Updates Jan. 15 with District changing voting venue to Tamitik
The Kitimat Northern Gateway plebiscite question as projected at the Council Chambers Jan 13, 2014. (Northwest Coast Energy News)
District of Kitimat Council voted Monday night to hold the plebiscite on the Northern Gateway project on Saturday April 12, with advance polls April 2 and April 9. Voting will be held at the Tamitik Jubilee Sports Complex and Mt. Elizabeth Secondary School with special voting at Kiwanis Village, Kitimat General Hospital, Mountain View Multi-care and Delta King Place.
The ballot question, as moved by Councillor Mario Feldhoff is:
Do you support the final report recommendations of the Joint Review Panel of the Canadian Environmental Assessment Authority (sic) and the National Energy Board, that the Enbridge Northern Gateway project be approved subject to 209 conditions set out in Volume 2 of the JRP’s final report?
Eligible residents will have the choice of voting yes, no or undecided.
Whether or not there will be other questions on the ballot was deferred to staff to consider issues such as the refinery proposed by David Black and possible marine components. The staff report will be presented at the next regular meeting of council on January 20.
Councillor Rob Goffinet said the question was confusing, calling it “The Quebec referendum on steroids.” Councillor Phil Germuth also argued for a simpler question, while Feldhoff, who proposed the question, maintained it was clear. The remainder of council were in favour of the question and some councillors also said the time between now and April would give Kitimat residents time to read and digest the almost 500 pages of the Joint Review Report.
Councillors Feldhoff, Mary Murphy, Edwin Empinado and Mayor Joanne Monaghan voted in favour of the wording. Germuth, Goffinet and Corrine Scott voted against.
Even as council was breaking up after the session, the audience were pointing out areas where there could be confusion over the question. What if someone is in favour of some, but not all the Joint Review conditions; what if someone approves the Joint Review Report but opposes the project in principle; does the question address the Northern Gateway project itself, or is it all about the Joint Review Report?
The public in Kitimat now has a week to react to the plebiscite question before the final ballot is decided at the regular meeting on January 20, when additional questions may be added. It is highly likely that given the question as it stands, there will be fierce community reaction to the question in the coming days.
Update
On January 15,Warren Waycheshen, Kitimat, Deputy Chief Administrative Officer updated the media on the voting locations saying:
We weren’t able to secure Riverlodge for all three days so the location for the April 2, 9 and 12 voting opportunities will now all be at the Tamitik Jubilee Sports Complex (400 City Centre). The April 12 location at Mt. Elizabeth Secondary School and the special voting locations are unchanged.
EPA map of river closures and dredging operations on the Kalamazoo River during 2013. (EPA)
Enbridge has missed the US Environmental Protection Agency’s deadline to clean up parts of the Marshall, Michigan bitumen spill by December 31, 2013.
Local television news, WOOD-TV says the EPA is now considering “enforcement options.”
The EPA had already granted Enbridge a 10 month extension that the company requested in March, 2013, setting the new December deadline.
In November, Enbridge requested a second extension. The EPA denied that request.
From the EPA letter it appears that, as in previous years, Enbridge is trying to avoid continuing clean up work into the winter. The EPA rejects that position, telling Enbridge it shouldn’t wait until the spring run off could spread the sunken bitumen.
The EPA says that beginning in March, 2013, “Enbridge has successfully removed oil and sediment from two of the three major impoundment areas identified in the order and from several smaller sediment trap locations.”
The letter to Enbridge, from Jeffrey Kimble, Federal On-Scene Coordinator denying the extension is another scathing indictment of Enbridge’s attitude toward the public and the cleanup, citing Enbridge failing to prepare “adequate contingency plans,” by failing to recognize the “serious opposition” the dredging plans.
Although the EPA had told Enbridge to consider alternative plans—and Enbridge claimed it did that—the EPA found the Enbridge’s own logs showed the company didn’t start considering alternatives until it was obvious that Comstock Township would reject their dredging plans.
The EPA letter also reveals that once again Enbridge is reluctant to do further cleanup work during the Michigan winter. The EPA rejects that stance, saying that “Removal of oiled sediments prior to the spring thaw will lessen the potential oiled sediment transport in the spring to Morrow Lake via increased river velocities from rain and ice melt.”
Although we recognize that the work required by the Order is unlikely to be completed by December 31, 2013, U.S. EPA believes that had Enbridge taken appropriate steps earlier as requested, it would not require an extension now. In particular, U.S. EPA believes that Enbridge has continuously failed to prepare adequate contingency plans for a project of this nature. For example, U.S. EPA acknowledges that failure to obtain a site plan approval for use of the CCP property for a dredge pad was a setback in the timely completion of the work in the Delta.
However, Enbridge failed to prepare any contingency plans recognizing the possibility of such an occurrence. Enbridge has known since at least the middle of July 2013 that there was serious opposition to its proposed use of the CCP property. When it became clear in August 2013 that opposition to the site use might delay the project, U.S. EPA directed Enbridge to “conduct a more detailed review of your options in short order.”
Although your letter claims that Enbridge “has considered such alternatives,” your logs indicate that Enbridge did not hold initial discussions with the majority of these property owners until long after the final decision to abandon plans for use of the CCP property. These contact logs do not demonstrate that Enbridge fully explored and reviewed alternative options in a timely manner so as to avoid delay in completion of the work. Although Enbridge claims that use of identified alternative properties would be denied by Comstock Township, Enbridge did not present any site plans to the Township for approval (other than use of the county park for staging of frac tanks). To the extent that any of Enbridge’s contingency plans include the use of land for dredge pads, U.S. EPA believes that Enbridge should begin multiple submissions for property use until one is accepted….
Enbridge claims that it cannot install winter containment in the Delta to prevent the potential migration of sediments to the lake. To support that claim, Enbridge has attached a letter from STS directing Enbridge to remove anchors and associated soft containment during winter monthsas these structures could damage STS’s turbines. However, none of the correspondence provided by Enbridge discusses the use of more secure containment methods, such as metal sheet piling, which may not pose the same risks as soft containment structures. Enbridge should consider using sheet piling to construct cells which would both allow winter work and contain the sediment during that work. Enbridge should therefore try to obtain access from STS for this specific work, and for other appropriate work, for the winter timeframe. Use of sheet pile cells would allow continued operations during the winter, especially in the southern zone of the Delta outside of the main river channel. Removal of oiled sediments prior to the spring thaw will lessen the potential oiled sediment transport in the spring to Morrow Lake via increased river
velocities from rain and ice melt.
Finally, U.S. EPA is unwilling to allow Enbridge to wait until after the likely spring high
velocity river flush to reinstall the E-4 containment structures. U.S. EPA has reviewed Enbridge’s modeling, which Enbridge claims supports its requested timeline, and has found it incomplete. The model has not incorporated, and does not match, field observation of flow velocities and water levels and their potential to impact upstream critical structures if containment is in place. Moreover, U.S. EPA completely disagrees with Enbridge’s assertion that there is no evidence of migration of submerged oil during high flow events. The results of three years of poling and sheen tracking demonstrate that Line 6B oil is mobile during periods of
high flow. Now that Enbridge has a five year permit from MDEQ for the E-4 containment system, U.S. EPA reiterates that this containment must be in place immediately upon thawconditions in the spring….
Although Enbridge’s proposed two phase approach may have components that can be incorporated into a final plan, it should not be considered the approved way forward. U.S. EPA believes that pausing the work cycle until new poling can be done in June or July of 2014 could again result in a wasted construction season in the Delta. Enbridge should consider and utilize a combination of techniques in the plan. For example, several dredge pad sites have been identified by Enbridge. Enbridge should obtain approval for one of these sites, or a combination of smaller sites, so as to support hydraulic dredging in conjunction with the current approved
approach and any potential dry excavation techniques. Enbridge should also consider other winter work techniques, such as cell build out and dewatering in the Delta via sheet piling.
As always, U.S. EPA will continue to work with Enbridge to develop adequate plans and complete the work required by the Order. However, nothing in this letter excuses any noncompliance with the Order nor does it serve as the granting of any extension to any deadline in the Order. U.S. EPA reserves all its rights to pursue an enforcement action for any noncompliance with the Order.
The EPA letter also calls into question the ruling of the Joint Review Panel on the Enbridge Northern Gateway. The JRP accepts, without question, Enbridge’s assurances that the company has changed its attitude and policies since the long delay in 2010 in detecting the pipeline rupture in Marshall, Michigan.
The JRP, on the other hand, accepts, without question, Enbridge’s assurances that it has expertise in winter oil recovery from a pipeline spill.
Parties questioned Northern Gateway about locating and recovering oil under ice. Northern Gateway said that Enbridge conducts emergency exercises in winter and that Northern Gateway would learn from those experiences.
Northern Gateway outlined a number of oil detection techniques including visual assessment (at ice cracks and along the banks), drills, probes, aircraft, sniffer dogs, and trajectory modelling. It said that, once located, oil would be recovered by cutting slots into the ice and using booms, skimmers, and pump systems to capture oil travelling under the ice surface.
The company said that oil stranded under ice or along banks would be recovered as the ice started to melt and break up. It discussed examples of winter oil recovery operations during Enbridge’s Marshall, Michigan incident, and said that operational recovery decisions would be made by the Unified Command according to the circumstances.
Northern Gateway said that equipment caches would be pre-positioned at strategic locations, such as the west portal of the Hoult tunnel. It said that decisions regarding the location or use of pre-positioned equipment caches would be made during detailed design and planning, based on a number of considerations including, but not limited to, probability of a spill, access, site security,
environmental sensitivities, and potential for oil recovery at the response site.
(vol 2 page 153)
In its ruling, the Joint Review Panel said
The Panel finds that Northern Gateway’s extensive evidence regarding oil spill modelling, prevention, planning, and response was adequately tested during the proceeding, and was credible and sufficient for this stage in the regulatory process.
Parties such as the Province of British Columbia, Gitxaala Nation, Haisla Nation, and Coalition argued that Northern Gateway had not provided enough information to inform the Panel about proposed emergency preparedness and response planning. The Panel does not share this view.
Northern Gateway and other parties have provided sufficient information to inform the Panel’s views and requirements regarding malfunctions, accidents, and emergency preparedness and response planning at this stage of the regulatory process.
Many parties said that Northern Gateway had not demonstrated that its spill response would be “effective.” Various parties had differing views as to what an effective spill response would entail.
The Panel is of the view that an effective response would include stopping or containing the source of the spill, reducing harm to the natural and socio-economic environment to the greatest extent possible through timely response actions, and appropriate follow-up and monitoring and long-term cleanup. Based on the evidence, in the Panel’s view, adequate preparation and planning can lead to an effective response, but the ultimate success of the response would not be fully known
until the time of the spill event due to the many factors which could inhibit the effectiveness of the response. The Panel finds that Northern Gateway is being proactive in its planning and preparation for effective spill response….
The Panel is of the view that an effective response does not guarantee recovery of all spilled oil, and that that no such guarantee could be provided, particularly in the event of a large terrestrial, freshwater, or marine spill.
The oil spill preparedness and response commitments made by Northern Gateway cannot ensure recovery of the majority of oil from a large spill. Recovery of the majority of spilled oil may be possible under some conditions, but experience indicates that oil recovery may be very low due to factors such as weather conditions, difficult access, and sub-optimal response time, particularly for large marine spills. …
To verify compliance with Northern Gateway’s commitments regarding emergency preparedness and response, and to demonstrate that Northern Gateway has developed appropriate site-specific emergency preparedness and response measures, the Panel requires Northern Gateway to demonstrate
that it is able to appropriately respond to an emergency for each 10-kilometre-long segment of the pipeline.
The Panel notes the concerns of intervenors regarding Northern Gateway’s ability to respond efficiently and effectively to incidents in remote areas, and its plan to consider this during detailed design and planning. The Panel finds that Northern Gateway’s commitment to respond immediately to all spills and to incorporate response time targets within its spill response planning is sufficient to
address these concerns. Northern Gateway said that its emergency response plans would incorporate a target of 6 to 12 hours for internal resources to arrive at the site of a spill. It also said that it would target a response time of 2 to 4 hours at certain river control points.
The Panel agrees with Northern Gateway and several intervenors that access to remote areas for emergency response and severe environmental conditions pose substantial challenges. The Panel notes that the company has committed to develop detailed access management plans and to evaluate contingencies where timely ground or air access is not available due to weather, snow, or other logistic
or safety issues.
Despite the EPA letter (which admittedly was released long after the JRP evidentiary deadline) that shows that Enbridge did not consult the people of Comstock Township, Michigan, the JRP says
The Panel accepts Northern Gateway’s commitment to consult with communities, Aboriginal groups, and regulatory authorities. The objective of this consultation is to refine its emergency preparedness and response procedures by gaining local knowledge of the challenges that would be present in different locations at different times of the year
(Vol 2 p 165-167)
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.
Cover of Volume 1 of the Joint Review Panel ruling on Northern Gateway
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.
And concludes:
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.
Cover of Volume 2 of the Joint Review rulng on Northern Gateway
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.
Regulations
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.
The National Energy Board says releasing its decisions in Calgary is standard practice regardless of where in Canada the project is located, and it will not make an exception for its report on the controversial $6.5-billion Northern Gateway pipeline proposal.
Apparently the NEB doesn’t trust reporters in BC to act as professionals. Also, as usual the stock market is more important than the people of BC.
NEB spokesperson Sarah Kiley told the Globe the board ruled out simultaneous lock-ups in Alberta and British Columbia.
“As far as hosting multiple media lock-ups, we need to make absolutely sure that the report is not inadvertently released before the markets close,” Ms. Kiley said. “This becomes more challenging if there are multiple events due to things like the need to ship reports.”
Because the ruling will affect markets, she said the report must be kept confidential until they close on the day of release.
A couple of years ago, on a visit to the Lower Mainland, I was speaking to man who was considering making a 10 minute comment before the Northern Gateway Joint Review panel. In the end, this man, who is by no means a radical environmentalist, just someone worried about the future, decided not to testify, telling me: “The National Energy Board is nothing more than an extension of the Petroleum Club.”
Once again today, the National Energy Board showed its contempt for British Columbia and proved my source’s belief that it is nothing more than an extension of the Petroleum Club.
Vancouver radio station News 1130 made a routine inquiry to the NEB about a reporters’ “lockup” on the day that the JRP decision is released. A “lockup” allows the media to read an embargoed report a few hours in advance so that at the moment it is officially released, it can print or broadcast an accurate account of a government report.
News 1130 was told by the NEB that there would be no lockup in British Columbia, only reporters in Calgary, the home of the NEB, will have that opportunity, because “logistics did not work out for a lock-up” in Vancouver.
(Reporters who work along the actual pipeline route in the north are even farther off the NEB radar. The Calgary lockup will leave northerners to figure out what the JRP decision actually means from reports from Alberta-based journalists. The history of the past few years has proven that most Alberta-based reporters have little interest or knowledge of the concerns of northwest British Columbia.)
Before the JRP hearings began in January, 2012, a well-known northern First Nations leader predicted all this in a background conversation. He noted that there was no representation from British Columbia on the Joint Review Panel. The JRP had two members from Alberta, chair Sheila Leggett, and member Kenneth Bateman, while the “First Nations member,” Hans Matthews, was from Ontario. The First Nations leader, who would have to appear before the JRP, privately called them “flatlanders” with no knowledge of B.C.
He was right.
Even before that conversation, the Joint Review Panel blundered in its first appearance in Kitimat, the preliminary hearing at Riverlodge on August 30, 2010, by offending the Haisla Nation with a schedule of appearances crafted in Calgary that ignored that Kitimat is on Haisla traditional territory and put then Chief Counsellor Dolores Pollard well down on the schedule. That hearing was held up for about half an hour while the JRP scrambled to undo their mistake.
While the JRP did finally learn to respect the customs of BC’s First Nations, and the panel was often hamstrung by arcane and obsolete rules of procedure, the panel too often proved far too inflexible in understanding the issues along the pipeline route and up and down the coast.
The most recent example was the JRP’s refusal to consider the recent evidence from both scientists and Fisheries and Oceans about the growing importance of humpback whales in Douglas Channel. The JRP’s excuse was that the window for evidence had closed. If the Northern Gateway actually goes ahead, Enbridge speaks about the 30-year-life of the project. Yet the JRP’s continuing inflexibility acts as if all the key issues can be decided by the December 30 deadline and after that everything will be just fine.
In the past few weeks, report after report has been released on projects that will change the lives of the people of the northwestern British Columbia. The media of the northwest, all with very limited budgets, have been ignored time and time again.
On Tuesday, the federal government also used Vancouver to release a report on tanker traffic. While Vancouver is also vulnerable to tanker problems, the feds considered their message could be carried best by the mainstream major metro media. Again, no one bothered with the northwest, where the tankers will be sailing along the coast and up and down Douglas Channel.
A few weeks ago, BC Premier Christy Clark announced her agreement with Alberta Premier Alison Redford on the compensation issue, one of her five conditions for heavy oil development in the province. Clark solved the political dispute with Alberta by handing off the compensation issue from the province to the energy industry with absolutely no guarantee that the energy companies will actually offer compensation for crossing BC. Northern reporters could listen in to an audio feed of the news conference from the BC government website, but could not ask questions.
In the 21st century, of course, these news conferences are not about presenting factual information; the news conferences are about getting out a government message track, so questions from reporters who actually know about issues are not wanted.
The Joint Review Panel (with the NEB one of the “joint” partners) is supposedly, on paper, a quasi-judicial body, independent of the government.
If the JRP wants to salvage even a bit of its crumbling credibility for its Northern Gateway decision, it will show that it respects British Columbia. The means holding two additional lockups. If Terrace was good enough for the final arguments, and a central location for the northwest, one lockup should be held in Terrace, so northerners can read reporting by northwest-based reporters. The second, of course, should be in Vancouver for the province’s major media centre.
Given the record of the past two years, don’t hold your breath, time and time again the bureaucratic priorities and the fact that the NEB is thoroughly embedded in the energy culture of Alberta, it is likely that the release of the report sometime in the coming weeks will be Alberta-centric and will prove my source right, that the NEB is nothing more than that extension of the Petroleum Club.
The board plans to hold a media lock-up in Calgary, but does not have similar plans to brief reporters in British Columbia, says an official with the independent federal agency established to regulate international and interprovincial issues around the electrical utility, gas and oil sectors.
Board spokesperson Sarah Kiley said Thursday that the board recognizes there is an interest in B.C. in the subject, and said there is no final plan yet.
The Globe was unable to get a statement from the Liberal government of BC but for the opposition,Spencer Chandra Herbert (Vancouver-West End) said, the energy board should not be hiding out in Calgary when they announce what they are going to do, regardless of whether they approve or reject the project.
“You would think they would have the ability and respect for B.C. to host it here and explain whatever decision they make here to B.C. media and intervenors,” he said.
The Northern Gateway Joint Review panel, Kenneth Bateman, Sheila Leggett and Hans Matthews, listen to final arguments in Terrace, June 17, 2013. (Robin Rowland/Northwest Coast Energy News)
Buried deep in the LNG Canada environmental assessment application, a reader will find a key difference in attitude with at least one of the group of companies planning liquified natural gas development in the northwest and Enbridge Northern Gateway.
It’s an earthshaking difference, since it’s all about earthquakes.
The documents filed by LNG Canada with the BC Environmental Assessment Office and the Canadian Environmental Assessment Agency acknowledge that there is a possibility of an earthquake (a one in 2,475 year event) at the LNG terminal site.
Northwestern British Columbia was shaken by two major earthquakes in the months before the Joint Review Panel concluded its hearings in Terrace. Both were far from Kitimat, but felt across the District. On October 27, 2012, there was a magnitude 7.8 earthquake on the Queen Charlotte Fault off Haida Gwaii. That quake triggered a tsunami warning, although the actual tsunami was generally limited to the coast of Haida Gwaii. Both landline and mobile phone service in Kitimat was briefly disrupted by both the quake and overloads on the system. Kitimat was also shaken by the 7.5 magnitude earthquake centered at Craig, Alaska a few weeks later on January 9, 2013.
With the exception of one vague reference in its final argument documents presented to the Joint Review Panel, Enbridge has stubbornly refused to consider any seismic risk to the region.
That was the company’s policy long before the October. 27, 2012 Haida Gwaii earthquake and was Enbridge policy after October 27, 2012.
In a public meeting in Kitimat on September 20, 2011, more than a year before the Haida Gwaii earthquake, John Carruthers, Northern Gateway president, insisted to skeptical questioners at a community forum at Mount Elizabeth Theatre that there was no earthquake danger to the proposed Northern Gateway pipeline and bitumen terminal in Kitimat. One of the questioners, Danny Nunes, of Kitimat, asked could the pipes withstand an earthquake? Carruthers repeated that Kitimat was not in an earthquake zone, that the fault was off Haida Gwaii and so would not affect Kitimat.
After the September, 2011 meeting, I asked Carruthers if Enbridge knew about the March 27,1964 “Good Friday” magnitude 9.2 Alaska earthquake that, because of its high magnitude, had caused major shaking in Kitimat. That earthquake destroyed much of Anchorage and triggered tsunamis that caused damage and death across Alaska and in parts of British Columbia, Oregon and California.
Carruthers promised to get back to me and never did.
On June 17, 2013, six months after the Craig, Alaska earthquake, in his opening summation before the Joint Review Panel, Richard Neufeld, lead lawyer for Northern Gateway, stayed on message track, telling the JRP, referring to pipelines: “The route is not seismically unstable. The seismic risk along the pipeline right-of-way is low, with only a few locations of moderate risk encountered, none of which are within the Haisla territory.”
That brought a gasp from spectators in the room, or at least those who had felt the October and January earthquakes.
The following day, June 18, Murray Minchin of Douglas Channel Watch found an anomaly in the Enbridge documentation, arguing in the group’s summation:
“The Proponent’s written final argument gets on shaky ground regarding design and construction of the storage tanks on a ridge beside Douglas Channel in paragraph 249 where they say:
“‘It also involves the safe construction and operation of the Kitimat terminal in Kitimat Arm in an area subject to seismic activity which encompasses both terrestrial and marine components.’
“Now, that’s interesting because isn’t that the first time — the first admission by the Proponent in a little over 10,000 pages of documents that the area they intend to build their project is in a seismically-active area?
“Haven’t they been telling us all along to this point that the only seismic concerns would be from the distant Queen Charlotte fault off of Haida Gwaii?
“Now, this completely contradicts Mr. Neufeld’s statement yesterday where he described the Project area as not “seismically unstable”. So what is it? This is their final argument and they’re contradicting themselves.”
Minchin went on to quote from the Enbridge argument: “’Seismic conditions in the project area have also been addressed.’
“Well, really? Is that a truthful statement, considering Natural Resources Canada has only submitted a preliminary report concerning a 50-kilometre fault line and massive submarine landslides they accidentally discovered last year in Douglas Channel while doing a modern survey of the Channel for navigation hazards.
“How can the Proponent claim to have adequately addressed seismic forces in their design of this Project when they don’t know what those forces are or for what duration they may be subjected to those forces.
“Has there ever been a paleoseismological study in the Project area to establish past earthquake or tsunami history?
“Wouldn’t it be in the best interest of the Proponent, the Panel and Canadians to know the risks before 1.3 billion litres of liquid petroleum products are allowed to be stored on a low ridge right beside Douglas Channel?”
In his final rebuttal on June 24, Neufeld did not address the contradictions that Minchin had pointed out.
Compare Enbridge’s attitude to the view of LNG Canada, which at very least, appears willing to consider that major events could have adverse consequences on the terminal and liquifaction facilities.
The first one is a bit puzzling to Kitimat residents “A 1 in 100 year 24 hour rain event,” after all the town often gets rain for 24 hours straight or more fairly often.
The second, 1 in 200 year flood of the Kitimat River. Flooding has always been a concern and will be even more so, because as the pipelines come into town, whether natural gas or bitumen, those pipelines will be close to the river bank.
Even more interesting is that LNG Canada is willing to consider possible effects of climate change on the project, saying: “Predicted climate change effects during the project lifecycle on sea-level rise, precipitation and temperature. Where relevant and possible, the implications of such climate induced changes to the extreme weather events given above will also be addressed.”
.
Although the hydrocarbon industry as a whole is reluctant to acknowledge climate change, it appears that on a practical level, the LNG Canada partners, if they are about to invest billions of dollars in a natural gas liquifaction plant and marine terminal, will certainly take steps to protect that specific investment from the effects of climate change.
On the other hand, the National Energy Board, as matter of policy and the Northern Gateway Joint Review Panel, both still stubbornly refuse to even consider any effects of climate change, even possible effects locally on a specific project application.
The Joint Review Panel decision on the Northern Gateway is expected sometime in the next three weeks. While most reports seem to indicate that the decision will be released after Christmas before the Dec. 30 deadline, there has been recent media speculation that the decision could be released next week.
The problem for Enbridge is that the new public relations campaign is repeating the blunders that began when they first proposed Northern Gateway in 2005. There have been meetings across the northwest, but those meetings have been invitation only affairs at chambers of commerce and community advisory boards, with possible opponents or skeptics and media perceived as critical of Enbridge not invited. So Enbridge still wants to control the message and will only talk to friendly gatherings.
Then there are the television spots featuring Janet Holder, the Enbridge vice president in charge of Northern Gateway, supposedly showing her commitment to wilderness. Those commercials would have had more credibility if the agency had produced the ads with actual video of Holder walking through the bush, rather than shooting the spots in front of a green screen in a studio, with pristine wilderness stock video in the background, and Holder acting as if she was a model for an adventure clothing company rather than vice president of a pipeline company.
Right-wing business columnists in Toronto and the countless Albertans fume at the so-called “hypocrisy” of British Columbians who support LNG and oppose bitumen.
Of course, those critics didn’t feel the earth move under their feet. The critics don’t see the difference between natural gas and bitumen, differences very clear to the people of British Columbia.
It’s more than the fact, that so far, the LNG projects have been relatively open and willing to talk to potential adversaries, as Chevron has done on the controversial Clio Bay project; more than the fact that if even a fraction of the LNG projects go ahead, the money coming into northwestern BC means that the handful of permanent jobs promised by Enbridge will be literally a drop in a bucket of warm bitumen.
Although there are many other environmental issues on the Northern Gateway project, the fact the potential for earthquakes in Kitimat is brushed off by Enbridge while LNG Canada is at least willing to consider the problem, sums it all up.
Updated with link to Sept. 2011 questions and answers
Documents show that Enbridge supplied the coffee for a secret briefing on “critical energy infrastructure.” (CBC)
Updated with Guardian report and link
Documents obtained by The Guardian and by CBC News under the Access to Information Act show that Canada’s security agencies, the RCMP and the Canadian Security Intelligence Service, together with other departments including Natural Resources Canada and the National Energy Board met with Canada’s big energy companies, including Enbridge, to discuss threats to the country’s energy infrastructure.
As the agenda obtained by CBC shows, Enbridge supplied the breakfast, lunch and coffee for those attending the security conference.
The agenda for the conference show there were panels on “BC Resource Development,” and “Aboriginal Protests and Occupations.”
The Guardian reports:
the meetings – conducted twice a year since 2005 – involved federal ministries, spy and police agencies, and representatives from scores of companies who obtained high-level security clearance.
Meetings were officially billed to discuss “threats” to energy infrastructure but also covered “challenges to energy projects from environmental groups”, “cyber security initiatives” and “economic and corporate espionage”.
Kinder Morgan has filed a last minute objection to the Northern Gateway Joint Review Panel’s preliminary conditions for the Enbridge project.
One of the objections from Kinder Morgan is the provision in the JRP’s proposed Gateway conditions for “purpose built tugs” to escort tankers (a measure that Enbridge has proposed for the Gateway project). Another provision Kinder Morgan objects to is “secondary containment facilities at marine terminals” likely to become an issue if the Vancouver terminal is expanded by Kinder Morgan.
Overall, Kinder Morgan warns that if the JRP imposes some of the proposed conditions on the Northern Gateway, it could adversely affect future pipeline projects in British Columbia.
As well, Kinder Morgan, it appears, is already concerned that if the proposed oversight of Northern Gateway goes ahead, the Kinder Morgan plan to twin the pipeline from Alberta to Vancouver and expand terminal operations in Vancouver could face ongoing scrutiny and possible delays.
The Kinder Morgan document, from the company’s Calgary lawyer, Shawn Denstedt, of Osler, Hoskins and Harcourt, filed May 31, appeared among all the final arguments filed on Friday by intervenors and governments to the Joint Review Panel on Northern Gateway.
Kinder Morgan’s letter to the JRP comes long after the final deadline for such comments.
Kinder Morgan is a registered intervenor in the Northern Gateway hearings, but has only filed four previous documents during the entire multi-year process. The company does not appear on the list of intervenors scheduled to appear for oral final arguments in Terrace beginning on June 17.
On April 12, 2013, the JRP issued a preliminary list of 199 conditions for the planning, construction and operation of the Northern Gateway project.
Now Kinder Morgan is worried. Denstedt’s letter notes:
we believe a number of the proposed conditions may have a material impact on pipeline and infrastructure development in Canada and consideration should be given to the conditions from this perspective.
Diplomatically, Denstedt goes on to tell the panel:
Our comments are intended to assist the JRP in understanding the potential outcomes of the proposed conditions if they become generally applicable to industry.
Commercial considerations
Under what Detstadt calls “Commercial considerations”, Kinder Morgan says “we observe that several of the proposed conditions are likely to affect the manner and risks involved in procuring pipeline facilities and services.
The list points to
Three layer composite coating or high performance composite coating is required for the entire pipeline although other pipeline coatings are commonly used in the pipeline industry depending upon ground conditions encountered
.
Complementary leak detection systems must be identified that can be practically deployed over extended distances of pipeline.
The construction of purpose-built tugs involves significant cost and lead time
A volume is prescribed for the secondary containment facilities at the marine terminal without reference to existing codes.
The letter goes on to say that if the conditions proposed by the JRP for the Northern Gateway come into effect, in Kinder Morgan’s opinion, it could adversely affect other pipeline projects in the future.
If broadly applied to industry, such conditions may limit the ability of pipeline companies to obtain competitive quotes because there are few sources of the required materials or services. The effect of conditions that require the use of a particular material or service may be to grant commercial benefits to certain suppliers through the regulatory process beyond the requirements of existing codes. Since several export pipelines are currently proposed, there will be a heightened demand for labour and materials in the coming years. The commercial effect of conditions that may exacerbate shortages of labour and materials should be a relevant consideration for the JRP.
Timing
One of Kinder Morgan’s objections is to the timing the JRP proposes for the Northern Gateway project if it applies to other pipelines.
Several of the proposed conditions contain NEB approval requirements and filings deadlines several years prior to operations. For example, plans related to the marine terminal and research programs must be filed for NEB approval three years prior to operations.
We are concerned that requiring reports to be filed for approval several years before operations can create significant schedule risks for infrastructure development projects. For example, a project with a two year construction schedule could take three years to complete with such conditions. Any changes to the construction schedule and anticipated date of operations would affect the filing deadline. Project proponents need sufficient schedule certainty in order to plan major expenditures on labour and materials.
To mitigate such risks, it is relevant for regulators to consider whether the filing deadlines and approval requirements prescribed in conditions could materially alter a project’s schedule. Filing deadlines should be set at a reasonable time before operations in order to minimize the risk that such deadlines materially affect the critical path for a project.
Many of the conditions require NEB approval, and in some cases the participation of other parties in the approval process, in order to be satisfied. Fulfillment of those conditions will require additional time, a Board process and potentially litigation. For example, certain reports must be filed with the NEB for approval prior to commencing construction activities. Other conditions require reports to be filed for approval by the NEB prior to construction with a summary of how concerns from other government agencies and Aboriginal groups were addressed.
So Kinder Morgan says:
In our view, conditions that require subsequent board approvals and that attract the potential for additional regulatory processes should be the exception and not a new standard or norm. There must be clear, well understood rationales given as to why additional approvals are in the public interest.
And so Kinder Morgan asks:
As an alternative, the NEB may utilize its existing powers and processes to ensure that when filings are made to satisfy imposed conditions an additional approval process is not required.
Overall the company sees the rules for Northern Gateway as a step back to the days before deregulation.
A number of the conditions may be interpreted as reflecting a return to a prescriptive approach to regulation. These conditions prescribe detailed audit requirements instead of setting a goal oriented approach to allow the proponent flexibility in mitigating any adverse effects. Such conditions tend to focus on operational aspects that are covered by existing codes and regulations rather than setting goals for the proponent to mitigate any significant adverse effects.
Denstedt, again diplomatically, concludes by saying:
Kinder Morgan wishes to thank the JRP for the opportunity to present these high level perspectives regarding its proposed conditions. Our comments are intended to ensure that the wider implications of the proposed conditions on the pipeline industry and infrastructure development are given appropriate consideration in the deliberations and final recommendations of the JRP.
The Northern Gateway Joint Review Panel has confirmed that final, closing arguments for the controversial Enbridge pipeline project will take place in Terrace for approximately two weeks, beginning on Monday, June 17, 2013.
The Panel says the purpose of closing arugments is to provide Parties Northern Gateway, intervenors, and government participants the opportunity to:
tell the Panel their views and opinions about the Project including whether Parties believe it is in the public interest;
persuade the Panel to recommend approval or denial of the Project;
make their case about the relevance and weight of any evidence on the Panel’s public registry;
discuss the merits of conditions that the Panel might place on any Certificate that may be issued for the Project;
suggest additional conditions should the Project be approved
.
As is common with National Energy Board and Joint Reivew procedures, final arguments argument should be in writing, followed by oral responses. Only one arugment document is permitted.
The written final arguments must be based on JRP evidence that is on the public record. No one can introduce new evidence in either the written argument or in their oral response.
The “aids to cross-examination” used during the questioning phase of the final
hearings cannot be used unless they were admitted onto the record by the Panel as evidence.
However a witness’ answer to questions given when an aid was used is evidence and can be
relied upon.
The absolute deadline for filing the written arugment is noon Pacific Time (1:00 pm Mountain
Time) on 31 May 2013.
Participants can take part either in the hearing room or remotely via a conferencing system.
A party of the proceeding cannot make an oral argument unless they have filed a written arugment.
The purpose of the oral argument is to let one party respond orally to the written argument filed by others. A party may also respond to the Oral Argument of other Parties who have presented Oral Argument before them and whose arguments they disagree with.
Participants are expected to have read in advance all the written arguments they may wish to challenge and are restricted from repeating arguments made by others but are allowed to indicate they agree with the earlier argument.
Top Down Bottom Up
There are very specific rules for how the closing arguments will proceed, which the JRP calls “Top Down Bottom Up”
In order to allow all Parties to respond to all of the Oral Arguments of other Parties, they will be given two opportunities to provide Oral Argument in what is referred to as a “Top Down –Bottom Up” process….
During either the Top Down or Bottom Up portion, parties may simply state that they adopt the position of specific parties who have gone before them.
In the Top Down portion, Northern Gateway will first provide its Oral Argument in response to the Written Argument of other Parties. This will be followed by the Oral Argument of intervenors and government participants in the order set out in the Order of Appearances (alphabetically, A-Z). During the Top Down, Parties will respond to the Written Argument of Parties they are opposed to as well as the Oral Argument of those who have argued before them.
Intervenors and government participants will have up to one (1) hour each to provide their Oral Argument. Since Northern Gateway has the burden of proving its case and will be responding to all other Parties, it will have up to two (2) hours for its Oral Argument.
After the Top Down Oral Argument, Parties will have the opportunity to very briefly reply to any new matters that were raised in the Oral Argument of other Parties who presented after them. This will proceed in a Bottom Up format where the Panel will start at the bottom of the Order of Appearances and proceed up from there (alphabetically, Z-A), ending with Northern Gateway.
During the Bottom Up Oral Argument, Parties can only reply to new matters that arose in Oral Argument after they presented their Oral Argument. For this reason, the Bottom Up Oral Argument should be very brief. Parties who do not have any reply comments specifically related to arguments they have not had the opportunity to address should not provide Bottom Up Oral Argument.
So that’s why the EIS took a couple of looks at Kitimat, with two possibilities for replacing the Keystone XL with a Kitimat terminal.
• Rail to Vancouver or Kitimat, British Columbia and tanker to the Gulf Coast area refineries
• The proposed Nothern Gateway Pipeline project.
The study doesn’t just include various forms of diluted bitumen from the Alberta bitumen sands, but petroleum products from the Western Canadian Sedimentary Basin (WCSB) and crude oil from the Bakken shale shipped to the refineries on the US Gulf Coast which would be served by the Keystone XL pipeline if it was not approved.
The EIS examined the Northern Gateway project and rejected the Enbridge pipeline as a possibility for Alberta bitumen and crude because of the continuing controversy.
However, a reading of the report shows that there could be pressure in the future for a bitumen or crude export terminal at Kitimat that would be served by the existing CN rail line (even though the State Department report prefers Prince Rupert as the best choice as an alternative to Keystone).
Enbridge is proposing to construct the Northern Gateway pipeline, which would transport up to 525,000 bpd of crude oil 1,177 km from Bruderheim, Alberta, to the Port of Kitimat, British Columbia. The port would be improved with two dedicated ship berths and 14 storage tanks for crude oil and condensate. Enbridge intends for the pipeline to be operational around 2017. A regulatory application was submitted in 2010, which is undergoing an independent review process led by the Canadian National Energy Board and the Canadian Environmental Assessment Agency. The pipeline would traverse First Nation traditional lands and important salmon habitat. The project has been controversial and has encountered opposition from some
First Nation bands and other organizations. Opposition to the project remains strong as evidenced by media reports of the January 2013 public hearings in Vancouver on the permit application. It remains uncertain at this time if the project would receive permits and be constructed, and therefore the option of moving additional crude to Kitimat was eliminated from detailed analysis.
The report goes on to say that Enbridge is moving the target for the Northern Gateway due the controversy and the longer than expected Joint Review Panel hearings
Enbridge is now stating in investor presentations that the Northern Gateway pipeline
(525,000 bpd expandable to 800,000 bpd) may be operational by “2017+”
However the State Department report does seriously consider transportation of WCSB crude by rail to Vancouver, Kitimat and Prince Rupert. The report takes an in-depth look at the railway to Prince Rupert option.
One reason is that even if it is transported by rail, the market in Asia is still more attractive to the energy industry than using Kitimat or Prince Rupert as a possible terminal for export to the US Gulf.
The transportation costs of shipping to Asia via the Canadian or U.S. West Coasts
would be significantly cheaper than trying to export it via the U.S. Gulf Coast.
The total per barrel cost of export to Asia via pipeline to the Canadian West Coast and onward on a tanker is less than just the estimated pipeline tariff to the U.S. Gulf Coast for the proposed Project, and is less than half the cost of the Gulf Coast route to Asia. If pipelines to the Canadian West coast are not expanded or approved, even incurring the additional cost of rail transport to the West Coast ports (Vancouver, Kitimat, or Prince Rupert), estimated at $6 per barrel, results in a total transport cost to Asia that is still 40 percent cheaper than going via the Gulf Coast Absent a complete block on crude oil exports from the Canadian West Coast, there would be little economic incentive to use the proposed project as a pass through. The high costs of onward transport to other potential destinations tend to mitigate against WCSB heavy/oil sands crudes being exported in volume from the Gulf Coast.
The EnSys 2011 study found that the rail systems of the United States and Canada were not at that time running at capacity, that there is significant scope to expand capacity on existing tracks through such measures as advanced signaling, and that adequate cross-border Canada/U.S. capacity exists to accommodate growth in rail traffic that would be associated with movements at the level of 100,000 bpd cross-border increase per year or appreciably higher. In addition, rail lines exist to ports on the British Columbia coasts (notably Prince Rupert, Kitimat, and Vancouver), which could be used for export of Western Canadian crudes.
And later in the report:
both of these proposed pipeline projects to Canada’s West Coast face significant
resistance and uncertainty, but there are strong cost advantages when compared with moving WCSB crude to the Gulf Coast even if rail were used to access the Canadian West Coast In fact, using rail and tanker to ship crude oil from the WCSB via the West Coast to China is comparable to the pipeline rate to reach the U.S. Gulf Coast. An increase in the transport costs to the Gulf Coast (utilizing alternative transport options such as rail) would have a tendency to increase the
economic incentive to utilize any West Coast export options, if they are available.
The report also notes the change in Canadian laws in the omnibus bills pushed through by Stephen Harper’s Conservative government:
Also not examined above, are more speculative political impacts that might occur as a result of a decision on the permit application for the proposed Project. In 2012, the Canadian government enacted new laws changing the way some major infrastructure projects, such as pipelines, are reviewed. Among the changes made were limits on the amount of time for such reviews. A declared intent was to promote alternative routes for the export of WCSB crude oils, especially
ones that would reduce reliance on the United States as, essentially, the sole market option.
In other words, even if Northern Gateway is stopped, there could be considerable pressure to export bitumen and crude oil from Alberta not only through Prince Rupert, the site preferred by the State Department EIS, but though Kitimat as well.
That might just open the door for David Black’s proposed $16 billion refinery at Onion Flats near Kitimat. As noted elsewhere on the site Black has possible investors for construction of a new oil refinery approximately 25 kilometers to the north of Kitimat BC on a 3,000 hectare site.
Black’s Kitimat Clean website says the refinery would process 550,000 barrels per day (87,445 cubic meters per day) of diluted bitumen from the oilsands region of Alberta delivered to the site by pipeline or by rail. The diluent will be extracted at the refinery and returned to Alberta if needed there. If not, it would be processed into gasoline. The bitumen will be converted into fuel products, primarily for export.
Black’s plans call for connecting the Northern Gateway bitumen Pipeline to the site. From the refinery six dedicated product pipelines will run to a marine terminal on the Douglas Channel. The Douglas Channel is a wide and deep fjord. VLCC (Very Large Crude Carrier) tankers will transport the refined fuels to markets around the Pacific Rim.
If the Northern Gateway is stopped, Black’s plans call for 12 additional 120 car trains running through every day. (Six in each direction) Northwest Coast Energy News Special report links
