Northern Report by Prince George Free Press

JUNE 2012

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The Northern REPORT www.pgfreepress.com

The Northern Gateway pipeline What you need to know about the project Je ff M cINTOSH/ N4 9 Ph o to

An oil and gas pumpjack is silhouetted against a sunset near Carstairs, Alberta.

Special Edition: The Northern Report

Prince George Free Press - JUNE 2012

STOP

ENBRIDGE PIPELINE!

The Harper Conservatives are pulling out all of the stops to approve e the Enbridge Northern Gateway Oil Pipeline. The disastrous Bill C-38 38 threatens to dilute both the Canadian Environmental Assessment Act ct and the Fisheries Act -- and allow speedy approval of the $5.5 billion n oil il pipeline. Changes in these important Acts would remove public input and streamline approval of this massive pipeline project that will put over er Z[YLHTZ HUK YP]LYZ H[ YPZR HZ ^LSS HZ [OL WHJPĂ&#x201E;J JVHZ[ SPUL VM )YP[PZO [PZO O Columbia which First Nations and the public depend on. Take back Democracy, Say No to the Enbridge Northern Gateway Pipeline! Say No To Enbridge Northern Gateway Pipeline for our Future Generations!

STOP THE ENBRIDGE PIPELINE! Photos: NOAA; Index Open; Greenpeace / Eamon Mac Mahon

CARRIER SEKANI TRIBAL COUNCIL www.carriersekani.ca/

Special Edition: The Northern Report

Q THE PROJECT

Prince George Free Press - JUNE 2012

What is it all about?

he Enbridge Northern Gateway Project involves the construction of two pipelines and the construction and operation of the Kitimat Marine Terminal. The two pipelines are each approximately 1,170 kilometres in length, from Bruderheim, Alberta to Kitimat, British Columbia. One 914 mm (36-inch) outside diameter line would carry on average 525,000 barrels per day of petroleum products west to Kitimat. The other line, a 508 mm (20-inch) outside diameter pipeline, would carry on average 193,000 barrels of condensate per day east to Bruderheim. Condensate is used to thin petroleum products for pipeline transport. The Kitimat Marine Terminal would have two ship berths and storage for three condensate tanks and 11 petro-

leum tanks. It would also include a radar monitoring station and first response capabilities. Enbridge estimates that about 5,500 person-years of on-site employment will be created during the construction phase in B.C. and Alberta. In addition, about 1,150 long-term jobs will

be created to operate the pipelines and marine terminal. Total local, provincial and federal government tax revenues during 30 years of operations will be approximately $2.6 billion; this includes about $36 million per year estimated to be paid by Northern Gateway as local property taxes.

What is the Joint Review Panel process? When a project may cause significant adverse environmental effects or there is a high degree of public concern, a project can be referred to a joint review panel process. The Minister of the Environment decided that the Enbridge Northern Gateway Project would be assessed using a joint review panel. Panel members will conduct a public process where they will receive and consider all the information on the record. The record will include information submitted by the project proponent and other participants. The review process will include a formal information request

process on the application and oral hearing sessions. Further details about the review process will be provided in the Hearing Order to be issued by the Panel. Based on the record, the Panel will issue an environmental assessment report which contains its conclusions and recommendations. The report will include the Panel’s rationale for its conclusions and recommendations. The report will also include any mitigation measures, follow-up programs and a summary of comments received from participants. The environmental assessment report will be submitted to the Minister of the Environment

SHEILA LEGGETT

Board member, Bateman was the vice-president of Legal Affairs for Enmax, a large energy distribution, supply and service company. At Enmax, Bateman served as head of the legal department and oversaw corporate governance, the regulatory affairs, environment and compliance departments. Bateman holds a Bachelor of Law degree from the University of Alberta and a Master’s degree of International Business Management from the American Graduate School of International Management. Bateman resides in Calgary, Alberta.

Who’s on the panel?

Sheila Leggett has extensive regulatory experience, as well as a background in environmental issues and research. She has been a member of the National Energy Board since 2006 and is currently the vice-chair of the National Energy Board.Before joining the National Energy Board, Leggett was a board member with the Natural Resources Conservation Board, which conducts hearings into natural resource development projects in Alberta. Prior to this, Leggett was a vice-president and senior consultant with an environmental consulting firm and a founding board member for Alberta Ecotrust. She has served on numerous NEB regulatory panels, nine of which she has chaired. One of those included serving as the chair for the Emera Brunswick Pipeline Project, the first National Energy Board hearing substitution for the Canadian Environmental Assessment Agency joint review panel process. Leggett is also the chair of the NEB’s Governance Committee. Leggett has a Bachelor’s degree in Biology from McGill University and a Master’s degree in Biology from the University of Calgary.

KENNETH BATEMAN Kenneth Bateman is a Canadian energy lawyer and former senior executive in the Canadian energy sector. He has been a member of the National Energy Board since 2006. In addition to expertise in the energy sector, Bateman has extensive experience with major sustainable energy projects including wind farms and biowaste facilities. As a member of the National Energy Board, Bateman has been involved in numerous land and off-shore pipeline hearings such as the Brunswick Pipeline Project, Deep Panuke and Keystone XL. He is chair of the NEB’s Regulatory Policy Committee. Prior to appointment as a National Energy

HANS MATTHEWS Hans Matthews is a professional geologist with more than 25 years experience in the mining, minerals and resource management industries. He has a Bachelor of Science in Geology from Brock University and has completed course work towards a Masters of Science at the University of Western Ontario. Matthews has held executive positions focused on natural resource and environmental management, economic development and strategic policy and planning. Matthews has extensive experience in Aboriginal community development and consultation within the mineral exploration industry in Canada and abroad. He has worked since 1991 with Aboriginal communities in supporting economic development initiatives as a leader, advisor and negotiator. Part of this has been to aid Aboriginal communities to use and understand aspects of the natural resources sector to promote community development through his role as President of the Canadian Aboriginal Minerals Association for more than 18 years. Moreover, he was an advisor of Natural Resources with Indian and Northern Affairs Canada where he developed employment strategies through the Aboriginal Workforce Participation Initiative.

for a government response. Once the government has responded to the report, the Panel will make a final decision on whether or not to approve the project under the National Energy Board Act. The Panel’s decision will include its reasons and any terms or conditions to be included in an approval if granted. The panel will resume hearings in July with its first stop in Prince George. Hearings will be held at the Prince George Civic Centre starting at 1 p.m. on July 9. Hearings will continue July 10-12 in Prince George, getting underway at 9

a.m. each day. And, if necessary, the panel will sit in Prince George on July 13 as well. On July 17, the panel is slated to be in Burns Lake at the Island Gospel Fellowship Church, starting at 9 a.m. July 19 it will be in Fort St. James at David Hoy Elementary School, also starting at 9 a.m. The panel will then hold two days of hearings in Bella Cella on July 26 and 28, staring at 9 a.m. and July 27, staring at 1 p.m. at a location yet to be determined. On July 30-31 it will be in New Hazelton at the New Hazelton Elementary School.

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An opportunity for Canada

PATRICK DANIEL

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Q THE DEBATE

Special Edition: The Northern Report

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Enbridge

With the second-largest proven petroleum reserves in the world, Canada may like to flatter itself that it is a global energy superpower, but it’s not true. It could be. One day it might be. But it is not an energy superpower yet. There is no doubt Canada’s energy reserves are a tremendous strategic advantage, but they will only deliver true value if we choose to develop them and make them available to the world. Millions of dollars in benefits The Enbridge Northern Gateway pipeline project, which will run from Edmonton, Alberta, to Kitimat, British Columbia, is one step on the road to Canada becoming an energy superpower. With Northern Gateway we will be able to safely move energy to the West Coast, open new markets for Canadian petroleum and create thousands of construction and supplier jobs as well as significant permanent employment right across Canada. Completion of the pipeline will also generate millions of dollars in direct, lasting and meaningful benefits for First Nations and other communities and hundreds of Patrick Daniel billions of dollars in employment income and tax revenue for a generation of Canadians. But to become an economic superpower, that is a country with influence and standing on the world stage, we have to be able to deliver our products to markets around the globe. Right now we don’t – and can’t – do that with Canadian energy. While our proximity to the world’s largest energy consumer is a unique advantage, one all our competitors would love to have, our unparalleled integration with the U.S. market creates a number of problems: 1) It makes us complacent. 2) We only have one customer for our energy, never a good position to be in. 3) American markets are projected to remain flat for the foreseeable future, which could spell trouble for Canada’s economy as well. Make no mistake, the U.S. is, and will remain, Canada’s most important market and our closest trading partner. The interdependence of our economies is a huge permanent advantage for Canadians and Americans. But Canada’s energy relationship with the U.S. should more accurately be described as ‘dependent’ not ‘interdependent’. Today, virtually all of Canada’s oil exports (95 per cent) go to the United States. No competitor can trump our advantage of geography, capacity and a trading partnership built on shared values on the environment, human rights, the rule of law and democracy. We might be their most important energy supplier, but the United States has other options available for energy trade partners. At this time, Canada doesn’t, but Northern Gateway can change that. For too long, Canada has been a price taker rather than a price maker in North American oil markets. Gateway liberates Canada from that straitjacket. Independent estimates of the project’s impact say it will deliver to all Canadians an additional $270 billion increase in Canada’s GDP over 30 years. Can Canada be a leader in the world energy market? Of course it can. But only if we make smart, strategic moves, and take the sustainable steps to make it happen, now. Northern Gateway – currently under review by regulators to determine if it is in our nation’s best interest and if it meets Canada’s world-class environmental and safety standards – is one such smart, strategic move. Its completion will connect Canada’s most important and valuable export commodity to the markets that need it. Building a stronger Canada As Canadians, we need to better understand the connection between what the energy industry does and the lives we all lead. There is a direct connection between your car’s gas pedal, your house thermostat and Canadian oil and gas. Of course, we could choose to keep Canada’s vast supply of oil, which we have developed ethically and responsibly, landlocked in North America. We could continue to sell it at a discount, while other nations create the energy supply lines and energy market access for the rest of the world. Or we can take the steps required to bring Canadian oil to markets around the planet. We can responsibly, sustainably and safely construct and operate nation-building projects like Northern Gateway. We can make the most of the opportunities available to us and build on our strategic advantages as a responsible, democratic trading nation. We can build an even stronger Canada for future generations. Patrick Daniel is President and CEO of Enbridge Inc.

www.troymedia.com

Pipeline Q&A Remember the Exxon Valdez. What makes Northern Gateway any different? The safety record of the shipping industry has improved dramatically since that tragic incident in large part due to the significant advances in technology along with international regulatory controls. We are confident that by putting in place world-class marine safety protocols, we can move these vessels safely in and out of Kitimat, just as they have in the Port of Vancouver, the east coast of Canada, and elsewhere in the world. With 20,000 annual Canadian tanker movements on both the east and west coasts, we believe that Canada has the regulatory system and pilot experience necessary to ensure safe movement in and out of Kitimat.

Special Edition: The Northern Report

Q THE POLITICS

Prince George Free Press - JUNE 2012

A political hot potato

BILL PHILLIPS Northern Report

The Northern Gateway pipeline project is one that many politicians are hesitant to throw their full support behind. Most famously in B.C. is Premier Christy Clark who has stated she wants to wait until the Joint Review Panel process determines whether the project can proceed before voicing support. That sentiment has been echoed by Prince George MLAs Pat Bell and Shirley Bond. Former Prince George Mayor Dan Rogers was on record as supporting the project, however, current mayor Shari Green has followed the premier’s lead saying, in a Sea to Sands questionnaire during the election campaign, that she supports the Joint Review Panel process adding that should first determine whether the pipeline can be built and operated safely. Given that the Joint Review Panel process is a federal one, the most senior level of politicians have been more vocal. Prime Minister Stephen Harper has said the pipeline is in the country’s national interest and several of his ministers, including Natural Resources Minister Joe Oliver who com-

Prince George-Peace River MP Bob Zimmer plained that environmental groups opposing the pipeline are foreign-funded, have done likewise. And with the passage of Bill C-38, the Conservative government cabinet may approve the project regardless of what the Joint Review Panel recommends. Conservative Prince GeorgePeace River MP Bob Zimmer, however, says the government supports responsible resource development.

Skeena-Bulkley Valley MP Nathan Cullen

“I’ve had a lot of conversations with (Environment Minister Peter) Kent and Oliver, and they want to acknowledge the process,” said Zimmer. “They want to see it through. They want to see it pass those environmental stringencies that we expect it to.” Natural resource projects are good for the province and the country, he said. “As long as it’s done in an environmentally sound way,”

he said. “We want to breathe the fresh and drink the fresh water like all Canadians do.” Zimmer said he feels he always wants the Joint Review Process to run its course and if it passes that, he will be supportive of it. NDP House Leader Nathan Cullen, however, has been steadfast in his opposition of the pipeline. According to Cullen, there were between four and six thou-

sand screenings and environmental assessments done of proposed projects every year. With the changes the Conservatives are putting forward, the number would go to 20 or 30 total. “How that makes for a healthier economy and environment is beyond me, I don’t understand,” he told Black Press before passage of the budget bill. “If they were proud of the changes they were making to the Fisheries Act, trust me, it would be a standing bill, it would have all sorts of balloons and champagne celebrating how smart they are, but they buried it in 425 pages for a reason.” The changes also concern Cullen because he sees them as long-lasting. “These changes will hit home,” he said. “They’re not just going to last a year, by the way. Most budgets, the changes that happen, you c an sometimes fix the following year, these ones may go for a generation or more, they’re profound.” At the local level, the Smithers, Terrace, Prince Rupert councils and the Skeena-Queen Charlotte Regional District board of directors have all passed motions opposing the pipeline.

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Special Edition: The Northern Report

Prince George Free Press - JUNE 2012

Q THE ECONOMICS

Economics prof. questions numbers

ALLAN WISHART Northern Report

For Al Idiens, the numbers on the Northern Gateway project don’t add up. “There are still more questions than answers,” the economics and business instructor at the College of New Caledonia says. “Enbridge isn’t giving us a lot of numbers to work with.” Idiens did a small study on the potential job impact the Northern Gateway would have on the Prince George region and says, quite simply, there probably won’t be much of one. “They’re still saying 4,000 to 5,000 jobs will be created, but most of those are short-term during the construction of the pipeline. Most of them would be things like brush clearing, where they would probably hire people in each region.” When it comes to the actual construction of the pipeline, though, “it wouldn’t make sense for them to hire different people in each region for laying the pipe.” “They’ll probably have one crew who will move from spot to spot during construction.” He does see the potential for some jobs in Prince George after completion of the pipeline. “There would be some jobs on the technical end afterwards,

and Prince George is probably where they would have people available to maintain and repair the pipeline.” That, he says, could tie in nicely with the local post-secondary institutions. “It would give us an opportunity to have people training on site.” However, Idiens also sees other problems, which could have economic impacts on the region. “Enbridge has never really addressed the impact of a spill, such as what the likelihood is what the extent of damage could be.” In the backcountry much of the pipeline is planned to traverse, he sees major economic impacts possible. “There could be a loss of fishing and hunting opportunities in the event of a spill.” As time goes by, the chances of a problem increase, Idiens says. “A study in the New York Times on pipeline spills in the United States showed that 22 per cent of them were caused primarily by corrosion. They have a lot of older pipelines in the U.S., but that is still something that needs to be looked at.” He feels Enbridge would have the opportunity to help other industries and itself with one

advance. “If they could be required to develop a corrosion-free pipeline, something that would last at least 30 years, the benefits for other industries would also be phenomenal.” That 30-year figure is one that comes up frequently in looking at the Northern Gateway project, since it’s the length of many of the agreements Enbridge is signing, both in Canada and overseas. “There are revenue-sharing agreements being signed with First Nations, but they’re equitybased, depending on what the pipeline will bring on over the next 30 years. “I can’t find out how valid the projections the company is putting forward are. I think over the first 10 years or so, there would be good value, but after that, there’s no way of knowing.” Idiens feels the overseas agreements Enbridge is signing with producers in China and other countries are on more solid footing. “Canada is recognized worldwide as a supplier of staples, such as oil. We’re not good at being cost-competitive, which is why there is such a risk looking at the price of oil over the 30 years.” For instance, he says, the Caucasus region in Eurasia has vast supplies of oil, but unstable gov-

Al Idiens ernments make it risky for countries like China to look there for supplies. “Where we (Canada) are good is being known for peace, order and good government. Other countries know our long-term promises will be made good on.” Again, though, Idiens says

it comes down to one simple problem when assessing the economic impact the Northern Gateway would have on the Prince George region. “There are more questions than answers. It would be nice to see something done, but these questions need to be dealt with.”

There’s a reason why We say NO to ENBRIDGE OUR WATERWAYS MEAN LIFE TO OUR LANDS AND PEOPLE

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Special Edition: The Northern Report

Q THE ECONOMICS

Prince George Free Press - JUNE 2012

What the think-tanks think

As might be expected, presentations from a couple of think-tank researchers looking at the proposed Northern Gateway pipeline raised more questions than answers. An economist from the Canada West Foundation and a policy analyst from the Pembina Institute analyzed the project at a symposium organized by the Northern Economics Student Society. The proposed Enbridge pipeline would ship oilsands production from northern Alberta some 1,170 kilometres west to Kitimat for export overseas. The project has run into stiff criticism from environmentalists and at least 70 First Nations. Michael Holden from Canada West said his non-partisan, Calgary-based think-tank has no formal position on the proposal and could provide “no answer” on whether it makes economic sense. As Holden pointed out, Enbridge’s stated intention to send the oil to Asia seems to make sense, with demand in China alone expected to double to nine million barrels per day by 2035, according to statistics he showed. He also said Canada currently sells almost all of its oil and gas into the U.S., and “most people would say that’s not necessarily a good thing to be devoted to a single market.” But from a purely economic standpoint, Holden continued, it’s impossible to accurately measure all of the benefits of the pipeline and determine if they outweigh all of the unknown costs to the company and the public. And he added that environmentalists, government and industry are all following their own agendas, so, “it’s difficult to know who to believe in some cases.” That’s why Holden and Canada West are advocating for a national energy strategy that will hear from absolutely everyone with a stake in the matter and hopefully result in “some sort of clearer Economist Michael Holden and policy analyst Nathan purpose and direction.” Lemphers

A “decision on pipeline investment (could then) be made in that context, rather than on political ebbs and flows of the day.” He allowed that such a plan would take years to develop, but the Pembina Institute’s Nathan Lemphers said Enbridge has lots of time. According to Lemphers’ analysis, there is still excess capacity in North America’s existing oil pipeline infrastructure, and there won’t be an acute shortage for at least a decade. Pembina is in favour of responsible oilsands development with conditions, like science-based environmental limits and a requirement to invest government proceeds in developing clean energy. Lemphers, who has dissected the Northern Gateway application package currently before a federal review panel, said the information provided is sorely lacking. Among the faults, he singled out the lack of publicly announced shipper agreements to demonstrate a need for the pipeline, and no analysis of demand for oilsands crude from Chinese refineries. What’s more, he said it’s wrong for Enbridge to keep secret the identities of 10 firms that have backed the project with $10 million each. “It puts private interests ahead of public interests,” said Lemphers, adding that $100 million is peanuts on a $5.5 billion project. As well, he is skeptical of the assumption that the Chinese appetite for oil is insatiable. Lemphers said Chinese cities are not following the North American model built around the automobile, so predicting unbridled demand for oil is “very presumptuous.” Lemphers will address the federal review panel on behalf of some environmental groups this fall, and will urge it to more closely examine alternatives to the Northern Gateway, such as expanding capacity of the Kinder Morgan pipeline from Edmonton to Burnaby, currently the only direct route for oil onto B.C’s coast.

Prince George Free Press - JUNE 2012

Enbridge puts office in P.G.

BILL PHILLIPS

“The analogy we use is that $270 billion is about the size of Ontario’s economy today,” she said. However, approval must first be granted to Enbridge will establish regional offices in the project and the approval process is now Prince George and Burns Lake, should the underway. controversial Northern Gateway pipeline be The National Energy Board (www.neb. approved. gc.ca) and the Canadian Environmental Michele Perret, senior manager of municiAssessment Agency (www. pal relations for Enbridge, told ceaa-acee.gc.ca/default. a Chamber of Commerce gathasp?lang= En&n=D75FB358-1) ering in Prince George earlier are leading a joint review this year that 12 people would panel for the Northern Gatework out of the Prince George way project, which will ultioffice and seven in Burns Lake. mately decide on whether the Those will be among the 500 project will proceed. And, as full-time jobs created by the for all the public debate surpipeline, about 200 of those rounding the pipeline project, being at the marine terminal in the panel looks at the informaKitimat. tion presented to it. “That regional manager “They will make an indepenwould employ a manager and Michelle Perret dent decision on the project,” office staff,” she said, addPerret said. “The joint review panel must ing other workers such as electricians would make their decision based on what’s on the work out of the local office. record.” As for construction, however, British Community hearings on the project Columbia is the big winner. Should the projbegan in January. Final hearings on the ect to built a pipeline from Edmonton to Kitiproject will be held this summer and a mat proceed, there will be more than 5,000 decision is expected by the fall or perhaps person-years of employment, 4,100 of those early 2013. will be in B.C., the remainder in Alberta. Should the project obtain approval, At $5.5 billion, it is a huge project and there will be spin-offs for the local economy during Perret said the company will then begin detailed engineering plans of the proposed construction, she said (see graphic). pipeline, and construction, expected to Perret said the project will contribute $270 take two-and-a-half to three years, will billion to the country’s gross domestic prodbegin. uct over 30 years.

Northern Report

Special Edition: The Northern Report According to Enbridge, the benefits of the project for British Columbians are huge: • 4,100 person-years of direct on-site employment in BC • 35,000 person-years of total employment (on-site, purchases, indirect, induced) in BC Northeast BC region: • 1,150 person years for construction employment; 675 from within the region • Peak pipeline construction will require up to 818 people • Peak pump station construction will require 56 people • 15 jobs for operational employment • $112 million in goods and services, Northeast BC: • Equipment rentals - $26 million • Camps / Accommodations / Catering - $30 million • Clearing / logging / salvaging - $16 million • Fuel - $12 million • Stockpiling Pipe - $5 million • Trucking - $5 million • Equipment Parts - $5 million • Surveying - $2 million • Access Roads - $4 million • Other Items and Services $6 million BC Central region: • 5,160 person years of total construction employment; 3,675 from within region • 1,805 person years of direct construction employment; 500 from within region • Peak pipeline construction will require 1,322 people • Operational employment will create 19 jobs • Purchase of goods and services will create 65 jobs • $401 million in goods and services, BC Central region: • Equipment rentals - $102 million • Construction Camps / Catering - $94 million • Clearing / logging / salvaging - $61 million • Fuel - $42 million • Stockpiling Pipe - $15 million • Equipment Parts - $20 million • Surveying - $7 million • Access Roads - $23 million • Trucking - $18 million • Other Items and Services - $18 million Coastal BC region: • 4,025 person years of total construction employment; 2,235 within region • 1,715 person years of direct construction employment; 515 from within region • Peak terminal construction will require 419 people • Peak tunnel and pipeline construction will require 765 people • $318 million in goods and services, Coastal BC:

Special Edition: The Northern Report

Prince George Free Press - JUNE 2012

Q THE SUPPORT

Gateway Alliance keeps growing

TERESA MALLAM Northern Report

The Enbridge Northern Gateway Pipeline plan is a golden opportunity with huge economic benefits not only for British Columbians, including northerners – but for all Canadians, says Colin Kinsley. The former Prince George mayor is chair of the Northern Gateway Alliance, a coalition of community leaders who support the regulatory review process in connection with the Enbridge project and who encourage members of the community to help shape the outcome. Membership in the Alliance has grown considerably. “[Just over] three years ago at the local government convention in Dawson Creek we launched the Alliance and [we] had about 50 members – they signed up mayors and other elected officials. That number is now approaching 1,600 and they tend to be community leaders, small business operators, contractors – just regular folks, a cross-section of people from labour, business and commerce.” Kinsley said he’s seen “huge interest” from people in their own communities wanting to see the project move forward. He’s also heard from the critics. But for him, it’s about the big picture. Enbridge’s plan to build 1,177 km-long twin pipelines from Bruderheim, Alberta to Kitimat, B.C. with an eastbound pipeline importing natural gas condensate and westbound pipeline exporting crude oil and bitumen to Asian markets via tankers, is not just big in scope, says Kin-

sley, it will provide far-reaching, future economic gains. “Building this pipeline to the coast is akin to the St. Lawrence Seaway coming in and opening up the interior of eastern Canada because this opens up a new market. Right now we’re price takers, we’re not price makers. We get what the Americans will pay us because 99 per cent of our oil goes to the United States.” Benefits from the proposed pipeline will flow to us all, he says. “Another thing that’s important to know – because I hear the criticism, ‘This is Alberta’s oil.’ Well, it’s Canada’s oil and there’s a huge amount of royalties and taxes paid that goes to the provincial and federal governments, particularly the federal government which is then distributed throughout the nation to pay for services. So this is in the Canadian interest.” This province will reap the rewards, says Kinsley. “For British Columbians, there’s going to be – literally – millions and millions of dollars of taxes that will be paid because Enbridge, like any pipeline [company] – pays one of the highest rates of taxes, under the Utilities classification.” Kinsley acknowledges several groups, particularly environmental organizations and individuals, oppose the plan. Many of them have made valid points and he believes they have “sincere” environmental concerns. “I understand their fear... [they think} if there is no pipeline, there is no fear of oil spills. I empathize with that.”

But he points to others, “fear mongers” and “merchants of misery,” as critics who may be clouding the issues and misrepresenting the facts. “The more radical environmental people say ‘it’s not a matter of if but when,’ he notes. However, having spent 30 years in the natural gas industry in northern B.C., Kinsley says people’s fears are often based on wrong information. “I’ve worked on all sizes of pipelines, including the size that’s being comtemplated here. I’ve worked in rough terrain. I’ve put in 36-inch pipe. A lot of people don’t realize there are three pipelines in Prince George, there is a 36-inch gas, 30-inch gas and a 12-inch oil [pipes]. They flow every day and they pay taxes. They’re not a drain on the municipalities [and] they don’t require services.” Why is it the Enbridge plan attracting so much ‘heat’? “There’s a very well-funded, sophisticated opposition, a lot of which in my opinion is directed at halting oil sands production. The oil sands are targeted because they’re a great fundraiser but people often don’t look at the facts. Eighty per cent is ‘in situ’ so it’s extracted right there. There is a lot of misinformation out there on oil sands extraction, the techniques they use and the harmful effects.” Pipelines are believed to be the safest way to transport liquids and they are very plentiful in Canada, Kinsley said. “There’s a criss-cross of pipelines all over the country. If you Google a map of it, there’s red pipelines everywhere...

We’re only 35 million people. We can’t consume all the oil we produce and if we didn’t export it, we wouldn’t have all the services that we do.” Enbridge has spent the money to reduce the risks, he said. “The Enbridge pipeline will have more shut-off valves than any other pipeline of this length, strategically placed. electronically and automatically controlled.” Consequences from any oil spills – and the risks of that ever happening – have been dramatically reduced, says Kinsley, “Humankind has learned from our mistakes. Scientists, engineers, they try to eliminate the risk as best they an. If we miss something, and there’s an incident, we fix it. But the big thing is in the technology. There’s all kinds of new technology Every piece of pipe is now x-rayed in the factory, a hard epoxy is put on it,” he said, noting that moisture (and bacteria) is a “killer of steel.” Support is strong, however and Kinsley is pleased with what he’s seen so far. “What we’re finding is there is strong leadership supporting this process. They believe the Canada Environmental Assessment Agency and the National Energy Board will conduct a rigourous and transparent review. The role of the Alliance is to support that process and inform the membership on issues, good and bad and that offices will soon be established in Prince George, Burns Lake and Kitimat, he said. For more information on Northern Gateway Alliance, visit www.northerngateway.ca.

Special Edition: The Northern Report

Prince George Free Press - JUNE 2012

Q THE ECONOMICS

Holes shot in economic model

ROBYN ALLAN Economics

There is a chorus singing the praises of the oil industry and its vast economic benefits – from the boardroom of pipeline company Enbridge to the office of the Prime Minister. They advocate rapid expansion and export of crude oil resources as a panacea for our economic future. They cite big numbers from numerous studies. The reports are used like quantitative billyclubs to beat back public inquiry and drive the discussion away from a thorough examination of macroeconomic implications. Instead, we have a forced narrative – industry financial gain must take precedence over environmental risk and First Nations’ rights. This is a false dichotomy. The reports include Enbridge’s Application to the National Energy Board in support of Northern Gateway pipeline; Canadian Energy Research Institute’s (CERI) studies No. 122, 124, 125 and 128; the School of Public Policy at the University of Calgary:Catching the Brass Ring; and the Wood Mackenzie Report prepared for the Government of Alberta. The benefits range from hundreds of thousands of jobs and trillions of dollars in Gross Domestic Product (GDP) in CERI’s studies, $270 billion from Enbridge, $132 billion from the University of Calgary, and $72 billion from the government of Alberta. These studies suffer from serious weaknesses which render the results not only unreliable, but unusable. The main ones are: 1. Input-Output Model: All the studies calculate a benefit without sensitivity analysis and develop a single long-term scenario. No board of directors would accept this approach

when making an important investment decision, particularly when the rosy picture is forecast to continue for decades. All but Wood Mackenzie use this information as input into an Input Output (IO) model to further expand their case. An IO model presents results as GDP, person years of employment, labour income and government revenues. Using these indicators of economic well being gives the illusion that the model has measured macroeconomic impact, when the model has not – because it cannot. IO models have severe limitations, over-estimate benefits and ignore economic costs. They do not perform a cost-benefit analysis. The underlying math constrains the models – they are static, linear, partial equilibrium representations of a sector of the economy at a point in time. The models have no feedback mechanism so do not incorporate price, exchange rate, interest rate, or other input cost changes on the oil industry or the broader Canadian economy. All the studies assume higher oil prices – rising to as much as $200 per barrel – but do not consider their impact on consumers as they cut back spending and saving, or businesses as they postpone investment, cut wages, and layoff employees. IO models tell us the Vancouver Canuck riot was a wealth generating opportunity as would be spilling oil rather than safely transporting it. 2. Exchange Rate: It is generally understood rising oil prices put upward pressure on the Canadian dollar. The studies ignore this. They assume a fixed and relatively low dollar over the long forecast period which inflates the benefit. Enbridge, Wood Mackenzie and the University of Calgary assume an 85 cent

Canadian dollar. Their U.S. dollar revenues automatically receive an 18 per cent increase when translated to Canadian dollars. An appreciating dollar hurts the Canadian economy. When the Canadian dollar goes up, the price of exports increase, foreign demand falls, and slower growth with job losses, follow. This phenomenon – when due to the expansion of the resource sector – is symptomatic of the Dutch disease. By holding the exchange rate fixed, the studies pretend a continued hollowing of our manufacturing sector does not occur. Mention the Dutch disease and the oil industry and its proponents get defensive. However, even the oil sands are not immune to petro-fever. A rising dollar fundamentally affects profit performance of oil producers. Crude oil sales are denominated in U.S. dollars while production costs are paid in Canadian. An increasing dollar squeezes profitability. For example, if the dollar is at par and oil sells for $100 U.S. per barrel, gross revenue is $100 Canadian. If the dollar rises to $1.05, that same barrel is worth $95.24 Canadian – a decline in gross revenue of 4.76 per cent. Unless this relationship is included, estimates of financial returns, investment, and future supply, will be exaggerated. These unrealistic supply forecasts are then used to support the need for new pipelines to service the U.S. and China. 3. Oil Prices: Not only do the studies depend on rapidly rising oil prices, a number also require higher oil prices in Canada with new pipelines than without them. This perverse market outcome occurs because access to the higher priced markets in the U.S. Gulf Coast and Asia will allow producers to charge higher prices for the oil they sell in Canada.

Enbridge assumes the price lift with Northern Gateway is $2 to $3 U.S. per barrel, on every barrel – conventional to bitumen – every year for 30 years. The Brass Ring assumes $7.20 U.S. to $13.60 U.S. from 2016 to 2030 while the Wood Mackenzie Report assumes an $8 U.S. per barrel price increase on heavy oil sands production from 2017 to 2025. These price increases are on top of the studies’ anticipated doubling of oil prices over the next 30 years. Refineries pass higher prices on and if they can’t suffer reduced margins and may shut down. When refineries close, the price on petroleum products rises anyway because of lost production. Either way, Canadian consumers and businesses pay more because of new pipelines, and this needs to be incorporated into a macroeconomic discussion of their impact. These deficiencies render the studies unusable. Their benefits should not be cited to expedite environmental review as they were in the Federal Budget 2012, demonize concerned citizens as Minister of Natural Resources Joe Oliver has done on numerous occasions, or silence discussion of economic development challenges facing Canada as Alberta Premier Alison Redford recently succeeded in doing in an open conversation with Ontario Premier Dalton McGuinty. Economic growth in all parts of Canada is needed to ensure national progress. To realize this progress requires a courageous look at economic reality along with sound analysis – not a reliance on studies that enable the economics of deception Robyn Allan has had a lengthy and successful professional career in senior executive positions in the public and private sector with an emphasis on insurance, finance and real estate.

www.troymedia.com

Developing Our Natural Resources Responsibly All of us use natural resources. Whether it’s the gas that fuels our cars, the natural gas that heats our homes, or the Tupperware containers filled with leftovers—it all comes from natural resource products. In order to function in today’s modern society, the responsible development of our natural resources is crucial and global demand for natural resources is continuing to grow.

consultations and discussions with Aboriginal and other organizations since 2008. The Northern Gateway Pipeline would represent an investment of $5.5 billion, creating thousands of jobs here in British Columbia during construction and additional long-term jobs to operate it.

I believe reviews for major projects, like this one, can be accomplished more efficiently, without lacking in environmental stringency. As the Member of Our natural resource industries, including energy, Parliament for Prince George-Peace River, I want to mining and mineral processing, and forestry, account see projects proceed provided they are for more than 10 per cent of our gross domestic environmentally sound, generate thousands of new product and provide close to 800,000 jobs in Canada. jobs for the region, open up new export markets, and provide for many of the services that we enjoy and In fact, most jobs in our region, from serving coffee at rely on. Starbucks to working at a sawmill, rely either directly or indirectly on developing of our natural resources. We want to identify safety issues before they occur. So, as part of our Responsible Resource Development In the next 10 years, more than 500 new projects plan, our Conservative Government will provide representing over $500 billion in new investments will $13.5 million over two years to improve pipeline be proposed for Canada in the natural resource safety across Canada by enabling the National sector. In British Columbia, companies are looking at Energy Board to increase the number of inspections review process for major economic projects, while investing $83.9 billion in the next ten years. The for oil and gas pipelines by 50 per cent from about maintaining the highest possible standards for potential for job growth in our region is enormous. 100 to 150 per year and double, from three to six, the protecting the environment. number of annual comprehensive audits. As we all know, the Northern Gateway Pipeline is We need to ensure timely, efficient and effective currently going through a process to ensure it is safe Our Responsible Resource Development plan will project reviews, while at the same time act as good and environmentally sound. Our Conservative create good, skilled, well-paying jobs in cities and stewards of our environment as we continue to Government has also been a part of ongoing communities across Canada by streamlining the develop our natural resource. We CAN do both!

Bob Zimmer, Member of Parliament for Prince George-Peace River 1-855-767-4567 • Bob.Zimmer@parl.gc.ca • www.bobzimmer.ca

Special Edition: The Northern Report

Prince George Free Press - JUNE 2012

Q THE ECONOMICS

Holes shot in Allan’s economic analysis

GERRY ANGEVINE

Senior Economist The Fraser Institute

The public debate surrounding Enbridge’s proposed Northern Gateway oil pipeline has suddenly veered off in a new direction, powered by economic nationalists and the suggestion that rather than exporting oil to China, we should be refining it here at home. The latest entry in this unfolding discussion comes courtesy of the Alberta Federation of Labour, which earlier this month released a report by B.C. economist Robyn Allan claiming the Northern Gateway project will damage the Canadian economy and hurt consumers because it will lead to markedly higher gasoline and other fuel prices. Meaningless claims But a critical look at economic data convincingly shows that Allan’s assumptions pertaining to the impact of Northern Gateway on domestic crude oil prices are unrealistic and therefore, her claims and conclusions are essentially meaningless. To begin with, Allan mistakenly assumes that exporting 525,000 barrels of crude oil and bitumen (both raw and upgraded) per day via the Northern Gateway pipeline (as Enbridge is proposing) would increase the price of every barrel of oil produced in Canada by $2 to $3 per barrel over a 30-year period. The United States currently absorbs virtually all of Canada’s crude oil exports and Enbridge suggest that, based on current and anticipated differentials between crude oil prices in Asia and the U.S., netbacks to Alberta could be $2 to $3 per barrel greater on oil marketed in China.

per cent. But there is no guarantee that the existing The United States currently absorbs price differentials will be maintained. In virtually all of Canada’s crude oil exports. fact, they almost certainly will not be. Enbridge suggests that, based on current The high crude oil prices in Asia, where and anticipated differentials between oil demand is growing more rapidly than crude oil prices in in most other parts Asia and the U.S., of the world, will oil sold in China undoubtedly attract could be worth incremental sup$2 to $3 per barrel plies from Canada, more in terms of the Middle East and gross sales revenue other world regions less the cost of until world regional A critical look at ecotransportation from oil price differenAlberta. tials mainly reflect nomic data convincBut there is no transportation costs ingly shows that Allan’s guarantee that the from one region to existing price difthe next. assumptions pertainferentials will be Further, the maintained. In fact, Northern Gateway ing to the impact of they almost cerProject will facilitate Northern Gateway on tainly will not be. the shipment of a To argue that relatively small pordomestic crude oil pric- once the Northern tion of Canada’s Gateway oil pipeconventional crude es are unrealistic and line is operational oil and bitumen protherefore, her claims every barrel of oil duction to the Asia produced in CanPacific. According to and conclusions are ada will cost Canathe National Energy essentially meaningdian refiners from Board’s most recent $2 to $3 more, and projections, at full less. that this will push capacity the North-- Gerry Angevine up fuel prices and ern Gateway oil accelerate inflation, pipeline will only be makes no sense. capable of transportThe National Energy Board predicts furing 17 per cent of Canadian oil production ther oil sands development will increase in 2020. Canadian oil production by 3.3 million With further growth in production barrels per day from 2010 to 2035. But (mainly from the oil sands), the per centrather than driving up oil prices, this will age of Canadian oil shipped to Asia via help keep world oil prices from increasNorthern Gateway will slip to under 10

‘‘

ing as much as they might otherwise. The International Energy Agency’s 2011 World Energy Outlook predicts that world oil demand will increase to 99 million barrels per day by 2035 from 87 million barrels per day in 2010. Increased oil supplies to meet those additional needs must come from somewhere. If oil sands production growth is constrained and the shortfall is not made up by increased production from other parts of the world, the world oil price will inevitably increase beyond the levels the IEA suggests. U.S. oil needs to drop Since Canadian oil requirements are not anticipated to increase much in coming years, apart from possible replacement of the relatively small supplies currently being imported, virtually all of our incremental production will be available for export. But the most recent long-term projections by the U.S. Energy Information Administration indicate that U.S. oil import requirements are likely to diminish in coming years as domestic production of crude oil and equivalent products grows and demand for transportation fuels decreases. This underscores the need for Canada to seek out and develop new markets. Contrary to what Allan and the Alberta Federation of Labour would have us believe, shipping a portion of the anticipated increase in Canada’s oil production to markets in the Asia Pacific will put neither Canadian consumers nor the Canadian economy at risk. Gerry Angevine is a senior economist in the Fraser Institute’s Global Resource Centre.

www.troymedia.com

Is this the path to our future?

www.coastalÀrstnations.ca

Special Edition: The Northern Report

Prince George Free Press - JUNE 2012

Q THE DEBATE

B.C. Chamber supports pipeline

JOHN WINTER President B.C. Chamber of Commerce

British Columbia was built on natural resource wealth. Northern British Columbians understand that better than anyone. Most everything that makes B.C. a great place to live -- from quality public health care to good schools for our children -- can be traced back to the wealth you helped create. It’s also true that all British Columbians value our environment and want to protect it for future generations - that’s just as true in northern B.C. as it is in the Lower Mainland. And time and again, British Columbians have led the way, showing the world that we can grow our economy, create jobs and preserve our environmental heritage. That’s why the B.C. Chamber of Commerce, representing over 32,000 B.C. businesses, is proud to support the Northern Gateway Pipeline. Because it represents what’s best about economic development in B.C.: thousands of new jobs and economic growth combined with world-class safety standards to protect our environment. Just step back for a moment and consider the benefits of the Northern Gateway Pipeline. First: The pipeline will employ 3,000 jobs at peak construction and 560 new permanent jobs here in B.C. -- good jobs that help bring economic stability and security to families right across northern B.C. In today’s economy, we need those jobs. The project will also bring with it much-needed skills training opportunities and long-term meaningful benefits to First Nations communities. Second: Over 30 years, the Northern Gateway Pipeline will generate more than $1.2 billion in tax revenue. That’s $1.2 billion! That means more hospital beds, new schools, and better roads all across B.C. Just like our forest industry supports every British Columbian’s quality of life, and has for generations, so too will the Northern

Gateway Pipeline. Third: The direct economic impact of the pipeline in coastal and northern B.C. will approach $1 billion spent on local goods and services. Small business owners understand how important that kind of local spending is to the bottom line and the jobs they create. It will also contribute millions of dollars a year to property taxes for local communities - money that can go right back into better local services, from policing to parks. Fourth: The Northern Gateway Pipeline will open up new markets for our energy exports all across Asia. Canada is a trading nation. It’s how we compete and are winning in the global economy. The Northern Gateway pipeline will give us a huge economic advantage in the global economy as we increase trade with the Pacific Rim. B.C. will lead the way. And fifth: The Northern Gateway Pipeline will show, once again, that when it comes to combining economic growth with environmental protection, no one does it better than we do in B.C. The pipeline will be constructed to the highest world-class standards, feature the latest in safety technology and be monitored 24/7, 365 days a year. It will also bring new investments in navigational technology on the ocean and first-class emergency response capabilities at sea and on land. Tankers and vessels have transported oil along our coast for decades. These investments will help ensure we John Winter build on that record of safety - making our coast that it goes forward, including making a submission to even safer for all marine traffic. the Northern Gateway Joint Review Panel earlier this Taken together the long-term benefits of the Northern month. Gateway pipeline are enormous: good jobs, better pubAt the chamber we feel it’s time for all British Columlic services, local economic growth, new trading opporbians who want to grow our economy, create new jobs tunities, and investments in world class environmental and protect our environment stand up and be counted. safety standards. It’s how we built this province. And it’s how we will That’s why the BC Chamber of Commerce is not only move forward. supporting this project, but doing what we can to see

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Special Edition: The Northern Report

Prince George Free Press - JUNE 2012

Q OCEAN SAFETY

Many safety measures in place

DELYNDA PILON Northern Report

The Enbridge pipeline issue is complex, involving miles of pipeline, a myriad of stakeholders as well as proponents and protesters of the project speaking out. One major issue is the oil tankers that will traverse the B.C. coastline, carrying the crude bitumen to foreign soils. Some, if upended, would span about three football fields in length. Many say the danger of them navigating the coast of B.C. is just too great. However, Chris Anderson, marine advisor at Enbridge, said though any coastline in the world that experiences gale-force winds must be contended with, B.C.â&#x20AC;&#x2122;s coast is no worse than others. â&#x20AC;&#x153;It is no more difficult than the North Sea in the winter, no more than the North Atlantic in the winter, no more than the coast of Japan, all of these places where tankers are trading on a regular basis.â&#x20AC;? Many have been operating for 30 years, and Anderson said the combination of applying new technologies with the experiences of others who have been in the business for so long can help Enbridge make the project as foolproof as possible. He added it has been said B.C. does not have confined channels, which is not true. â&#x20AC;&#x153;The fact of the matter is we do. Ours are longer but also deeper and wider.â&#x20AC;? He said they are used so ships can keep in the shelter. However, before navigating them, a pilot must come aboard ship. This means if there is a storm and a pilot cannot get to the ship, it must wait before proceeding. Often, when a storm is fore-

cast, the speed of the ship is adjusted so it arrives when the storm ends and the pilot can be procured. Anderson added not only is the company working diligently so safeguards are put in place to ensure there is no spill in the first place, but also to mitigate any damage if something happens. There are already numerous regulations in place governing tankers, he said. Some are implemented by the Canada Shipping Act, others by the International Maritime Organization. Enbridge, he said, plans to not only strictly adhere to those measures but hopes to improve on them, meaning they intend to be more cautious and safety conscious than what is required. However the studies, simulations and promises made by Enbridge lend little comfort to some of those concerned who believe people should be cynical about the information Enbridge is sharing since the company has a vested interest in the outcome of such studies. â&#x20AC;&#x153;We are not the fox guarding the hen house,â&#x20AC;? Anderson said. â&#x20AC;&#x153;That is not correct. Shipping is governed.â&#x20AC;? If the pipeline goes through, the oil that arrives in Kitimat will be shipped overseas via a northern and southern route. Twenty-five per cent of the ships going through the coastal passages will be smaller tankers, Aframax, about 180 to 200 metres long capable of shipping 100,000 tonnes of cargo. The Suezmax, which will make up about 50 per cent of traffic, are about 280 metres long and carry 160,000 to 180,000 tonnes. The Very Large Crude Carrier (VLCC) are 830 metres long, about the length of three football fields, and carry

Chris Anderson 300,000 tonnes of cargo. They will carry about 25 per cent of the cargo. Although all the ships have electronic navigation, nighttime watch keepers and built-in radar, at this time there is no independent radar system in Kitimat. Anderson said Enbridge intends to install radar and communication systems, and augment those available in Prince Rupert. Other safety measures include a system that changes ballast water in deep sea so no contaminants from other shores are brought to Canada. With safety and design measures, the focus will be on the escort tugs which will have built-in suspenders, capable of acting as an independent entity to steer. Anderson said each ship must list all of

its particulars including every port it has entered, whether it has been inspected and its deficiencies. All certifications must be up-to-date. Questions regarding whether or not the crew speaks English and can communicate with the pilot will be asked. â&#x20AC;&#x153;Currently there are no speed restrictions in place,â&#x20AC;? Anderson said. They will institute some so the escort tug can always control the ship. The tugs are designed with firstresponse capabilities if there ever is a spill. They are able to skim oil, deal with fire suppression and monitor the situation. â&#x20AC;&#x153;We canâ&#x20AC;&#x2122;t close our eyes and say there will never be a spill,â&#x20AC;? Anderson said. â&#x20AC;&#x153;The worst case is a collision risk.â&#x20AC;? Having the gear, equipment and manpower on-hand to accommodate if a spill occurs not only through properly outfitting tugs as first responders but positioning everything needed at three primary centres is part of the plan. â&#x20AC;&#x153;We will have the whole coast covered for a 12-hour response,â&#x20AC;? he said. TheyĂve also promised they will maintain or contract a RO capable, under the planning standards, of containing, and recovering within 10 days or the shortest possible time, up to 32,000 tonnes of onwater oil, which is more than three times the Canadian Standard. Currently response comes via Vancouver or Victoria and takes up to 72 hours. â&#x20AC;&#x153;We believe all the safety measures put in place are going to make this project a viable one,â&#x20AC;? Anderson said.

Northern Gateway Pipeline . . . . an agenda for Shared Prosperity The Enbridge Northern Gateway Pipeline represents substantial economic and community benefits for British Columbia. The pipeline will create: r r r r r r

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The Northern Gateway Pipeline: an opportunity BC cannot afford to miss.

Enbridge Norman Wells Pipeline right-of-way between Norman Wells and Fort Simpson. The pipeline right-of way is the wide flat indentation to the left of the road.

The BC Chamber is the largest and most broadly based business organization in the province. Representing over 120 Chambers of Commerce and 32,000 businesses of every size, sector and region of the province, the BC Chamber of Commerce is â&#x20AC;&#x153;The Voice of Business in BCâ&#x20AC;?.

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Special Edition: The Northern Report

Prince George Free Press - JUNE 2012

Q THE OPPOSITION

Coastal First Nations say â&#x20AC;&#x2DC;noâ&#x20AC;&#x2122;

DELYNDA PILON Northern Report

The Coastal First Nations will go to the wall to stop the Enbridge pipeline project, and according to Art Sterritt, executive director, about 80 per cent of British Columbians stand behind them. Sterritt said they were asked about their position on the pipeline some time ago. â&#x20AC;&#x153;Quite a while ago Northern Gateway was proposed and Coastal First Nations had no position on it,â&#x20AC;? he said. Understanding the pros and cons of the proposal became their first challenge. â&#x20AC;&#x153;We engaged in a consultation process. We looked at the results of the Exxon Valdez oil spill in Alaska, looked at shipping around the world and hired a bunch of scientists. Then we conducted a consultation process with the community, all of which took about three years before we came up with a final conclusion,â&#x20AC;? he said. Before the Coastal First Nations finished their consultations, Enbridge stood the project down for a time. Sterritt said they went at it for a couple years, then backed off for a year. By the time Enbridge re-engaged in the process, Coastal First Nations came out with a position stating no good could come from the project. â&#x20AC;&#x153;The dangers presented to the coast for this project were so monumental we had no choice but to oppose it,â&#x20AC;? Sterritt said. â&#x20AC;&#x153;The area we come from is considered to be the fourth most dangerous body of water in the world. There are 24-foot tides and narrow rocky shores. And, we

depend on the ocean. Everything we get comes out of the ocean. We live on sea food and plants. Ninety per cent of our work comes out of ocean, with 30,000 jobs on the coast of B.C. that depend on a healthy environment. It generates $2.5 billion in revenue, not counting the tourism industry. When we were done with consulting with the community, we all gathered up as a group and declared a ban on tanker traffic in the Great Bear Rainforest, which is our home.â&#x20AC;? Enbridge did not agree with the position taken by the Coastal First Nations. Sterritt said during their initial meetings Enbridge said if the community was against the project, they would discontinue it. â&#x20AC;&#x153;When we first met with them they said to us if the community is against the project, they would stop the project, and that they didnâ&#x20AC;&#x2122;t want to do a project if the community didnâ&#x20AC;&#x2122;t want it. We said thatâ&#x20AC;&#x2122;s fair, and thatâ&#x20AC;&#x2122;s why it took so long for us to make sure we had the right decision.â&#x20AC;? Sterritt said they met with Enbridge and shared their position with them, and were told the company intends to do business with many other communities out along the pipeline, not just the Coastal First Nation. So the Coastal First Nation began an engagement process with all the other communities along the pipeline. Out of all of them, only two supported the project. â&#x20AC;&#x153;So itâ&#x20AC;&#x2122;s looking like less than 10 per cent of communities on the pipeline support it,â&#x20AC;? Sterritt said. They went back to Enbridge and shared the results of what theyâ&#x20AC;&#x2122;d found

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only to be told the company was also consulting non-First Nations groups. So the Coastal First Nations spoke with the Union of B.C. Municipalities. â&#x20AC;&#x153;We engaged in a conversation with the UBCM and they actually passed a motion a couple of years ago opposing the Northern Gateway project,â&#x20AC;? Sterritt said. And although the decision wasnâ&#x20AC;&#x2122;t unanimous, the vote passed easily, Sterritt said, by a large percentage. Several polls throughout the process conducted by the Coastal First Nations has Sterritt convinced that the citizens of the province do not see any benefit of the project. â&#x20AC;&#x153;Basically we are hoping Enbridge will respect the wishes of British Columbians,â&#x20AC;? he said. However he believes Enbridge is pushing forward with the hope the federal government will back them. â&#x20AC;&#x153;It would appear the ace up their sleeves is theyâ&#x20AC;&#x2122;ve got in bed pretty good The going with ith th tthe he ffeds. eds. d T Th he ffeds eds d are go g ing g tto o ttry y do they to d to o ever eeverything ev veerry ytth hiing ng tth hey ca he hey ccan an to to sshove hove hove ho ve tthis his his hi

down our throats. We have done poles through the years and 80 percent of British Columbians are against this. If the federal government wants to make an issue of it British Columbians are ready to go to the wall on this one. This time the autonomy of this province is going to be shown to Canada. Weâ&#x20AC;&#x2122;re not going to allow a project here that benefits Alberta and the federal government, but jeopardizes the sustainability of B.C. Sterritt pointed out the province is rife with plenty of natural resources, including natural gas on the coast, and argues that any type of incident with these materials wouldnâ&#x20AC;&#x2122;t even come close to having the same consequences as a spill if the bitumen were shipped as wished and something happened. â&#x20AC;&#x153;It would not be catastrophic like the bitumen that comes out of Alberta. If it gets into the environment, it never comes out. What Coastal First Nations is saying is pretty clear. Weâ&#x20AC;&#x2122;re going to the wall on this, support perr thi th is, and d we have h the supp th pportt off 80 pp 80 pe p off Br British Columbians.â&#x20AC;? ccent ce ent nt o B rrit itis iti it ish Co ish C Col olu lumb mbi bia ians ians ns.â&#x20AC;?

Carrier-Sekani opposed B.C. First Nations members are prepared to use whatever measures necessary, including blockades, to prevent the development of the Enbridge Northern Gateway Pipeline Project, according to Union of B.C. Indian Chiefs Grand Chief Stewart Phillip. Phillip said the B.C. Union of Indian Chiefs passed a motion opposing the project in solidarity with the Coast First Nations and Carrier Sekani Tribal Council which has also opposed the project. Blockades are a certainty if the project goes ahead, Phillip said. â&#x20AC;&#x153;What options do we have? We have the courts and assertion measures on the land and water,â&#x20AC;? he said. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ll get arrested if it comes to that. We are gravely concerned about the implications and ramifications as it relates to the transport of petroleum projects on the north coast.â&#x20AC;? Enbridge is expected to file its proposal to a federal joint review panel this spring. â&#x20AC;&#x153;I donâ&#x20AC;&#x2122;t think youâ&#x20AC;&#x2122;ll find a First Nation in B.C. that does not oppose the (joint review) process. It does not recognize our aboriginal title interests,â&#x20AC;? Phillip said. â&#x20AC;&#x153;In our view, the (joint review) process is merely rubber stamping these grandiose resource projects.â&#x20AC;? First Nations, environmental, fishing and recreational interests are coming together in opposition to the Northern Gateway Pipeline Project, he said. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a huge issue and we are very much in opposition,â&#x20AC;? Phillip said.

The primary concern is about the risk of an oil tanker spill from one of the 225 tankers scheduled to arrive at the Kitimat oil terminal each year, he said. The 1,170 km dual pipeline will also cross over 1,000 streams and rivers, raising concerns about an inland oil spill. Carrier Sekani vice-chief Terry Teegee spoke at Enbridgeâ&#x20AC;&#x2122;s annual general meeting in Calgary last year to take his concerns to the company shareholders. â&#x20AC;&#x153;We donâ&#x20AC;&#x2122;t support the project. There is strong opposition from the coastal First Nations as well,â&#x20AC;? Teegee said. â&#x20AC;&#x153;(The gulf spill) is a wake up call to British Columbians of the potential disaster if a tanker runs aground. Are British Columbians and First Nations willing to risk that?â&#x20AC;? In addition to the risk of a tanker running aground in the Douglas Channel or on the B.C. coast, Teegee said, there is the risk of an inland oil spill. â&#x20AC;&#x153;Inland spills are more common than people might think,â&#x20AC;? Teegee said. â&#x20AC;&#x153;Enbridge alone had over 40 spills in the last year.â&#x20AC;? Even a small spill could have a devastating impact on fish-bearing streams and rivers, he said. If the project is given environmental approval by the federal government, Teegee said, he expects there to be a legal challenge by one or more First Nations groups. â&#x20AC;&#x153;Even the smallest amount of oil in our lands and waters is unacceptable. â&#x20AC;&#x153;The risk to our environment is too great.â&#x20AC;?

Special Edition: The Northern Report

Prince George Free Press - JUNE 2012

Q THE OPPOSITION

Benefits for aboriginals

Vince Prince feels Ottawa is eroding First Nations rights DELYNDA PILON Northern Report

When Vince Prince, executive director of the Aboriginal Business Service Network Society, considers the Enbridge pipeline he wears two hats, that of an economic developer and the other as a First Nations leader, intent on preserving the natural world which sustains him and the culture he loves. â&#x20AC;&#x153;For me itâ&#x20AC;&#x2122;s kind of tough. My hat, as an economic developer, says plan to take advantage of what you can. But everything under the hat as a person is concerned about the destruction it will bring. Itâ&#x20AC;&#x2122;s not if there is a spill, but when, and how devastating it will be. It will happen. Theyâ&#x20AC;&#x2122;ve never proved otherwise. Can they control it if it happens, or fix it? Thereâ&#x20AC;&#x2122;s no evidence of that. It is a concern to me with every fibre of my being.â&#x20AC;? He added he feels the government is on-board with the construction of the pipeline, no matter what people want. â&#x20AC;&#x153;The Canadian government is trying to push this project through.â&#x20AC;? He compared Prime Minister Stephen Harper to a dictator, slowly removing the rights of First Nations people while trying to push the pipeline project through a province where there remain a number of disputed land claims. â&#x20AC;&#x153;This is deeply disturbing in a province where title hasnâ&#x20AC;&#x2122;t been settled to any meaningful degree. That Harper can dictate to what happens to land from the other side of the country is wrong. â&#x20AC;&#x153;I challenge MPs to raise their voice. No one has the voice or the courage to speak out, to try to protect what they believe in and give a well-placed argument.â&#x20AC;? The money to construct the pipeline, he said, is better spent elsewhere.

â&#x20AC;&#x153;The money is better spent on tourism including in Aboriginal communities.â&#x20AC;? He added getting in business with the Chinese, who he said have a notorious record for human rights violations as well as an acknowledged disrespect for their own environment, is a mistake. â&#x20AC;&#x153;Harper and his gang are organized bullies. They should take a look at the environment in China, drink from their rivers and eat off of their land. He is supporting a Communist country to forward his Communist regime.â&#x20AC;? The pipeline, he said, offers little in terms of longterm employment. And, he said, the community work done by Enbridge of late is little more than propaganda. â&#x20AC;&#x153;Theyâ&#x20AC;&#x2122;re trying to develop a name when they need to be taking ownership of oil spills.â&#x20AC;? Perhaps, he said, if there were a death penalty for oil spills, things would be different. â&#x20AC;&#x153;If it was their life on the line it would be a very different story. Harper and his bandits and the Enbridge crooks would tell a different story if it was their lives on the line. If the law was an oil spill was punishable by death it would be a very different story. There would be a very different push and their would be no propaganda,â&#x20AC;? he said. Prince said the story that 60 per cent of First Nations are in favour of the pipeline seems a fallacy to him since heâ&#x20AC;&#x2122;s yet to speak to one person who says they agree. â&#x20AC;&#x153;They are here to destroy our country, our land. Theyâ&#x20AC;&#x2122;ve given no straight answers in terms of employment. Theyâ&#x20AC;&#x2122;ve attacked the environmental people. There has been a funding cut across the board for First Nations programs. ... Harper doesnâ&#x20AC;&#x2122;t need to be in power anymore. He is going to kill us off. He is doing everything in his power to destroy the Aboriginal people of B.C.â&#x20AC;?

Enbridge has developed a package of environmental and economic commitments for the communities along the route, including coastal communities. Enbridge has entered into numerous protocol agreements with Aboriginal groups along the proposed pipeline corridor. Northern Gateway is prepared to make the following safety and economic commitments to make the sustainability objectives a reality: 1. Aboriginal Equity Ownership. Northern Gateway is offering Aboriginal people a 10 per cent share in a $5.5 billion project. The long-term financial benefits for participating Aboriginal shareholders will be significant. Aggregate equity ownership is expected to generate approximately $280 million in net income to neighbouring Aboriginal communities, over the first 30 years. Becoming an owner in this project means Aboriginal groups are going to see cash flow within the first year of operations. Through equity ownership, Aboriginal people will be able to generate a significant new revenue stream that could help achieve the priorities of their people â&#x20AC;&#x201C; such as improved health care, education and housing. 2. Procurement, Employment and Training. Aboriginal people are expected to comprise approximately 15 per cent of regional construction employment. Northern Gateway will work to identify direct and indirect employment opportunities for members of neighbouring Aboriginal communities. Northern Gateway anticipates that combined employment, procurement and joint venture opportunities will reach approximately $400 million in value over the three years during construction. Aboriginal business involvement in construction activities will be dependent upon community capacity and desire to participate. We are currently entering into commercial memorandums of understanding to ensure interested communities are able to fully participate. 3. Community Trust. A Community Trust will be established for Aboriginal and non-Aboriginal communities with a commitment of 1% pre-tax domestic profit to support the trust, measured on a five year rolling average basis. Itâ&#x20AC;&#x2122;s estimated to exceed $100 million over the 30-year economic life of the Project. 4. Stewardship Programs. Aboriginal communities along the right-of-way will have access to existing Enbridge stewardship and habitat protection initiatives such as the Neutral Footprint Program, the Natural Legacy Program, the Enbridge School Plus Program, and the Safe Community Program (as applicable).

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