Northern Gateway pipeline approval overturned Federal Court of Appeal finds Canada failed to consult with First Nations on pipeline project

The Federal Court of Appeal has overturned approval of Enbridge’s controversial Northern Gateway project after finding Ottawa failed to properly consult the First Nations affected by the pipeline.

“We find that Canada offered only a brief, hurried and inadequate opportunity … to exchange and discuss information and to dialogue,” the ruling says.

“It would have taken Canada little time and little organizational effort to engage in meaningful dialogue on these and other subjects of prime importance to Aboriginal Peoples. But this did not happen.”

Constitutional requirement to consult

The majority ruling was signed by two of the three judges on the Appeal Court panel. Judge Michael Ryer wrote a dissenting opinion.

Pipeline opponents have called the decision “landmark.”

“At every turn you’re going, you are seeing nails in the coffin of the Enbridge project,” said Peter Lantin, president of the council of the Haida Nation, one of the parties that appealed.

“I don’t think there’s enough room for another nail in the coffin.”

“First Nations, local communities, and environmental interests said no to Enbridge 12 years ago when it first proposed the project. And now that “no” has the backing of the courts,” said Ecojustice lawyer Barry Robinson.

“Between on-the-ground opposition and the federal government’s promises to keep B.C.’s North Coast tanker free and demonstrate climate leadership, this pipeline is never getting built.”

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Northern Gateway panel releases 199 pipeline conditions

A federal panel has laid out almost 200 conditions for the proposed Northern Gateway pipeline project that would have to be met before it could proceed, including almost $1 billion in liability coverage in the event of a catastrophic oil spill.

Among the other requirements, Enbridge must undertake rigorous pipeline inspections every two years to check for cracks, and have specially equipped tugboats accompany tankers out of Kitimat Harbour in northern B.C.

The company must also have a plan for monitoring the pipeline’s effect on the environment and submit plans for monitoring species at risk, including proposals for caribou habitat restoration.

No decision yet
The release of the conditions by the joint federal review panel is part of the continuing process examining the feasibility of the twinned 1,100-kilometre pipeline from Edmonton to Kitimat.

Tankers would use Douglas Channel to gain access to the terminus of Enbridge’s proposed Northern Gateway oil pipeline at Kitimat, B.C. Opponents fear the tankers and pipeline would lead to oil spills. (Darryl Dyck/Canadian Press)
The joint federal review panel stressed that the release of the 50-page draft document does not mean a decision has been made.

“The publication of potential conditions is a standard step in the hearing process that is mandated by the courts,” said a letter provided to review participants by the panel.

The parties involved have until the end of May to comment or propose additional conditions as part of their written final arguments. They will be discussed during final oral arguments on the project in Terrace in June.

199 conditions

Among the 199 conditions proposed by the panel, Northern Gateway Pipelines, a subsidiary of Enbridge Pipelines Inc., must have total coverage of $950 million for clean-up, remediation and any other damage that might result from the project.

‘I take it as a sign that the [National Energy Board] is getting the message that people are really concerned about this pipeline—Ben West, ForestEthics Advocacy

That would include unfettered access to at least $100 million within 10 business days of a large spill to cover immediate costs while insurance claims are processed.

The company would also have to undertake a research program on the behaviour of heavy oils such as diluted bitumen, a molasses-like petroleum product that will flow through one of two pipelines linking Bruderheim, just outside of Edmonton, to a tanker port in Kitimat, B.C.

The second pipeline would carry natural gas condensate, used to dilute bitumen, east from B.C. to Alberta.

MAP Canada’s main pipeline network
Ivan Giesbrecht, a spokesman for Northern Gateway Pipelines, said the company was pleased to receive the document issued by the panel.

“At this point, we’re not in a position to make comments on any specific conditions until our team has thoroughly reviewed the entire document,” Giesbrecht said.

Public concerns
The conditions will set in stone many voluntary commitments the company has made in response to public concerns in British Columbia, where conservation groups have targeted the Northern Gateway with protests.

Ben West of ForestEthics Advocacy said the conditions won’t sway project opponents.

The pipeline has faced strong opposition across B.C. (CBC)

“I take it as a sign that the [National Energy Board] is getting the message that people are really concerned about this pipeline,” West said, pointing out that no other pipeline project has had so many conditions put forward by a review panel.

“I don’t think it’s going to change much in terms of how the public feels about these pipelines. The safest option is just not to build this pipeline.”

Final hearings on the project are slated to begin next month. The panel has until the end of the year to submit its report and recommendation to the federal cabinet.

Oil spill consultant speaks out against Enbridge pipeline

A B.C. oil spill expert who was hired to consult in the wake of the infamous Exxon Valdez spill says the Enbridge Northern Gateway pipeline is too risky to proceed.

“The consequences of a major oil spill along B.C.’s north coast could be catastrophic and irreversible,” Gerald Graham wrote in his submission to the Joint Review Panel studying the Enbridge proposal. “With a 14.1 per cent probability of such a potentially disastrous spill occurring, the overall threat level posed by Northern Gateway is unacceptably high.”

Graham has been examining oil-spill issues off the B.C. coast since the late 1980s and now runs Worldocean Consulting Ltd. Using numbers provided by Enbridge, he estimates there is a one in seven chance that a small, but still significant spill (roughly 31,500 barrels) will occur over the life of the pipeline project.

Kinder Morgan proposes bigger pipeline through B.C.
Pipeline spurs showdown on aboriginal rights
B.C. opposition to Northern Gateway pipeline higher than ever: poll

“It’s not a question of whether the benefits outweigh the risks,” he said. “If a project such as this could have significant adverse environmental effects, then it should not proceed.”

In addition to the loss of habitat and animal life, Graham is concerned about the impact an oil spill would have on First Nations communities. Even a small spill could result in a kind of “cultural genocide,” he said.

“We’re talking about the way of life of several coastal First Nations communities. An oil spill on the coast could completely destroy their way of life. Nothing can compensate them for that.”

Should there be a spill, Graham worries that water conditions, climate and the isolated nature of the B.C. coast would hamper the response time.

“The conditions there can be very severe, even at the best of times,” he said. “You might not even be able to get boats out there on the water to respond to a spill.”

Enbridge has refuted concerns about the project and defended the safety record of the region. In a prior interview with Metro, Enbridge spokesperson Ivan Giesbrecht said 1,560 vessels carrying petroleum products sailed into Kitimat between 1982 and 2009 without incident.

“There’s some assumptions that have been made that there is going to be a spill, and we would disagree with that,” Giesbrecht said.

Northern Gateway pipeline economics

Robyn Allan
I grew up at Jericho Beach. My brother and I played war games with our friends based on a TV show called The Rat Patrol. We’d sneak along the beach, under the army base wharf, past imaginary enemy lines and make our way to Spanish Banks and up into a field we called the Plains of Abraham.

I never imagined then that I would be fighting now to stop Supernatural British Columbia from becoming a supertanker terminal for Alberta. It’s not just the danger of a spill and what it will do to the beaches that I want to talk about today. It’s the broader issue of Canada’s energy strategy putting all our futures at risk.

Canada has an energy strategy? Yes we do. It’s just not designed to serve Canadians.

The strategy is decided in the boardrooms of large corporations and national oil companies owned by foreign governments. It’s delivered to the federal government behind closed-door meetings with lobbyists and over dessert at state dinners in other countries. Companies like Suncor, Nexen, MEG Energy, Cenovus and Total are all investors in the Northern Gateway approval process. We also have national oil companies owned by the Communist Party of China like Sinopec, PetroChina, and the Chinese National Offshore Oil Company. These companies are all directly or indirectly involved in this project.

These players have decided they need pipelines to the westcoast. They want to ship crude oil, primarily unprocessed oil sands called bitumen, to Asian markets. Both Sinopec and PetroChina have a fleet of oil tankers. They own almost all the refineries in China. That’s where they plan to upgrade and refine the crude oil they produce here into gasoline, diesel, jet fuel and other petroleum products necessary to power Asia’s economic growth. It’s upgrading and refining that creates jobs. It’s upgrading and refining that generates value added – not shipping bitumen down a pipeline.

We’ve been led to believe Northern Gateway means construction jobs. Enbridge – in a new ad campaign developed for British Columbians – pitches the construction jobs as a big plus. Enbridge claims “over 3,000 construction jobs at the peak of construction.” Sounds, you know, okay. That is until you run it by the truth metre.

That number comes from Volume 6C of their application, pages 4-8. The number is 3,029 person years of employment for three months in the third quarter of the third year of a five-year construction project. Person-years of employment are not jobs. If you work for a company for three years as a manager, that’s one job and three person-years of employment. Enbridge would call it three jobs. The construction jobs, when we run them through the truth meter, are just a tad over a 1,000, not 3,000.

That doesn’t mean these jobs are for British Columbians – they may go to anyone, even offshore temporary workers.
Enbridge CEO Pat Daniel has told us PetroChina would “love” to build the pipeline. Stephen Harper has made major changes to the Temporary Foreign Worker Program in Budget Bill C-38. These changes allow companies to import workers within 10 days, and pay them 15 percent less than the going domestic rate. These changes will certainly help PetroChina tender a low bid since they have a huge, low-paid labour pool ready to draw on.

There are virtually no long-term jobs from Northern Gateway. Enbridge says 78 jobs in BC and 26 in Alberta. A total of 104 permanent jobs.
But we do give up a lot of permanent jobs by not upgrading bitumen in Alberta. We ship those jobs down the pipeline along with the crude oil. For the bitumen that can be shipped along Northern Gateway, it’s estimated 4,800 permanent upgrading and refining jobs are lost. Compare 4,800 permanent jobs lost to Enbridge’s 104 permanent jobs gained.

We need to know that when bitumen is exported, so are jobs and value-added wealth. None of the lost jobs have been acknowledged by Enbridge in its ads or included in any of its analysis. If the Canadian government was as concerned about jobs in Canada as it pretends to be, bitumen would be upgraded in Alberta.

So what’s stopping us? The multinational companies and the Chinese government don’t want it that way. Upgrading and refining in Alberta was the strategy as recently as 2008. The oil industry had 10 new upgraders planned and even some new refineries, but then the financial crisis hit. Since then, oil production plans have recovered, while plans for new upgraders and refineries in Canada have not.

Back in 2008, when Prime Minister Harper was running for re-election, he promised bitumen would not be shipped to Asia. His government continued to publicly extol the virtues of processing oil in Canada right up until Enbridge filed its application for Northern Gateway in May 2010. So when industry proponents say it’s not economic to upgrade and refine in Canada, you can say, “Hey wait a second, as recently as 2008 that was the plan; it was economic and it was endorsed by Harper’s government.”

Once Northern Gateway is built, when Enbridge decides it wants to expand capacity, increase tanker traffic and expose the land and sea to exponential spill risk, no one will be held accountable to address the environmental threat. If the actual environmental threat of Northern Gateway is going to be assessed, it has to be done as part of the initial application.

This issue becomes important when Kinder Morgan submits its application to the National Energy Board. You need to ensure the full design capacity of the new pipeline and marine expansion is assessed, not the minimum, as has happened with Northern Gateway.
Kinder Morgan has presented its new project as a 450,000 barrel per day pipeline. With design features similar to Northern Gateway’s, it could move 850,000 barrels a day and that means somewhere around 475 oil tankers a year dropping anchor off English Bay.

There’s one final area of misinformation I want to discuss today. That’s Enbridge’s operating risk and safety record. Enbridge tells us in its ad campaign that the company has “World-class safety standards… carefully planned and built to respect the terrain and wildlife. The pipeline will be monitored 24/7.” But when you run this information through the truth metre, well…

From 1998 to 2010, Enbridge had 770 reportable oil spills, a number of them considered large by National Energy Board standards. When Enbridge submitted its risk analysis to the National Energy Board, it only included spill statistics from 2005 to 2009. In the insurance industry, we call this kind of selective choice of data “cherry picking.”

On July 25, 2010, a little over a month after filing its application for Northern Gateway, Enbridge suffered the most significant spill in the company’s history. Enbridge’s Line 6B ruptured in Marshall, Michigan, releasing more than 20,000 barrels of dilbit. Toxic condensate evaporated into the air impacting the local population. Bitumen made its way into the Kalamazoo River.

Enbridge’s corporate standard for identifying a spill is 10 minutes with an additional three minutes for pipeline shutdown. It took more than 17 hours for the Kalamazoo spill to be detected and the pipeline shut down. This pipeline was monitored by Enbridge “24/7.” Enbridge CEO Pat Daniel testified before the US House of Representatives in September 2010. He said, “By the end of September, we will have completed the bulk of the clean up.”

Twenty-three months later, with clean-up costs reaching $765 million, only three of the 39 miles of the Kalamazoo River have been opened to the public. Restoration of the affected waterway and surrounding lands has not started. The restoration stage of the Kalamazoo River will certainly take years and possibly decades. A few weeks ago [early June], the US National Transportation Safety Board released 170 documents, 5,000 pages and 58 pictures of the spill. These documents provide an arms-length, independent look at Enbridge’s world-class safety standards. They explain operating safety took a back seat to corporate growth.

All it will take to ruin the Kitimat watershed system is a spill of – not 20,000 barrels of dilbit into the Kitimat River, but if the spill takes place upstream – somewhere in the neighbourhood of 600 to 650 barrels should do it.

There are more than 700 fresh waterways that Northern Gateway will traverse. The topographical and other geophysical challenges of Northern BC are significantly greater than the relatively flat land traversed by Line 6B in Michigan.

The Kalamazoo spill wasn’t discovered by Enbridge in its state of the art control room, even after 17 hours of pressure problems, repeated alarms in the control room and three shift changes. No one saw the problem as a spill. Someone in Marshall who saw the oil called the control room. But here is something truly shocking. Enbridge doesn’t just downplay Kalamazoo; the company behaves as if the spill never happened.

During the past two years, Enbridge has not updated any of the risk analyses filed with the National Energy Board to include the Kalamazoo spill. We need to ask – who is looking after the Canadian public interest? Mr. Harper is not. Mr. Harper is not behaving as the Prime Minister of Canada. Mr. Harper is behaving as a marketing manager for big oil.

We need to ask who is looking after BC’s public interest? Premier Clark is not. As Premier she has the constitutional power to ensure Northern Gateway undergoes a provincial environmental assessment that includes the environmental threat of the designed capacity of the project—including the tanker traffic it triggers.

She has the power to ensure BC’s public interest is protected, but stands back and allows it to be trampled by the Harper government. We need to be clear. Premier Clark has been asked to lie down and play dead on Northern Gateway. By agreeing to do so she has given Northern Gateway the go ahead.

Not exercising the right to a provincial environmental assessment means BC agrees to accept the National Energy Board decision. Prime Minister Harper has told us Northern Gateway will go ahead. The only way to stop this pipeline and the tanker traffic that comes with it is for BC to exercise our right to review the project and decide whether or not we want it to go ahead.

Who is looking after the pubic interest of this riding? Your MLA Christy Clark is not. As Premier, she has the power to ensure a provincial environmental assessment of the Kinder Morgan project. Yet she has not said the Kinder Morgan pipeline proposal will undergo a provincial review. As a result, Premier Clark has agreed to – what has become – a National Energy Board rubber stamp with a big yes on it.

By doing nothing, Christy Clark has made a decision for you.

She has decided the oil export strategy designed in the boardrooms of big oil take precedence over your vision of what British Columbia, as a province, and Vancouver, as a coastal city, should be.

Environmental assessment is our right. While you still have the power to keep BC’s economy and environment out of harms way, take action. Tell Prime Minister Harper you’ve had enough of his support of large oil companies who put at risk our economy and our environment.

Tell Premier Clark to stop playing dead and stand up and protect the rights of all British Columbians. Thank-you.
Robyn Allan is an economist and the former president and CEO of ICBC (Insurance Corporation of British Columbia) On June 16, she delivered a talk on the Northern Gateway Pipeline at a townhall meeting in Vancouver hosted by Joyce Murray, Liberal MP for Vancouver Quadra, The text here has been adapted from her talk. Read her entire address at

This article appeared in the JULY 2012 print edition © Common Ground magazine.
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Lawyers for First Nation question benefits of proposed Northern Gateway pipeline

EDMONTON – The benefits to the oil industry of Enbridge Inc.’s proposed Northern Gateway pipeline may be exaggerated and its costs to the economy and environment underestimated, hearings into the project heard Tuesday.

The $6-billion pipeline has been touted as a way to link burgeoning production from Alberta’s oilsands to growing markets in Asia, which would allow Canadian producers to improve profits by reaping higher prices for crude overseas.

But a lawyer for the Haisla First Nation, which claims much of the land the pipeline would travel though, said projections of nearly $1.5 billion a year in increased revenue by 2018 are inflated.

Hana Boye said the estimate Enbridge (TSX:ENB) is presenting at the National Energy Board hearings was developed with figures from the Canadian Association of Petroleum Producers which suggest oil supply in Western Canada will grow by 6.5 per cent a year between 2011 and 2020.

That’s different than what Enbridge is telling its own investors and shareholders, said Boye. The company’s own estimate is 4.4 per cent growth — a difference of 500,000 barrels a day by 2020 that leads to a corresponding drop in revenues earned by producers.

“Have you given a different supply forecast to your shareholders than that provided to the panel?” Boye asked Enbridge’s Gateway manager John Carruthers on Tuesday.

Carruthers acknowledged that different figures have been used at different times. Estimates can vary depending on assumptions of what the mix of varying crudes would be, he said.

“There would be times when we would see differences.”

But the variances aren’t big enough to change the project’s economics, Carruthers said.

“The minor changes over time don’t change the project need.”

Boye added that the project could discourage the upgrading of oilsands bitumen in Alberta and that its cost to the environment hasn’t been fully evaluated.

She pressed Enbridge over the use of diluent — lightweight solvents mixed with bitumen or other heavy crudes to make them flow through a pipe. Although the mix varies, roughly one-third of what would flow through the Gateway line would be diluent. The Gateway project includes a second pipeline that would import diluent from the B.C. coast back to Alberta.

Boye suggested the cost of that diluent has not been factored into calculations of producer benefit.

Ignoring the cost of diluent exaggerates the case for shipping raw bitumen outside Alberta for upgrading or refining, said Robyn Allan, an analyst for the Alberta Federation of Labour, who is advising the Haisla.

“There is no economic analysis … that’s been supplied to the hearings (of the impact) to the Canadian economy when we import condensate instead of upgrading in Alberta,” she said outside the hearing.

“Importing condensate instead of upgrading (bitumen) is hollowing out the sector.”

Boye also questioned environmental economist Mark Anielski about his dollar-value calculation of the project’s environmental impact. She pointed out that his analysis only included the 50-metre pipeline right of way and ignored possible effects outside that corridor.

Anielski responded those effects could exist, but there’s no credible method of putting a monetary value on them.

“This kind of information is not available,” he said. “To speculate would be unprofessional of me.”

Anielski also acknowledged his report didn’t put a value on a wide array of ecological effects from forests that would be disturbed by the pipeline — everything from erosion control to genetic diversity to pollination.

Enbridge has promised to plant a tree for every one cut down for the pipeline right-of-way, he said. The company is also working with the Nature Conservancy to protect land that would offset areas disturbed by the project.

The hearings are expected to continue in Edmonton throughout the week.

© The Canadian Press, 2012