TORONTO (miningweekly.com) – A federal joint review panel for the proposed Enbridge Northern Gateway project on Thursday recommended that, subject to 209 required conditions, the federal Canadian government approve the Northern Gateway pipeline project.

The pipeline would link Canada’s significant oil sands-crude oil producing province of Alberta, through British Columbia, with the Pacific Ocean, providing a 1 170-kilometer, 525 000 bbl/d gateway that would ship oil sands crude to new markets in Asia.

Running from Bruderheim, Alberta, to a deepwater port at Kitimat, British Columbia, the controversial pipeline project also envisages a second pipeline that would return 193 000 bbl/d of condensate, which would be used to blend into the thick tar-like oil sands bitumen, enabling it to flow through the pipelines.

Canada’s Athabasca oil sands are large deposits of bitumen or extremely heavy, tarry crude oil, located in north-eastern Alberta, roughly centred on the boomtown of Fort McMurray.

Project promoter Enbridge CEO Al Monaco on Thursday said during a media conference call that the panel’s decision confirmed that it had “a sound project”.

“Despite being happy, we are not yet celebrating. Despite the decision being a critical step, it is only one step.

“We would first be carefully reviewing the report, while awaiting the federal government decision. More work also still needs to be done with aboriginal groups,” he said.

The review panel found the project to be in the public interest, stating that "opening the Pacific Basin markets is important to the Canadian economy and society."

The panel had also found that "the project would bring significant local, regional, and national economic and social benefits."

“Based on a scientific and precautionary approach to this complex review, the panel found that the project, if built and operated in compliance with the conditions set out in its report, would be in the public interest.”

FEDERAL DECISION

Following the panel’s recommendation, Canada's Conservative federal government now has 180 days in which to decide whether to accept the recommendations.

Federal Natural Resources minister Joe Oliver in a statement affirmed that the panel’s report represented a rigorous, open and comprehensive science-based assessment.

“Now that we have received the report, we will thoroughly review it, consult with affected Aboriginal groups and then make our decision. We also encourage everyone with an interest to take the time and review the report,” he said.

He stressed that the federal government would continue to improve the safe transportation of energy products across Canada.

“No project will be approved unless it is safe for Canadians and safe for the environment,” Oliver said.

The Canadian Association of Petroleum Producers’ ‘2013 Crude Oil Forecast, Markets and Transportation’ reported earlier this year that it expected Canadian crude oil production to more than double to 6.7-million barrels a day by 2030, up from 3.2-million barrels per day in 2012. This includes oil sands production of 5.2-million barrels a day by 2030, up from 1.8-million barrels per day in 2012.

With oil sands output expanding rapidly, the Northern Gateway pipeline would provide Canadian producers with the country’s first means to export oil sands crude directly to new markets in Asia, eclipsing the over-supplied US markets, where Canadian crude oil sells for less than benchmark prices.

CONCERNS

Despite Thursday’s decision being a step forward for Enbridge, affected First Nation communities along the route, non-governmental environmental activists and the British Columbian government had fervently opposed the project since public hearing began about 18 months ago, and court challenges could be expected.

They had raised concerns that land or marine oil spills would damage British Columbia's pristine landscapes and disrupt subsistence hunting and fishing.

Minister Oliver said that during the independent review process, the panel heard 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.

However, the panel concluded that the environmental burdens associated with project construction and routine operation could generally be effectively mitigated and that continued monitoring, scientific research and adaptive management could further reduce adverse effects.

The panel stated that "the environmental, societal and economic burdens of a large oil spill, while unlikely and not permanent, would be significant”, adding that Northern Gateway had taken steps to reduce the likelihood of a large spill through its precautionary design approach and its commitments to use innovative and redundant safety systems.

Among the panel's 209 condition, which it said would be enforced by the National Energy Board, included requirements for Enbridge Northern Gateway to develop a marine mammal protection plan; prepare a caribou habitat restoration plan; and prepare an enhanced marine spill trajectory and fate model; as well as to develop a research programme on the behaviour and cleanup of heavy oils.

The Kitimat marine terminal would have two tanker berths, three condensate tanks and 16 oil storage tanks.