Canada Seeks Alternatives to Transport Oil Reserves
Published: June 13, 2012
LONDON, Ontario — As the United States continues to play political Ping-Pong with the fate of the
Keystone XL pipeline, Canadian officials and companies are desperately seeking alternatives to get the country’s
nearly 200 billion barrels in oil reserves — almost equal to that of Saudi Arabia — to market from landlocked Alberta.
Michael McElroy for The New York Times
Environmental activists who oppose pipelines shut down a hearing in Ontario last month.
A blog about energy and the environment.
Michael McElroy for The New York Times
Lawyers for Enbridge, a transporter of oil exports,
listened to opponents of the company’s pipeline plan at the hearing.
Oil companies complain that they are losing revenues from pipeline bottlenecks. So
Canada is plunging ahead with plans to build more pipelines of its own.
To hasten development of new export routes, the Conservative government
is streamlining permit processes by accelerating scheduled hearings and
limiting public comment. The government has also threatened to revoke
the charitable status of environmental groups that are challenging the
projects. And Public Safety Canada, the equivalent of the United States
Department of Homeland Security, has classified environmentalists as a
potential source of domestic terrorism, adding them to a list that
includes white supremacists.
After
President Obama refused to grant a permit for Keystone XL
in January, Stephen Harper, Canada’s prime minister, indicated that he
would never again be “held hostage” to United States politics, saying
that some Americans saw his country as “one giant national park.” He
said Canada would redirect oil that had been destined for Gulf Coast
refineries to other countries, particularly China.
While Joe Oliver, Canada’s minister of natural resources, said in an
interview that the United States would remain Canada’s “most important
customer,” billions of barrels of oil that would have been refined and
used in the United States are now poised to head elsewhere. Expansion of
Canada’s fast-growing oil-sands industry will be restricted by the lack
of pipeline capacity before the decade’s end, he said, which “adds to
the urgency of building them so that the resources will not be
stranded.”
Three new pipeline network proposals — two that call for heading west
and the other east — have been put forward. In May, Enbridge, a
transporter of Canadian oil exports, announced a $3 billion
plan called Eastern Access. It is seeking permission to build a new
“Northern Gateway Pipelines”
network, to bring 525,000 barrels a day to Canada’s Pacific Coast.
Kinder Morgan, a Texas-based energy company, said it will nearly double
the capacity of an existing pipeline network along a different route.
Together, the new westward pipelines would carry more oil than Keystone
XL would. But even with aggressive government backing, creating new
pipelines may prove as difficult in Canada as it has been in the United
States, though for different reasons.
Indigenous groups must be consulted if new pipelines cross their land.
To gain coastal access, pipeline companies must also navigate the
politics of some of the most environmentally conscious Canadian
provinces, British Columbia and Quebec, where public opinion tends to be
against both pipelines and further fossil fuel development.
Vancouver’s City Council recently passed a motion requiring that
pipeline companies take on 100 percent liability for the economic and
environmental costs of a worst-case spill. Even though the federal
government gives permissions for pipelines, such local maneuvering and
lawsuits can cause severe delays.
“It’s poetic justice that Vancouver, the birthplace of Greenpeace,
stands between the last big oil deposit on Earth and the expanding
markets in Asia,” said Ben West of the
Wilderness Committee, a consortium of environmental groups. “I’d anticipate it won’t get built for years.”
Mr. Obama said no to Keystone XL over issues of routing and insufficient
environmental analysis, after a showdown with Congressional
Republicans. No further action is expected before next year, although
the pipeline builder, TransCanada, has reapplied for a permit.
But as pipeline companies cast about, the United States may again be
drawn into the fray over routes in other parts of the country. The most
likely eastern Canadian pipeline route would reverse existing pipelines
through Ontario and Quebec, and then cross the border into Vermont,
heading to a tanker port in Portland, Me. Such a project was proposed in
2008 but dropped during the
recession.
A State Department spokesman said it had not fielded inquiries to revive
the idea, but residents of the United States’s Northeast are organizing
against it. Without a reliable way out, Canadian oil often trades for
$30 a barrel less than other crudes, said Todd Nogier, an Enbridge
spokesman. The company estimates its proposed new westbound pipeline
will increase Canada’s gross domestic product by $270 billion over 30
years. Chinese companies have already invested in Canadian
oil sands.
Environmentalists are not nearly as enthusiastic. One reason is that
Canadian oil is extracted in a process that creates relatively high
emissions of carbon dioxide. Also, oil from oil sands is exported as
bitumen, a gritty paste that must be thinned with chemicals for
transport.
The United States Pipeline Safety and Hazardous Materials Administration
is studying
whether diluted bitumen is more corrosive and prone to dangerous spills
than conventional crude, thus requiring special regulation. The report
is due next year. A 2010 spill of diluted bitumen from an Enbridge
pipeline in Battle Creek, Mich., has cost over $720 million, and parts
of the Kalamazoo River remain closed.
In Canada, environmental groups and opposition politicians say Mr.
Harper’s government is trampling on civil liberties and due process in
its rush to get bitumen to market. Public hearings on proposed pipelines
were expedited from the fall to the spring, leaving groups little time
to organize and mount challenges to inadequate environmental analysis of
the impacts, said Gillian McEachern of
Environmental Defense, a Canadian environment group.
Ms. McEachern said that the application process for public comment was
made so complicated that many with opposing views were shut out.
Last month here in London, a coalition that included environmentalists
and members of aboriginal tribes disrupted what was to have been
an obscure public hearing.
Enbridge’s Eastern Access expansion plan involves moving bitumen from
Alberta east to Montreal by reversing the directional flow in older
pipelines that now carry refined oil westward to Ontario. The hearing
was solely about allowing a change of direction for a 100-mile pipeline
segment.
“We sent a letter asking to speak and didn’t even get a reply,” said Wes
Elliot, of the Six Nations indigenous group, one of several dozen
ejected by the police for speaking without permission. The hearing was
then closed to the public. On the curb outside, he said he worried about
spills.
Under Canadian law, aboriginal groups must be consulted about pipeline
projects that cross their lands. Enbridge has offered many tribes a 10
percent stake in its westward pipeline project; Graham White, an
Enbridge spokesman, said about half have accepted.
Others in attendance said proposed bitumen pipelines would traverse
vital agricultural aquifers — concerns that tripped up Keystone XL in
the United States.
“They say they’re just tinkering with existing pipeline,” said Steven
Guilbeault, co-founder of Equiterre, a Canadian environmental group. “We
think they’re doing it bit by bit so they won’t attract attention like
Keystone.”
Mr. White said there was currently no plan for a pipeline extending into
the United States, but would not rule it out in the case of market
demand.
Groups in Vermont and Maine are girding for a fight, concerned most
about spills in Maine’s Casco Bay, a center of fishing and tourism. Glen
Brand, head of the Sierra Club’s Maine chapter, said that a meeting on
the issue in Bangor this spring attracted over 100 people. On both
coasts of North America, residents object to a predicted manyfold
increase in tanker traffic in harbors where people relocate to enjoy the
pristine beauty. Simon Donner, a scientist at the University of British
Columbia, sees the pipeline as symptomatic of the weakness of Canada’s
climate policy, and said he thinks the Canadian government is
underestimating the opposition. “People won’t roll over on this issue,” he said.
This article has been revised to reflect the following correction:
Correction: June 19, 2012
A
picture caption on Thursday with an article about Canada’s quest for
alternatives to the proposed Keystone XL pipeline to carry the country’s
billions of barrels in oil reserves to market from landlocked Alberta
misstated, in some editions, the date of a hearing in Ontario that was
shut down by environmental activists who oppose the pipeline. The
hearing that several activists were shown attending was last month, not
Wednesday.