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Trudeau govt approves Trans Mountain, Line 3 pipelines, rejects Northern Gateway

30th November 2016

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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VANCOUVER (miningweekly.com) – Canada’s Liberal federal government under the leadership of Prime Minister Justin Trudeau has approved two out of three contentious crude oil pipelines in the country – critical infrastructure needed to get Canada’s vast oil reserves to new markets.

In a landmark decision, the Trudeau government has approved Kinder Morgan’s C$6.8-billion Trans Mountain Expansion project, which will match the existing 1953-built Trans Mountain pipeline system between Edmonton, Alberta and Burnaby, British Columbia. This is expected to triple Canada’s access to new crude markets, as it looks to diversify oil exports away from the US, Canada’s largest customer.

Government also approved Enbridge’s C$7.5-billion Line 3 Replacement project, which will replace 1 067 km of existing pipeline from Hardisty, Alberta, to Gretna, Manitoba, to enhance its safety and integrity. This is the largest project in Enbridge's history and will enhance the safety of the line and restore its original 1960s-built capacity of 760 000 bbl/d.

Since being elected to power just more than a year ago, the Liberal government has announced plans to create a national price on carbon. It also recently announced a national plan to phase out coal-powered plants by 2030 and overhaul the country's regulator, the National Energy Board (NEB).

Government has, however, directed the NEB to reject Enbridge’s Northern Gateway Pipelines project application on grounds that the project is not in the public interest, given that it would result in crude oil tankers transiting through the sensitive ecosystem of the Douglas Channel, which is part of the Great Bear Rainforest of British Columbia’s pristine marine environment.

The pipeline, which would have carried diluted bitumen from Alberta's oil sands to a tanker port in Kitimat, was widely opposed by communities and First Nations throughout Northwest British Columbia.

Added to the rejection of the Northern Gateway project, government placed a moratorium on crude and persistent oil tankers along British Columbia’s north coast. This area spans the Alaska/British Columbia border down to the point on British Columbia mainland next to the northern tip of Vancouver Island. It also includes the culturally important islands of Haida Gwaii.

“Canadians expect the government of Canada to help grow the economy while protecting the environment. This tanker moratorium is another example of how this can be achieved and shows our commitment to establishing a world-leading marine safety system that meets the unique needs of Canada from coast to coast to coast,” Transport Minister Marc Garneau stated.

Government said it would introduce legislation to implement the moratorium by the spring of 2017.

“There isn’t a country in the world that would find billions of barrels of oil and leave it in the ground while there is a market for it. But it isn’t enough to exploit that resource for our short-term interest. Our challenge is to use today’s wealth to create tomorrow’s opportunity,” Trudeau said during a broadcast press conference in Ottawa.

BINDING CONDITIONS
Kinder Morgan hailed the decision as a “defining moment” for Canada’s energy industry.

“This is a defining moment for our project and Canada's energy industry," said Kinder Morgan president Ian Anderson.

Subject to 157 binding conditions that will address potential indigenous, socioeconomic and environmental impacts, including project engineering, safety and emergency preparedness, the Trans Mountain project is expected to create 15 000 new jobs during construction, provide access to global markets and generate significant direct economic benefits, including C$4.5-billion in federal and provincial government revenues.

Trudeau said the government expects Kinder Morgan to "meet and exceed" the 157 conditions the NEB imposed on the project in April, including world-leading spill-mitigation plans. He also pointed to the C$1.5-billion ocean protection plan he announced earlier this month to improve responses to tanker and fuel spills in the Pacific, Arctic and Atlantic oceans.

"If I thought this project was unsafe for the BC coast, I would reject it. This is a decision based on rigorous debate on science and evidence. We have not been, and will not be, swayed by political arguments, be they local, regional or national," Trudeau stated.

The Line 3 Replacement project is subject to 37 binding conditions that will also address potential indigenous, socioeconomic and environmental impacts, aimed at ensuring that the pipeline and facilities are built and operated in a manner that is safe for Canadians and the environment. The project will generate significant economic benefits, including C$514.7-million in federal and provincial government revenues and 7 000 new jobs during construction. It also provides a vital link to the North American refinery market for Canadian oil.

"We're pleased by the federal government's decision to approve the Line 3 replacement programme, an essential maintenance project that will ensure the safe and reliable delivery of Canada's energy resources to market . . . We have strong support for the project from our communities along the route, including indigenous communities," Enbridge said in a statement.

“Our duty is to permit infrastructure so Canada’s resources get to market in a more environmentally responsible way, creating jobs and a thriving economy. Today’s announcements also demonstrate that when the government determines projects are not in the public interest, we will act accordingly and make the tough decisions,” Natural Resources Minister Jim Carr stated.

PARTNERSHIPS
Trudeau stressed that the economy and the environment go hand-in-hand. “That is why we are pricing carbon pollution, making the most significant investment ever to protect Canada’s oceans and coastlines, [and] instituting world-leading safety standards for pipelines by passing the Pipeline Safety Act," he said, adding that the Liberal government had also signed the Vancouver Declaration with the provinces and territories on clean growth and climate change.

“You cannot choose either the economy or the environment,” he stated, noting that transport by rail was much more expensive and risky and "that pipelines are simply the safest way to move our natural resources to market". This was aptly demonstrated by the July 6, 2013 fatal derailment and explosion of a fully laden oil train, which partially destroyed the town of Lac-Mégantic, in Quebec.

Government underscored its committed to working in partnership with indigenous communities. To address specific interests identified by indigenous groups, and to build on existing partnerships some parties have with the proponent, government announced that it would codevelop advisory and monitoring committees with indigenous communities to provide ongoing environmental monitoring for each of the two approved projects.

It will also establish an ‘economic pathways partnership’ for each pipeline that will make it easier for indigenous groups to access existing federal programmes, helping them benefit economically.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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