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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The Canadian federal government on June 17 approved the Northern Gateway Project, a $6.1 billion crude oil and condensate pipeline and marine terminal that is being developed by Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta). The approval, which was widely expected, does not mean dirt is ready to be turned on the project: Before construction permits can be issued, Northern Gateway must fulfill 209 specific conditions established by the national government, as well as five additional conditions set by British Columbia Premier Christy Clark.
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"We are at least 18 months away from the start of construction, and it will take about three years to build the project," Enbridge Communications Manager Ivan Giesbrecht told Industrial Info.
Roughly 113 of the federal conditions must be met before construction can begin, he continued, while the other 96 can be met during construction or when the project is operating. About 50 of the 113 federal conditions have to do with consultations with Aboriginal or non-Aboriginal stakeholders.
"There is a tremendous amount of consultative work to be done throughout the project," Giesbrecht said. "Consultation with stakeholders is an ongoing priority. We don't see it as something with an end date. We accept our responsibility to be good neighbors."
Toward that end, Enbridge has set a goal that at least 15% of the Northern Gateway workforce will come from Aboriginal communities, Giesbrecht said. The company plans to spend about $300 million on worker skills training, and at least 1,800 people, many of them from Aboriginal communities, will benefit from Enbridge's skills training.
In addition, about 26 Aboriginal communities, representing more than 60% of the nearby Aboriginal population, are equity owners in the Northern Gateway project. Those communities' total equity stake is about 10%, Giesbrecht said, adding: "We are looking for more Aboriginal partners."
The June 17 decision by the Canadian federal government was welcomed by Enbridge officials. While acknowledging "our work is not done," project leader and Senior Vice President Janet Holder said: "Time and again, people have told us Northern Gateway is important to our future, but only if we do it right. Our company understands that economic development and environmental protection must go hand in hand."
"The Northern Gateway project team, Enbridge, and our funding partners will also continue the important work of building trust with Aboriginal communities along the proposed route," she continued in a June 17 statement. "We need to do more and, in the days ahead, we look forward to building on our progress."
The Northern Gateway project seeks to transport up to 525,000 barrels per day (BBL/d) of heavy Canadian crude oil westward via a 36-inch pipeline stretching about 731 miles from Bruderheim, Alberta to Kitimat, British Columbia, where it can be exported via tanker ships. That pipeline's twin will be a 20-inch diameter pipe that can bring up to 193,000 BBL/d of condensate eastward from Kitimat to Bruderheim. The third element of the project is a marine terminal at Kitimat with two tanker berths, three condensate storage tanks and 16 oil storage tanks. For more on the project, see January 3, 2013, article-- Northern Gateway Pipeline Eyes Mid-2014 Decision from Canadian Government.
Northern Gateway is one of several ways that developers and the Canadian government are trying to export Canada's heavy oil. Currently, most of the oil and gas Canada exports go to the U.S.
Limited export markets have contributed to a heavy price penalty imposed on Western Canadian Select (WCS) crude oil, compared to benchmark crudes, like Brent and West Texas Intermediate. But the years-long delay in permitting the Keystone XL pipeline have convinced developers and politicians north of the border they need to widen their options. For more on the delays in permitting the Keystone XL pipeline, see May 24, 2014, article- Has the Keystone XL Pipeline Project Become a Zombie?
What's next? In a June 17 statement, Al Monaco, president and chief executive of Enbridge, said: "Going forward, we will focus on three priorities: meeting the Joint Review Panel's (209) conditions; working with the Province of British Columbia on its five conditions for supporting oil pipelines; and continuing to engage Aboriginal communities to build further trust and seek additional input that would make the project even better."
It won't be easy to reach accommodations with some affected stakeholders. The news media have highlighted opposition from Aboriginal and environmental groups. "Just like Keystone XL, the Northern Gateway pipeline faces widespread opposition from the people whose land, water, and livelihoods would be threatened by the prospect of a disastrous tar sands spill," Tzeporah Berman, a Canadian author and environmentalist, told the Oil & Gas Journal.
The Coastal First Nations, an alliance of nine native groups opposed to Northern Gateway, has vowed to stop the pipeline. If the group can't stop it using legal or political means, Art Sterritt, the group's executive director, said, "our people will be out there stopping the bulldozers."
A recent Canadian Supreme Court ruling may affect Northern Gateway's Aboriginal outreach plans. Under the law, those communities must be consulted when a proposed project crosses their land or affects their communities. Until now, "consultation" has not been interpreted to mean Aboriginal communities can veto a project they dislike.
But Enbridge's Giesbrecht said the recent court ruling will have "significant implications" for Northern Gateway and other proposed resource projects. He summarized the court's ruling this way: Once an Aboriginal group asserts title to a piece of land, project developers must secure that community's consent for a project to cross that land. In effect, the court granted Aboriginal communities a veto power.
Jesus Davis, Industrial Info's vice president of research for the Oil & Gas Production, Pipelines and Terminals industries, believes Canadian heavy oil will find a way to get to market, whether via pipeline or rail: "Both means of transportation are very safe, but when spills or accidents occur, they draw widespread media coverage. There is a definite need for this project, but if the stridency of the opposition is any indication, Enbridge has a lot of hard work ahead of it. The recent court case appears to have created a new set of burdens on Enbridge."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
View Plant Profile - 1082858 1059728 1059876
View Project Report - 57000434 56000678 57000435 56000945 57000589
"We are at least 18 months away from the start of construction, and it will take about three years to build the project," Enbridge Communications Manager Ivan Giesbrecht told Industrial Info.
Roughly 113 of the federal conditions must be met before construction can begin, he continued, while the other 96 can be met during construction or when the project is operating. About 50 of the 113 federal conditions have to do with consultations with Aboriginal or non-Aboriginal stakeholders.
"There is a tremendous amount of consultative work to be done throughout the project," Giesbrecht said. "Consultation with stakeholders is an ongoing priority. We don't see it as something with an end date. We accept our responsibility to be good neighbors."
Toward that end, Enbridge has set a goal that at least 15% of the Northern Gateway workforce will come from Aboriginal communities, Giesbrecht said. The company plans to spend about $300 million on worker skills training, and at least 1,800 people, many of them from Aboriginal communities, will benefit from Enbridge's skills training.
In addition, about 26 Aboriginal communities, representing more than 60% of the nearby Aboriginal population, are equity owners in the Northern Gateway project. Those communities' total equity stake is about 10%, Giesbrecht said, adding: "We are looking for more Aboriginal partners."
The June 17 decision by the Canadian federal government was welcomed by Enbridge officials. While acknowledging "our work is not done," project leader and Senior Vice President Janet Holder said: "Time and again, people have told us Northern Gateway is important to our future, but only if we do it right. Our company understands that economic development and environmental protection must go hand in hand."
"The Northern Gateway project team, Enbridge, and our funding partners will also continue the important work of building trust with Aboriginal communities along the proposed route," she continued in a June 17 statement. "We need to do more and, in the days ahead, we look forward to building on our progress."
The Northern Gateway project seeks to transport up to 525,000 barrels per day (BBL/d) of heavy Canadian crude oil westward via a 36-inch pipeline stretching about 731 miles from Bruderheim, Alberta to Kitimat, British Columbia, where it can be exported via tanker ships. That pipeline's twin will be a 20-inch diameter pipe that can bring up to 193,000 BBL/d of condensate eastward from Kitimat to Bruderheim. The third element of the project is a marine terminal at Kitimat with two tanker berths, three condensate storage tanks and 16 oil storage tanks. For more on the project, see January 3, 2013, article-- Northern Gateway Pipeline Eyes Mid-2014 Decision from Canadian Government.
Northern Gateway is one of several ways that developers and the Canadian government are trying to export Canada's heavy oil. Currently, most of the oil and gas Canada exports go to the U.S.
Limited export markets have contributed to a heavy price penalty imposed on Western Canadian Select (WCS) crude oil, compared to benchmark crudes, like Brent and West Texas Intermediate. But the years-long delay in permitting the Keystone XL pipeline have convinced developers and politicians north of the border they need to widen their options. For more on the delays in permitting the Keystone XL pipeline, see May 24, 2014, article- Has the Keystone XL Pipeline Project Become a Zombie?
What's next? In a June 17 statement, Al Monaco, president and chief executive of Enbridge, said: "Going forward, we will focus on three priorities: meeting the Joint Review Panel's (209) conditions; working with the Province of British Columbia on its five conditions for supporting oil pipelines; and continuing to engage Aboriginal communities to build further trust and seek additional input that would make the project even better."
It won't be easy to reach accommodations with some affected stakeholders. The news media have highlighted opposition from Aboriginal and environmental groups. "Just like Keystone XL, the Northern Gateway pipeline faces widespread opposition from the people whose land, water, and livelihoods would be threatened by the prospect of a disastrous tar sands spill," Tzeporah Berman, a Canadian author and environmentalist, told the Oil & Gas Journal.
The Coastal First Nations, an alliance of nine native groups opposed to Northern Gateway, has vowed to stop the pipeline. If the group can't stop it using legal or political means, Art Sterritt, the group's executive director, said, "our people will be out there stopping the bulldozers."
A recent Canadian Supreme Court ruling may affect Northern Gateway's Aboriginal outreach plans. Under the law, those communities must be consulted when a proposed project crosses their land or affects their communities. Until now, "consultation" has not been interpreted to mean Aboriginal communities can veto a project they dislike.
But Enbridge's Giesbrecht said the recent court ruling will have "significant implications" for Northern Gateway and other proposed resource projects. He summarized the court's ruling this way: Once an Aboriginal group asserts title to a piece of land, project developers must secure that community's consent for a project to cross that land. In effect, the court granted Aboriginal communities a veto power.
Jesus Davis, Industrial Info's vice president of research for the Oil & Gas Production, Pipelines and Terminals industries, believes Canadian heavy oil will find a way to get to market, whether via pipeline or rail: "Both means of transportation are very safe, but when spills or accidents occur, they draw widespread media coverage. There is a definite need for this project, but if the stridency of the opposition is any indication, Enbridge has a lot of hard work ahead of it. The recent court case appears to have created a new set of burdens on Enbridge."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
