The Northern Gateway project is a major petroleum pipeline project proposed by Enbridge Inc. to transport crude oil from Alberta's oil sands to a tanker port in Kitimat where it can be exported. Over the course of the Aboriginal and public consultations, considerable controversy has grown around the project's environmental, economic and social impacts. The rhetoric surrounding the project has become increasingly divisive and having an informed debate about the risks and benefits of the pipeline is becoming more challenging.
The project proposal encompasses two pipelines running from Kitimat B.C. to Bruderheim Alberta (about an hour north east of Edmonton). The two pipelines would have a capacity of 718,000 barrels of oil per day (BPD). To put this in perspective, the Tran Mountain Pipeline that runs from Alberta to Burnaby currently has a capacity of 300,000 BPD, though the operators of this pipeline are drafting plans to triple its capacity.
The terminal in Kitimat would include two tanker berths, three storage tanks for condensate and 11 tanks for oil storage. To help shepherd oil tankers up and down the narrow inlet they must traverse, radar and weather stations will be built in Kitimat. First response capabilities for accidents or spills would be kept on hand in the new terminal.
It is the single largest infrastructure project that has ever been undertaken between the provinces of Alberta and British Columbia. Enbridge is expecting construction of the Northern Gateway project to require 62,700 person-years of employment (i.e. 6,270 employees for 10 years). A study by the Canadian Centre for Policy Alternatives disputed this claim, saying their economic analysis could account for only 14% of these person-years, even if all the steel for the pipelines was manufactured in Canada. Enbridge believes another 1,150 new "long-term" jobs will be created across the country. Only 217 of these jobs will be created by direct employment (people working on the pipeline operations), while a large proportion of the remainder are indirect (lawyers, accountants, cooks, etc.). Over a third of Enbridge's projected long-term jobs are induced, meaning they are expected to be created from the money spent in local communities by these direct and indirect workers.
Our fossil fuel infrastructure map tracks the route of the Northern Gateway pipeline along with other pipeline projects in the province.
The primary rationale for the pipeline is to diversify Canada's oil exports. Currently the vast majority of Canada's oil exports go to the United States, making Canada the U.S.'s largest single supplier. There are several trends worked into this strategic decision to diversify. Primarily is there is no guarantee of future American demand for the quantities of oil Canada is planning to start pumping in the near future. Enbridge, for instance, predicts that Canadian oil production from the oil sands will triple by 2035.
It does however appear that American oil consumption has hit a ceiling, following the oil price spikes of 2008 and American economic weakness following the global economic downturn that same year. American oil demand peaked in 2005 at 20.8 million BPD and has since declined to 18.7 million. At the same time American oil production has defied the declining trend since American oil production peaked in the 1970s. With the introduction of new technologies like fracking and horizontal drilling, and the opening up of more offshore fields, the Americans are boosting their own oil production, meaning they need to import less. These trends can be seen in the chart below.
A continuation of current trends means that Canadian oil exports to the United States might hit a ceiling, leaving Canada with surplus capacity. This could happen even faster if the United States was able to continue to push up its own production. Another fear is that the United States could enact a rigorous climate action agenda, driving down their own oil consumption further with improvements in energy efficiency, an ambitious renewable energy program, and the widespread adoption of plug-in electric cars. If this was to occur before Canada built pipelines like Northern Gateway, it would leave few avenues to sell crude oil from the oil sands as fast as it was being produced.
This reliance on American oil demand means that Canadian oil is sold for less than it would be in a more competitive environment. A study by the School of Public Policy found that oil sold to Asia would fetch oil companies $10.30 more per barrel by 2016 than it would if sold to the United States.
In March 2012 a report was released by CIBC World Markets warning that Albertan energy producers may be losing $18 billion a year on crude oil sold due to the lack of infrastructure for shipping and refining.
American domestic politics pose another threat to Canadian oil exports: ethical opposition to the oil sands. The higher greenhouse gas emissions from the oil sands than from conventional oil production make it highly controversial. As an example of one opinion popular in the United States, James Hansen, head of NASA's Goddard Institute for Space Studies, wrote in a New York Times op-ed that "if Canada proceeds [with developing the oil sands] and we do nothing, it will be game over for the climate."
On the other hand Americans often argue that it is better to import oil from Canada, which is democratic, stable and a staunch ally, than it is from Saudi Arabia and Venezuela. Currently American policy seems to be to slowly expand oil sands imports, without coming down strongly either way.
Enbridge has said the pipeline will bring major economic benefit for British Columbia, Alberta and Canada as a whole. The pipeline will bring in $1.2 billion in tax revenues to B.C. over 30 years, and result in hundreds of millions in investment around the north coast, central B.C. and the northeast. Canada's GDP would grow by $270 billion over the next 30 years if the project were approved; of that the federal government would reap $81 billion in revenue and $48 billion of it would go to Canadian workers.
As the study by the Centre of Policy Alternatives points out, the share going to workers is only 18% of the total, the rest largely going to corporate profits. "This is extremely low by Canadian economic standards, which has traditionally seen a labour share of income in excess of 50% of GDP. This is due to the extremely capital-intensive nature of the oil and gas industry."
Questions have also been raised about the idea of exporting unrefined oil sands crude. 'Why not refine the oil in Canada?' As of 2010 Canada only has the infrastructure to refine 4.2 million barrels of oil a day.
One of the main concerns about the pipeline is the threat of a spill. The proposed route for the pipeline crosses the headwaters of the Mackenzie, Fraser and Skeena rivers, and weaves through largely remote areas of northern B.C. Given the many diverse and pristine ecosystems the pipeline would be crossing, and the risk of quickly polluting mountainous watersheds, it would be desirable for a spill to be stopped quickly or avoided entirely.
Unfortunately, in remote regions it is more difficult to identify any leaks or damage in the pipeline. Along with increased complexity in the identification of malfunctions, maintenance becomes harder in remote areas. Furthremore Enbridge has had some very public pipeline bursts in recent years resulting in large oil spills. In 2010 20,000 barrels of oil were spilled from an Enbridge owned-pipeline along the Kalamazoo River in Michigan, even after a local official had raised concerns about the highly corroded state of the pipeline with Enbridge several months before. The Globe and Mail reported, "The Polaris Institute of Ottawa tallied about 600 Enbridge leaks in the decade to 2008, at an average of roughly 200 barrels. The last largest spill comparable to the one in Michigan happened at a hub near Edmonton in 2001, where most of the oil was eventually recovered."
Other large oil spills have occurred recently in Alberta, though not on pipelines owned by Enbridge. Also in 2010, a rupture along the Rainbow pipeline in Northern Alberta spilled over 28,000 barrels of oil. The Rainbow pipeline rupture was the largest spill in Alberta in almost 40 years.
These events, among others, show the very real possibility of accidents, and the possibility of a ruptured pipeline has been a key facet in the environmental concerns surrounding the Northern Gateway pipeline. It is also an economic concern as over 5,000 British Columbians that live along the pipeline route have jobs, in fishing and tourism for instance, that would be badly affected by a major oil leak, more jobs than created by the pipeline itself.
The threat of a spill has been enhanced by the perceived increased corrosiveness of bitumen. These fears have proved to be false. In a statement, Oliver Moghissi, the President of NACE International (a research organization whose focus is the study of erosion), was quoted as saying, "Corrosivity of diluted bitumen is largely similar to crude oil, which is considered to be low."
Along with the environmental concerns relating to the location and construction of the pipeline itself, there are also concerns about the proposed shipping route for the tankers to reach the Kitimat terminal. Ships would have to navigate 185 kilometers of inner coastal waters which suffer from heavy weather in the winter months. This is the same region where the MV Queen of the North sank in 2006, veering off course in the night and running aground on Gil Island.
In order to address these concerns Enbridge has stated in the project proposal that:
- During the filling of outbound ships with crude oil they are to be surrounded by containment booms.
- Outbound tankers will be tethered to tug boats until they have left coastal shipping routes
- Improved emergency response capabilities with the new tug boats
All ships entering the port must also be under the control of a certified marine pilot; and a reduction of vessel speed to between 8 and 12 knots (14-22km/h) among other things.
- The channels that the tankers would be passing through are also more than 3 times the minimum width required for dual lane tanker traffic.
- All tankers are required to be double-hulled.
It should be noted that both the Exxon Valdez and the Prestige (which sank causing a major oil spill off the coast of Spain in 2002) were single-hulled tankers. Independent reviews later found that a double-hull would have limited the quantity of oil spilled, but would not have prevented either spill entirely.
In the event of an oil spill it is unclear whether Canada would be ready to respond. Heavy crude oil spills are harder to control as the substance does not readily evaporate, and can break up contaminating larger areas.
Washington State, concerned about the increasing tanker traffic that could be plying its coastal waters if the Kinder Morgan pipeline to Burnaby was expanded, asked a state senator to look into B.C.'s oil spill response capability. She reported back that "It seems that Canada's oil spill response plan in the Pacific Northwest is to call the Americans."
This image of poor preparedness was not helped when in 2012 the federal government removed a Vancouver-based five-person team tasked with giving scientific advice if an oil spill occurs. While the move caused some trepidation, the federal government has maintained that the functions performed by these workers can be carried out just as well from eastern Canada.
The Northern Gateway project, as it is currently being proposed, crosses the land of 65 First Nations groups. The planned use of this land has become a major point of contention in the project's proposal. At the Save the Fraser Gathering of Nations, 55 nations of these groups signed a declaration that they would not allow the Northern Gateway project to be built on their lands due to concerns about environmental safety.
Aboriginal title is the idea that when no treaty was signed between the government, and no war was fought over the land, first nations groups in Canada are entitled to the land on which they have historically lived and still inhabit. The courts in Canada have thus far defined Aboriginal Title to be a right to the land itself, not just to hunt, fish and gather from the land9. In the 1982 constitution, aboriginal rights were affirmed, however no mention was made of aboriginal title which has led to its debate in the courts now. Although it was in 1973 that the Supreme Court first recognized Aboriginal Title, it was not until 1997 that a legal outline of Aboriginal Title was given by the Supreme Court.
This decision puts the responsibility of governments to consult native groups on crown projects that use land claimed by native groups, even without the establishment of aboriginal title. This was further strengthened in British Columbia by the cases of Haida First Nation v. British Columbia and Taku River Tlingit First Nation v. British Columbia which determined that the crown has the responsibility to consult and accommodate first nations.
A joint review process is used when the project being proposed may either: cause significant adverse environmental effects, or if there is a high level of public concern for the project. It was under these parameters that a project may be referred to a joint review process. On January 20, 2010, then Environment Minister Jim Prentice and chair of the NEB Mr. Gaétan Caron referred the Northern Gateway project to a joint review panel for environmental and regulatory review.
The review panel consists of three members who were selected by both the government and the NEB. The panel consists of: Ms. Sheila Leggett, the vice chair of the NEB with experience in regulation and environmental issues and research; Mr. Kenneth Bateman, an energy lawyer with experience in both renewable energies and major land/offshore pipeline projects across Canada; and Mr. Hans Matthews, a professional geologist who's experience is in the mineral exploration industry where he has worked on Aboriginal community development and consultation.
The joint review panel has been holding hearings in the towns and cities along the proposed pipeline route since January 10, 2012 when the first hearing was held in Kitimat. Over 4,000 people have signed up to speak at the hearings. As of April 11, 2012 there have been 27 public hearings across northern B.C. and Alberta with another 38 scheduled between April 13, 2012 and July 31, 2012 with more possibly being added in Bella Coola, B.C. and Edmonton, Alberta.
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