Tag: Enbridge

Harper’s decision to defund coast management group may blow back on Enbridge, lawyer says

Energy Environment Link

The West Coast Environmental Law blog says the decision by Prime Minister Stephen Harper to take funding away from the Pacific North Coast Integrated Management Area plan may actually blow back on Enbridge, delaying the Northern Gateway pipeline project for years.

 The cancellation of the funding is  perceived as part of the Conservative government’s aim of pushing the
Northern Gateway pipeline through no matter what the cost.   (Two cabinet ministers, Joe Oliver and James Moore are publicly endorsing the Northern Gateway, despite the fact the Joint Review Hearings don’t even begin until January 2012. It is unlikely either minister would make an endorsement like that without Harper’s approval.)

In the blog post, Why Harper’s shot at PNCIMA also hit Enbridge in the foot, lawyer Andrew Gage argues that Harper’s move,  apparently motivated by fears that the PNCIMA process could block the pipeline, fears created by Vancouver blogger Vivian Crause and her allies among PostMedia’s right wing columnists, will actually delay the pipeline for years because it negates the legal obligation to consult First Nations and thus will likely throw the entire process into the courts for years.

Litigation by any of the Coastal First Nation against the Enbridge Pipeline could pose a serious problem for Enbridge and its Northern Gateway Project.  Because of First Nations title and rights that are protected by Canada’s constitution, the federal government has a duty to “act honourably” and to consult and accommodate First Nations who have a “credible but unproven claim” of rights that may be adversely affected by a government decision (such as approving the Enbridge Northern Gateway Pipeline project and related tanker traffic.)

As a result,  anything that the federal government does in relation to consultations with the Coastal First Nations about tanker traffic and the Enbridge Pipeline that might be considered “dishonourable” creates legal uncertainty and problems for Enbridge.  So was the decision to withdraw from the current PNCIMA funding arrangement “dishonourable?”

Gage notes that the federal government is required by the Oceans Act, passed under the Liberals in 1997, to set up integrated management plans for all coastal areas of Canada, not just the northwest, a process that began in 2005.

Gage also points out that Enbrige has, in the past, participated in the process:

A wide range of stakeholders, including one seat for the conservation sector, provide input and consensus based advice on an Integrated Oceans Advisory Committee, but do not determine the outcomes of the PNCIMA process. Enbridge has itself participated on the Integrated Oceans Advisory Committee, along with representatives of the fish farming, commercial fishing, renewable energy, recreational fishing and tourism industries, and even sponsored an early workshop in the PNCIMA process.

In short, PNCIMA is created by the federal government, managed jointly by the federal and provincial governments and First Nations, but with efforts being made to involve a wide range of stakeholders. Because the PNCIMA is co-chaired by a federal government staff-member, and requires sign-off from the government, it was unlikely to have resulted in a complete ban on oil tanker traffic, although it might have placed restrictions on marine travel, or otherwise provided protection for the coast from shipping impacts.

However, progress was slow, in part due to the limits of federal funding available for the process.

He goes onto to say that the Harper government itself agreed to the now controversial foundation funding in 2010. That was before the attacks from Crause and the PostMedia’s business columnists reached a crescendo in recent weeks. But now there is no longer any mechanism that can be perceived as neutral that consult with First Nations and other northwest coast stake holders.

To flip-flop now, slightly more than a year before the process was supposed to wrap up, leaves the PNCIMA process without the funding that the government has acknowledged is required for a thorough planning process. It is also a slap in the face for the Coastal First Nations, the BC government, environmental organizations and industry stakeholders who have worked on this process for years.

Prime Minister Harper’s government may have believed that it was helping Enbridge and its Northern Gateway Pipelines by withdrawing from this funding agreement. But the resulting uncertainty, and the appearance that the federal government has acted less than honourably towards the Coastal First Nations, may well cause Enbridge huge legal head-aches in the future.

Editor’s note: As I said in this post, there appears to be a double standard, since what the Harper government, PostMedia’s columnists and Krause apparently are saying that it is only acceptable if billionaire capitalists spend their money on a conservative or pro-energy industry agenda, but it is not acceptable if a billionaire capitalist decides to spend his money to protect the environment.

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International backing for Northern Gateway pipeline grows: new Chinese investment, more Joint Review intervenors

Energy Northern Gateway Links

The Globe and Mail and Reuters are reporting that Enbridge has more Chinese support for the proposed Northern Gateway Pipeline project. One large Chinese group, China Petroleum & Chemical Corp. (Sinopec), is already backing Enbridge’s efforts to build the Northern Gateway.

In Enbridge’s push to the Pacific wins support from China .

the Globe’s Nathan Vanderklippe says:

Sources have now told The Globe and Mail that the list of funders also includes MEG Energy Corp., which is partly owned by CNOOC Ltd., another Chinese state-owned energy company. Each funder gains the right to discounted shipping rates and an option to buy an equity stake at a later date…MEG spokesman Brad Bellows said the company is “not commenting on speculation.” But, he added, MEG is “interested in expanded market access, absolutely.”

On its website, MEG describes itself as “part of the next generation of oil sands development. We are an Alberta-based company that uses Steam Assisted Gravity Drainage (SAGD) technology to recover drillable (in situ) oil from the oil sands.”

Reuters reports

Enbridge declined to disclose any of the Northern Gateway partners. However, Gina Jordan, spokeswoman for the pipeline company, said they include a mix of oil sands producers and Asian refiners.

Several Chinese companies have invested in the oil sands over the past decade to tap what is currently ranked as the world’s third-largest crude deposit as a way to help fuel their booming economy at home.

Last week, Enbridge said it and would-be shippers had agreed on terms for moving oil on Northern Gateway… before regulatory hearings scheduled to start in January.

The Globe and Mail is also reporting that a growing list of international companies are filing as intervenors for the Joint Review Panel hearings slated for January.

Nearly two dozen companies have asked to be “intervenors” … including small Canadian companies, major multinationals like Exxon Mobil Corp. and foreign companies like South Korean conglomerate Daewoo International.

Companies typically intervene when they want to closely follow a project, are interested in using it – by sending crude through Gateway, for example – or have a financial interest in it.

[T]he project holds the promise of dramatically altering Canada’s energy geography, providing for the first time access to a major new – and growing – export market. That has made it an increasing object of global interest.

South Korean trading and construction firm Daewoo International, for example, is hopeful it can provide steel or engineering to the Gateway pipeline. That’s just one part of its Canadian strategy.

Al Arabiya turns its eyes on Kitimat

Energy link

The English-language website of one the world’s major Arab-language satellite television networks  Al Arabiya, has turned its eye on Kitimat, the Northern Gateway pipeline and the repeated claim by the Conservative government that Canada is an “energy super power.”

The article:  Canada: Energy Superpower?  is an analysis by Mary E. Stonaker, described as “an independent scholar, most recently with the Middle East Institute, National University of Singapore.” Stonaker puts Canada’s energy policy, including the pipelines to Kitimat, in a world wide perspective, summing up the story for  Saudi-owned Al Arabiya‘s main audience in the oil-rich Middle East. It doesn’t just look at oil and gas energy, but hydro, solar and wind.

“Northern Gateway” has yet to be fully hatched though it is encouraging to see Canada expand its partnerships beyond its southern neighbor especially during the recent economic downturn. Relying too heavily on one consumer, no matter who that consumer may be, is setting up an extremely weak energy security strategy.

“Call the Americans.” Canadian Coast Guard cutbacks now an issue in the US Senate

The Coast

The controversy over the Harper government’s cutbacks to Canadian Coast Guard resources on both west and east coasts  has now become an issue in the United States Senate.

While most of the media attention last week was on Newfoundland, where there are fears not only of moving the search coordination centre from the island to Trenton, and the possible privatization of the entire search and rescue service, the cutbacks on the northern coast of British Columbia have yet to become a national story, even though the conservative government is increasing its promotion of tanker traffic from Pacific ports.

Now the issue has come to attention of  Senator Maria Cantwell, a Washington Democrat, who is raising alarm bells in the Senate about the dangers of tanker traffic, the possibility of a spill and  the probable inadequacy of the Canadian response to any major shipping accident along the coast.

 


Cantwell’s main concern is upgrading the ability of the United States Coast Guard to respond to such an accident, “This is a major threat to our region,” Cantwell said at hearing on July 20 of the Senate  Oceans, Atmosphere, Fisheries, and Coast Guard Subcommittee. “It seems that Canada’s oil spill response plan in the Pacific Northwest is to call the Americans.  …Obviously any such spill in the narrow and heavily populated waters of the Puget Sound or Strait of Juan de Fuca would cause tens of billions of dollars in damage and impact millions of my constituents. … I think it deserves a very robust oil spill response plan.”

Cantwell  says she secured a commitment  from  Rear Admiral Paul F. Zukunft, Assistant Commandant for Marine Safety, Security and Stewardship for the United States Coast Guard, to have the U.S. Coast Guard perform an extensive analysis of cross-border readiness and ability to respond to potential spills given the potentially dramatic increase in oil tanker traffic along the U.S.-Canada maritime border off Washington state.

After the BP spill in the Gulf of Mexico, Cantwell pushed a bill through the U.S. Congress  that, strengthens oil spill protections for Puget Sound and other U.S. coastal waters. The bill, which was signed into law by President Barack Obama on October 15, 2010, includes  provisions that significantly enhance oil spill response and prevention to protect valuable coastal communities and their economies.

Cantwell’s news release  says

The legislation expands the oil spill response safety net from Puget Sound out to the entrance of the Strait of Juan de Fuca, ensuring that Puget Sound and the Strait of Juan de Fuca have spill response teams and equipment in place. The bill further reduces ship and tanker traffic in the Olympic Coast National Marine Sanctuary; enhances spill prevention efforts on vessels transporting oil; and establishes a stronger role for tribes.

Cantwell also fought to include a provision that requires tug escorts for double-hulled tankers in Prince William Sound. Approximately 600 oil tankers and 3,000 oil barges travel through Puget Sound’s fragile ecosystem annually, carrying about 15 billion gallons of oil to Washington’s five refineries. The Strait of Juan de Fuca also has significant outbound tanker traffic originating in Vancouver and carrying Canadian oil. Prior to the 2010 Coast Guard Reauthorization Bill, American industry only had to position oil spill response equipment in Puget Sound, leaving the busy shipping lane in the Strait of Juan de Fuca unprotected.

Cantwell’s provision extended the “high volume port area” designation west to Cape Flattery. As a result, oil spill response equipment, such as booms and barriers, are now prepositioned along the Strait, supplementing the response equipment already in place in Puget Sound.

An oil spill in waters in Washington state interior waterways could be devastating. According to the Washington State Department of Ecology, a major spill would have a significant impact on Washington state’s coastal economy, which employs 165,000 people and generates $10.8 billion. A spill would also severely hurt our export dependent economy because international shipping would likely be severely restricted. Washington state’s waters support a huge variety of animals and plants, including a number of endangered species, all which would be harmed by a spill.

Cantwell says she was successful in protecting a tanker ban in Puget Sound.  Former  Alaskan Repuiblican Senator Ted Stevens attempted to overturn the then 28-year-old protections authored by former Senator Warren Magnuson limiting oil tanker traffic in the Puget Sound. In 1977, Senator Warren Magnuson had the foresight to recognize the great risk that oil supertankers would have on the waters of Puget Sound. He put his findings into law and essentially banned supertankers in the Puget Sound by prohibiting the expansion of oil terminals in Puget Sound.

Enbridge, environmentalists agree

The inadequate Canadian Coast Guard resources in the Pacific region bring rare agreement between Enbridge which wants to build the controversial Northern Gateway pipeline and the project’s environmental opponents.

While Enbridge maintains that safety systems it plans would make a tanker accident a rare event, when officials were questioned at last September’s public meeting in Kitimat, they said Enbridge was worried about Coast Guard resources on the west coast.   They said that Enbridge’s emergency planning scenarios call for it to take 72 hours for the Canadian Coast Guard to respond with its meagre equipment from Victoria and Vancouver to a tanker accident in Douglas Channel.  The Enbridge team admitted under questioning from the audience that the company would urge to Canadian government to call on US Coast Guard resources from Alaska and as far away as California in the event of a major spill, confirming Sen. Cantwell’s statement to the subcommittee that Canada would “Call the Americans.”

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As Keystone decision nears, new interest in pipeline safety, especially Enbridge

Links: Energy Environment

The US State Department will announce its decision on the Keystone XL bitumen pipeline from Alberta to Texas as the Calgary Herald reported on July 22

The U.S. State Department said Friday that it will wrap up its
examination of environmental impacts of a proposed Canadian pipeline
expansion from the oilsands in less than a month in order to ensure a
final decision on the controversial project by the end of the year…

Daniel Clune, the principal deputy assistant secretary from the U.S.
Bureau of Oceans and International Environmental and Scientific Affairs,
said that the department would consider a variety of factors, including
recent developments such as a major pipeline spill on the Yellowstone
River, instability in Libya affecting global oil supplies, as well as
this week’s announcement by Canadian Environment Minister Peter Kent
that Canada would increase its monitoring of the impact of oilsands
activity based on recommendations from scientists.

A couple of weeks before the State Department ruling, the US Pipeline and Hazardous Materials Safety Administration (PHMSA) Technical Pipeline Safety Standards Committee (TPSSC) and the Technical Hazardous Liquid Pipeline Safety Standards Committee (THLPSSC) will meet in Arlington, Virginia  on  August 2, 2011 to consider draft pipeline safety recommendations  for the United States called `The State of the National Pipeline Infrastructure–A Preliminary
Report.”   The public had until July 13, 2011, to make submissions to be considered
by the subcommittee members prior to submission of their draft
recommendations to the overall committees.

There is a web page from the PHMSA on the July, 2010, Marshall, Michigan, Enbridge pipeline break and spill.

The National Post updates the Marshall Enbridge spill with a report Aftermath of a Spill by Sheldon Alberts.

Now, one year later, local residents and U.S. authorities are taking
stock of the toll. A National Transportation Safety Board investigation
into what caused the two metre gash in the pipeline is ongoing, with its
conclusion perhaps months away.

The Kalamazoo, which in normal
summers would be flush with paddlers and recreational fishermen, is
still closed to the public as a massive effort to clean up the remaining
oil – most of it now submerged on the riverbed – continues.

Also
raging is the heated debate that the Enbridge spill ignited in the
United States and Canada over the safety of pipelines – some new, others
decades old – that carry oil sands bitumen to markets in America’s
heartland.

KM LNG hearings wrap with concerns over conditions

Energy

The National Energy Board hearings into the application from KM LNG for an export licence to ship liquified natural gas to Asia through Kitimat wrapped up in Calgary Thursday, with the main participants expressing concerns over conditions on the licence proposed by the NEB.

The board panel reserved its decision. No date was given for a possible decision. Unlike the earlier hearings  in June which were held in Kitimat, the Phase 2 hearings were held in Calgary and only available to residents of Kitimat by audio webcast

On July 6 and July 8, the board panel issued a list of 12 proposed conditions on the export licence.  (The concerns of the Kitimat Rod and Gun were not among the 12. See story here)

Among the conditions the NEB wants to impose are a detailed reporting requirement that would include the name of  the LNG tankers loading the natural gas, the quantity of gas and the revenue in Canadian dollars as well as the sales contracts KM LNG may sign with its Asian customers.

Those proposed conditions brought strenuous objections from the proponents of the project, voiced by lead counsel Gordon Nettleton and echoed by other lawyers, saying that the conditions could actually scuttle the entire project. That is because Asian buyers, whether private companies or sovereign (government) agencies, place much stricter emphasis on confidentiality of the agreements than in North America. The lawyers warned that the potential Asian customers could walk away from any deals in favour of less regulated vendors in other countries if the NEB insists on full disclosure, especially if the details could be made public either through the Access to Information Act or by NEB procedures and policies.

Nettleton and the other lawyers recommended a compromise where  KM LNG would disclose to the board the total exports each quarter, the aggregate value in Canadian dollars for each quarter,  the “heating value” of the aggregate and export totals by destination country.

The lawyers also objected strenuously to conditions proposed to cover environmental and social effects of building the Kitimat LNG terminal  and the associated Pacific Trails pipeline.

These include filing a Marine Mammal Protection Plan and answer how KM LNG  would react to any potential effects on marine mammals of the ships passing up and down Douglas Channel and the BC Coast. 

One of the lawyers for the energy companies wondered why the board panel was interested in the shipping issues.”That’s what shps do, they use
existing shipping lanes,” he said. “Ships do not need permisson [now] to go up
Douglas Channel.  [This issue] has been examined bythe appropraite
authorites arnd should be accepted by the board without conditions.”

Other conditions wanted reports on potential effects and probable mitigation efforts for marine mammals, birds, fish and fish habitat, “listed fish and wildlife species,” vessel wake, ballast and bilge water management, fisheries and “First Nations traditional use activities.”

The lawyers mainly objected on legal grounds, since under the hearings for an export licence, (unlike a facility hearing like the Enbridge Joint Review panel)  the board is not supposed to be concerned about environmental issues.  There were also long, legal arguments whether the pipelines from the shale gas fields to Kitimat where “directly connected” under the legal definition used in the Canadian energy industry. The lawyers also argued that the environmental and social issues addressed in the NEB’s proposed conditions would be covered in parallel investigations by other government agencies, such as a Transport Canada review of the shipping plans for Douglas Channel,

At the same time, all parties pledged that they would be “good corporate citizens” in their undertakings to work with the Haisla First Nation and other residents of the Kitimat region and to respect the local environment.

NEB proposed conditions 1 – 9

A33_-_Letter_to_All_Parties_Phase_II_Update_and_Possible_Licence_Conditions_-_A2A2V5.pdf

NEB proposed conditions 10 – 12

A34_-_Letter_-_Possible_Export_Licence_Conditions-Environment_and_Socio-Economic_Matters_-_A2A3T7_.pdf

Energy media turns its eyes on Kitimat, LNG and Enbridge

The prospect of Kitimat becoming a major port for export of Liquified Natural Gas was bound eventually to spark interest in the media covering the energy sector.

This week, photos of Kitimat mayor Joanne Monaghan turned up on as the lead on stories in Alberta Oil magazine and The Financial Post.
In Alberta Oil’s Export visions stoke deep divisons in a coastal town, the longest of the two articles,  feature writer Jeff Lewis, puts the history of Kitimat into some perspective for the Alberta oil patch. 

Alcan came to northern British Columbia in the early 1950s with plans to build the world’s biggest aluminum smelter…. 

Even by today’s standards of engineering, the $500-million “Kitimat Project” was ambitious…. They bored into a mountain to create the Kemano hydro plant. They blasted enough rock to dam and reverse the Nechako River. They strung high-wire transmission towers across a rugged valley. And they built Kitimat – complete with schools, pre-fabricated houses floated in on barges, roads and even a toastmasters club – from scratch. 

It is to this history that Mayor Joanne Monaghan refers when she dismisses fears about development in the region ruining a natural wilderness. “Kitimat is geared to be an industrial town,” she says over lunch at the local Chalet Restaurant. “That’s what it was built as.” Distinct neighborhoods and services were laid out for a population many thought would crest 50,000, with heavy industry built at a remove from the commercial and residential areas of town. 

 The vision never quite materialized…  Monaghan… insists job prospects in the town are poised for recovery. The unemployment rate was 9.5 per cent in 2006. “I think it can only get better from here,” the mayor says. “I really feel like we’re a sleeping giant, and the giant is waking up.” 

It is also true that the town remains partially stuck, very much groping in what is perhaps the darkest hour before the mayor’s dawn. Local divisions aren’t limited to the physical split between the town’s industrial park and its residential streets. While the Apache-sponsored gas terminal has progressed to the point where site preparation is underway, Enbridge’s Northern Gateway faces tremendous opposition – from the Haisla, but also from pockets of local residents. The multibillion-dollar pipeline has underscored deep-seated tensions in the region to such an extent that the local council refuses to talk about it. Some, including Monaghan, favor a referendum on the project. “It’s a contentious issue,” she says.

The Financial Post’s energy reporter Claudia Cattaneo focuses more on the issues on her beat in LNG Trying to Dock    Catteneo notes that the March earthquake in Japan which crippled the country’s nuclear energy raised interest in exports of liquified natural gas from Alberta through the port of Kitimat.

Her article also reflects the hints of skepticism that have arisen about natural gas exports in the past couple of weeks.  She points out that part of the price advantage that Alberta gas may have in Asia is not the “molecules” the term so beloved of  the experts in the energy industry but “arbitrage” the difference between the Asian price of natural gas which is a percentage of the price of oil (which is going up) and the North American price, which is based on supply and demand, North American gas  supply is up due to exploitation of the shale gas reserves and so the price of natural gas has dropped. (Kitimat residents of course haven’t noticed the drop in the price of natural gas due to the high transportation “bill” charged by the local monopoly Pacific Northern Gas).  The companies that want to build a port at Kitimat are basing part of their profit picture on that price difference.
Cattaneo quotes Chris Theal who works for a Calgary hedge fund who says that the Asian demand for natural gas will continue to increase in the coming years, but export could be strangled by limited capacity on the BC coast even if all the projected Kitimat projects go ahead and there is an expansion of the port of Prince Rupert to handle natural gas from pipeline or rail tanker. Theal says (ideas that also recently came out at the NEB hearings in Kitimat) that alternative export ports could exist in the United States at ports like Coos Bay and Clataskanie, Oregon and Astoria,Washington.

Blog: Canada Day In The Petro-State: Common Dreams

Common Dreams blog

Just in time for Canada Day, Alberta Finance and Enterprise Minister Lloyd Snelgrove chose to exhibit why Canadian democracy is devolving into something akin to corporate rule (“Ottawa urged to get behind Enbridge pipeline,” Edmonton Journal, June 23). This particularly appears to be the case in the province of Alberta where, more often than not, it is government of the oil industry, by the oil industry, for the oil industry.

Loss of Coast Guard cutters brings supertankers to the forefront: Courier-Islander

Courier-Islander

The imminent loss of the Coast Guard cutters Point Henry and Point Race is solidifying opposition to proposed super tanker traffic on the coast, says NDP MP Nathan Cullen and the Living Oceans Society.

 But Vancouver Island North MP John Duncan, who referred to the replacement boats as “less capable” in the past, continues to support replacement of the Point Race and Point Henry this week. 

 The 47-foot motor lifeboat CCGS Cape Palmerston is to be officially named and dedicated to service in Campbell River next Thursday, replacing the 70-foot Point Race. Ceremonies to replace Prince Rupert’s Point Henry with the CCGS Cape Dauphin are slated for July 26.

Enbridge to improve risk assessment on proposed Northern Gateway pipeline

Vancouver Sun 

Enbridge to improve risk assessment on proposed Northern Gateway pipeline 

 

Enbridge acknowledged Thursday it needs to improve its risk assessment of potential accidents along the route of a controversial proposed pipeline that would deliver crude oil to the west coast of British Columbia. 

A company spokesman made the comments in response to a new analysis to be submitted Friday to a government review panel that raises questions about potential impacts of the Northern Gateway project.

“There are major sources of uncertainty that are not adequately acknowledged and/or incorporated into the analysis,” said the review, prepared by Stella Swanson, a Calgarybased aquatic biologist.

The review analyzed the company’s public submissions to the government panel that is assessing the environmental impacts of the $5.5-billion Northern Gateway project.