Canadian Approves Plans for an Oil Pipeline

An environmental and economic review panel approved plans for a pipeline and port project that, if built, will move oil from Alberta’s oil sands to tankers on Canada’s Pacific Coast.

After approval stalled in Washington for the Keystone XL pipeline, which would link the oil sands to the United States Gulf Coast, the Enbridge Northern Gateway pipeline, which would cost about 7.9 billion Canadian dollars, or about $7.4 billion, became Canada’s backup plan for increasing oil sands production.

The current federal government in particular hopes to add Asian markets to the oil sands’ list of customers. The United States has long been Canada’s only significant export market for both oil and natural gas.

While it is an important step forward, the approval from the panel organized by the National Energy Board and the Canadian Environmental Assessment Agency is not the final word on the project.

The Conservative federal cabinet must give its final approval by July. While that approval is all but certain given the government’s support for the plan, widespread opposition from many native groups with land claims along the route, as well as environmental groups, may lead to legal challenges.

Like Keystone XL, the Northern Gateway pipeline has been used by some environmentalists as a stand-in for their broader concerns about the oil sands, whose development, they say, is harmful to the environment. But the plan’s potential to create an oil spill off British Columbia’s rugged and scenic coastline also prompted widespread public opposition in that province.

The government of British Columbia has voiced concerns and laid out its own set of conditions for approving the project, although they are symbolic because the matter is a federal issue.

The three-member review panel concluded that while a major oil spill is unlikely, “a large spill would initially have significant adverse environmental effects on ecosystems.” But it concluded that any harm created by a spill could be cleaned up and affected areas returned “to a functioning ecosystem similar to that existing prior to the spill.”

“After weighing all the oral and written evidence, the panel found that Canada and Canadians would be better off with the Enbridge Northern Gateway project than without it,” the report said.

Environmental groups, which argued at hearings that conventional oil spill technologies could not handle the heavy, tarlike bitumen that comes from the oil sands, swiftly condemned the panel’s conclusions. Those groups failed in efforts to include the overall impact of oil sands extraction in the review.

Karen Wristen, the executive director of the environmental group Living Oceans, which is based in Vancouver, said the panel’s approval was expected. But she added that environmentalists would only increase their efforts to block the project. “This is only the beginning of it,” she said.

In a statement, Enbridge, the pipeline company, said that it would work to fulfill 209 conditions laid down by the panel.

“Northern Gateway has worked with one goal in mind: to access new markets by building a safer, better pipeline,” said Janet Holder, the leader of the Northern Gateway project for Enbridge. “The joint review panel conducted the most comprehensive and science-based pipeline review in Canadian history, and their report reflects the input of thousands of Canadians. Their report is an important step towards that goal.”

Mary Polak, the environment minister for British Columbia, said her government needed to study the panel’s report. “We are not yet in a position to consider support for any heavy oil pipeline in B.C.,” she told a televised news conference.

While some political analysts believe that the current federal government has been using the prospect of Canadian oil exports to China through Northern Gateway as a form of pressure on Washington, expanding Canada’s oil exports to other countries has long been a national goal.

To date, however, there have not been firm commitments from Asian buyers for the 525,000 barrels of diluted bitumen a day that the pipeline would carry.

Jennifer Winter, a research associate at the University of Calgary who recently studied the ability of Asian refineries to handle bitumen, concluded that sufficient capacity exists. Demand, however, may be another matter, she said.

“There is demand but maybe not as big as the politicians would like or even the energy companies in Canada would like,” she said.

Kinder Morgan, the American pipeline company, has also applied for approval to expand the capacity of an existing pipeline from Alberta to British Columbia that it owns.

NY Times