Pipeline hurdles remain high, despite premiers’ friendly meeting Read more: http://www.vancouversun
It took more than a year, a B.C. election, much back and forth at the official level, and an 11th-hour flutter that threatened to derail the whole process on the eve of success.
Still, there stood B.C. Premier Christy Clark and Alberta Premier Alison Redford in Vancouver Tuesday, finally on common ground in support of B.C.'s five preconditions for the construction of any heavy oil pipeline through this province.
Clark, celebrating the deal, underscored that she'd not backed off any of her initial expectations. The five conditions remain the ones she laid out on July 23, 2012.
Redford, for her part, assured the folks back home that she'd left no room for B.C. to encroach on her province's oil royalties and taxes. Plus B.C. had now agreed to join the Alberta-led Canadian Energy Strategy.
Still that is a long way from saying ing the two premiers cut a deal to support the controversial heavy oil pipeline that Enbridge is proposing to construct through northern B.C. to Kitimat and the no-less-controversial tanker traffic that will result from completion of the Northern Gateway project.
None of B.C.'s conditions have yet been met with respect to the Enbridge project, nor is it necessarily the case that all five will ever be met.
Condition 1 requires "successful ful completion of the environmental review process." In the case of Northern Gateway, "that would mean a recommendation by the National Energy Board Joint Review Panel that the project proceed."
The panel is scheduled to issue a verdict by the end of the year. It could reject the pipeline or attach so many of its own conditions (as per B.C's extensive, very critical submission to the panel) as to renful render it economically unviable.
Conditions 2 and 3 require the provision of "world-leading marine oil spill response, prevention and recovery systems" and "world-leading practices for land oil spill prevention, response and recovery systems."
No small order, judging from the B.C. government's recent report on what it would take to meet such standards, especially given the inadequacies (well documented in the report) of resources to meet current risks, never mind expanded ones.
Some have read that report as indicating that world-class standards are next to impossible with respect to the Enbridge project because of the remoteness and difficulty of both the terrain and the marine environment.
As if those were not enough obstacles to overcome, there's condition No. 4: "Legal requirements regarding aboriginal and treaty rights must be addressed and First Nations be provided with the opportunities to benefit from these projects."
This is arguably the most onerous condition of all. In the eyes of many observers, Enbridge blundered into the province without understanding the full extent of its obligations to the many First Nations whose traditional territories comprise the proposed route and/or the affected regions on the coast.
"B.C. expects the proponent to build strong, enduring relationships with First Nations potentially affected by the Northern Gateway project," as the province said in a 50-page background brief on the five conditions.
"Through those relationships there should be discussion of possible impacts on aboriginal rights, implementation of measures that would mitigate those impacts and the development of impact management and benefit agreements."
The brief set out a dozen expectations for such agreements, ranging from employment, training and education opportunities, to financial support, information sharing, and equity participation.
Absent such agreements with the dozens of affected First Nations, Enbridge could be tied up in litigation for years, undercutting the economic viability of the project. Then there's Condition 5, requiring that "B.C. receives a fair share of the fiscal and economic benefits of a proposed heavy oil project that reflects the level, degree and nature of the risk borne by the province, the environment and the taxpayers."
From the outset, this condition generated the most political controversy. The Albertans presumed B.C. was reaching for a piece of their oil industry royalties and taxes - a plausible assumption given some of the messaging coming from Victoria.
The Clark government calculated that B.C. would assume 100 per cent of the risk of marine oil spills and more than half of the risk of on-land oil spills, while reaping only eight per cent of the revenues that would flow to governments. Alberta would get 39 per cent and Ottawa would get the rest.
No wonder B.C.'s analysis had Albertans clutching their wallets.
Still, the Clark government never specifically targeted Alberta's oil revenues and Clark, when asked the question months ago, ruled out a revenue grab at the expense of her neighbour to the east.
She ruled it out again Tuesday, finally putting to rest doubts that had been part of the last-minute flutter between the two governments, mentioned at the outset of this column.
This leaves the province having to seek offsetting benefits from Ottawa or the industry itself. Those might include port development, construction of a facility to refine the heavy oil into lighter product, or other infrastructure.
Iffy to be sure. The premier's vaunted five conditions, like the Enbridge project itself, are a long, long way from success.
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