Canadian government approves Northern Gateway pipeline

July 7, 2014
Canada's federal government approved Enbridge Inc.'s proposed Northern Gateway crude oil pipeline project as long as it meets 209 conditions a joint review panel imposed in December.

Canada's federal government approved Enbridge Inc.'s proposed Northern Gateway crude oil pipeline project as long as it meets 209 conditions a joint review panel imposed in December.

"Today constitutes another step in the process," Canadian Natural Resources Minister Greg Rickford said in announcing the decision on June 17. "Moving forward, the proponent must demonstrate to the independent regulator, the [National Energy Board], how it will meet the 209 conditions. It will also have to apply for regulatory permits and authorizations from federal and provincial governments."

Rickford said, "In addition, consultations with Aboriginal communities are required under many of the 209 conditions that have been established and as part of the process for regulatory authorizations and permits. The proponent clearly has more work to do in order to fulfill the public commitment it has made to engage with Aboriginal groups and local communities along the route."

Enbridge Chief Executive Officer Al Monaco said the Calgary oil and gas transmission company and its partners welcomed the decision. "The Joint Review Panel recommendation and the [Governor in Council] approval are important milestones and reflect years of work by all stakeholders," he said, adding, "However, we have more work ahead of us. The decision is one more step in the process that requires a considered and respectful approach with our stakeholders."

Monaco said Enbridge now will focus on three priorities: meeting the JRP's conditions, working with the British Columbia government 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."

The project's opponents vowed it will never be built. "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," said Tzeporah Berman, a Canadian author and environmentalist. "Regardless of the Harper administration's approval, that opposition is only growing stronger."

Proposed in 2010

Northern Gateway Pipelines LP (NGP) originally proposed in 2010 construction of two parallel pipelines to transport 525,000 b/d of heavy crude and 193,000 b/d of condensate 1,107 km from Bruderheim, Alta., to Kitimat, BC, where a marine terminal would be constructed. It submitted its plan to the NEB for a regulatory review and environmental assessment at that time.

Canada's environment minister and the NEB then established the JRP to evaluate the project. It received feedback from more than 1,450 participants in 21 different communities, reviewed more than 175,000 pages of evidence, and received 9,000 letters of comment, according to Natural Resources Canada (NRC).

"In December 2013, the [JRP] found that construction and operation of the [NGP] project is in the public interest, subject to 209 conditions being met by the proponent," Rickford said. "After carefully reviewing the report, the government accepts the independent panel's recommendation to impose 209 conditions on [NGP's] proposal."

NEB now will issue certificates of public convenience and necessity, but the project's sponsor still must obtain its approval of the detailed pipeline route and final right-of-way. As part of this process, NGP must provide written notice in a newspaper and notify all landowners with acreage to be acquired. NEB will hold hearings within 30 days on the detailed route in affected areas to consider objections and concerns.

Simultaneously, NGP will seek various regulatory approvals from the federal, Alberta, and British Columbia governments, NRC said.

Monaco emphasized Enbridge's commitment to world-class safety and environmental standards for the project. "Northern Gateway is benefiting greatly from the input and engagement of communities along the right-of-way, Aboriginal communities, and numerous technical experts," he said. "Today's decision and the work of the JRP confirm that the project can be built and operated safely, and that it's in Canada's national interest."

West Coast alternative

NGP and KN Energy Inc.'s proposed expansion of its pipeline from Alberta to Vancouver, BC, represent significant alternatives for Canadian producers if TransCanada Corp. is unable to obtain a cross-border permit for Keystone XL. "We feel victimized by US regulations, especially in that case," Rob Merrifield, a Conservative member of Canada's House of Commons from Alberta, said in Washington on June 17 during the Canadian American Business Council's North America: Fueling the Future conference.

"[Keystone XL's] approval process has gone on for 6 years now because politics has trumped science," Merrifield noted. "I don't think it's about energy and the environment. I think there's another political agenda."

US Rep. Bill Owens (D-NY), who was on the same panel, applauded US House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and member Gene Green (D-Tex.) for introducing legislation that would standardize US approval processes for cross-border energy projects. He also predicted that the US Senate likely would not take up the bill if the House approves it.

"Given the nature of the two houses, I don't think it will be considered," said Owens. "We don't have a body of people we trust scientifically who can reliably provide us information, facts, and recommendations." He added that he favors Keystone XL as a long-term US supply source if Saudi Arabia and other Middle East producers ship more of their crude into Asian markets.

Monaco said Northern Gateway would be the first approved pipeline project enabling Canada to diversify its crude oil markets and achieve full market value pricing.

"It will mean a major boost to our provincial and national economies," he said. "It will create jobs and result in new tax revenues for communities and governments to support social programs and infrastructure. Importantly, Northern Gateway will involve Aboriginal communities as owners and partners in the project, and it provides meaningful training, job, and business opportunities in communities along the right-of-way."

About the Author

Nick Snow

NICK SNOW covered oil and gas in Washington for more than 30 years. He worked in several capacities for The Oil Daily and was founding editor of Petroleum Finance Week before joining OGJ as its Washington correspondent in September 2005 and becoming its full-time Washington editor in October 2007. He retired from OGJ in January 2020.