After a bumpy ride this summer, Enbridge will face a tough grilling this week on its $6 billion Northern Gateway project as public hearings enter their final phase in which interveners can challenge the company’s evidence.
Enbridge will square off with unions and First Nations while big oilsands players, including MEG Energy, Cenovus, Suncor, Nexen and Total appear in a joint witness panel. The Alberta government is also prepared to appear for the “questioning” phase of the federal Joint Review Panel hearings to examine the economic benefits of the proposed $6-billion pipeline project to carry Alberta bitumen to Kitimat on the coast of British Columbia for export to China.
Critics like the Alberta Federation of Labour will argue Canada’s refining industry will shrink — with a loss of 8,000 jobs expected — if the pipeline project goes ahead and diverts bitumen feedstock to China. Opponents will also argue there is plenty of room in existing pipelines to handle growing bitumen exports.
Enbridge, however, is ” very confident” going into the hearings as it will finally have a chance to respond to critics, says spokesperson Ivan Giesbrecht, noting the company will speak Tuesday.
“This is our first chance to speak; it’s going to be a rigorous questioning and we welcome that,” Giesbrecht said. “We really feel the project will benefit both provinces and Canada. It’s an opportunity for Canadians to listen in on a very democratic process.”
Enbridge is also required, by noon Tuesday, to submit a highly critical U.S. report on the 2010 Michigan pipeline spill that saw 12,000 barrels of heavy oil spill into Kalamazoo River from its pipeline. Initially, the federal review panel said it would not take the report, but reversed its decision mid-August.
Enbridge’s project — twin pipelines, with one to carry 585,000 barrels of diluted bitumen west and another to carry the diluent — faced growing resistance, starting in late July when B.C. Premier Christy Clark raised the stakes. Her province will not approve the pipeline unless B.C. gets a share of the increased revenues Alberta will gain from shipping more bitumen, she said.
With the project stuck in political hot water, B.C. newspaper tycoon David Black stepped in with a proposal for a $13-billion refinery in Kitimat as a way to bring economic benefit to the province. The oilpatch was not keen on the idea.
Meanwhile, Enbridge came under fire for a smaller spill in late July in Wisconsin. It also hit rough water when it posted a map of the Douglas Channel route into the Kitimat port that left out many islands, rocks and narrow channels that make the route particularly difficult to navigate. Around the same time, the company also announced $500 million in improvements to pipeline safety for the Northern Gateway pipelines which start in Bruderheim northeast of Edmonton. Those include increasing the thickness of the line by 20 per cent, adding 50 per cent more shut-off valves and increasing inspections by 50 per cent.
Company officials said such improvements are meant to respond to concerns raised by First Nations and other members of the public during a federal review that started six months ago.
The federal review panel is jointly operated by the National Energy Board and the Canadian Environmental Assessment Agency.
The Alberta government remains firmly committed to the project to diversify markets for bitumen, said Tim Markle, spokesman for Alberta Energy. Oilsands producers will only get higher world prices when they have access to Asian markets, said Markle, noting the price differential is up to $20 a barrel.
The province will be represented at the hearings by Christopher Holly from Alberta Energy and Skip York of Wood Mackenzie Consulting, the consulting company which predicted the province will lose $72 billion over nine years if the pipeline is not built.
Gil McGowan, leader of the Alberta Federation of Labour, disputes the province’s figures.
“We think this project will kill more jobs than it will create,” said McGowan, noting that Enbridge’s own figures estimate a four-per-cent reduction in refining capacity by 2018 in Canada as a result of the pipeline.
“This isn’t just about losing value-added jobs in the future, it’s now becoming clear that existing jobs in the refining sector are also threatened,” McGowan said.
He said “we will be raising questions” that there is no agreement in the evidence of the proposed pipeline’s impact on refining jobs in Alberta.
Oilsands producers will get higher prices for their product in Asia, but that will only be temporary, McGowan said, noting that China’s industry is state-run so there is no real market pricing.
In a report for Forest Ethics Advocacy, David Hughes, a former geologist with the federal government, says the price differential will be eliminated when the glut at Cushing, Oklahoma in the U.S. Midwest is relieved.
“Once it gets to the Gulf coast, the oil can go around the world and they will be forced to pay world price and that’s important,” said Hughes, adding that could eliminate the need for the Northern Gateway.
Meanwhile, Canadians should talk about whether “we should liquidate our energy resources to sovereign countries like China” or look at longer-term strategies for national energy security, he added.
The hearings begin Tuesday at 2 p.m. at the Holiday Inn at 4485 Gateway Blvd. They run until Saturday Sept. 9, then resume again Sept. 17 at 9:30 a.m. for ten days at the Westwood Inn at 18035 Stony Plain Road.
In November, hearings continue in Prince George to deal with pipeline safety and later in Prince Rupert to deal with marine issues.
Last week, just days before the hearing, Enbridge received approval from the Energy Resources Conservation Board Alberta for a new 400,000-barrel-a-day pipeline to bring bitumen from Fort McMurray to its Edmonton hub. The company says the new Woodland pipeline project is not connected to the Northern Gateway.
The Vancouver Sun, Monday September 4 2012
Byline: Sheila Sprattt, Edmonton Journal