OIL SANDS:

Hundreds of conditions attached to Northern Gateway route's approval

In a decision that could shake up the political battle over the Keystone XL pipeline, a joint review panel steered by the Canadian National Energy Board yesterday attached more than 200 conditions to its recommended approval of a 525,000-barrel-per-day oil sands crude route to the nation's West Coast.

The joint panel's asterisk-ridden thumbs-up to the $7.4 billion Northern Gateway, a combination of pipelines and tankers aimed at opening new Asian markets for Alberta's emissions-heavy fuel, includes multiple safety commitments not present in TransCanada Corp.'s current proposal for KXL.

Those extra emergency-response measures for Gateway, designed to help better prepare the environmentally minded province of British Columbia for the ramifications of a possible spill, include investment in a research program to test whether thick oil sands crude creates unique cleanup challenges -- as many of its critics contend -- and information on the specific chemical properties of the fuel that it would transport.

The higher bar set by the joint panel's sign-off on Gateway relative to KXL carries little practical import, however, to environmentalists who have long vowed to defeat both pipelines. Their bid to deny the oil sands industry its "social license to operate," organizing Canadians and aboriginal First Nations against a fuel that Obama administration analysts say is an average of 17 percent more polluting than conventional crude, promises to gain even more strength in the coming days as climate activists rally against the Gateway recommendation.

"This is not approval for the pipeline, and the fact is this pipeline will never be built," Danielle Droitsch, Canada Project director at the Natural Resources Defense Council, said yesterday in a statement.

Canada's conservative prime minister, Stephen Harper, "needs support from First Nations and a social license to build this pipeline -- and he has neither," she added.

Gateway's sponsor, Enbridge Inc., yesterday promised to work to meet the joint panel's conditions as well as a five-part framework for approval of oil sands crude pipelines to the West Coast of Canada that the provincial governments of Alberta and British Columbia agreed to last month (EnergyWire, Nov. 6).

"Together with world-leading engineers and scientists, the team at Northern Gateway is engaged in an expert review process," Janet Holder, Enbridge's project leader for the pipeline, said in a statement yesterday. "We will closely analyze the panel's conditions -- many of which reflect commitments we put forward at the [joint review panel] hearings -- and continue to listen and be open to change."

The hundreds of requirements drafted by the joint review panel, convened by the Harper government and the NEB four years ago, are set to become part of any operating certificate delivered to Enbridge for the project. Gateway includes a 36-inch pipeline that would carry diluted bitumen west along with a 20-inch pipeline that would bring light condensate -- the diluent mixed with heavy bitumen to form oil sands crude -- back eastward, in addition to tanker and port infrastructure that would take the fuel overseas.

No climate talk

The stakes for Canada, and Harper, could not be higher. Amid a continentwide escalation of resistance to the development of Alberta's 168-billion-barrel oil sands reserves, the government must secure First Nations support for Gateway if it is to make the economic promise of an oil export market outside of the United States into a reality.

So far, that First Nations support has proved wanting. Moreover, the joint panel hearings provided ample fodder for U.S. greens working against KXL, particularly when an Enbridge witness made the later-withdrawn declaration that spilled oil sands crude would not sink (EnergyWire, Aug. 16).

While the joint review panel's conditions focused sharply on safety and economic benefits, requiring Enbridge to verify shipper commitment to use at least 60 percent of Gateway's capacity, the climate change concerns that underpin the anti-KXL campaign were all but absent. For conservationists north of the border, the silence on emissions proved a major black mark on the review.

"Without a credible plan to address greenhouse gas pollution and to ensure the oil sands are being developed in an environmentally responsible manner, building the infrastructure that enables rapid oil sands expansion cannot be in the public interest," said Josha MacNab, British Columbia director at the Canadian green group Pembina Institute, in a statement yesterday.

While the oil sands industry hailed yesterday's report, to be followed by a final decision from the Harper government within 180 days, First Nations retain strong legal rights in Canada that activists and analysts alike say spell delays for the project. In fact, KXL opponents pointed to Gateway's still far-off day of reckoning as a sign that its U.S.-based cousin would be the first major oil sands crude pipeline to face its political future.

Given the hurdles that remain for Gateway, Droitsch of NRDC said, "the Keystone XL tar sands pipeline -- not Northern Gateway -- is the linchpin to tar sands expansion."