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The federal government has officially given the stamp of approval to two major pipeline projects in Canada, Kinder Morgan's Trans Mountain expansion and Enbridge's Line 3 pipeline. It has rejected the highly-controversial Enbridge Northern Gateway pipeline.
The two new pipelines will add roughly one million barrels per day in new oil transport capacity. Trudeau made the announcement on Tuesday in Ottawa, prior to a meeting with Alberta Premier Rachel Notley, who has been urging the federal government to help its oil companies get access to new markets by approving pipelines.
The decisions by his cabinet open the door to Enbridge Inc.'s Line 3 replacement project, described as the biggest in the Calgary-based company's history, and Kinder Morgan's Trans Mountain expansion (TMX), described by a Trudeau-appointed panel as being among the most "controversial in the country, perhaps in the world, today."
The new approvals are likely to provide some political cover for Notley and Trudeau who have been blamed by Alberta opposition politicians for the slumping global oil prices that have hammered the province's economy, triggering tens of thousands of job losses. At the same time, the approval of a new pipeline is likely to draw detractors from some members of the environmental community who have been urging rejection of all new pipelines.
Each project would result in annual carbon pollution that would be equivalent to about five or six million cars on the roads, Environment and Climate Change Canada estimated.
"Canadians know that strong action on the environment is good on the economy," Trudeau said during a press conference, flanked by five cabinet ministers. "We said that major pipelines could only get built if we had a price on carbon and strong environmental protection in place. We said Indigenous people must be respected and part of the process."
It was using this framework of understanding, he explained, that his cabinet decided to approve the projects although the prime minister also said that, "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 both projects will also likely face threats from legal challenges and economic factors that could still stand in the way of final investment decisions.
Many megatonnes of GHGs from oilsands
Line 3 would allow western oil producers to ship up to 760,000 barrels of oil per day from Alberta to the U.S. midwest, doubling the capacity of the existing line that is now facing pressure restrictions for safety reasons. Canada’s National Energy Board recommended in April that the government approve the Line 3 replacement project with 89 conditions.
The Trans Mountain expansion (TMX) would triple the capacity of an existing pipeline network that links the Edmonton and Vancouver regions, shipping roughly 890,000 barrels of crude oil and petroleum per day. The NEB recommended that project for approval in May, along with 157 environmental, financial and technical conditions.
"If I thought this project was unsafe for the B.C. coast, I would reject it," he said of the TMX approval. "This is a decision based on rigorous debate, on science and on evidence. We will not be swayed by political arguments."
His comments contrasted with recent concerns raised by young scientists about the poor quality of federal reviews as well as with the conclusions of the panel his government appointed to review the project this summer. The panel said that the NEB had failed to prove that the project was in the public interest, but Trudeau disagreed.
"We made this decision today because we are convinced it is in the best interests of Canadians," Trudeau said.
Pipelines to produce major emissions
After meeting with Trudeau in Ottawa, Alberta Premier Notley said the new pipeline approvals open the door to her accepting the federal government's plan for a higher price on carbon than Alberta currently has planned.
"I want to thank Prime Minister Trudeau and his government for approving these energy infrastructure projects, which are critically important to the economic future of the people of Alberta," said Notley in a press statement after the announcement. “We are getting a chance to break our landlock. We're getting a chance to sell to China and other new markets at better prices.
"We're getting a chance to reduce our dependence on one market, and therefore to be more economically independent. And we're getting a chance to pick ourselves up and move forward again. Of equal importance, we are building the economy within a strong new national environmental policy."
Trudeau said the project can proceed without compromising Canada's climate change goals, but he has not yet produced a complete plan to explain how the country can do this.
Meantime, Kinder Morgan has said it is committed to working with local communities and First Nations to improve the project.
“This Project has evolved substantially as a result of the scrutiny it has undergone and the input received from communities, Indigenous and Metis groups and individuals. No voice has gone unheard, and we thank everyone who has helped make this project better,” said Kinder Morgan Canada president Ian Anderson.
Trudeau has scheduled a meeting with provincial and territorial premiers on Dec. 9 to discuss further details of a national climate change plan. His government has already introduced a series of policies, including plans to make polluters pay for carbon emissions and proposals to regulate fuels used for transportation and buildings.
B.C. Premier Christy Clark spoke with Trudeau today. Clark has not announced whether her government will support the Kinder Morgan expansion and a statement from the prime minister's office expressed that, "The leaders agreed on the importance to take a balanced approach to the development of natural resources to help ensure the environment is protected, while creating jobs, including jobs in British Columbia."
Northern Gateway rejected, tanker ban announced
In the meantime some economists have cast doubts about estimates from industry that suggest new pipelines would help promote growth in the oilsands sector, which is struggling to compete because it has higher production costs and a larger environmental footprint than more conventional forms of oil.
Trudeau, who has long been opposed to Enbridge's Northern Gateway pipeline, rejected that project, which would have gone through a pristine ecosystem on the west coast of B.C., known as the Great Bear Rainforest. This project had been thrown into limbo following a Federal Court of Appeal decision last June which found that the permits issued by the former Harper government were invalid because it had failed to adequately consult with First Nations.
He also delivered on a federal tanker ban for crude oil tankers on B.C.'s north coast that will be translated into formal legislation in the coming months.
"The Great Bear Rainforest is no place for a pipeline and the Douglas Channel is no place for tankers," he told reporters.
But the approval of Line 3 is good news for Calgary-based Enbridge, which has been criticized in recent years following major oil spill disasters in 2007 on Line 3 in Glenavon, Sask. and on Line 6B in 2010 in Marshall, Michigan. Regulators said Enbridge failed to stop these disasters from happening because it was having trouble monitoring and repairing pipeline cracks that formed from corrosion. The company has said it has made improvements since these spills.
"The learnings from our experience have made us a better company and the way we think about safety has changed," said Enbridge president and chief executive Al Monaco in a statement, following a US$177 million settlement reached in July with the U.S. government for the Marshal spill and another in Romeoville, Illinois in 2010. "Over the past six years, we've intensified our focus on the safety and integrity of our systems enterprise-wide and we've invested significantly in our people, processes, equipment and technology. Across Enbridge, our team is galvanized by our number one priority of safety and reliability of our systems and the protection of the public and the environment."
The energy company must still gain U.S. approval from Minnesota if it wants to proceed with the Line 3 project to modernize, widen and increase the capacity of the line that runs between Hardisty, Alta. and Superior, Wisconsin. It would also allow the company to avoid the pressure restrictions on its existing line that have been imposed for safety reasons.