State of play: A look at the status of pipeline projects in Canada
By Lauren Krugel, The Canadian Press
January 22, 2016
By Lauren Krugel, The Canadian Press
Calgary – Pipeline proposals just can’t catch a break these days.
The latest hurdle came this week when an organization representing 82 Montreal-area municipalities came out against TransCanada Corp.’s
Energy East Pipeline, drawing a sharp rebuke from politicians in Alberta and Saskatchewan.
Here is an update on the status of other major Canadian pipeline projects:
TransCanada, the same company behind Energy East, applied for U.S. permission to build its Keystone XL pipeline in September 2008. The idea was to expand an existing cross-border pipeline to give oilsands crude a more direct route to U.S. Gulf Coast refineries.
At the time, TransCanada thought XL would proceed through the regulatory process just as smoothly as the previous Keystone phases. It was wrong.
The stretch of pipe cutting a diagonal line from the Saskatchewan-Montana border to southern Nebraska became the focal point of the U.S. environmental movement and a political lightning rod in Washington.
Debate over Keystone XL centred not only on the environmental effects on the American Heartland in the event of a spill, but on its broader role in climate change. Stop pipelines, the environmental groups argued, and you stop the development of carbon-intensive oilsands crude.
After a seven-year regulatory saga, U.S. President Barack Obama rejected Keystone XL in November – weeks before United Nations climate change talks in Paris.
TransCanada set in motion a US$15-billion challenge under the North American Free Trade Agreement arguing it was treated inequitably. It has also launched a separate federal lawsuit seeking a declaration that Obama overstepped his constitutional power when he rejected Keystone XL.
TransCanada maintains it has not given up on Keystone XL.
Enbridge’s Northern Gateway pipeline would ship 525,000 barrels a day of oilsands crude from northeast of Edmonton to Kitimat, B.C. Its goal is to sell Alberta crude in lucrative Asian markets. A parallel line would bring 193,000 barrels a day of bitumen-thinning diluent in the opposite direction.
Northern Gateway has been hugely controversial. The idea of crude-oil laden supertankers navigating the choppy waters of the Douglas Channel on their way out to the Pacific is a non-starter for many British Columbians. The line also passes through huge tracts of unceded First Nations territory in British Columbia. Though Enbridge has signed agreements with many First Nations along the route, many – especially on the coast – are staunchly opposed.
Enbridge has had a federal permit to build Northern Gateway since mid-2014, but recent developments have caused critics to declare Northern Gateway “dead in the water.”
The federal Liberal government has signalled it intends to formalize a tanker ban on B.C.’s north coast.
A recent B.C. Supreme Court ruling found the province did not properly consult First Nations over an agreement to cede decision-making power over Northern Gateway to the federal National Energy Board. The ruling essentially forces B.C. to make its own decision on Gateway _ with aboriginal input. Observers say that decision could have implications for another controversial B.C. crude project, Kinder Morgan’s Trans Mountain expansion.
Enbridge says it’s still committed to the project, though it’s in no hurry to make an official go-ahead decision.
The company is working to “re-engage” with First Nations and work out an updated cost estimate. The joint review panel’s report in late 2013 pegged the cost at $7.9 billion.
The Canadian arm of U.S. energy giant Kinder Morgan is aiming to nearly triple the capacity of its Trans Mountain pipeline to 890,000 barrels of oil a day. The existing Trans Mountain line currently ships 300,000 barrels a day of various petroleum products from the Edmonton area to the B.C. Lower Mainland and Washington state.
The project is in the thick of the NEB review process. It has faced stiff opposition from those who do not want to see more crude-filled tankers moving through the Burrard Inlet, including Lower Mainland mayors. The B.C. government has said it doesn’t support the project because it doesn’t meet its five conditions for crude pipelines.
Kinder Morgan filed its regulatory application for the Trans Mountain expansion in late 2013. The National Energy Board hearing process for Trans Mountain has been highly criticized. Opponents have called on Ottawa to halt that review – and the one into Energy East – while the NEB process is revamped.
Though the official cost estimate for the project remains $5.4 billion, Kinder Morgan Canada’s president said it’s looking like it will be higher because of currency swings, delays and design changes.