Opinion

COLUMN: Former Newfoundland premier, now living in Qualicum Beach, makes case for pipeline

BRIAN PECKFORD

Special to The NEWS

In May, 2010 the Norther Gateway Pipelines Limited Partnership filed an application to the National Energy Board (NEB) to build a pipeline to carry bitumen to the coast of British Columbia for export to markets overseas. Here is how the NEB described the project:

"The application identified a one-kilometer-wide corridor for the proposed 1,178-kilometer-long

route. The exact location of the pipelines' shared 25-meter-wide right-of-way within the corridor would be determined after detailed engineering if the project were approved. An additional 25-meter-wide temporary work space along the entire route would be reclaimed after construction. Ten electric-powered pumping stations, including those at Kitimat and Bruderheim (Alberta), would be located along the route. The final 'footprint' on the landscape would be the 25-metre-wide right-of-way, re-contoured and re-vegetated, plus the access roads at key points, power lines, and the 4-hectare fenced sites around pumping stations."

"Northern Gateway said the project would cost about $7.9 billion to build, including pre-development costs and marine navigation enhancements, and could be completed by late 2018. Once in operation, about 220 tankers would call at the Kitimat Terminal annually to deliver condensate or load oil products. The westbound pipeline could carry a variety of crude oil products. Studies prepared for the project indicated that the majority of shipments would be diluted bitumen, which is a blend of light and heavy oil products."

"Northern Gateway is a limited partnership registered in Alberta. It was formed in 2004 to build and operate the Enbridge Northern Gateway Project. Enbridge Inc., a major pipeline company, led development of the project. Enbridge and 10 other energy companies invested more than $450million to develop the proposal. Interested parties also invested funds and countless hours as active participants in our review of the project. Up to 10 per cent of the equity was set aside for Aboriginal partners. Northern Gateway offered the equity package to 40 Aboriginal groups, and 26 accepted the offer."

The NEB conducted extensive consultations and meetings in British Columbia and Alberta. Twenty-one communities were visited and 180 days of hearings were conducted. The NEB records the following:

"To help us understand the evidence, we viewed the pipeline route and portions of the shipping routes by air and by boat. In 2011, our staff provided 35 public information sessions and 32 online workshops to share procedural information and answer questions on how to participate in the hearing process. All documents and transcripts of the proceedings are publicly available on the National Energy Board website. The audio from the hearings was webcast live."

"We received and read more than 9,000 letters of comment regarding the application. Most of

the letters argued against approving the project. Many referred to the risk of spills and the effects on people and their well being and on Aboriginal activities. People arguing for the project emphasized its economic benefits and the social benefits from employment opportunities and increased government revenues. Various organizations with large regional or national memberships submitted letters in support of the project. Some letters cited peer-reviewed scientific and technical data."

"Many relied on internet and media references. We considered all the information and views filed on the public record. Our process was designed to receive all perspectives."

"Our recommendations are based on technical and scientific analysis rather than on the number of participants sharing common views either for or against the project."

"From January to July 2012, we heard oral evidence from 393 participants in 17 communities. Aboriginal people, from youth to Elders, told us of their history and culture, traditional use of lands, waters, and resources, and how they could be affected by the project. We also heard from non-Aboriginal groups and individuals who shared their stories and experiences on the land and water. All of this knowledge informed our assessment. Beginning in March 2012, we heard oral statements from 1,179 individuals in 17communities. Unlike oral evidence, oral statements are untested evidence and are not subject to questioning by other parties. Young and old were represented. The statements covered a wide spectrum of styles and views. Many cited their personal or professional experience in areas such as forestry, fishing, recreation, business."

After all the hearings and open houses, oral presentations, written submissions the Joint Expert panel ruled in favor of the project, subject to 209 conditions.

Under the law, this approval was subject to a decision of the Federal Government who has the power to accept or reject or make amendments to the NEB approval.

On June 17 The Government of Canada approved the project as proposed by the NEB. In other words, the project is approved subject to the 209 conditions imposed by the NEB.

A. Context in BC

There is substantial opposition in British Columbia given that most of the pipeline is in B.C. plus the Terminal at Kitimat.

There seems to be little recognition that this is a national project involving directly two provinces and many other provinces in its construction and its value to assist the nation in its substantial trade that benefits  the whole nation. History seems lost to many in B.C. that the national railways provide great benefit to the province in that those railways bring to port many resources from other parts of Canada and make Vancouver the largest port in the country. Here are some facts:

Including indirect and induced effects, in round numbers, the total impacts of ongoing operations at businesses related to Port Metro Vancouver across Canada are:

•    98,800 jobs

•    $9.7 billion in Gross Domestic Product (GDP)

•    $20.3 billion in economic output

•    $6.1 billion in wages

•    $67,000 average wage for direct job, vs. $44,000 average wage in Canada

Although all of this is not due to the rest of Canada, a large part is as a result of the delivery of products from other parts of the nation and it is the railways that makes it possible and in which all Canadians invested historically. This is valuable to producers in the rest of Canada and to Vancouver and B.C. in providing the port; everyone benefits.

It often seems to me that in the Lower Mainland of B.C. such large resource development in our province is somehow viewed as new and is just not green enough to pass muster. They forget that the province's largest export is coal. Yes, that evil commodity that is about to destroy the planet, according to many extreme environmentalists. The province produces 20 to 30 million tons each year (10 producing mines), moving it by train from the interior, with all its risks, to Vancouver for export overseas. No other province produces this much coal. The Roberts Bank Superport facility near Delta has both a container terminal and a coal terminal. It's coal terminal is the busiest single coal export facility in North America. Where are the protests to both producing coal, transporting coal, and sending it to human rights abusers like China?

Besides coal, B.C. produces natural gas, another hydro carbon, and lots of it. With new shale and tight gas discoveries of the Horn River Basin and the Montney Basin, natural gas is abundant and is carried by pipeline around the province, even by pipeline under ecologically sensitive Georgia Strait to Vancouver Island. One would think this would be a real target for those who so vehemently oppose this Gateway Project.

When one hears people talk of Northern Gateway you would think that we are new to the game of pipelines carrying hydrocarbons.

The B.C. Oil and Gas Commission regulates 39,000 kilometers of oil and gas pipelines in this province. There are over 100,000 kilometers of oil and gas pipelines across Canada. Canada's first gas pipeline was in 1853!

Most of the new gas we produce here in B..C is from fracking, another issue that 'environmentalists' find offensive and too dangerous to use. As a matter of fact, the B.C. Oil and Gas Commission confirmed to me that 50 per cent of the gas presently being produced is from unconventional sources where hydraulic fracturing is being used. But where are the protesters to this enterprise that is happening every day in this province? Are they protesting in Fort St. John and Fort Nelson? I suspect that if one were to interview at random people on the streets of Vancouver less that 50 per cent would know the location of Fort Nelson.

B. Special Deal

Under our Constitution, pipelines that travel across provincial boundaries are federal. There is a substantial number of B.C. residents who feel that some how this project is different. However, very few ever make reference to the gas pipeline from Aiken, B.C. that travels through Alberta, Saskatchewan, and the states of North Dakota, Minnesota, Iowa and into Illinois bringing B.C. gas to the U.S. One would think that these jurisdictions should be asking for some special treatment too, if B.C. insists on that for this project. I wonder how many British Colombians realize that we have hydro carbons from B.C. traveling in pipelines over other peoples' land? Two other provinces and four states of a foreign country!

C. Bitumen

One often hears statements by various people of how more dangerous bitumen is to transmit through pipeline than regular oil. I have never heard these people provide hard evidence of this. First, bitumen has been traveling through pipeline for 30 years from Alberta to the U.S.A. I have not heard of any particular problems over those 30 years. Secondly, and more to the point, however, is the fact that last year a special study was done on the transport of bitumen. It was conducted by the National Academy of Sciences in the U.S.A. The authors were: Committee for a Study of Pipeline Transportation of Diluted Bitumen; Transportation Research Board; Board on Energy and Environmental Systems; Board on Chemical Sciences and Technology; National Research Council

It was entitled: TRB Special Report 311: Effects of Diluted Bitumen on Crude Oil Transmission Pipelines and it analyzes whether shipments of diluted bitumen have a greater likelihood of release from pipelines than shipments of other crude oils. The oil sands region of Canada is the source of diluted bitumen shipped by pipeline to the United States.

It found: "The committee that produced the report did not find any pipeline failures unique to the transportation of diluted bitumen or evidence of physical or chemical properties of diluted bitumen shipments that are outside the range of those of other crude oil shipments. The committee's comprehensive review did not find evidence of any specific aspect of the transportation of diluted bitumen that would make it more likely than other crude oils to cause pipeline releases."

D. Aboriginal Issues

These are very important and must be addressed in an honorable and respectful, and comprehensive way. When the company made application to the NEB it was revealed that 29 of 40 aboriginal groups had accepted the company's offer of a 10 per cent equity stake. In the 209 conditions of the NEB's decision, numbers 76, 77, 93, 94 and 135-136 specifically address aboriginal matters. It is clear from Supreme Court of Canada decisions that meaningful negotiations and accommodation with first nations is compulsory and there are examples of resource developments that have met the standards set by the court. And, for example, NEB conditions 76 and 77 say:

"Aboriginal, local, and regional skills and business capacity inventory Northern Gateway must file with the NEB, at least 6 months prior to commencing construction, an Aboriginal, local, and regional skills and business capacity inventory for the Project. The inventory must include:

a) a description of the information and data sources, including Northern Gateway's Regional Skills and Business Inventory database, and any other sources;

b) a summary of Aboriginal, local, and regional skills and business capacity;

c) an analysis of the ability of Aboriginal, local, and regional capacity for meeting Northern Gateway's commitments for Aboriginal, local, and regional employment and business opportunities for the Project;

d) a description of identified or potential skills and business capacity gaps, and any proposed measures to address them or to support or increase skills or capacity; and

e) plans for communicating with Aboriginal, local, and regional communities and businesses regarding skills and business capacity, any identified gaps, and any proposed measures to support or increase skills or capacity. Northern Gateway must file with the NEB, at least 90 days prior to commencing construction, any updates to a) through e).

Northern Gateway must file with the NEB for approval, at least six months prior to commencing construction, a plan for monitoring the implementation and outcomes of Aboriginal, local, and regional training and education measures and opportunities for the Project. The plan must include:

a) a description of, and rationale for selecting, the elements or indicators that will be monitored to track the implementation of training and education measures and opportunities, and progress toward meeting intended outcomes of these measures and opportunities;

b) the monitoring methods and schedule, including information and data sources for the elements or indicators being monitored; and

c) plans for consulting and reporting on the implementation and outcomes of training and education measures and opportunities with relevant Aboriginal, local, and regional communities; industry groups or representatives; government sponsors; and education delivery agencies and institutions. Northern Gateway must file with the NEB, at least 90 days prior to commencing construction, any updates to a) through c.

E. The 209 Conditions

These are often glossed over and I have yet to see an detailed examination of them. These are real and substantial and legally binding on the company. Those who complain about a rush decision or this being pushed down their throats would do well to read these conditions. They are substantial and detailed . I have reviewed them a little and find that many of them have a number of undertakings under the one condition. In doing a rough arithmetical calculation it turns out that we are really looking at approximately 350 undertakings . For example, under the marine condition number 18 there are over twenty undertakings. So the approval by the NEB is anything but a slam dunk and much work is yet to be done to meet these important undertakings.

D. Summary

1. This is a National Project and all parties: first nations , industry, provinces and the Federal Government need to co operate.

2. There are risks, of course, and historically if today's environmental rules applied to the building of the railways I suspect they may not have been built. But we are a mature democracy that can use technology and common sense to advance our economic, financial and cultural interests. That means mitigating the real concerns of new resource developments. To objectively determine if the benefits out weigh the risks. In this present project due diligence and objective measures have been applied. To sustain our present standard of living, to say nothing of making it even better, we must develop our natural resources. That's how we achieved our present prosperity.

3.    It is interesting to note that the four Provinces who are 'have' provinces today are all oil and gas producers. Remove oil and gas exploration and development from anyone of those Provinces and it is doubtful that they would remain 'have' for very long. Who then will pay the equalization payments for the other eight 'have not' Provinces?

4.    Notwithstanding the desire for renewable energy, it remains very expensive compared to coal , oil and gas and nuclear generation ; and when the wind does not blow and the sun does not shine, what then?Germany is using more coal today than it did three years ago, according to the Institute of Energy Research . In closing down their nuclear plants they were unable to replace it with reliable base power through renewables. And Germany leads the world in renewable energy.

5.    Is it just coincidence that Spain , California, and Ontario have very serious financial difficulties and these are three of the most active renewable energy developers? We all want to be green, yet we must travel, transport, remain warm, have light and run our industries for reasonable cost.

6.    The latest BP Energy Review for 2013 published this past week shows global energy consumption by source : oil 33%, coal 30% , gas 24% , hydro 7%, nuclear 4% and non hydro renewals 3%. And coal grew more than oil or gas , globally. That is the reality and Canada is posed to respond to this demand. Of course, where feasible, competitive renewable generation should be used and we need to continue research to make renewables more competitive.

7.    On balance, then, as the NEB has said, this is a project in the national interest and should proceed if all the conditions have been met.

- Brian Peckford was the premier of Newfoundland from 1979-1989. He lives in Qualicum Beach.

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