British Columbia needs promises of more cash if it is to support the construction of twin pipelines to carry oil sands crude and condensate from Alberta to the coast for shipment to the United States and global markets, the provincial government said this week.

The ultimatum could slow the Northern Gateway project, through which Enbridge Inc. has proposed to spend $6.6 billion on a pair of pipelines terminating at a new marine shipping terminal near Kitimat, British Columbia. That proposal is one of several to export Canadian petroleum products from the west coast to markets in Asia and elsewhere, as producers seek to expand their markets for Albertan crude.

The declaration of five provincial "requirements" relating to safety, spill response and risk compensation Monday from British Columbia Premier Christy Clark comes on the heels of a slew of pipeline safety news. The government of Alberta is reviewing pipeline safety in the wake of a series of local spills, while Enbridge has pledged to add up to $500 million to its Northern Gateway proposal to beef up safety measures following a scathing assessment by the U.S. National Transportation Safety Board earlier this month of the company's 2010 pipeline spill on the Kalamazoo River in Michigan (EnergyWire, July 23).

"Our government has identified and developed minimum requirements that must be met before we will consider support for any heavy oil pipeline projects in our province," Clark said in a Monday statement. "We need to combine environmental safety with our fair share of fiscal and economic benefits."

Some of the demands Clark presented are no-brainers: She said that the proposal must successfully complete the federal environmental review process that is ongoing under a panel representing the National Energy Board and the environment ministry, and that legal requirements around First Nations stakeholders must be addressed.

She also called for "world-leading" land and marine oil spill response, prevention and recovery.

For marine spills, the government's recommendations were to strengthen industry response requirements to match those of the United States and Norway, which require faster arrival on site, planning around larger spill volumes, a unified response model and larger financial reserves to handle spills.

Stronger land-based spill response capacity would include closer engagement with industry and the development of tested plans, among other measures, the government said.

But the biggest demand on Clark's list -- and the one likely to pose a real challenge in negotiations among the federal government, those of British Columbia and Alberta, and Enbridge -- was Clark's demand that British Columbia receive greater financial benefit than currently proposed from the deal.

Saying the province faces 100 percent of the project's marine risk and 42 percent of the land risk, based on a calculation of how much of the pipeline would lie within the province's borders, Clark said a recent assessment shows that British Columbia stands to take in $6.7 billion in tax revenues over 30 years of pipeline operation, or 8.2 percent of the total new tax revenue.

"Given the risk to British Columbia from land-based and coastal bitumen spills, [British Columbia] does not believe an equitable distribution exists for fiscal benefits," the declaration concluded.

Attacked on all sides

Environmentalists and other critics of the project proposal assailed the declaration as not protective enough of the province's interests.

Living Oceans Society, an environmental group, said no existing technology can adequately clean up diluted bitumen oil, which is heavier than conventional oil and has components that will sink to the ocean floor.

"World-leading marine oil spill response and recovery systems will do nothing for us in the event of a spill of tar sands bitumen," said Living Oceans Executive Director Karen Wristen. "Enbridge needs to establish to the satisfaction of British Columbians that there exists any technology that could clean up such a spill. When diluted bitumen is spilled into water, much of it sinks to the bottom, where conventional spill response technology is simply useless."

Others suggested that the views of First Nations groups, which have strongly opposed the proposal to date, will not be sufficiently reflected in any final agreement to go forward with the project.

In a statement, federal environment minister Joe Oliver did not explicitly address the financial side of the British Columbia government's demands, but reiterated his commitment to "rigorous environmental standards" and aboriginal consultation. "Jobs and economic growth benefiting all Canadians is our No. 1 priority," he said.