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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Shortly after his October 19 election, Canadian Prime Minister Justin Trudeau fulfilled a campaign pledge when he instructed his new transport minister, Marc Garneau, to "formalize a moratorium on crude oil tanker traffic on British Columbia's North Coast," in collaboration with several other ministries and agencies.
Environmental groups as well as some First Nations groups cheered the announcement, claiming it would kill the proposed Northern Gateway crude-oil pipeline, a $6.5 billion project under development for years by Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta). Officials for the pipeline disagreed with these groups' rush to judgment, noting Northern Gateway had been approved with numerous conditions in mid-2014 by Canada's National Energy Board. For related information, see July 22, 2014, article - Canada's Northern Gateway Project Wins Approval, Faces More Hurdles.) Canada's Transport Ministry isn't saying much of anything, further muddying the picture.
As proposed, Northern Gateway would transport up to 525,000 barrels per day (BBL/d) of oil sands crude oil over a 731-mile route from Alberta to Kitimat, British Columbia, where it would be loaded onto ships for transport to Asian markets. A second pipeline would transport up to 193,000 BBL/d of imported diluent eastward back to Alberta. Construction of the pipeline has been delayed several times. Currently, the project is scheduled to begin construction in early 2017 and be operating by yearend 2019.
Click on the icon for a route map for the proposed Northern Gateway crude-oil pipeline.
In 2010, a non-binding resolution banning crude-oil shipments through the northern coast of British Columbia was passed by Canada's House of Commons, but the resolution died at the end of that session. Trudeau's so-called mandate letter, sent November 13, looks to be the start of a process to implement that ban. In the election, Trudeau's party also won majorities of both houses of Parliament, which should ease legislative passage of any measure to ban crude-oil traffic from B.C.'s north coast.
The ban would neither affect the existing Trans Mountain Pipeline nor a proposed $5.5 billion twin pipeline expansion, both owned by Kinder Morgan, as those pipelines terminate at the south coast of B.C., not the north coast. The mandate letter explicitly refers to banning crude-oil shipments from the province's northern coast. The Trans Mountain twin pipeline project is scheduled to begin construction in August 2016 and begin operations in the summer of 2018.
It was not clear what proposed projects the memorandum would affect. Proponents and opponents of the Northern Gateway pipeline interpreted the mandate letter differently. And efforts by Industrial Info to gain clarity from the transport ministry were unsuccessful.
Trudeau's mandate letter to his transport minister begins: "Canadians sent a clear message in this election, and our platform offered a new, ambitious plan for a strong and growing middle class. ... We made a commitment to invest in growing our economy, strengthening the middle class, and helping those working hard to join it. ... We committed to public investment as the best way to spur economic growth, job creation, and broad-based prosperity. ... As Minister of Transport, your overarching goal will be to ensure that Canada's transportation system supports our ambitious economic growth and job creation agenda."
Picking up on the economic development element in the premier's letter, Northern Gateway Manager of Communications Ivan Giesbrecht said: "Northern Gateway and the project proponents, including Aboriginal Equity Partners, remain committed to this essential Canadian infrastructure. We are confident the Government of Canada will be embarking on the required consultation with First Nations and Metis in the region, given the potential economic impact a crude oil tanker ban would have on those communities and Western Canada as a whole."
Furthermore, Giesbrecht noted in an emailed statement, "Northern Gateway received government approval last year, following the National Energy Board's careful examination of the project, one of the most exhaustive reviews of its kind in Canadian history." The company noted it made 22 revisions to the proposed route to minimize its impacts.
A spokeswoman for the transport ministry declined to answer questions as to whether Northern Gateway was or was not covered by the moratorium. Nor would she comment on the process for implementing the moratorium.
Canadian sources say the Prime Minister's mandate letters, delivered to all cabinet ministers November 13, amount to a statement of priorities for each ministry. As such, the letters are a starting point in a process, rather than a final directive like an executive order from the U.S. president.
Environmental advocates seemed to disagree, judging from their statements to the Canadian media. "This ban ends the dangerous Northern Gateway pipeline," ForestEthics campaigner Karen Mahon told the National Observer. "Prime Minister Trudeau killed the Enbridge pipeline. Without tankers, crude oil has no place to go--and that means no pipelines, no oil trains moving tar sands to the northern BC coast."
Stewart Phillip, grand chief of the Union of B.C. Indian Chiefs, told the Observer, "Without a means to convey the bitumen to Asian markets, Enrbridge's Northern Gateway's proposal is literally dead in the water." Greenpeace Canada said the mandate letter was "the end of Enbridge's Northern Gateway pipeline," according to a report in The Calgary Herald.
"The Northern Gateway project has aroused a lot of controversy and opposition," said Jesus Davis, Industrial Info's vice president of research for the Oil & Gas Production, Pipelines and Terminals industries. "Enbridge is working hard to find common ground with as many First Nations tribes and citizens groups as possible. But it appears some groups are so opposed to the project that compromise seems impossible. The decline in crude-oil prices will give Enbridge more time to fulfill the conditions imposed by the National Energy Board. But we'll have to stay tuned to see if this moratorium kills Northern Gateway, if it gets an exemption or if the pipeline can be rerouted to the south coast of British Columbia."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five 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. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at www.industrialinfo.com.
Environmental groups as well as some First Nations groups cheered the announcement, claiming it would kill the proposed Northern Gateway crude-oil pipeline, a $6.5 billion project under development for years by Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta). Officials for the pipeline disagreed with these groups' rush to judgment, noting Northern Gateway had been approved with numerous conditions in mid-2014 by Canada's National Energy Board. For related information, see July 22, 2014, article - Canada's Northern Gateway Project Wins Approval, Faces More Hurdles.) Canada's Transport Ministry isn't saying much of anything, further muddying the picture.
As proposed, Northern Gateway would transport up to 525,000 barrels per day (BBL/d) of oil sands crude oil over a 731-mile route from Alberta to Kitimat, British Columbia, where it would be loaded onto ships for transport to Asian markets. A second pipeline would transport up to 193,000 BBL/d of imported diluent eastward back to Alberta. Construction of the pipeline has been delayed several times. Currently, the project is scheduled to begin construction in early 2017 and be operating by yearend 2019.
Click on the icon for a route map for the proposed Northern Gateway crude-oil pipeline.In 2010, a non-binding resolution banning crude-oil shipments through the northern coast of British Columbia was passed by Canada's House of Commons, but the resolution died at the end of that session. Trudeau's so-called mandate letter, sent November 13, looks to be the start of a process to implement that ban. In the election, Trudeau's party also won majorities of both houses of Parliament, which should ease legislative passage of any measure to ban crude-oil traffic from B.C.'s north coast.
The ban would neither affect the existing Trans Mountain Pipeline nor a proposed $5.5 billion twin pipeline expansion, both owned by Kinder Morgan, as those pipelines terminate at the south coast of B.C., not the north coast. The mandate letter explicitly refers to banning crude-oil shipments from the province's northern coast. The Trans Mountain twin pipeline project is scheduled to begin construction in August 2016 and begin operations in the summer of 2018.
It was not clear what proposed projects the memorandum would affect. Proponents and opponents of the Northern Gateway pipeline interpreted the mandate letter differently. And efforts by Industrial Info to gain clarity from the transport ministry were unsuccessful.
Trudeau's mandate letter to his transport minister begins: "Canadians sent a clear message in this election, and our platform offered a new, ambitious plan for a strong and growing middle class. ... We made a commitment to invest in growing our economy, strengthening the middle class, and helping those working hard to join it. ... We committed to public investment as the best way to spur economic growth, job creation, and broad-based prosperity. ... As Minister of Transport, your overarching goal will be to ensure that Canada's transportation system supports our ambitious economic growth and job creation agenda."
Picking up on the economic development element in the premier's letter, Northern Gateway Manager of Communications Ivan Giesbrecht said: "Northern Gateway and the project proponents, including Aboriginal Equity Partners, remain committed to this essential Canadian infrastructure. We are confident the Government of Canada will be embarking on the required consultation with First Nations and Metis in the region, given the potential economic impact a crude oil tanker ban would have on those communities and Western Canada as a whole."
Furthermore, Giesbrecht noted in an emailed statement, "Northern Gateway received government approval last year, following the National Energy Board's careful examination of the project, one of the most exhaustive reviews of its kind in Canadian history." The company noted it made 22 revisions to the proposed route to minimize its impacts.
A spokeswoman for the transport ministry declined to answer questions as to whether Northern Gateway was or was not covered by the moratorium. Nor would she comment on the process for implementing the moratorium.
Canadian sources say the Prime Minister's mandate letters, delivered to all cabinet ministers November 13, amount to a statement of priorities for each ministry. As such, the letters are a starting point in a process, rather than a final directive like an executive order from the U.S. president.
Environmental advocates seemed to disagree, judging from their statements to the Canadian media. "This ban ends the dangerous Northern Gateway pipeline," ForestEthics campaigner Karen Mahon told the National Observer. "Prime Minister Trudeau killed the Enbridge pipeline. Without tankers, crude oil has no place to go--and that means no pipelines, no oil trains moving tar sands to the northern BC coast."
Stewart Phillip, grand chief of the Union of B.C. Indian Chiefs, told the Observer, "Without a means to convey the bitumen to Asian markets, Enrbridge's Northern Gateway's proposal is literally dead in the water." Greenpeace Canada said the mandate letter was "the end of Enbridge's Northern Gateway pipeline," according to a report in The Calgary Herald.
"The Northern Gateway project has aroused a lot of controversy and opposition," said Jesus Davis, Industrial Info's vice president of research for the Oil & Gas Production, Pipelines and Terminals industries. "Enbridge is working hard to find common ground with as many First Nations tribes and citizens groups as possible. But it appears some groups are so opposed to the project that compromise seems impossible. The decline in crude-oil prices will give Enbridge more time to fulfill the conditions imposed by the National Energy Board. But we'll have to stay tuned to see if this moratorium kills Northern Gateway, if it gets an exemption or if the pipeline can be rerouted to the south coast of British Columbia."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five 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. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at www.industrialinfo.com.
