CANADA:

Political fight escalates over proposed oil sands pipeline to West Coast

High-profile U.S. protesters against the Canadian oil sands are taking their activism north this week, as the battle over a pipeline that would send crude to Asia enters a critical regulatory stage.

Today, activists backed publicly by actress Pamela Anderson, film director Michael Moore and actress Daryl Hannah will stage a mass sit-in and risk arrest in front of British Columbia's Legislature to protest against two proposed oil sands pipelines that would stretch from Alberta to Canada's West Coast.

The better known of the two pipelines, Enbridge's Northern Gateway, rivals TransCanada's Keystone XL in its size and would carry 525,000 barrels of crude a day.

"By [Canadian protesters'] effectively killing Gateway, they've taken away the only argument the Obama administration had for Keystone XL, the 'It'll go to China anyway' line," said Bill McKibben, founder of 350.org and one of several well-known individuals signing on as official endorsers of the rally.

Later in the week, activists will create a human chain around government buildings in more than 50 British Columbia communities as part of an exercise that could be Canada's largest-ever event of civil disobedience against the oil sands.

Part of the main argument of the protesters -- as it was in U.S. Keystone XL protests at the White House last year -- is that the project would worsen climate change, considering that oil sands production releases more greenhouse gases than traditional drilling. Peter McHugh, a spokesman for Greenpeace Canada, said that 3,900 people signed an online pledge for the "Defend our Coast" protest, and more than 500 people are confirmed to be on the ground today.

The protests underscore a changed dynamic for Northern Gateway in the past six months with looming provincial elections, public hearings on the project and a sped-up regulatory process galvanizing public opinion and creating a toxic political environment, analysts say.

Major political warming

Some conservative news columnists who support oil sands development are calling for a time-out. British Columbia officials and Enbridge engaged in a public spat last week over whether they will even have a meeting.

The dynamic creates a prickly situation for Prime Minister Stephen Harper, a strong backer of oil sands development who depends on British Columbian seats in Parliament for his current majority.

The protests, and the politics swirling around them, also raise questions about the long-term trajectory of the oil sands with many analysts saying that the current situation makes it more likely that industry will try to move oil sands crude eastward rather than take the West Coast-China option.

Two recent developments are driving much of the growing political contentiousness, said Brian Lee Crowley, managing director of the conservative-leaning Macdonald Laurier Institute, a think tank. For the past few months, a joint-review government panel has been hearing testimony about the project, allowing Enbridge to be cross-examined for the first time in a public way.

In one public exchange in September, Chris Peter, an engineer at C.J. Peter Associates Engineering, argued that the pipeline would release 37 million tons of greenhouse gases annually and have a carbon cost of $743 million under a full life-cycle analysis of emissions from well to wheel.

Enbridge officials said the carbon cost was much less than that, when the impact of just oil production in Canada was considered.

"What is clear by international protocols and standards is that Canada is responsible for emissions within its own country, certainly not for emissions in countries to which it may be exporting its products," said Jack Ruitenbeek for Enbridge.

Further, British Columbia Premier Christy Clark is likely to lose next year's provincial elections to New Democratic Party leader Adrian Dix, who is adamantly opposed to Gateway, Crowley said.

That political pressure has helped push Clark into a series of anti-Gateway statements, he said, including a threat that the province could withhold giving electric power to Northern Gateway if it is approved.

Meanwhile, British Columbia Environment Minister Terry Lake released a public statement last week saying that "the responses that Enbridge/Northern Gateway representatives are giving our legal counsel are long on promises, but short on solid evidence." Among other things, Enbridge will not have a spill response plan finalized until six months before pipeline operations begin, Lake said.

Enbridge seeks a meeting

Enbridge's Janet Holder responded that British Columbia officials seem to have a "misunderstanding" of Canadian regulations. She said the company has followed the proper timeline of when it will outline details, such as emergency preparedness plans. She pointed out that the British Columbia premier and her ministers have declined to meet with Enbridge since February.

"The invitation has been put out," said Todd Nogier, a spokesman for Enbridge. "We're waiting."

The back-and-forth between Clark, Enbridge and Albertan Premier Alison Redford exacerbates a growing feeling that there is a worsening rift between British Columbia and Alberta, said Crowley.

The feeling is heightened by Clark's demand this summer that five conditions must be met for Northern Gateway's approval, including her demand that British Columbia should receive its "fair share of the fiscal and economic benefits" from Alberta to protect itself from environmental risks of the pipeline.

Clark's demands shifted the debate from one about the pipeline's general impacts to a discussion about whether British Columbia would be taken advantage of by Alberta, according to Crowley. Resentment of Alberta's oil wealth was already there among some but was not as out in the open, he said.

A provincial rift poses a risk for Harper, because campaigns for national elections could occur around the same time Harper's Cabinet must make a final decision on approval of the project. Under new rules, Harper can override recommendations from the joint government review panel currently holding hearings on Gateway's environmental impact.

Last week, the joint review panel said it expected to make a final recommendation by December 2013 but added that legal challenges could threaten the date -- a prospect that would put the matter even closer to national elections.

Even though many British Columbia conservatives support Harper on Northern Gateway, they have their eye on public opinion in the province and the prime minister cannot afford to lose those seats in Parliament, said Michael Byers, a political science professor at the University of British Columbia.

"This could swing the whole federal election," Byers said.

A poll this summer from Abacus Data found that 41 percent of 2011 British Columbia voters from Harper's Conservative Party oppose the pipeline.

Another poll in October from Angus Reid Public Opinion reported that 57 percent of British Columbians overall oppose Northern Gateway.

Use of U.S. celebrities could backfire

The survey did not ask about the views of environmentalists, but Crowley said that green groups in Canada could face some backlash by linking with U.S. celebrities.

"Nothing unites Canadians more than the idea that they are being told what to do from outsiders," he said. Many of the high-profile backers of the protests, like McKibben, will not be in attendance but are advocating heavily for the rallies via Twitter and other media.

Ultimately, Crowley said that he doesn't expect Harper to override the review panel if it recommends that Northern Gateway not be built. "That would be too big of a risk" for Harper, he said.

He also doesn't expect that British Columbia -- even if Dix takes the helm in the province -- truly will turn off power or deny permits for Gateway, especially since national law makes it clear that the national government has the ultimate say about cross-province pipelines.

The real determinant of Gateway's fate likely will be British Columbian First Nations, Canada's native peoples, who are opposed to a pipeline across their lands, said Brenda Belak, a staff counsel at West Coast Environmental Law. Many First Nation groups in the pipeline's pathway -- including some whose members will be leading today's protests -- have said they will sue if Gateway is approved.

Canada was colonized from east to west, and in the process, British Columbian First Nations groups did not sign formal treaties with the government, said Belak, whose organization opposes Gateway. In the mid-1980s, a charter of rights was added to the Constitution that reaffirmed "preexisting aboriginal rights," although the Canadian Supreme Court has never fully defined what that means.

A 2004 legal case, Haida Nation v. British Columbia, "completely changed the business environment in British Columbia," said Belak. It found that the national government had to "consult" with First Nations about major projects that could affect their rights and "accommodate" them when appropriate by requiring compensation or by rejecting or modifying projects.

One reason the situation is so challenging for Gateway is that the Joint Review Panel has been designated as the primary entity to "consult" with First Nations, she said. The panel consists of the National Energy Board and the Canadian Environmental Assessment Agency.

Alternative routes to China

A 2009 court case raised doubts about whether the National Energy Board in Canada can be this sole consultation negotiator with First Nations, she said. That legal uncertainty provides one of several avenues for challenges to the project by First Nations, which could "tie this up for years," she said.

The other possible western route to Asia for oil sands crude, Kinder Morgan's Trans Mountain project, could have an easier route to approval, because it would expand an existing right of way, said Byers. Kinder Morgan announced it May it wanted to expand existing pipe by roughly 300,000 barrels per day (ClimateWire, April 13).

Nogier of Enbridge noted that 60 percent of First Nations along Northern Gateway's route have accepted the company's offer for an equity stake in the project. "Time is on our side on this," he said, adding that Enbridge is holding meetings with British Columbia residents in "coffee shops and at kitchen tables."

The protests, he said, are just "part of the dialogue."

Regardless, many analysts think that the West Coast option -- if protests and First Nations kill it -- may not matter for the oil sands in the end. The Canadian Association of Petroleum Producers, which represents the industry, reported this year that it expects oil sands production to grow from 1.6 million daily barrels to 5 million barrels by 2030.

That means the industry is counting on a major growth in pipeline capacity.

The association's projections tend to be rosy but are probably close to the mark, said an economist at a New York investment bank. Keystone XL is going to get built, once the "political jockeying" involved with the U.S. presidential elections is over, the economist said. The idea of piping oil sands crude to Canada's East Coast has faced much less opposition, he said.

New Democratic Party leader Thomas Mulcair, a staunch opponent of Gateway, said last month that he supported the idea of shipping oil to Canada's East Coast. In May, Enbridge announced an eastern plan for oil sands crude (ClimateWire, May 18).

"Even with the transport costs, the economics to send crude to Asia from the East Coast are compelling," said the New York economist.

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