A tale of two pipelines: comparing Northern Gateway and Keystone XL
Steve Rennie, The Canadian Press
Published Tuesday, June 17, 2014 4:02PM EDT
Last Updated Wednesday, June 18, 2014 5:13PM EDT
OTTAWA -- With the Conservative government giving a green light to Northern Gateway, here's a look at the controversial pipeline project and how it shapes up against its cross-border cousin, Keystone XL:
Northern Gateway is a proposed 1,177-kilometre twin pipeline that would carry diluted bitumen from Alberta to the town of Kitimat on the British Columbia coast, where it would be shipped overseas by oil tankers.
One pipeline would carry an average of 525,000 barrels a day of petroleum products west to Kitimat. The other pipeline would carry a daily average of 193,000 barrels of natural-gas condensate -- used to dilute oilsands bitumen -- east to Bruderheim, Alta., just north of Edmonton.
Calgary-based Enbridge Inc. would develop the $6.5-billion pipeline. The company submitted an application for the pipeline to the National Energy Board in May 2010. Consultations were then held with opponents and supporters of the project.
In December 2013, a federal joint review panel recommended approval of the project, subject to 209 conditions. The government's approval Tuesday is contingent on those conditions being met, and further consultations with affected aboriginal communities.
The Northern Gateway project is worth an estimated $300 billion in gross domestic product over 30 years.
Keystone XL is a proposed 1,897-kilometre pipeline that would carry crude oil from Hardisty, Alta., to Steele City, Neb., where it would link up with other pipelines that run to the Gulf Coast and the U.S. Midwest.
The pipeline would carry an average of 830,000 barrels of oil per day to refineries in the Midwest and the Gulf Coast.
TransCanada would develop the US$5.4-billion pipeline. In May 2012, the company filed a new application for a presidential permit -- a requirement for any cross-border pipeline -- after the U.S. State Department denied its first application.
Earlier this year, the State Department put off its decision again, pending the outcome of a court fight in Nebraska over the proposed route. A decision is not expected before next year.
The Canadian Energy Research Institute estimates that Keystone XL will add $172 billion to the United States' gross domestic product by 2035.
One pipeline involves provincial politics, while the other is a matter between Canada and the United States. Both are laden with concerns about the environment, the economy and energy security.
British Columbia's Liberal premier, Christy Clark, and Alberta's former Progressive Conservative premier, Alison Redford, initially butted heads over the provinces' share of oil and gas royalties from the Northern Gateway pipeline.
Clark's government put five conditions on the project, including B.C. getting its fair share of the pipeline's economic benefits. Last year, the provinces came to a tentative agreement on the project.
But on Monday, Clark said Northern Gateway still does not meet the five conditions the province has set out for approval. The province would have to issue about 60 construction permits to build the pipeline, giving it some negotiating leverage.
Complicating matters is the uncertain political situation in Alberta, where interim Premier Dave Hancock is filling in until the Progressive Conservatives choose a new leader to replace Redford, who resigned in March.
At the federal level, both the New Democrats and Liberals oppose the project, which the governing Conservatives support.
It's a different story with Keystone XL. Liberal Leader Justin Trudeau supports that pipeline, as do Prime Minister Stephen Harper's Conservatives, while the NDP is against the project.
Pipeline politics in the United States are complicated, to say the least.
Earlier this year, some members of Congress tried to slide a Keystone XL provision into another piece of legislation, which would have forced U.S. President Barack Obama to either sign it into law or veto the entire bill.
But U.S. Senate Republicans blocked the bipartisan bill, which would have cut electricity use through strict building codes and required federal data centres to become more efficient.
Democrats accused the Republicans of blocking the bill to keep one of its sponsors, Democratic Sen. Jeanne Shaheen, who is campaigning for re-election, from touting a win on the campaign trail.
Then there are First Nations.
Some aboriginal groups strongly oppose the Northern Gateway pipeline, which runs through their land. They have already threatened court challenges if the federal government gives the project the go-ahead.
Other First Nations are in favour of the project, although they have been nowhere near as vociferous as opponents of the pipeline.
The federal government has already been cautioned by Doug Eyford, its special envoy on energy affairs, that it must build trust with First Nations communities and address issues outside of billion-dollar projects if it hopes to move forward with energy developments.
Eyford consulted widely with aboriginal communities in British Columbia as part of an effort to help resolve an impasse over major oil and gas developments in the West.
THE POSSIBLE FALLOUT
Queen's University energy policy expert Warren Mabee said it's unlikely that the approval of Northern Gateway would put pressure on the Obama administration to give the green light to Keystone XL.
"Keystone XL is caught up in politics," Mabee said. "President Obama does not want to move in either direction at this point. He'd rather keep it boiling on the back burner as long as he can."
Because U.S. demand for Canadian oil is declining, Tuesday's decision might end up taking some of the pressure off, he added.
"This is another way that oil can get to markets, so you might have a president and a government that say, 'Oh, you've got that sorted, so there's less pressure on us to make this decision today."'
University of British Columbia political science professor Kathryn Harrison agreed the U.S. is unlikely to feel added pressure to make a decision on Keystone XL.
"There may be some minor impact, but whatever happens (with Northern Gateway) is going to be one stage in a long process," she said.
"Even if building the Enbridge Northern Gateway pipeline would have an impact on the Keystone decision ... the announcement today does not guarantee that the pipeline will be built."