Pipelines: the oil will flow

Pipeline

On a conference call last week with investors, Vern Yu, Enbridge’s senior vice-president of business and market development stated that the company expects a decision by the Conservative government on the Northern Gateway pipeline across British Columbia by the middle of 2014.  Yu said that “we expect that there would be some appeals to that decision and that would take us into early 2015 and at that point we would be able to start construction, which would allow for somewhere around a 2018 in-service date.”

There are multiple pipelines being discussed at this time: Trans Mountain, Northern Gateway, TransCanada East and Keystone XL.  The Keystone XL pipeline would cross from Canada into the Unites States while the remaining three pipelines would stay within the Canadian borders.

There has been vocal opposition from well-funded conservation groups in the U.S. pressuring the Obama administration who will be making a decision on the Keystone XL pipeline in the coming months.  These conservation groups have turned their attention to the proposed pipelines in Canada.  Besides the environmental impact relating to the pipelines on the ground, the proposed domestic pipelines will result in hundreds of tankers entering the waters off of the Pacific coast.

We have also learned in the last few months that if oil is not moved via pipelines and tankers, oil will be transported via rail that has similar risks to the environment and the public.  The tanker train derailment in Lac-Megantic, Quebec caused millions in damage and 47 deaths.

The discussion on the proposed pipelines is secondary to the broader debate on the oilsands development and skepticism over energy projects in general.  Matt Krogh, spokesman for Forest Ethics, stated at a news conference, “from pipelines to tankers to crude-by-rail, we’re facing an onslaught of new oil proposals, many of them toxic oilsands oil, that would turn the Pacific Northwest into a giant shipping lane for oil, gas and for coal.”

Without understanding the nuances of the arguments on both sides, the debate comes down to economics and employment on one side and the preservation of the environment on the other.  The expansion of the Trans Mountain pipeline would increase capacity by 590,000 barrels of oil a day while the Northern Gateway would deliver 525,000 barrels to the proposed tanker terminal in Kitimat, British Columbia.

We have had similar debates previously whether it was around coal or nuclear energy generation, green house gas emissions and the global impact of climate change. The difference now versus twenty or thirty years ago is that we should be ensuring that the development of the pipelines respect the environment and that there are contingency plans in place to deal with potential disasters.  Perhaps corporations should be required to transfer funds to governments during construction to be held in trust to deal with potential disasters.

This week Christy Clark, Premier of British Columbia, stated that the federal government currently is not able to handle a major oil spill now and this before contemplating the increase in tanker traffic with additional pipelines.  This should be a wake-up call to all Canadians.

The fact is that oil from the oilsands will be produced and it will flow via rail, water and pipelines.  The environmentalists should recognize that the pipeline projects will proceed.  We need them to work with the corporations and government to develop plans to ensure that there will be no disasters and if a spill occurs, contingency plans to minimize the impact.

The advertising expenditures that both sides are incurring to convince voters to support their position is unwarranted.  Those funds should be directed to ensure that we have the best infrastructure and plans in place to avoid a disaster when the oil flows.  And the oil will flow.

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