Northern Gateway | Northwest Coast Energy News

Enbridge buys natural gas plant from Encana

Energy

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

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

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

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

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

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

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

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

Enbridge plans natural gas pipeline along Northern Gateway route

Enbridge CEO Pat Daniel has told Reuters in New York that the company would prefer to supply natural gas through Kitimat to Asia “over any other export project” and that Enbridge plans to build a natural gas pipeline along the route of the
proposed Northern Gateway bitumen pipeline.

Pat Daniel was interviewed by Reuters reporter Edward McAllister. In a story with a New York place line the agency reports:

Pipeline operator Enbridge Inc
would prefer to supply natural gas to the Kitimat liquefied natural gas
plant in British Columbia over any other export project in western
Canada, the company’s chief executive told Reuters on Thursday.

Enbridge is interested in joining one of two proposed Canadian LNG
projects to ship natural gas to Asia, it said this week, as ample North
American supply pushes gas prices far below global levels.

But the location of Kitimat has attracted Enbridge more than Royal Dutch Shell’s potential project in Prince Rupert, also in British Columbia, company head Patrick Daniel said in an interview.

“Kitimat is the preferred project. Pipelining into Kitimat is
relatively straight forward compared to Prince Rupert, which is the
other proposed port,” Daniel said, though talks continue with both
projects…..

Enbridge plans to build a natural gas pipeline along the route of the
proposed Gateway oil line, which would transport natural gas from Horn
River and other natural gas fields to the coast by 2016, Daniel said.

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

Energy

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

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

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

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

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

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

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

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

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

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

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

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

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

How Kitimat harbour will look if both Northern Gateway and KM LNG go ahead

Detail of a map filed by Enbridge Northern Gateway with the Joint Review Panel showing the foot print of the proposed bitumen terminal and the LNG terminal. The proposed BC LNG terminal would add a third terminal at North Cove (green text on this map)

A recent filing by the Enbridge Northern Gateway project with the Joint Review Panel shows just what Kitimat harbour and the service area will look like if the liquified natural gas projects go ahead and so does the Northern Gateway.

Three maps show areas where the two pipelines follow the same routes and where they diverge beginning just east of the service centre. (Larger versions of maps pop up if you click your mouse)

In this map, the Enbridge pipeline is yellow with a black outline, the LNG pipeline is red. Where there are yellow and red alternating squares, that means the two pipelines will follow the same route. Solid orange lines are paved roads,broken orange lines are unpaved roads and the green lines are power lines.

Just before the pipelines reach the service centre, they diverge, the yellow Enbridge pipeline following the road route around the periphery of the service centre, while the gas pipeline at first follows the route of the Pacific Trails Pipeline and then snakes off at the hydro substation. The two pipelines then run parallel just off Haisla Boulevard across from the Rio Tinto Alcan plant. The green line beside the two pipelines marks a hydro line that would be build to power the facilities.

The final map shows the Enbridge pipeline coming into the bitumen/condensate terminal with its large footprint, while the natural gas pipeline continues, crosses Bish Creek and then enters the Bish Cove KM LNG terminal. If the BC LNG terminal is built at North Cove, just west of the proposed Enbridge Northern Gateway facility, a branch pipeline would go from the main gas pipeline down to that facility. (There were indications at the June NEB hearings that negotiations were under way on “sharing” gas “molecules” between the two groups).

Footprint of the Enbridge Northern Gateway plant.

Enbridge photo maps showing Northern Gateway and LNG routes in pdf format

Natural Resources minister Joe Oliver continues to push Northern Gateway

Energy Links

Conservative Natural Resources Minister Joe Oliver is continuing to promote the Enbridge Northern Gateway pipeline. In a speech to the Canadian Club in Toronto, Oliver promoted both the Keystone XL pipeline from the Alberta oil sands to Texas and the Northern Gateway pipeline through Kitimat.

The Globe and Mail reports in New pipelines crucial to expand energy exports: Minister

Canada needs projects like Enbridge Inc. Northern Gateway pipeline to provide crucial access to growing markets for the country’s energy exports, says Natural Resources Minister Joe Oliver.

In remarks prepared for a speech Friday in Toronto, the Minister said the federal government would respect the regulatory review now being conducted on the Gateway project. But he made it clear Ottawa supports the construction of oil pipelines to the west coast, despite opposition from environmental groups and First Nations…..

Projects such as the proposed Northern Gateway Pipeline would connect Alberta’s oil sand to the port at Kitimat on the coast of British Columbia, where tankers could transport oil to Asian customers.”

While he said the government respects the regulatory process, he added: “It is a key strategic objective to diversify our customer base” beyond the U.S., which now accounts for 97 per cent of Canada’s oil exports.

The Associated Press also covered Oliver’s speech, as published in the Washington Post:

Canada’s natural resource minister says the country needs Enbridge’s proposed Northern Gateway pipeline to the Pacific coast to be built so that it can diversify its energy exports to China.

Natural Resource Minister Joe Oliver noted in a speech Friday that the U.S. is basically Canada’s only energy customer. Oliver says it is a key strategic objective to diversify the customer base.

But Aboriginal and environmental opposition to the Pacific pipeline is fierce. The opponents fear it will leak. The local member of Parliament, Nathan Cullen, has said accidents are inevitable in the rough waters around Kitimat, British Columbia, where the pipeline will end. And no one has forgotten the Exxon Valdez oil spill of 1989, some 800 miles (1,300 kilometers) north of Kitimat….

Sinopec, a Chinese state-controlled oil company, has a stake in a $5.5 billion plan drawn up by the Alberta-based Enbridge to build the Northern Gateway Pipeline from Alberta to the Pacific coast province of British Columbia.

Natural Resources Canada news release: Minister Oliver Touts Canada’s Energy Resources and Economic Strengths

Harper appears to endorse Northern Gateway in TV interview

Energy Politics

In an interview with Bloomberg News, Prime Minister Stephen Harper strongly endorsed the bitumen pipeline from Alberta to Texas, the controversial Keystone XL project and then went on to apparently push for the Enbridge Northern Gateway project by saying “there is all the more reason why Canada should look at trade diversification and particularly diversification of energy exports.”

In the interview with the business news service Harper said U.S. approval of TransCanada Corp.’s proposed $7 billion Keystone XL pipeline is a

“no-brainer” because it will create jobs and add to America’s secure energy reserves.

“The need for energy in the U.S. is enormous, the alternatives for the U.S. are not good, on every level,”

Harper said he’s “confident” the pipeline will be built.

Keystone would link Canada’s oil sands to U.S. refineries on the Gulf of Mexico coast. The 2,673-kilometer pipeline would begin in Hardisty, Alberta, and cross Saskatchewan, Montana, South Dakota and Nebraska.

The alternatives for the United States are not good. And, you know, on every level, not just economic (but) political, social, even environmental, the case is very strong for this…”The fact that there are these kinds of pressures to, you know, to potentially take decisions which would, in my judgment . . . to avoid a decision would be a complete no-brainer.”

Shawn McCarty of The Globe and Mail interprets Harper’s statement this way:

the federal government has broadly endorsed the oil industry’s efforts to build new pipelines to the West Coast to open up new markets in Asia.

The National Energy Board is reviewing plans for a natural gas pipeline to Kitimat, B.C., and a plant to liquefy the gas so it can be exported via tanker.

The NEB and Canadian Environmental Assessment Agency are holding a joint review of Enbridge Inc.’s more controversial Northern Gateway oil pipeline to the coast. The Gateway project is opposed by environmental groups and first nations, whose traditional lands would be affected.

Harper has now added his voice to cabinet ministers Joe Oliver and James Moore in pushing for the Northern Gateway Pipeline, which once again raises the question, why have the Joint Review Panel since it appears the decision to go ahead has already been made?

Related Link Vancouver Sun U.S. approval of Keystone a ‘no-brainer’: Harper

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.

Edmonton region council backs Northern Gateway, but wants Alberta jobs

Energy Link

Capital Region Board to lobby for Northern Gateway pipeline

Edmonton radio station 880 News reports:

Mayors and reeves from the greater Metro Edmonton area are throwing some political weight behind the idea of a pipeline to the west coast.

But, there’s a catch to the proposal of the Northern Gateway.

“Don’t ship all of our bitumen out,” said Coun. Ed Gibbons during a break in Thursday’s meeting Capital Region Board meeting. “Let’s have value added, so we want to look at more upgraders into the future.

Harper kills bitumen export ban, support for ocean monitoring group: reports

Energy Links

According to media reports, Prime Minister Stephen Harper has killed support for the Pacific North Coast Integrated Area Management Initiative (PNCIMA) set up to monitor the ocean on the northern BC coast, while at the same time killing a plan to ban export of bitumen to countries with poor environmental records.

The Calgary Herald, in Harper backs off from initiative that threatens opposition to Northern Gateway pipeline

Prime Minister Stephen Harper’s government has withdrawn support from a deal with the B.C. government and First Nations due to concerns about excessive influence by U.S.-funded environmental groups in the development of an oceans management plan for the B.C. north coast….

There were specific concerns that a new plan being developed under the Pacific North Coast Integrated Area Management Initiative (PNCIMA) could be used to rally opposition to Calgary-based Enbridge Inc.’s proposed $5.5-billion Northern Gateway pipeline that would funnel diluted bitumen crude from Alberta’s oilsands sector to Asian markets docking at Kitimat, B.C.

A letter dated Sept. 1, and sent to the B.C. government, three First Nations groups and the environmental organization Tides Canada, said Ottawa is withdrawing support for a proposed agreement that would have resulted in $8.3 million, from the Gordon and Betty Moore Foundation of Palo Alto, California, to fund the PNCIMA process.

The letter, from Fisheries and Oceans Canada regional director general Susan Farlinger, said the government still intends to come up with an oceans management plan by 2012 in co-operation with B.C. and First Nations.

The Vancouver Sun reports Conservatives’ promise to restrict bitumen exports falls by wayside

The Harper government has quietly buried a controversial promise to ban bitumen exports to countries that are environmental laggards…

One person familiar with Prime Minister Stephen Harper’s surprise announcement during the 2008 federal election campaign said the pledge was simply electioneering at the time and was to be “buried and never seen again.”

Alberta’s energy minister also wonders whether the campaign promise is even a government policy any longer, noting the issue has never been discussed with him during his two years in the portfolio.

However, a spokeswoman for federal Natural Resources Minister Joe Oliver said Wednesday the government policy — designed to halt the flow of raw bitumen and jobs overseas — remains in place but is being regularly examined.

Link Pacific North Coast Integrated Area Management Initiative

Editor’s note:A double standard?

On the issue of the PNCIMA, the controversy is over money for the organization from the foundation set up by the founder of Intel, Gordon Moore.

Moore is famous not only for starting the successful chip company but for Moore’s Law, which has governed the accelerating pace of technological change in the past decades and is described by Wikipedia in Moore’s original formulation: “The number of transistors that can be placed inexpensively on an integrated circuit doubles approximately every two years. This trend has continued for more than half a century…” That simply means that computer processing power can be expected to double every two years.

The Gordon and Betty Moore Foundation, according to the Herald, called for the money to be channeled through a group called Tides Canada.

Support for Canadian environmental efforts by American foundations has long been the subject of a heated campaign by blogger Vivian Krause who told the Herald, “I’m pleased that taxpayers’ money will no longer further a foreign-funded campaign that is against Canadian interests,” Krause said, adding that foundation money should go to the developing world.

Krause says she is an independent commentator. She once worked as Corporate Development Manager for North America for NUTRECO, one of the world’s largest producers of farmed salmon and fish feed but disassociates herself from current public relations campaigns by the fish farming industry. Her online biography says she spent some part of her childhood in Kitimat.

Krause is a favourite of many of the right wing columnists across the PostMedia newspaper chain.

While Krause may have some valid points, one wonders why for Krause and her supporters on the business pages across Canada, that it is perfectly acceptable for the billionaires in the transnational energy industry, many of them American, (as well as the state owned Chinese energy companies) to spend corporate millions supporting the oil sands and the pipelines, while is not acceptable for another American capitalist billionaire to spend his money earned in the free market to support his views on the preservation of the environment.

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.