Pipelines key to increasing energy exports, Natural Resources Minister says - Globe and Mail

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Pipelines key to increasing energy exports, Natural Resources Minister says

shawn mccarthy GLOBAL ENERGY REPORTER,

OTTAWA From Saturday's Globe and Mail

Last updated Saturday, Sep. 24, 2011 8:55AM EDT

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Canada needs projects such as Enbridge Inc. (ENB-T31.840.240.76%) Northern Gateway pipeline to provide crucial access to growing markets for the countrys energy exports, says Natural Resources Minister Joe Oliver.

In a speech given Friday in Toronto, the Minister said the federal government would respect the regulatory review now being conducted on the Gateway project. But he made it clear that Ottawa supports the construction of oil pipelines to the West Coast, despite opposition from environmental groups and first nations.

With that in mind, we support increased access to key Asian markets to secure the benefits of our resources now and for the long term, he said. Projects such as the proposed Northern Gateway pipeline would connect Albertas oil sand to the port at Kitimat on the coast of British Columbia, where tankers could transport oil to Asian customers.

While he said the government respects the regulatory process, he added: It is a key strategic objective to diversify our customer base beyond the U.S., which now accounts for 97 per cent of Canadas oil exports.

The National Energy Board (NEB) and Canadian Environmental Assessment Agency are currently conducting a joint review of the $6.6-billion Gateway project, which would deliver 500,000 barrels per day of oil sands bitumen to the West Coast.

The joint review panel can either turn down or approve a project, and can impose a series of conditions. Because the NEB is an independent, quasi-judicial tribunal, cabinet cannot overturn a review panel decision. But, in the event of approval, the government must issue a certificate permitting the application to proceed, and could refuse to do so.

However, the Ministers statement of government policy may be influential as the review panel prepares to begin hearings in January on whether the Gateway project is in the national interest, said Brenda Kenny, president of the Canadian Energy Pipeline Association.

Canada is very fortunate to have clear, transparent, evidence-based processes to evaluate any and all major projects, Ms. Kenny said. Government policy can help inform what national interest looks like.

In a speech in Vancouver on Friday, Enbridge chief executive officer Pat Daniel noted that Canada is the only energy exporter that relies so heavily on a single market, and that the Gateway project is critical to breaking that U.S. exclusivity. He said the pipeline would boost Canadian crude prices by $3 a barrel, by accessing world markets and reducing the glut of oil sands crude in the United States.

And I firmly believe that as the regulatory review progresses, stakeholders and the public will develop an appreciation for the merits of the project and Enbridges diligent approach to respectful consultation, safety, reliability and the environment, Mr. Daniel said.

In Toronto, Mr. Oliver also defended the federal governments support for TransCanada Corp. (TRP-T0.220.53%) Keystone XL pipeline to the U.S. Gulf Coast refining hub, saying the high-profile opposition to that project is a major concern.

Activists held protests against the oil sands in Washington this summer, where actors including Margot Kidder and Darryl Hannah were arrested. Canadian celebrities, including Gordon Pinsent and Dave Thomas, are expected at a similar demonstration in Ottawa on Monday.

But Mr. Oliver said the oil and gas industry will remain a critical driver to the health of the Canadian economy, even as government and industry work to reduce its environmental impact. He said Keystone opponents fail to mention that coal plants in Wisconsin emit more greenhouse gases (GHGs) than the oil sands, or that Californias unconventional, thermal oil is more GHG-intensive than the oil sands. You dont hear any that from the celebrity protesters, he said.