningful consultation and collaboration, and not litigation, is the best path forward for everyone involved. We look forward to working with the government and Aboriginal communities in the renewed consultation process. We believe the government has a responsibility to meet their Constitutional legal obligations to meaningfully consult with First Nation and Métis. It also reflects the first priority of Northern Gateway and the 31 Aboriginal Equity Partners to build meaningful relationships with First Nation and Métis communities and ensure their voice is reflected in the design of the project.
We believe that projects like ours should be built with First Nation and Métis environmental stewardship, ownership, support, and shared control. Northern Gateway, the Aboriginal Equity Partners, and our commercial project proponents remain fully committed to building this critical Canadian infrastructure project while at the same time protecting the environment and the traditional way of life of First Nation and Métis and communities along the project route.
In order to encourage investment and economic development, Canadians need certainty that the government will fully and properly consult with our nation’s Indigenous communities. We look forward to this process and assisting those communities and the Federal Government with this important undertaking in any way we can.
The economic benefits from Northern Gateway to First Nation and Métis communities are unprecedented in Canadian history. As part of the opportunity to share up to 33 percent ownership and control in a major Canadian energy infrastructure project, the project’s Aboriginal Equity Partners will also receive $2 billion in long-term economic, business, and education opportunities for their communities.
The project would add over $300 billion to Canada’s gross domestic product over the next 30 years, 4,000 construction jobs and 1,000 long-term jobs, $98 billion in tax revenue, and an estimated $100 million investment in community programs and services. Northern Gateway will provide a badly needed multibillion dollar private infrastructure investment in Canada’s future.”
Statement from the Aboriginal Equity Partner Stewards (Bruce Dumont, President, Métis Nation British Columbia; David MacPhee, President, Aseniwuche Winewak Nation; Chief Elmer Derrick, Gitxsan Nation Hereditary Chief; Elmer Ghostkeeper, Buffalo Lake Métis Settlement):
“We support Northern Gateway’s decision to not appeal the recent decision by the Federal Court of Appeal. This is a reflection of the commitment to the new partnership we are building together and their support of meeting Constitutional obligations on government to consult.
The Federal government has publically stated they are committed to reconciliation with First Nation and Métis communities. As such, we are now calling on this same government to actively and fully undertake the required consultation as directed by the Federal Court of Appeal in relation to the Northern Gateway project.
The Aboriginal Equity Partners is a unique and historic partnership that establishes a new model for conducting natural resource development on our lands and traditional territories. We are owners of Northern Gateway and are participating in the project as equals.
Environmental protection remains paramount and as stewards of the land and water, and as partners in this project, First Nation and Métis communities have a direct role in the environmental protection of the lands, waters, and food sources along the pipeline corridor and in marine operations. Our traditional knowledge, science, and values will be used to design and operate land and coastal emergency response to make the project better. We believe with this project there is an opportunity to work together with the Federal Government to improve marine safety for all who live, work, and depend on Canada’s western coastal waters.
This ownership ensures environmental stewardship, shared control, and negotiated business and employment benefits. Collectively, our communities stand to benefit from more than $2 billion directly from this Project.
Our communities need the economic and business benefits that Northern Gateway can bring. We are focused on ensuring our communities benefit from this project and are actively involved in its decision making so we can protect both the environment and our traditional way of life through direct environmental stewardship and monitoring.
Our goal is for Northern Gateway to help our young people to have a future where they can stay in their communities with training and work opportunities. We remain committed to Northern Gateway and the opportunities and responsibilities that come with our ownership. We also remain committed to working with our partners to ensure our environment is protected for future generations.”
The headline on Thursday’s CBC.ca coverage of the sudden controversy over a boycott in British Columbia of Tim Horton’s over the Enbridge ads sums up everything that’s wrong about media coverage not only of the boycotts, but of northwest energy and environment issues overall.
“Tim Hortons yanks Enbridge ads, sparks Alberta backlash.” The anger at Tim Hortons across northwest British Columbia over those Enbridge ads, the calls for a boycott have been building for more than two weeks but no one in the media noticed despite widespread posts on Facebook and other social media.
As usual, the concerns of the northwest didn’t really become a story until Alberta got involved and the story has become the “Alberta backlash.” Now, there’s a backlash on social media to the Alberta backlash, with northwestern British Columbians tweeting and posting their displeasure, angry at the usual blinkered views of Alberta-centric coverage of energy issues.
Let’s make one thing clear– despite the outraged cries of the usual suspects like Defence Minister Jason Kenney, Conservative MP Michelle Rempel, who represents Calgary Centre-North and Kyle Harrietha, the Liberal candidate for Fort McMurray-Cold Lake that the boycott was aimed at Alberta’s entire energy industry and the province’s views of a manifest destiny as an energy super power, the doughnut boycott was really aimed specifically at Enbridge, and the company’s arrogance and incompetence.
Of course Jean, like most Albertans, isn’t looking at the bigger picture. The question that Jean should really be asking, is the continuing unquestioning support for Enbridge actually harming the rest of the Alberta energy industry by increasing the resistance in northwestern BC to other energy projects? When are Alberta politicians, whether federal or provincial, ever actually going to show even a Timbit of respect for the issues in northwestern British Columbia?
Look at what Enbridge is doing
There is strong support (with some reservations) for the liquified natural gas projects. There is a level of support for pipelines that would carry refined hydrocarbons to the coast, something that the new premier of Alberta, Rachel Notley is seriously considering. But it is so typical of Alberta, the Alberta media and most of the Canadian media, to believe that the boycott was an attack on the entire energy industry.
Ask any executive of an energy company that wants to do business in northwestern British Columbia and they’ll come up with the a joke that is now so old and so often repeated that it’s become a cliché, “We look at what Enbridge is doing and then do the exact opposite.”
The fact is that Enbridge has been dealing with northwestern British Columbia for more than ten years and they still can’t do anything right. Shell, Chevron, Petronas (and before them Apache) and even TransCanada make more efforts to listen to the people, First Nations and non-Aboriginal residents alike, than Enbridge ever has or ever will (despite their claims in their PR campaigns).
While these energy giants may not agree with what they hear, they are respectful and depending on their corporate culture are making genuine efforts to come up with ways to make their projects work. After a decade of blunders, however, Enbridge still hasn’t shown that much respect for anyone here. Those touchy feely ads that appear on television and at Tim Horton’s are just another example of how not to run a public relations campaign.
There are those who oppose any bitumen sands extraction who signed the online petition, but the core of opposition, as always, comes from northwestern BC and the issue is an ill-conceived pipeline.
Enbridge has been successful in one area of its public relations strategy. They’ve convinced Albertans that Enbridge and the Northern Gateway pipeline is an essential part of not only the Alberta economy but Alberta culture. Any attack on Enbridge becomes an attack on Alberta. Hence the unreasoned anger when after Tim Hortons pulled the ads.
The big blame America lie
The other Big Lie we keep hearing from the Harper Government, is that this all orchestrated by American NGOs and activists. Again this shows Alberta-centric contempt for British Columbia. It’s very easy and convenient to keep believing that everyone in northern British Columbia are dumb and stupid and are being led by the ear by those nasty green Americans who have it in for the efforts to make Canada an energy superpower. That idea, promoted by the more conservative Canadian media has always been animal waste. The battle to protect the environment of northwestern British Columbia while at the same time attracting resource projects that have recognized and obtained social licence to operate has always and will always in BC on a case by case, community by community basis.
A morning shock with your morning coffee and Timbits
Social media across northwestern British Columbia, mostly Facebook, began spreading the news within hours of the ads appearing in the local Timmys. There were angry posts from individuals who had walked in Tim Hortons and saw the ads.
Why didn’t the media get the story?
So why wasn’t the story covered by the media at least ten days ago?
That’s because in this age of tight budgets, it’s considered easy and economical to try to all of northern BC cover from either Vancouver or Calgary; that means covering from far away both the coast where the pipelines and tankers may or may not operate to the east near the Rockies where the natural gas extraction is on going
If you look at map of northern BC, and the two federal ridings Skeena Bulkley Valley and Prince George–Peace River–Northern Rockies, the population is about 200,000 spread over an area about half the size of Europe. Both ridings in this region are supposedly vital to the future of the Canadian economy, but you wouldn’t know it from most of the media. (The Globe and Mail is an exception, with more ongoing coverage of northern BC than you will find in either The Vancouver Sun or The Province).
As for CBC, there are just eight radio staff, two in Prince Rupert and six in Prince George to cover all the apparently vital issues across half the province. ( Almost all the staff work mostly for the Daybreak North morning show which dominates the regional rates but it looks like with the latest CBC cutbacks that at least one of those positions will be eliminated). CBC TV and Global cover the region from Vancouver.
At least the Vancouver based media make efforts to cover the north from time to time. The Alberta media, however, especially the Calgary Herald, is hopeless, and so biased against British Columbia and so dismissive of the issues here, that the coverage across Alberta is completely unreliable about 90 per cent of the time—it’s no wonder that the majority of Albertans have no understanding of British Columbia culture and issues.
Then there are the punditi, pontificating from their cubicles in Ottawa and Toronto without a clue, without doing the basic journalism of picking up the phone (or writing an e-mail) to actually find out what’s going on.
Andrew Coyne, for example, made these rather silly two tongue-in-cheek tweets Thursday night. While Coyne’s tweets do often exhibit a sense of humour, his excellent coverage of the decline of our democratic parliament has to be compared with his blind, unchecked ideological assumptions about the issues of the northwest, which are simplistic, cubicle bound and far off the mark. The same can be said for Jeffrey Simpson in his occasional writing about this region. Neither the view from the Hill, where you can see as far as the Queensway, nor from Bloor Street, where you can see part of the Don Valley, are vantage points to understand what is going in northern British Columbia.
So let’s look at the specific errors in the media coverage of the Tim Horton’s story.
Both Shawn McCarthy in the Globe and Mail and Kyle Bakyx on CBC.ca seem to accept without question that SumofUs, was the instigator of the petition. Like many issues in northwestern BC, the Lower Mainland or US based activist groups follow the lead of northwestern BC and jump on the bandwagon, not the other way around. Jason Kirby in MacLean’s says the boycott movement began a week ago. Here in Kitimat, it began within hours of the ads appearing in the local Timmys and was picked up on activist social media groups before the SumofUs petition site.
McCarthy repeats the conventional wisdom: “The Conservatives and oil industry supporters have been waging a public relations war with the environmental groups that oppose expansion of the oil sands and construction of new pipelines.”
CBC.ca quotes Alan Middleton of York University “Enbridge, of course, is not just pipelines and oilsands; they are a whole range of products including heating people’s homes. Tims should have thought about that.” Again a mistake. I lived in Toronto for many years. A company called Consumers Gas supplied natural gas to homes until it was taken over by Enbridge, so Enbridge does heat the homes in Toronto. But what has that got to do with northwestern British Columbia? Why didn’t CBC.ca call the University of Northern British Columbia? Easier to call York (which by the way is where I got both my BA and MA)
McCarthy quotes Rempel as saying, “One has to wonder whether head office talked to their franchise owners in Alberta before making the decision. I imagine those calls are being made this afternoon – certainly there are a lot of people voicing their displeasure.”
The question that should have been asked whether or not Tim Hortons consulted their franchise owners in British Columbia before ordering them to play the ads. People here were “voicing their displeasure” from the moment the first Kitimatian walked into the local Timmys for an early morning coffee and had to stand in line while being told how wonderful Enbridge is.
Of course, if Albertans force Tim Hortons into reinstating the ads, that will only trigger a bigger boycott in British Columbia. As Maclean’s asks, “what were they thinking?”
Jason Kenney, flying in, flying out
As for Jason Kenney, who is quoted by the CBC as tweeting: “I’m proud to represent thousands of constituents who work for Enbridge & other CDN energy companies,” if Kenney aspires to be Prime Minister one day, he had better start thinking about representing more Canadians than just those employed by the energy industry—a mistake that his boss Stephen Harper keeps making.
Jason Kenney did visit Kitimat for a just a few hours in February 2014 for a tour of the Rio Tinto modernization project and an obligatory and brief meeting with the Haisla First Nation council. If Kenney had actually bothered to stick around a few more hours and talk to the community, everyone from the environmentalists to the industrial development advocates, he might not have been so quick on the trigger in the Twitter wars.
Not one of the major media who covered this story, not The Globe and Mail, not CBC.ca, not MacLean’s, no one else, once bothered to actually call or e-mail someone who lives along the Northern Gateway pipeline route in British Columbia, the area where the boycott movement actually began to ask about Enbridge’s track record in this region. The media still doesn’t get it. This morning’s stories are all about Alberta. As usual, my dear, the media doesn’t give a damn about northwestern British Columbia.
That is why the coverage of the Tim Hortons boycott is a double double failure of the Canadian media.
Where else the media is failing northwestern BC
Full disclosure. Since I took early retirement from CBC in 2010 and returned to Kitimat, I have worked as a freelancer for CBC radio and television, Global News, Canadian Press, The National Post, The Globe and Mail and other media.
However, largely due to budget cuts, freelance opportunities, not only for myself, but others across the region have dried up. The media seems to be concentrating more on the major urban areas where there is larger population base and at least more of the ever shrinking advertising dollar. I am now told more often than I was a couple of years ago that “we don’t have the budget.”
Now this isn’t just a freelancer who would like some more work (although it would be nice). If the media these days actually had environmental beats for reporters the boycott of Tim Hortons in northwest BC would have been flagged within a couple of days, not almost two and half weeks and later only when Alberta got hot under its oily collar.
So as well as the Tim Horton’s boycott here are two major ongoing stories from Kitimat that the media haven’t been covering.
100 day municipal strike
-Kitimat’s municipal workers, Unifor 2300, have been on strike since February 28. Three rounds of mediation have failed, the union has refused binding arbitration, the pool, gym and community meeting halls have been closed since February, the municipal parks and byways are now returning to the wilderness. Only essential services are being maintained (but residents still have to pay their property taxes by July 2, taxes that are skyrocketing due to increased assessments for home values based on LNG projects that haven’t started) By the time most people read this the strike will have been on for 100 days. There is no settlement in sight and both sides, despite a mediator ordered blackout, are fighting a press release war on social media. Can you imagine any other place that had a 100 day municipal workers strike with no coverage in the province’s main media outlets, whether newspaper or television? Local CBC radio has covered the strike, as has the local TV station CFTK. (Update: District of Kitimat says in a news release that the mediator has now approved the DoK news releases.)
Of course, in the bigger picture the media concentrates on business reporting. There haven’t been labour reporters for a generation.
So if most Canadians were surprised that there was a boycott of the unofficial national symbol, Tim Hortons, it’s because of that double double media fail and as the media continues to decline, as budgets are cut, as “commodity news” disappears, expect more surprises in the future. Oh by the way Kitimat is vital to the national economy but we can cover it from a cubicle in Toronto.
Final disclosure: I am not a coffee drinker. When I go to Timmy’s I prefer a large steeped tea and an apple fritter.
It comes down to the idea that Harper will approve Gateway “in the national interest,” count on a vote split between the NDP and Liberals in British Columbia to avoid any consequences to the Conservative majority and then leave it up to Enbridge to actually get the job of building the pipeline and terminal project done.
Mason quotes “ a senior member of Mr. Harper’s government,” and while Mason doesn’t say what part of Canada the source is from, (unlikely in my view the source is from BC) what the member told Mason reveals that the Harper government is still mired in it the Matrix-world that has always governed its policy on Northern Gateway.
The first step, apparently coming in the next few days, is that the Harper government “rigorous” new tanker protocols for traffic along the west coast.
Even if the protocols are new, just who is going to enforce those policies?
Even if Gateway and the Kinder Morgan expansion went ahead, he argued, B.C. would still only see about 60 per cent of the annual oil tanker traffic the neighbouring state of Washington deals with. And yet Washington has an exceptionally clean record when it comes to the safe transport of oil in and out of its harbours – this, he noted, while operating under marine safety regulations that are not as rigorous as the ones Ottawa intends to put in place for the shipment of oil along the West Coast.
There are a lot big problems with that statement.
First, there’s an organization that the Mason’s source may have heard of known as the United States Coast Guard. The United States rigorously enforces its “weak” regulations, while Canada’s Coast Guard is plagued by staff shortages and budget cuts.
Second, the State of Washington also rigorously enforces its environmental regulations, not only on the coast but across the state. I have been told by retired British Columbia forestry and environmental officials (not to mention Fisheries and Oceans) that there are often more state environmental watch dogs in most Washington State counties than in all of northern British Columbia where the Northern Gateway is supposed to be going.
The September 2013, report by the US National Oceanographic and Atmospheric Administration on the export of Canadian bitumen sands through the US shows that the Washington Department of Ecology is working on strengthening regulations for both pipelines and (where it’s in state jurisdiction) tanker traffic. The same report says the state of Alaska Department of Environmental Conservation is updating its plans and possible regulations in anticipation that bitumen filled tanker traffic from Kitimat would come close to the coast en route to Asia.
Third, the coast of northern British Columbia is more rugged and stormy than the waters off Washington.
The one factor that the urban media seems to ignore, is the big question.
Who pays to enforce the 209 conditions that the Joint Review Panel imposed on the Northern Gateway project?
If the Harper government announces new tanker regulations in the coming days, who pays to enforce those regulations?
There were no provisions in the February budget for enforcing the 209 conditions. Rather there were continuing budget cuts to the very departments that the JRP ruled must be involved in the studying, planning, implementation and enforcement of the 209 conditions, Environment Canada, Fisheries and Oceans and Transport Canada.
So while Mason says “The federal government will play its part in meeting the five conditions laid out by the B.C. government for support of the project,” the response must be “Show me the money!”
During the recent plebiscite campaign, Northern Gateway finally revealed its plans for the “super tugs” that will escort tankers along the coast and up Douglas Channel. Owen McHugh, a Northern Gateway emergency manager said, “Adding these four or five tugs to the north coast provides a rescue capability that doesn’t exist in this format. So for any large commercial vessel that is traveling on our coast, this capacity to protect the waters of the north coast.” Those tugs and Northern Gateway’s plans to station teams at small bases along the coast means that the company is, in effect, creating a parallel, private, coast guard on the BC Coast.
What about the Coast Guard itself? The Harper government has been gutting Coast Guard resources along the coast even before it had its majority. It closed and dismantled the Kitsilano Coast Guard station in Vancouver. There is more dependence on the Royal Canadian Marine Search and Rescue volunteers, who have to raise money locally for modern rescue boats which cost up to $750,000. The money that government was “generously” giving to RCMSAR had to be split up to 70 stations in 42 communities along the coast as well as its administrative and training staff.
Does anyone notice what is missing from that list? What’s missing are better Coast Guard vessels just to police all the expected tanker traffic on the west coast (whether LNG or bitumen) and no mention of dedicated spill response vessels, which under the “polluter pay” policy will likely be left to private contractors (and hope that the ships are available at the time of a spill)
How will we know?
Then there is the question of how will people even know if the 209 conditions are being enforced; whether or not the reports demanded by the Joint Review Panel are going be sitting on the National Energy Board server and ignored.
There is every indication, given the government’s obsession with secrecy that until there is a disaster the Canadian public will never know what’s going on. Harper’s muzzling doesn’t just cover government scientists, it covers the lowest level of bureaucrats, as District of Kitimat Council found out when low level DFO bureaucrats refused to appear publicly before council to discuss the risk to the Kitimat River.
So the scenario is, according to Mason’s source
“I think once this decision is made, Enbridge could have shovels in the ground the next day,” the member said. “They are ready to go. This means the First Nations could start realizing profits from this right away, as opposed to the promised profits from LNG, which may never materialize. I think they need to think about that.”
While the LNG market is volatile, the “member” forgets that most of the First Nations of British Columbia have opposed the Northern Gateway since Enbridge first floated the idea in 2001. The current LNG rush didn’t start until after Japan shut down its nuclear power plants after the March 2011 earthquake, The first major anti-Enbridge rally, “The Solidarity Gathering of Nations” was held at Kitamaat Village in May 2010.
Writing off BC
It appears that Conservatives, in their election strategy have already written off Gateway opponents:
Still, there is a raw political calculus that needs to be taken into account. Polls measuring support for the pr.oject in B.C. vary, but generally have shown that anywhere from 55 to 60 per cent of the province opposes Gateway and 40 to 45 per cent support it. Isn’t that enough to scare off a government that needs critical votes in B.C. to win another majority?
“Let’s say 60 per cent are against it,” he said. “And that vote splits between the Liberals and the NDP come the next election. Who are the 40 per cent going to vote for?”
Mason also speculates that Harper will approve Gateway to stick it to Barack Obama and the delays on Keystone XL. As he points out that’s a political, not an economic decision.
There are civil disobedience classes being held across northwestern BC this month. Access to Information requests by the Vancouver Observer revealed increased RCMP surveillance of the anti-Gateway movement. There has always been talk of a “war in the woods” if the pipeline project is forced on an unwilling population.
So it comes down to a question that Mason and the Conservatives are avoiding. Mason’s source says Northern Gateway is crucial to the national interest:
“At the end of the day, you have to do what’s right, not what’s politically expedient,” he said. “You have to ask: What’s in the best interests of all Canadians?”
So given all that will the Harper government leave Enbridge to tough it out on its own?
But will the Harper government, with its bean counting obsession on balancing the budget be willing to pay for all that is needed?
There’s lots of marine clay along the pipeline route, laid down by ancient oceans. That brings to mind just one word. Quagmire, not just the wet, sticky BC mud but a political quagmire.
That was 25 years ago. The media loves anniversary stories and the Exxon Valdez look-backs and updates are already ramping up—right in the middle of the Kitimat plebiscite on the Northern Gateway pipeline and terminal project.
The hashtag #ExxonValdez25 is beginning to trend, based on a Twitter chat for Monday sponsored by the US National Oceanic and Atmospheric Administration.
The voters of Kitimat who will have to cast their ballots on the Joint Review Panel’s interpretation of the Northern Gateway proposal will find once again that the JRP tilted toward the industry and downplayed the lingering risks from a major tanker disaster—and that means neither the pro nor the anti side can be happy with the events that will be marked on March 24, 2014.
The Exxon Valdez accident is part of the Joint Review Panel findings that the economic benefits of Northern Gateway outweigh the risks. The JRP generally accepted the industry position, taken by both Northern Gateway and by ExxonMobil that Prince William Sound has recovered from the Exxon Valdez incident, something that is fiercely debated and disputed.
One area that is not in dispute is that the Exxon Valez disaster brought laws that forced energy companies to use double-hulled tankers. However, commercials that indicate that Northern Gateway will be using double-hulled tankers because the company respects the BC coast is pushing things a bit far, since those tankers are required by law.
Northern Gateway told the Joint Reivew Panel that
on a worldwide basis, all data sets show a steady reduction in the number
and size of oil spills since the 1970s. This decline has been even more apparent since regulatory changes in 1990 following the Exxon Valdez oil spill, which required a phase-in of double-hulled tankers in the international fleet. No double-hulled tanker has sunk since 1990. There have been five incidents of double-hulled tankers that have had a collision or grounding that penetrated the cargo tanks. Resulting spills ranged from 700 to 2500 tonnes
The Haisla countered by saying:
The Haisla Nation said that, although there have been no major spills since the Exxon Valdez spill in Prince William Sound, there were 111 reported incidents involving tanker traffic in Prince William Sound between 1997 and 2007. The three most common types of incidents were equipment malfunctions, problems with propulsion, steering, or engine function, and very small spills from tankers at berth at the marine terminal. The Haisla Nation said that, in the absence of state-of-the-art prevention systems in Prince William Sound, any one of those incidents could have resulted in major vessel casualties or oil spills.
The herring of Prince William Sound still have not recovered. Neither have killer whales, and legal issues remain unresolved a quarter of a century later. Monday is the 25th anniversary of the disaster, in which the tanker Exxon Valdez ran aground on Bligh Reef and spilled at least 11 million gallons of oil into the pristine waters of the sound.
Prince William Sound today looks spectacular, a stunning landscape of mountainous fjords, blue-green waters and thickly forested islands. Pick up a stone on a rocky beach, maybe dig a little, though, and it is possible to still find pockets of oil.
“I think the big surprise for all of us who have worked on this thing for the last 25 years has been the continued presence of relatively fresh oil,” said Gary Shigenaka, a marine biologist for the National Oceanic and Atmospheric Administration.
The legal dispute over the spill is still ongoing, with the Telegraph’s Joanna Walters noting:
[S]tate senator Berta Gardner is pushing for Alaskan politicians to demand that the US government forces ExxonMobil Corporation to pay up a final $92 million (£57 million), in what has become the longest-running environmental court case in history. The money would primarily be spent on addressing the crippled herring numbers and the oiled beaches.
“There’s still damage from the spill. The oil on the beaches is toxic and hurting wildlife. We can’t just say we’ve done what we can and it’s all over – especially with drilling anticipated offshore in the Arctic Ocean – this is significant for Alaska and people around the world,” she told The Telegraph.
An ExxonMobil spokesman then told The Telegraph, the energy sector’s standard response:
Richard Keil, a senior media relations adviser at ExxonMobil, said: “The overwhelming consensus of peer-reviewed scientific papers is that Prince William Sound has recovered and the ecosystem is healthy and thriving.”
But federal scientists estimate that between 16,000 and 21,000 gallons of oil from the spill lingers on beaches in Prince William Sound and up to 450 miles away, some of it no more biodegraded than it was at the time of the disaster.
Overall, the Exxon Valdez disaster was, as US National Public Radio reported, a spur to science. But NPR’s conclusion is the exact opposite of that from the Northern Gateway Joint Review Panel—at least when it comes to fish embryos.
Twenty-five years of research following the Exxon Valdez disaster has led to some startling conclusions about the persistent effects of spilled oil.
When the tanker leaked millions of gallons of the Alaskan coast, scientists predicted major environmental damage, but they expected those effects to be short lived. Instead, they’ve stretched out for many years.
What researchers learned as they puzzled through the reasons for the delayed recovery fundamentally changed the way scientists view oil spills. One of their most surprising discoveries was that long-lasting components of oil thought to be benign turned out to cause chronic damage to fish hearts when fish were exposed to tiny concentrations of the compounds as embryos.
It seems that some species recovered better than others from the oilspill.
For example, the recovery of the sea otter population has received widespread media coverage, but with widely divergent points of view. The more conservative and pro-industry writers point to the recovery of the otter population, while environmental coverage stresses the quarter century it took for the otter population to rebound.
Although recovery timelines varied widely among species, our work shows that recovery of species vulnerable to long-term effects of oil spills can take decades,” said lead author of the study, Brenda Ballachey, research biologist with the U.S. Geological Survey. “For sea otters, we began to see signs of recovery in the years leading up to 2009, two decades after the spill, and the most recent results from 2011 to 2013 are consistent with recovery
The Joint Review Panel generally accepted Northern Gateway’s and the energy industry’s evidence on the Exxon Valdez incident and concluded
The Panel’s finding regarding ecosystem recovery following a large spill is based on extensive scientific evidence filed by many parties, including information on recovery of the environment from large past spill events such as the Exxon Valdez oil spill. The Panel notes that different parties sometimes referred to the same studies on environmental recovery after oil spills, and drew different conclusions.
In its consideration of natural recovery of the environment, the Panel focused on effects that are more readily measurable such as population level impacts, harvest levels, or established environmental quality criteria such as water and sediment quality criteria.
The Panel finds that the evidence indicates that ecosystems will recover over time after a spill and that the post-spill ecosystem will share functional attributes of the pre-spill one. Postspill ecosystems may not be identical to pre-spill ecosystems. Certain ecosystem components may continue to show effects, and residual oil may remain in some locations. In certain unlikely circumstances, the Panel finds that a localized population or species could potentially be permanently affected by an oil spill.
Scientific studies after the Exxon Valdez spill indicated that the vast majority of species recovered following the spill and that functioning ecosystems, similar to those existing pre-spill, were established.
Species for which recovery is not fully apparent, such as Pacific herring, killer whales, and pigeon guillemots, appear to have been affected by other environmental factors or human influences not associated with the oil spill. Insufficient pre-spill baseline data on these species contributed to difficulties in determining the extent of spill effects.
Based on the evidence, the Panel finds that natural recovery of the aquatic environment after an oil spill is likely to be the primary recovery mechanism, particularly for marine spills. Both freshwater and marine ecosystem recovery is further mitigated where cleanup is possible, effective, and beneficial to the environment.
Natural processes that degrade oil would begin immediately following a spill. Although residual oil could remain buried in sediments for years, the Panel finds that toxicity associated with that oil would decline over time and would not cause widespread, long-term impacts.
The Panel finds that Northern Gateway’s commitment to use human interventions, including available spill response technologies, would mitigate spill impacts to ecosystems and assist in species recovery..
It is clear, however, from the local coverage in Alaska and from the attention of the world’s media that Prince William Sound has not fully recovered from the Exxon Valdez incident (it may yet in who knows how many years). Anger and bitterness still remains among the residents of Alaska, especially since the court cases are dragging on after a quarter century.
Those are the kinds of issues that Kitimat residents will face when they vote in the plebiscite on April 12. Just who do the people of Kitimat believe, those who say the chances for a spill are remote and the environment and the economy will quickly recover? It probably depends on whether or not you consider 25 years quick. Twenty-five years is quick in geological time but it is a third or a half of a human life time.
As for the residents of Kitamaat Village, and probably many people in Kitimat, Haisla Chief Counsellor Ellis Ross summed it up in a Facebook posting on Sunday
If this happens in Kitamaat, all those campaigning for Enbridge will pack up and leave for another coastline to foul. Haisla don’t have much of a choice. We would have to stay and watch the court battles on who should pay what.
Ross is right. Whether it’s Prince William Sound or Douglas Channel, the people who live the region are stuck with the mess while the big companies walk away and the lawyers get rich.
The Haisla Nation are calling on the federal cabinet to postpone its decision on the Northern Gateway project to allow time for adequate consultations with First Nations, according to the Haisla response to the Joint Review Panel, seen by Northwest Coast Energy News.
The Joint Review Panel report and recommendations were released on Dec. 19, 2013 and the cabinet has 180 days from that point to recommend approval of the project.
The Haisla argue that Section 54 of the National Energy Board act allows the Governor-in-Council, the federal cabinet, to extend the timeline if it wants to, if recommended by the Minister of Natural Resources.
So far, the Harper government has refused to extend the deadline. The Haisla response document says Chief Counsellor Ellis Ross spoke to Minister of Natural Resources Joe Oliver on the telephone requesting the extension, but, according to the document, all Oliver did was point to the legislation that calls for the 180 day response to a joint review report.
The Haisla response document also has a long lists of what the Haisla say are flaws in the Joint Review Panel report.
In correspondence with the Haisla, Brett Maracle, Crown Consultation Coordinator at the Canadian Environmental Assessment Agency for the Northern Gateway project, says:
the process set out by the Government of Canada in the Aboriginal Consultation Framework was finalized after receiving and carefully considering input from Aboriginal groups….The Government of Canada believes the process outlined in the Aboriginal Consultation Framework provides for a deep level of meaningful consultation with Aboriginal groups with Phase IV being the final step prior to a decision being made on the Project.
The Haisla dispute there has been any “deep level of meaningful consultation,” citing in the document a long list of attempts to engage the federal government with little or no response.
In their response, the Haisla Nation Council says:
Canada, has, to date, refused to engage in meaningful consultations with the Haisla Nation. Instead Canada has unilaterally imposed what it calls a “deep level meaningful consultation” process which is fundamentally flawed for a number of reasons…
The document lists attempts by the Haisla to engage with ministers and government departments including requests for a meeting with then Environment Minister Peter Kent, prior to the opening of the JRP formal hearings in Kitamaat Village in January 2012. Although the Haisla requested a meeting with Kent, several times in 2011, no meeting ever occurred. It was not until April 19, 2012, four months later that Kent replied to the Haisla saying he had asked the President of the Canadian Environmental Assessment Agency to meet with the First Nation prior to the start of the JRP hearings. However, it was apparently impossible to schedule such a meeting in December, 2011.
To which the Haisla reply:
For over six years, Canada ignored Haisla Nations requests for meetings. Once the JRP’s oral hearings process commenced, Canada further closed the door on any opportunity for a meeting until the JRP Report was release. This refusal to consult was baseless. The ongoing JRP process was not a rational or justifiable basis for Canada’s refusal to consult…
Canada has yet to meet with the Haisla Nation to discuss the proposed project, other than to tell the Haisla Nation it is only engaging through the JRP process for now. This is not consultation. It is, perhaps, at best an initial step towards a consultation process.
Ignoring the Eyford report
In March 2013, Natural Resources Minister Joe Oliver flew to Terrace for a photo op to announce the appointment of Douglas Eyford to consult First Nations on the Northern Gateway project. Oliver then flew back to Ottawa without meeting anyone in the region. Eyford’s report Forging Partnership Build Relationship was released in November, 2013.
The Haisla say:
Mr. Eyford’s Report recommended that Canada should consider undertaking early engagement to address Aboriginal interests that may not be dealt within a regulatory process. The Haisla Nation has been seeking such early engagement from Canada since the proposed project was first announced.
Mr. Eyford’s Report also recommended that Canada should engage and conduct consultations n addition to those in regulatory processes, as may be required, to address issues and facilitate resolutions in exceptional circumstances. The Haisla Nation also asked for this, identifying early that this proposed project was an exceptional circumstance due to the significant potential impacts on the Haisla Nation.
The Haisla Nation Council response was sent to Brett Maracle, Crown Consultation Coordinator at the Canadian Environmental Assessment Agency for the Northern Gateway project. The Haisla also sent copies of the response to Joe Oliver, the Minister of Natural Resources, Gaetan Caron, Chair of the National Energy Board, Leon Aqlukkaq, Minister of the Environment, Bernard Valcourt Minister of Aboriginal Affairs and Northern Development, Gail Shea, Minister of Fisheries and Oceans, BC Premier Christy Clark, Steve Thomson, BC Minister of Forests, Lands and Natural Resources and Mary Polak, BC Minister of the Environment.
In the response, seen by Northwest Coast Energy News, the Haisla are objecting to both the government’s and the JRP’s attitude toward the idea of consultation as well as some of the specific findings by the panel. The Haisla also fault the JRP process for refusing to take into consideration reports and studies that were released after the evidentiary deadlines.
Overall, the Haisla say
The JRP report is written in a way that prevents an assessment of how or whether the JRP considered Haisla Nation concerns and of how whether the JRP purports to address the Haisla Nation’s concerns. Further the JRP Report is lacking n some of the fundamental justification required to understand how arrived at its recommendations.
So what are the Haisla concerns?
In the document filed with the Canadian Environmental Assessment Agency, the Haisla say:
The proposed project carries with it an inordinate amount of risk to Haisla Nation Territory. The Haisla Nation is being asked to play host to this proposed project, despite the risk the proposed project poses to the land waters and resources relied on by the Haisla Nation for sustenance and cultural heritage. The risk includes a huge risk to Haisla Nation aboriginal rights to trap, hunt and fish, to gather seafood and gather plant materials. It could result in significant damage to the Haisla Nation cultural heritage—its traditional way of life…..
The terminal site is one of the few areas suitable for terminal development in our territory. It is also home to over 800 Haisla Nation Culturally Modified Trees (CMTs). Northern Gateway proposes to irrevocably alter the land, the use of the land and access to this land for the duration of the proposed project, which is anticipated to be at least 80 years. This irrevocable alteration includes the felling of our CMTS….
By seeking to use Haisla Nation aboriginal title land for the proposed project, Northern Gateway will be effectively expropriating the economic value of this land. Northern Gateway is proposing to use Haisla Nation aboriginal title land for a project with no benefit to the Haisla Nation and which is fundamentally at odds with Haisla Nation stewardship principles.
Obstructed clear understanding
The Haisla say that “Canada has failed to adhere is own framework” for the JRP because in the Aboriginal Consultation Framework says “Federal departments will be active participants in the JRP process to ensure the environmental assessment and consultation record, is as accurate and complete as possible.”
The Haisla say “Canada provided limited written evidence to the JRP” and goes on to say that the “federal governments not only failed to provide relevant information but also obstructed a clear understanding of project impacts.”
Among the evidence relevant to Northern Gateway that the federal government was “unable or unwilling to provide” includes:
Natural Resources had expertise on acid rock damage and metal leaching but did not include evidence on that in their evidence
Fisheries and Oceans did not have a mandate to conduct an assessment of the potential toxicological effects of an oil spill.
Environment Canada did not review or provide information on the spills from pipelines.
The federal government witnesses were unable to answer questions about the toxicity of dispersant.
Environment Canada was asked if it had studies of the subsurface currents and the movement of submerged oil. Environment Canada told the JRP did not measure hydrodynamic data but relies on DFO. DFO cold not provide any witnesses to the JRP with expertise on subsurface currents.
In the formal response on the JRP report, Haisla also say:
The JRP has concluded that the risk of a large spill form the pipeline in the Kitimat River Valley is not likely, despite very significant information gaps relating to geohazards, leak detection and spill response.
The JRP has concluded that a large spill would result in significant adverse environmental effects. However, the JRP appears to base a finding that these effects are unlikely to occur on an unreasonable assumptions about how widespread the effects could be or how long they would last. The JRP has not considered the extent to which a localized effect could impact Haisla Nation.
The JRP relies on the concept of “natural recovery” as mitigation of significant adverse effects. The Haisla Nation asked the JRP to compel information from Northern Gateway about the applicability of its evidence to species found in Haisla National Territory. The JRP, however, refused to compel this evidence from Northern Gateway.
The JRP has accepted at face value that Northern Gateway would shut down its pipeline within 13 minutes in the event of a rupture and has failed to consider the effects of a large spill that is not detected with this timeframe through the control centre (or was in the case of Kalamazoo, is detected by the control centre but is systematically mischaracterized and ignored).
As part of the consultation process the Haisla want 22 changes to the JRP report, changes which echo the Haisla Final Written Argument that was filed at the end of the hearings.
The Panel should find that potential impacts to asserted Haisla Nation aboriginal rights and title from the proposed project are such that project cannot be found to be in the public interest in the absence of meaningful consultation… The current status of engagement and the federal government imposition of a 6-month time limit to complete consultation raise serious concerns that meaningful consultation will not be possible. Therefore the proposed project is not in the public interest.
Among the others are:
The JRP should have determined the significant of adverse effects to rare ecological communities that cannot mitigated.
The JRP should have provided more information to allow a reasonable assessment of the risk of a spill from the pipelines.
The JRP would have considered all factors to contribute to the risk of a spill.
The JRP should have found that Northern Gateway’s assessment of the toxicity of an oil spill because it did not consider the full range of products to be shipped nor did it consider the potential pathways of the effect of a toxic spill, whether from a pipeline, at the marine terminal or in the case of a tanker spill
The evidence had not demonstrated that Northern Gateway’s spill response would be able to mitigate the effects of a spill either at the pipeline, at the Kitimat marine terminal or from a tanker spill.
The JRP did not consider the impact of the Kitimat Marine Terminal on their cultural and archaeological heritage, including culturally modified trees.
The Haisla Nation in their response to the Crown on the Northern Gateway Joint Review Panel details four studies, three Canadian and one American that were released after the Joint Review evidentiary deadline had passed, evidence that the Haisla say should be considered in any consideration of the Northern Gateway pipeline, terminal and tanker project. (The American report from the National Oceanic And Atmospheric Administration was released after the JRP final report)
JRP chair Sheila Leggett’s constant citing of rules of procedure and her stubborn refusal to consider new evidence and studies in a dynamic situation that was changing rapidly was one of the reasons that many people in the northwest said the JRP had lost credibility.
The Haisla say: “It is incumbent upon Canada to consider and discuss the information in these reports as part of a meaningful consultation process…” and then lists “key findings” that have potential impacts on aboriginal rights and title:
The West Coast Spill response for the government of British Columbia which found:
Most oil spilled into the marine environment cannot be cleaned up
There is a disconnect between planning and actual repose capability
Canada’s spill response is “far from world class.”
The Transport Canada Ship Oil Spill Preparedness and Response study:
Douglas Channel will go from low risk to high risk for pills if the project goes ahead
The study recommends preparation for a “true worst case discharge” rather than “the credible worst case discharge” as proposed by Northern Gateway
Canada needed a much more rigorous regulatory regime covering tankers.
The joint federal government technical report on the properties of bitumen from the Canadian Oil Sands:
There are uncertainties on how diluted bitumen would behave in a marine environment.
Northern Gateway did not provide adequate information about sediment levels to allow for proper study of interaction with diluted bitumen
Dispersant may not be effective.
Weathered diluted bitumen would “reach densities at which it will sink freshwater without mechanical or physical assistance.”
The US National Oceanic And Atmospheric Administration report on Transporting Alberta Oil sands:
Diluted bitumen has “significant differences from conventional crudes.’ (The JRP used conventional crude as a benchmark in its findings)
The physical properties of diluted bitumen “fluctuate based on a number of factors.
Pipeline operators may not have detailed information related to products in the pipeline at the time of a spill
There is a lack of experimental data on the weathering behaviour of oil sands product which limits the ability of spill response organizations “to understand and predict the behaviour and fate of oil sands products in freshwater, estuarine and saltwater environments.”
The costs for Enbridge to clean up the 2010 Marshall, Michigan oil spill now far exceeds the maximum estimate that the Joint Review Panel gave for a major spill on the Northern Gateway Pipeline and also exceeds the amount of money the JRP ordered Enbridge to set aside to deal with a spill. Enbridge’s cleanup costs have also now edged past the higher liability amount requested by the Haisla Nation.
According to the US firm Enbridge Energy Partners’ filing with the United States Securities and Exchange Commission, as of September 30, 2013, the cost of cleanup was $1.035 billion US, not including possible additional fines and penalties that might be imposed by US authorities in the future.
In its decision, the Joint Review Panel estimated the cost a major oil spill from the Northern Gateway project would be about $693 million. As part of the 209 conditions, the JRP ordered Enbridge to set aside “financial assurances” totaling $950 million.
Note all costs in this article are for a pipeline breach. The Joint Review Panel had different estimates for a tanker spill and the liability rules for marine traffic are different from pipelines.
In its filing for the third quarter of 2013, with the SEC, Enbridge Energy Partners say that the cost up until September 2013 had “exceed[ed] the limits of our insurance coverage.” The same filing says that Enbridge is in a legal dispute with one its insurers.
Lakehead Line 6B Crude Oil Release
We continue to perform necessary remediation, restoration and monitoring of the areas affected by the Line 6B crude oil release. All the initiatives we are undertaking in the monitoring and restoration phase are intended to restore the crude oil release area to the satisfaction of the appropriate regulatory authorities.
As of September 30, 2013, our total cost estimate for the Line 6B crude oil release is $1,035.0 million, which is an increase of $215.0 million as compared to December 31, 2012. This total estimate is before insurance recoveries and excluding additional fines and penalties which may be imposed by federal, state and local governmental agencies, other than the Pipeline and Hazardous Materials Safety Administration, or PHMSA, civil penalty of $3.7 million, we paid during the third quarter of 2012. On March 14, 2013, we received an order from the EPA, or the Environmental Protection Agency, which we refer to as the Order, that defined the scope which requires additional containment and active recovery of submerged oil relating to the Line 6B crude oil release. We submitted our initial proposed work plan required by the EPA on April 4, 2013, and we resubmitted the workplan on April 23, 2013. The EPA approved the Submerged Oil Recovery and Assessment workplan, or SORA, with modifications on May 8, 2013. We incorporated the modification and submitted an approved SORA on May 13, 2013. The Order states that the work must be completed by December 31, 2013.
The $175.0 million increase in the total cost estimate during the three month period ending March 31, 2013, was attributable to additional work required by the Order. The $40.0 million increase during the three month period ending June 30, 2013 was attributable to further refinement and definition of the additional dredging scope per the Order and associated environmental, permitting, waste removal and other related costs. The actual costs incurred may differ from the foregoing estimate as we complete the work plan with the EPA related to the Order and work with other regulatory agencies to assure that our work plan complies with their requirements. Any such incremental costs will not be recovered under our insurance policies as our costs for the incident at September 30, 2013 exceeded the limits of our insurance coverage.
According to the SEC filing, the breakdown of costs include $2.6 million paid to owners of homes adversely impacted by the spill.
Despite the efforts we have made to ensure the reasonableness of our estimates, changes to the recorded amounts associated with this release are possible as more reliable information becomes available. We continue to have the potential of incurring additional costs in connection with this crude oil release due to variations in any or all of the categories described above, including modified or revised requirements from regulatory agencies in addition to fines and penalties as well as expenditures associated with litigation and settlement of claims.
The material components underlying our total estimated loss for the cleanup, remediation and restoration associated with the Line 6B crude oil release include the following: (in millions)
Response Personnel & Equipment $454
Environmental Consultants $193
Professional, regulatory and other $388
Total $ 1,035
For the nine month periods ended September 30, 2013 and 2012, we made payments of $62.3 million and $120.9 million, respectively, for costs associated with the Line 6B crude oil release. For the nine month period ended September 30, 2013, we recognized a $2.6 million impairment for homes purchased due to the Line 6B crude oil release which is included in the “Environmental costs, net of recoveries” on our consolidated statements of income. As of September 30, 2013 and December 31, 2012, we had a remaining estimated liability of $265.9 million and $115.8 million, respectively.
As for insurance, Enbridge Energy Partners say:
The claims for the crude oil release for Line 6B are covered by the insurance policy that expired on April 30, 2011, which had an aggregate limit of $650.0 million for pollution liability. Based on our remediation spending through September 30, 2013, we have exceeded the limits of coverage under this insurance policy. During the third quarter 2013, we received $42.0 million of insurance recoveries for a claim we filed in connection with the Line 6B crude oil release and recognized as a reduction to environmental cost in the second quarter of 2013. We recognized $170.0 million of insurance recoveries as reductions to “Environmental costs, net of recoveries” in our consolidated statements of income for the three and nine month periods ended September 30, 2012 for the Line 6B crude oil release. As of September 30, 2013, we have recorded total insurance recoveries of $547.0 million for the Line 6B crude oil release, out of the $650.0 million aggregate limit. We expect to record receivables for additional amounts we claim for recovery pursuant to our insurance policies during the period that we deem realization of the claim for recovery to be probable.
In March 2013, we and Enbridge filed a lawsuit against the insurers of our remaining $145.0 million coverage, as one particular insurer is disputing our recovery eligibility for costs related to our claim on the Line 6B crude oil release and the other remaining insurers assert that their payment is predicated on the outcome of our recovery with that insurer. We received a partial recovery payment of $42.0 million from the other remaining insurers and have since amended our lawsuit, such that it now includes only one insurer. While we believe that our claims for the remaining $103.0 million are covered under the policy, there can be no assurance that we will prevail in this lawsuit.
The Joint Review, Enbridge and Michigan
The Joint Review Panel based its finding on the Marshall, Michigan spill on the figure of $767 million from the summer of 2012 –again showing the limitations of the JRP’s evidentiary deadlines since the costs are now much higher.
The JRP quoted Enbridge as saying:
Northern Gateway considered the high costs of the Marshall, Michigan spill, which were at least $252,000 per cubic metre ($40,000 per barrel), to be an outlier or a rare event because the spill occurred in a densely populated area, because the pipeline’s response time was abnormally long, and because there was the prospect of potentially lengthy legal proceedings.
Enbridge assured the JRP that the corporate culture and management changes and equipment upgrades since the Marshall, Michigan spill lowered that chances of a similar event.
The company based its models for the JRP on much smaller spills, including one spill at Lake Wabamun, Alberta from a train not a pipeline (Vol. 2 p 357)
Enbridge’s risk assessment did not “generate an estimate of economic losses caused
by a spill.”
The JRP says Northern Gateway relied on its analysis of literature, and spill events experienced by Enbridge and other liquid hydrocarbon carriers in Alberta and British Columbia. After assessing all of this information, Northern Gateway regarded the high costs of a cleanup as “conservative”–meaning the company expects costs to be lower than its estimates in evidence before the JRP.
In Northern Gateway’s view the most costly pipeline spill incident would be a full-bore oil pipeline rupture, with an estimated cost of $200 million, and an extremely low probability of occurrence.
In their evidence, the Haisla (and other First Nations and intervenors) were doubtful about Northern Gateway’s assurances. The Haisla asked that Enbridge have a minimum of $1 billion in liability, an amount Enbridge has now exceeded in Michigan.
Haisla Nation estimated the cost of damage to ecosystem services because of a terrestrial oil spill from Northern Gateway’s pipeline would be in the range of $12,000 to $610 million for a 30-year period.
The Haisla’s cost estimates were based on values for environmental goods and services and probabilities of spills that were independent of Northern Gateway’s parameters for estimating oil spill costs. In contrast to Northern Gateway’s estimated spill frequency and costs, the Haisla predicted that spills would occur more often and placed a higher value on damages to environmental goods and services.
Haisla Nation argued that Northern Gateway overestimated its ability to detect and respond to a spill. In the Haisla’s view this resulted in the cost of a spill and the requisite financial assurances being understated. Haisla cited several factors, including: remote location, limited access, challenging terrain, seasonal conditions, and river flow conditions that would cause the cost of cleaning up a spill in the Kitimat River valley to be significantly greater than the costs associated with Enbridge’s Marshall, Michigan spill.
For these reasons, Haisla proposed that Northern Gateway should be required to obtain a minimum of $1 billion of liability coverage through insurance and financial assurances. Haisla said that Northern Gateway should file annually the report from an independent third party assessing the financial assurances plan. (Vol 2 p359)
In response Northern Gateway said:
Northern Gateway said that Haisla’s findings were based on a number of fundamental methodological flaws and a lack of probability analysis to support the high frequency of occurrence of oil spill events. Northern Gateway argued that Haisla’s estimates of ecosystem service values were inflated because they were based on values from unrelated studies. In Northern Gateway’s view, Haisla relied on high passive use values that were not justified.
As it has in most of its decision, the JRP accepted Northern Gateway’s evidence, including its explanation of the Marshall, Michigan spill and then went on to base its spill cost estimates not on a pipeline breach but on the 2005 railway spill at Lake Wabumum, near White Sands, Alberta.
The Panel accepts that the cleanup costs for the Marshall, Michigan spill were orders of magnitude higher because of the extended response time. In this application, the Panel accepts Northern Gateway’s commitment to complete the shutdown in no more than 13 minutes after detection. For this reason the Panel did not use the Marshall spill costs in its calculations. The spill volume and the resulting costs are directly dependent on the Northern Gateway’s control room staff and the pipeline control system fully closing the adjacent block valves no longer than 13 minutes from the detection of an alarm event, as well as the amount of oil which would drain out of the pipeline after valve closure due to elevation differences.
The Panel decided on a total unit cost of $138,376 per cubic metre ($22,000 per barrel). This is midway between the unit cost of $88,058 per cubic metre ($14,000) per barrel proposed by Northern Gateway and the unit cost of $188,694 per cubic metre ($30,000 per barrel) for the Lake Wabamun spill. It is about one-half of the Marshall spill’s unit cost. Giving weight to the Lake Wabamun costs recognizes actual costs experienced in a Canadian spill and the greater costs of spills in high consequence areas. In these areas, individuals, populations, property, and the environment would have a high sensitivity to hydrocarbon spills. The deleterious effects of the spill would increase with the spill volume, the extent of the spill, and the difficulty in accessing the spill area for cleanup and remediation.
Using these spill volume and unit cost values in the calculation below, the Panel estimated the total cost of a large spill could be $700 million. Total cost of a spill = 31,500 barrels x $22,000 per barrel = $693 million, or $700 million when rounded up.
The Panel based the financial assurances requirements for Northern Gateway on a spill with a total estimated cost of $700 million and directs Northern Gateway to develop a financial assurances plan with a total coverage of $950 million that would include the following components:
i. Ready cash of $100 million to cover the initial costs of a spill;
ii. Core coverage of $600 million that is made up of stand-alone, third party liability insurance and other appropriate financial assurance instruments, and
iii. Financial backstopping via parental, other third party guarantees, or no fault insurance of at least $250 million to cover costs that exceed the payout of components i. and ii.
The financial backstopping would be available to fill the gap if the spill volumes or unit costs were under-estimated or if the payout from the core coverage would be less than 100 per cent.
The Panel noted that:
The evidence indicates that there is some probability that a large oil spill may occur at some time over the life of the project. In these circumstances the Panel must take a careful and precautionary approach because of the high consequences of a large spill. The Panel has decided that Northern Gateway must arrange and maintain sufficient financial assurances to cover potential risks and liabilities related to large oil spills during the operating life of the project.
Northern Gateway committed to investing $500 million in additional facilities and mitigation measures such as thicker wall pipe, more block valves, more in-line inspections, and complementary leak detection systems. This initiative should enhance the safety and reliability of the system and help reduce and mitigate the effects of a spill, but it would not eliminate the risk or costs of spills. This initiative is not a direct substitute for third party liability insurance and does not eliminate the need for liability insurance or any other form of financial assurance to cover the cost of a spill. (p 361)
So the JRP decision comes down to this, if you accept Northern Gateway’s position that pipeline spills are rare and mostly small, then the company has the financial resources to cover the damage. If, however, Northern Gateway is wrong and the costs of a pipeline cleanup exceed the $950 million required by the Joint Review Panel, as has happened in Michigan, then those JRP conditions are already obsolete.
(Northwest Coast Energy News encourages all readers to read the complete JRP report and SEC filing since space and readability does not permit fully quoting from the report)
The Department of Fisheries and Oceans has handed responsibility for fish and fish habitat along pipeline routes over to the National Energy Board. The same agreement also gives the National Energy Board responsibility for dealing with First Nations fisheries if a pipeline or power line crosses their traditional territory.
DFO and NEB quietly announced a memorandum of agreement on December 16, 2013, that went largely unnoticed with the release three days later of the Joint Review Panel decision on Northern Gateway and the slow down in news coverage over the Christmas holidays.
As of December 16, 2013, Enbridge no longer has to apply to DFO for permits to alter fish habitat along the Northern Gateway route. It was also on December 16 that Kinder Morgan filed its application with the NEB for the expansion of its pipeline from Alberta to Burnaby.
Fish and fish habitat along those pipeline is now the responsibility of the Alberta-based, energy friendly National Energy Board.
Applications submitted to the NEB shall be reviewed under the Fisheries Protection Provisions of the Fisheries Act to determine if impacts shall occur, and if an authorization will be required under the Fisheries Act. The NEB shall also become responsible to determine if proposed projects will impact aquatic species at risk and require permitting under the Species at Risk Act. If the NEB determines than an authorization or permit will be required, DFO shall be notified and will be responsible for issuing the authorization or permit.
This MOU better integrates the Government of Canada’s initiative to streamline application processes by eliminating the requirement for duplicate reviews.
In the “Guiding Principles” of the memorandum of understanding between DFO and NEB, the first provision is
The Parties will use the provisions of this MOU to support the Government of Canada’s regulatory process improvement objectives through coordination to:
Facilitate effective and efficient use of government resources in order that regulatory decisions are made in a timely manner by applying a one-project one-review approach;
Promote clarity and consistency of the regulatory decision making process; and
Ensure responsibilities for mitigation, monitoring and reporting, compliance and enforcement, follow-up monitoring, and Aboriginal consultation are addressed.
Protecting fisheries and fish habitat is only the third priority in the MOU
Conservation and protection of fish and fish habitat, and listed aquatic species at risk and their critical habitat, will be managed in accordance with DFO’s regulatory and policy frameworks for the application of the fisheries protection provisions of the Fisheries Act and SARA [Species at Risk Act] respectively.
The question most people on the northwest coast and along BC’s rivers will ask (whether or not they support or oppose pipeline projects): Just how much expertise, if any, in fisheries and fish habitat can be found in the Calgary offices of the National Energy Board?
According to the FAQ posted on the NEB website, it is now up to the NEB to determine whether a project impacts fisheries or species at risk.
How will the MOU affect authorizations under the Fisheries Act?
The NEB will assess a project application and determine if mitigation strategies are needed to reduce or prevent impacts to fish or fish habitat. If the project could result in serious harm for fish then the NEB will inform DFO that a Fisheries Act authorization under paragraph 35(2)(b) is likely to be required. DFO will review and issue an authorization when appropriate, prior to project construction. Authorizations issued by DFO would relate to those watercourses impacted, not the entire project.
How will the MOU affect permits under SARA?
The NEB will assess a project application for potential impacts to aquatic species at risk. If an impact to a SARA-listed aquatic species may occur, the NEB will inform DFO. DFO will review and issue a permit under SARA when appropriate, prior to project construction.
The NEB claims that the MOU will not affect environmental protection
Will this MOU reduce environmental protection?
No, the NEB has always considered impacts to fish and fish habitat and aquatic species at risk when making its decisions. The initial assessment of impacts of federally regulated pipeline and power line projects
Another potentially troubling aspect of the agreement is that it makes the National Energy Board the lead agency in dealing with First Nations.
when the Crown contemplates conduct that may adversely affect established or potential Aboriginal and treaty rights in relation to the issuance of authorizations under the Fisheries Act, and/or permits under SARA, the NEB application assessment process will be relied upon by DFO to the extent possible, to ensure Aboriginal groups are consulted as required, and where appropriate accommodated;
Canada’s First Nations have dealt with DFO for generations and by and large both sides understand each other’s aims, even if they don’t always agree. The NEB, however, at least as seen during the JRP hearings, often showed little understanding or respect for First Nations. That means that already troubled relationship between First Nations and the Crown over pipelines is going to get a lot more troubled.
The memorandum of understanding between DFO and MOU is yet another result of the Harper government’s omnibus bills, which have the aim of efficiently approving energy projects while downplaying environmental costs.
It also means that from now on there must be a much more careful reading of the 209 conditions imposed by the Joint Review Panel on Enbridge to see if those conditions are actually going to be rigorously enforced or if all Enbridge has to do is to file reports with the NEB.
It also appears that the new and highly restrictive NEB procedures that restrict input from all but those the NEB considers “directly affected’ by a project will also apply to their new responsibility for fisheries.
If you read both the 76 pages of Volume One of the Northern Gateway Joint Review decision and the 417 pages of Volume 2, a total of 493 pages, one word keeps reappearing. That word is “burden.”
The JRP panel asks “How did we weigh the balance of burdens, benefits, and risks?”
And it says:
Many people and parties commented on the economic benefits and burdens that could be brought about by the Enbridge Northern Gateway Project. In our view, opening Pacific Basin markets wouldbe important to the Canadian economy and society. Though difficult to measure, we found that the economic benefits of the project would likely outweigh any economic burdens.
The JRP notes:
The Province of British Columbia and many hearing participants argued that most of the project’s economic benefits would flow to Alberta, the rest of Canada, and foreign shareholders in oil and pipeline companies. They said British Columbia would bear too many of the environmental and economic burdens and risks compared to the benefits.
But, as the panel does throughout the ruling, it accepts, with little, if any, skepticism, Northern Gateway’s evidence and assertion:
Northern Gateway said about three-quarters of construction employment would occur in British Columbia, and the province would get the largest share of direct benefits from continuing operations.
It does touch on the “burdens” faced by the Aboriginal people of northern BC and others in the event of a catastrophic spill.
In the unlikely event of a large oil spill, we found that there would be significant adverse effects on lands, waters, or resources used by Aboriginal groups. We found that these adverse effects would not be permanent and widespread. We recognize that reduced or interrupted access to lands, waters, or resources used by Aboriginal groups, including for country foods, may result in disruptions in the ability of Aboriginal groups to practice their traditional activities. We recognize that such an event would place burdens and challenges on affected Aboriginal groups. We find that such interruptions would be temporary. We also recognize that, during recovery from a spill, users of lands, waters, or resources may experience disruptions and possible changes in access or use.
And the JRP goes on to say:
We recommend approval of the Enbridge Northern Gateway Project, subject to the 209 conditions set out in Volume 2 of our report. We have concluded that the project would be in the public interest. We find that the project’s potential benefits for Canada and Canadians outweigh the potential burdens and risks….
We are of the view that opening Pacific Basin markets is important to the Canadian economy and society. Societal and economic benefits can be expected from the project. We find that the environmental burdens associated with project construction and routine operation can generally be effectively mitigated. Some environmental burdens may not be fully mitigated in spite of reasonable best efforts and techniques…. We acknowledge that this project may require some people and local communities to adapt to temporary disruptions during construction.
As for the chance of a major oil spill, again the JRP talks about burdens:
The environmental, societal, and economic burdens of a large oil spill, while unlikely and not permanent, would be significant. Through our conditions we require Northern Gateway to implement appropriate and effective spill prevention measures and spill response capabilities, so that the likelihood and consequences of a large spill would be minimized.
It is our view that, after mitigation, the likelihood of significant adverse environmental effects resulting from project malfunctions or accidents is very low.
We find that Canadians will be better off with this project than without it.
In the Joint Review ruling is one fact. Northern British Columbia must bear the “burden” of the Northern Gateway project for the good of Alberta and the rest of Canada. The JRP accepts, without much questioning, Northern Gateway’s assurances that environmental disruptions during construction will be minimal and that the chances of a major spill from either a pipeline or a tanker are minimal.
Canadians as a whole may be better off with the Northern Gateway. Whether the people who live along the pipeline and tanker route will be better off is another question, one which the Joint Review Panel dismisses with casual disdain.
The politics of the Joint Review Panel
There are actually two Joint Review Panel reports.
One is political, one is regulatory. The political decision by the three member panel, two from Alberta and one from Ontario, is that the concerns of northwestern British Columbia are fully met by Enbridge Northern Gateway’s assurances. There is a second political decision, found throughout both volumes of the report, and the reader sees the Joint Review Panel has the notion that many parts of the environment have already been degraded by previous human activity, and that means the construction and operation of the Northern Gateway will have little consequence.
Here is where the Joint Review Panel is blind to its own bias. With its mandate to rule on the Canadian “public interest,” the panel makes the political determination that, in the Canadian public interest, northwestern BC must bear the “burden” of the project, while other political issues were not considered because, apparently those issues were outside the JRP’s mandate.
…some people asked us to consider the “downstream” emissions that could arise from upgrading, refining, and diluted bitumen use in China and elsewhere. These effects were outside our jurisdiction, and we did not consider them. We did consider emissions arising from construction activities, pipeline operations, and the engines of tankers in Canadian territorial waters.
During our hearings and in written submissions, many people urged us to include assessment of matters that were beyond the scope of the project and outside our mandate set out in the Joint Review Panel Agreement. These issues included both “upstream” oil development effects and “downstream” refining and use of the products shipped on the pipelines and tankers…Many people said the project would lead to increased greenhouse gas emissions and other environmental and social effects from oil sands development. We did not consider that there was a sufficiently direct connection between the project and any particular existing or proposed oil sands development or other oil production activities
If someone in Northwestern British Columbia favours the Northern Gateway project, if they believe (and many people do) what Enbridge Northern Gateway says about the economic benefits, then it is likely they will accept the burden and the further environmental degradation imposed by the Joint Review Panel on this region of British Columbia.
If, on other hand, for those who are opposed to the project, then the decision to impose the burden on this region is both unreasonable and undemocratic (since no one in northern BC, in the energy friendly east or the environmental west has been formally asked to accept or reject the project). For those opposed to the project, the idea that since the environment has already been disrupted by earlier industrial development, that Canadians can continue to degrade the environment with no consequence will only fuel opposition to the project.
As for the assertion that green house gas emissions were not part of the Joint Review Panel’s mandate, that is mendacious. The panel made a political decision on the role of the people of northwestern BC and the state of northwestern BC’s environment. The panel made a political decision to avoid ruling on the role of Northern Gateway in contributing to climate change or the larger world wide economic impact of pipelines and the bitumen sands.
The Joint Review Panel is supposed to be a regulatory body and should be pipeline, terminal and tanker project go ahead after the expected court challenges from First Nations on rights, title and consultation and from the environmental groups, then those 209 conditions kick in.
While the Joint Review Panel largely accepts Enbridge Northern Gateway’s evidence with little questions, in some areas the panel does find flaws in what Northern Gateway planned. In a few instances, it actually accepts the recommendations from intervenors (many from First Nations, who while opposed to the project, successfully demanded route changes to through environmentally sensitive or culturally significant territory.)
When it comes to regulations, as opposed to politics, the Joint Review Panel has done its job and done it well. If all 209 conditions and the other suggestions found in the extensive second volume of the ruling are actually enforced then it is likely that the Northern Gateway will be the safe project that Enbridge says it will be and actually might meet BC Premier Christy Clark’s five conditions for heavy oil pipelines across BC and tankers off the BC coast.
But and there is a big but.
The question is, however, who is going to enforce the 209 conditions? In recent conversations on various social media, people who were quiet during the JRP hearings, have now come out in favour of the pipeline project. Read those comments and you will find that the vast majority of project supporters want those conditions strictly enforced. Long before the JRP findings and before Premier Christy Clark issued her five conditions, supporters of the Northern Gateway, speaking privately, often had their own list of a dozen or two dozen conditions for their support of the project.
The people of northwestern BC had already witnessed cuts to Fisheries and Oceans, Environment Canada and the Canadian Coast Guard in his region even before Stephen Harper got his majority government in May 2011.
Since the majority government Harper has cut millions of dollars from the budgets for environmental studies, monitoring and enforcement. The Joint Review Panel began its work under the stringent rules of the former Fisheries Act and the Navigable Waters Act, both of which were gutted in the Harper government’s omnibus bills. Government scientists have been muzzled and, if allowed to speak, can only speak through departmental spin doctors. The Joint Review Panel requires Enbridge Northern Gateway to file hundreds of reports on the progress of surveying, environmental studies, safety studies, construction plans and activities and project operations. What is going to happen to those reports? Will they be acted on, or just filed in a filing cabinet, perhaps posted on an obscure and hard to find location on the NEB website and then forgotten?
Will the National Energy Board have the staff and the expertise to enforce the 209 conditions? Will there be any staff left at Environment Canada, Transport Canada, Fisheries and Oceans and the Canadian Coast Guard where the conditions demand active participation by government agencies, or ongoing consultation between federal agencies and Northern Gateway? Will there actual be monitoring, participation and consultation between the project and the civil service, or will those activities amount to nothing more than meetings every six months or so, when reports are exchanged and then forgotten? Although Stephen Harper and his government say the Northern Gateway is a priority for the government, the bigger priority is a balanced budget and it is likely there will be more cuts in the coming federal budget, not enhancements to environmental protection for northwestern BC.
The opponents of the project might reluctantly agree to the 209 conditions if Harper government forces the project to go ahead. It will be up to the supporters to decide whether or not they will continue their support of Northern Gateway if the 209 conditions are nothing more than a few pages of Adobe PDF and nothing more.