Edmonton, Sept. 28th, Day 16
The final day of hearings in Edmonton opened with Dr. Tom Gunton as the expert witness for the Coastal First Nations. The only witness for the entire day, he was lucid and informative on all the topics addressed in his public interest and potential impacts reports filed as evidence.
Richard Neufeld for Northern Gateway Pipelines questioned Dr. Gunton for the greater part of the day, followed by Carol Hales for the National Energy Board. And for the first time, all three Panel members had questions for the witness, each seeking advice, not information.
Mr. Neufeld’s questions presented Dr. Gunton with opportunities to point at shortcomings in the two reports Northern Gateway Pipelines had commissioned as the cornerstones of its economic evidence: the markets analysis of Muse Stancil, and the public interest and cost-benefit report of Wright Mansell. On one critical issue, the two reports were in conflict.
Drawing on the ENSYS analysis done for the US Dept. of Energy, Dr. Gunton explained his concern that proposed pipeline projects, including Gateway, would result in significant overcapacity. Every year there is overcapacity, there is a cost to the system. Industry still reaps benefits, but passes those costs through to the public as reduced taxes.
Dr. Gunton said that the Muse Stancil markets analysis had made a number of assumptions which essentially drove its results. Dr. Gunton said, “If you take those assumptions away and allow the market to operate over time, the market will equilibrate and will remove [the price differentials that provide the rationale for building Northern Gateway.]
He also expressed concern about the Northern Gateway reports forecasting a small difference (+/- 2%) in price over a long period of time. Forecasting that degree of accuracy is beyond the reasonable expectations of forecasting, especially when Muse Stancil completely missed forecasting the bottleneck at Cushing, and the $18 disparity between WTI and Brent prices which resulted only two years after the original Muse Stancil report was published.
Dr. Gunton was candid about the difficulties involved in quantifying ecosystem values. But, he argued, the values are real, and are significant and must be taken into account.
On oil spills, he said Enbridge understates both the risks and the costs, yet its refusal to take responsibility for spills suggests that it has little confidence in its own stated numbers.
Following a rich discussion with Mr. Neufeld and Ms. Hales, Dr. Gunton was asked a few questions by each Panel member.
In response to a question from Kenneth Bateman of the Panel, about the polarized views about this project across the country, Dr. Gunton said, “The probability of building a project such as this with this degree of opposition is virtually zero.”
For a more detailed summary, please see the document below or download the PDF (490Kb)