Politics & Government | Northwest Coast Energy News

Editorial: Any one who believes the Northern Gateway can be fast tracked is out of touch with reality

Editorial

In the past few days there has been a lot of comment from politicians, pundits, columnists and business analysts about “fast tracking” the Northern Gateway pipeline project now that the United States has postponed approval of the Keystone XL pipeline.

If anyone wanted proof that these people are completely out of touch with reality, the past three days has proven it beyond any reasonable doubt–and it has absolutely nothing to do with politics.

For the purposes of this editorial, let’s assume, just for the sake of argument, that there was no opposition, but one hundred per cent support for Enbridge’s project to build the pipeline from the Alberta bitumen sands to the port of Kitimat. Let’s assume that the Minister of Natural Resources, Joe Oliver, was successful, as he is quoted today, in expediting the approval process by the Northern Gateway Joint Review Process.

After all that, could the Northern Gateway be “fast tracked?”

No.

Let’s ignore, for this argument, any of the objections that the environmental movement has raised against the pipeline.

Let’s instead take one argument that Enbridge has used to promote the pipeline project, that the Northern Gateway is another “national dream,” the equivalent of building the Canadian transcontinental railway more than a century ago.

The problem with the majority of economists, as always, is that they think that they are dealing with a spreadsheet not the real world. Just move everything from the Keystone column to the Northern Gateway column. The bitumen goes to China instead of Texas, and the money rolls in.

The problem with cabinet ministers like Joe Oliver and Jim Flaherty, proponents of fast tracking the pipeline, is that either they are not getting the proper briefing notes or they are ignoring those briefing notes. (That is scary when it comes to Flaherty since he is supposed to be guiding the Canadian economy).

As noted earlier, the business columnists and analysts don’t even bother to read the technical studies posted by Enbridge on the Northern Gateway Joint Review site.

The bitumen pipeline is planned to cross 1,172 kilometres of challenging terrain from the bitumen sands to Kitimat. The parallel condensate pipeline is planned to cover 1,172 kilometres from Kitimat to the bitumen sands
.
Why does Enbridge call the pipelines the equivalent of the great railway construction of the nineteenth century?

The pipelines will have to cross some of the most rugged territory on this planet; mountain ranges, including the Rocky Mountains, The Bulkley Ranges, the Coast Ranges.

Even the valleys and plateaus the pipeline must cross are considered geologically unstable.

The weather is often terrible. Rain. Snow. More rain. Wind storms. Lots and lots of rain. The pipeline will come to close to Lakelse Lake, just east of Kitimat, that has a Canadian record for a one day snowfall, 118 centimetres.

Just ask DriveBC how difficult it is to maintain the highways in this region, highways that have been around for at least 60 years and where the engineering has improved over those decades from the tracks my family drove when I was a kid. Washouts happen, even in “mild” years.

Then there’s the possibility of earthquakes. As Enbridge, correctly, points out, the tectonic plates where the major quakes can be triggered are far off shore and at least according to the maps, the pipeline is not in a quake zone. Yet Kitimat was badly shaken by the magnitude 9.2 1964 Good Friday earthquake in Anchorage, thousands of kilometres away.

So terrain, weather (summer or winter) and even earthquakes could hold up construction.

The building of the Canadian Pacific Railway was held up, not just by the challenging terrain but by the Northwest Rebellion, financial mismanagement by the CPR, (they ran out of money) and political scandal. That was in the nineteenth century when health and safety regulations were non existent and no environmental precautions were required.

Some of the first locomotives and rolling stock were not built for crossing some of the biggest mountain ranges on Earth.

Yes the CPR was built. It didn’t come in on time and on budget. The CPR certainly wasn’t “fast tracked.”

In the end one has to wonder if any of the politicians, pundits, columnists and analysts who are so certain they can fast track the Northern Gateway pipeline have attempted a home renovation. Perhaps they should try to finish their basements before pronouncing on building a pipeline fast tracked across the west.

Harper says oil to Asia “important priority,” Oliver wants to expedite Gateway Joint Review process

Energy Politics

Prime Minister Stephen Harper has told reporters at the APEC summit in Hawaii that pushing Canadian energy products to Asia are an “important priority” for his government given the postponement of the Keystone XL pipeline project.

Reuters reports from Honolulu:

“This does underscore the necessity of Canada making sure
that we are able to access Asia markets for our energy
products,” Harper told reporters on the sidelines of the
Asia-Pacific Economic Cooperation forum.

“That will be an important priority of our government going
forward and I indicated that yesterday to the president of
China.”

A couple of hours earlier, the industry newsletter Platts quoted Natural Resources Minister Joe Oliver as saying he wanted the Northern Gateway pipeline approval process expedited and limited to just one year.

Platts quoting a CBC interview (the quote, at this point is not on the CBC website story about Oliver) says:

Canadian Natural Resources Minister Joe Oliver said November 13 he wants a regulatory decision by early 2013, a year ahead of the current schedule, on Enbridge’s Northern Gateway project to expedite the shipment of Alberta oil sands crude to Asia….

“The Chinese are ready to buy,” he told the Canadian Broadcasting Corporation. “The issue is building the infrastructure to get our resources to China.”

To that end, Oliver said he now expects Northern Gateway’s hearings to be completed within a year of starting in January 2012.

While insisting that he will not interfere in the Northern Gateway process, Oliver said it is a “fundamental strategic objective” of the Canadian government to diversify its customer base for oil beyond the United States.

Oliver apparently made his statement before Stephen Harper was scheduled to meet with US President Barack Obama.

Keystone XL decision – more questions than answers: Blog

A blog by Edmonton based, University of Alberta business professor Andrew Leach, Keystone XL decision – more questions than answers, analyzes the Keystone postponement through the rose coloured glasses we see often from Alberta (referring, of course, to the provincial flower, not the political party) and is more intelligent than what we’ve seen from the business press across Canada.

Interestingly Leach says:

It took exactly 3 minutes after I first heard the news for me to hear
someone say, “if they don’t want our oil, we’ll send it to China!”
Surprisingly, it took another 3 hours for me to hear someone make
reference to letting Americans freeze in the dark.

And later, Leach goes on to advise Albertans:

If Alberta wants to grow oilsands production beyond about 3 million barrels per day, we are going to need others to accept infrastructure in their backyards to get it to market. In the past, landowners along 1000s of miles of pipeline would have no easy way to come together and oppose the project – that has all changed and if you don’t believe me, ask the 4000 people who have signed up to intervene at the Northern Gateway Joint Review Panel hearings, or the 10000+ people who converged on the White House to oppose Keystone XL.

Editor’s Note: Leach was part of a wide ranging Twitter debate after the Keystone XL was postponed. A key article that sparked the debate was a piece in the New York Times by Michael Levi, that talked about NIMBYism in the Keystone case, A Shortsighted Victory in Delaying the Keystone Pipeline. That three minute record seems typical of the attitude on Twitter from many Albertans, who assume that the Northern Gateway pipeline will go ahead.

‘Keystone Cops’ crippling U.S. economy: National Post

Energy Politics

Diane Francis, writing in the National Post, in Keystone Cops’ crippling U.S. economy, a wide ranging piece attacking the decision to postpone the Keystone XL pipeline, makes her contempt for all the people of northern British Columbia pretty clear in her push to get the Northern Gateway pipeline going

The other priority is to fast-track the proposed pipeline through British Columbia to the West coast to ship oil to Asian markets. The aboriginal claims must be settled financially and generously as quickly as possible before the trans-national non-state players in the environmental movement organize them and stop the pipeline.

Editor’s note: Why do the business columnists across the Canadian media continue to believe that the people of northern British Columbia, aboriginal and non-aboriginal, are so stupid and helpless that they are under the thumb of the so-called “trans-national non-state players in the environmental movement” rather than local residents concerned about the environment where the live, work and play?? (Sounds like an editorial, which will be forthcoming)

Flaherty talks tough with U.S. in wake of Keystone pipeline delay : reports

Energy Politics

Finance minister Jim Flaherty is “talking tough” according to the Globe and Mail’s Steven Chase and threatening the Americans with the Northern Gateway pipeline in the wake of the postponement of the Keystone XL project.

Finance Minister Jim Flaherty [is] warning the postponement could kill the project and accelerate this country’s efforts to ship oil to Asia instead.

“The decision to delay it that long is actually quite a crucial decision. I’m not sure this project would survive that kind of delay,” Mr. Flaherty told Bloomberg News. “It may mean that we may have to move quickly to ensure that we can export our oil to Asia through British Columbia.”

The original Bloomberg article also reports:

Flaherty, 61, will travel later this week to Beijing, where he will discuss increasing energy exports to China and facilitating investment in Canadian natural-resource assets. Enbridge Inc. (ENB) has proposed building a pipeline, called Northern Gateway, that would transport crude from Alberta’s oil sands to Canada’s Pacific coast, while Kinder Morgan Inc. plans to expand its Trans Mountain route to do the same.

Keystone “too important not to proceed” TransCanada CEO says

Energy Environment Politics

The CEO of TransCanada, Russ Girling, reacting to news that the US State Dept. has delayed approval of the Keystone XL pipeline said Thursday, Nov. 10, 2011, “This project is too important to the U.S. economy, the Canadian economy and the national interest of the United States for it not to proceed.”

While Girling also said, “”We remain confident Keystone XL will ultimately be approved,” but the news release from TransCanada also acknowledged:

… while Keystone XL remains the best option for American and Canadian producers to get their oil to the U.S. Gulf Coast, today’s announcement by the DOS could have potential negative ramifications, especially where shippers and U.S. refiners are concerned.

“Supplies of heavy crude from Venezuela and Mexico to U.S. refineries will soon end,” said Girling. “If Keystone XL is continually delayed, these refiners may have to look for other ways of getting the oil they need. Oil sands producers face the same dilemma – how to get their crude oil to the Gulf Coast.”

In the release, TransCanada says the company will be discussing its next steps with the U.S. Department of State after it said further analysis of route options for the Keystone XL pipeline need to be investigated, with a specific focus on the Sandhills in Nebraska.

TransCanada said the company has already studied 14 different routes for Keystone XL, eight in Nebraska. The earlier studies included one potential alternative route in Nebraska that would have avoided the entire Sandhills region and Ogallala aquifer and six alternatives that would have reduced pipeline mileage crossing the Sandhills or the aquifer. TransCanada said the company hopes this work will serve as a starting point for the additional review and help expedite the review process.

“If Keystone XL dies, Americans will still wake up the next morning and continue to import 10 million barrels of oil from repressive nations, without the benefit of thousands of jobs and long term energy security,” concluded Girling. “That would be a tragedy.”

TransCanada said it has held more than 100 open houses and public meetings in six states since 2008, The company said thousands of pages of supplemental information and responses to questions were submitted to state and federal agencies. The State Department received over 300,000 comments on the project.

Pembina urges Harper to follow US “objective perspective” of Keystone in looking at Northern Gateway

Energy Environment

The Pembina Institute, the Alberta based environmental and energy think tank has reacted to the decision by the United States Department of State to delay approval of the Keystone XL bitumen pipeline by urging Prime Minister Stephen Harper to under take a similar “objective perspective” on the proposed Enbridge Northern Gateway pipeline from the Alberta bitumen sands to Kitimat.

In a news release, Pembina spokesman Dan Woynillowicz said that US President Barack Obama “has made it clear that he has heard the concerns of Americans about environmental protection, climate change, and the need for the United States to create a clean energy future.”

The State Department release on the decision did include “climate change,” which Pembina interprets as, “The fact that climate change will be explicitly considered in the final decision is notable given the higher greenhouse gas pollution associated with oilsands compared to other sources of oil.”

Woynillowicz said the US decision shows that the regulatory process should be ” based on the best available information and analysis, and will take into account the views and concerns of American citizens.”

He then goes on to say:

“This decision stands in stark contrast with the Canadian government’s approach to the proposed Enbridge Gateway pipeline that would transport oil sands product to the West Coast. Rather than maintaining an objective perspective on this pipeline, Prime Minister Harper and his cabinet have been actively promoting its approval before public hearings on the environmental impacts of the project have even begun.

“The Canadian government should take a lesson from the U.S. and ensure a broader and more rigorous review of Gateway is completed, including the upstream environmental and greenhouse gas impacts of expanding oilsands development to fill the pipeline.”

Keystone XL delayed until 2013, media reports say

Energy Politics

Numerous media reports, quoting sources, are saying that approval of the Keystone XL pipeline from Alberta to Texas has been delayed until 2013, after the current American election cycle.

The New York Times says U.S. to Delay Decision on Pipeline Until After Election

The Obama administration is preparing to delay a decision on the contested Keystone XL pipeline while it studies an alternate route, effectively pushing any action past the 2012 election, officials and lobbyists who have been briefed on the matter said on Thursday. An announcement is expected as early as Thursday afternoon.

The proposed project by a Canadian pipeline company had put President Obama in a political vise, squeezed between demands for secure energy sources and the jobs the project will bring, and the loud opposition of environmental advocates who have threatened to withhold electoral support next year if he approves it.

CBC reports Keystone project reportedly shelved until 2013

The U.S. State Department will order another environmental assessment for the Keystone XL pipeline route, allowing U.S. President Barack Obama to shelve the controversial issue until after the 2012 elections, media reports said Thursday.

Earlier Reuters and Bloomberg reported that US State Department had ordered new studies on the route of the Keystone pipeline.

Reuters says

The United States will study a new route for the Keystone XL Canada-to-Texas oil pipeline, U.S. officials said on Thursday, delaying any final approval beyond the 2012 election and sparing President Barack Obama a politically risky decision for now.

The delay was a victory for environmentalists who say oil sands crude development emits large amounts of greenhouse gases. It would deal a blow to companies developing Alberta’s oil sands and to TransCanada Corp, which planned to build and operate the conduit.

Analysts have said a long delay could kill the $7 billion project because it would cause shippers and refiners to look for alternative routes to get Canadian oil sands crude

The questions for northwestern British Columbia is, whether long delays in the Keystone XL pipeline will ramp up pressure to build the Northern Gateway pipeline from Alberta to Kitimat. One big difference here is that Stephen Harper has already won re-election and has a safe and pro-pipeline majority government.

Koch owned Flint Hills Resources is intervenor in Northern Gateway Joint Review

Energy Politics

Flint Hills Resources Canada LP, the energy and resources company owned by the controversial American brothers, David and Charles Koch, is one of the intervenors in the Northern Gateway Joint Review process, a check of the JR website shows.

Flint Hills Resources LP Canada registration at NGJR

The two men own Koch Industries, the second largest privately held company in the United States. According to a Forbes article quoted by Wikipedia, Koch Industries has a world wide annual revenue estimated at $98 billion.

Koch Industries website

Northwest Coast Energy News checked the JRP website after an article published online today by Columbia Journalism Review outlined the Koch brothers and their company’s involvement in the Keystone XL pipeline and their extensive holdings in Canada through Flint Hills Resources.

The Koch brothers are active in conservative American politics and numerous media reports say they are chief financial backers of the Tea Party.

Wikipedia says David and Charles have funded and libertarian policy and advocacy groups in the United States.

Since the 1980s the Koch foundations have given more than $100 million to such organizations, among these think tanks like the Heritage Foundation and the Cato Institute, as well as more recently Americans for Prosperity.Americans for Prosperity and FreedomWorks are Koch-linked organizations that have been linked to the Tea Party movement

On Nov. 7, 2011, The Guardian reported that the Koch brothers plan to launch a giant database listing all Americans with conservative leanings in an attempt to influence the 2012 elections, including the presidential race. See Koch brothers: secretive billionaires to launch vast database with 2012 in mind

An interactive from The Guardian lists all the Koch connections.

Koch replies to its critics on the KochFacts site.

Enbridge confident of avoiding Keystone XL woes: Globe and Mail

Energy Link

In Enbridge confident of avoiding Keystone XL woes, The Globe and Mail reports on Enbridge’s US bound pipelines. (So it is not really a story about Northern Gateway, although the Keystone and Gateway projects are similar)

Enbridge Inc. is expressing confidence that it won’t be harmed by the problems that have dogged its rival TransCanada Corp.’s Keystone XL line.

Enbridge has secured substantial support for two of its own new U.S. pipeline projects – one called Flanagan South, the other Wrangler. But because the Enbridge projects would run through existing pipeline corridors, chief executive Pat Daniel said he believes the company can avoid some of the loud environmental criticism that has caused delays – and the threat of serious new problems – for Keystone.