Short Summary of Days 1-5, Sept. 4th-8th
Following opening comments by the Panel Chairperson, Sheila Leggett, and Northern Gateway Pipelines lead lawyer, Richard Neufeld, Northern Gateway introduced its first panel of seven witnesses which included John Carruthers, President of NGP, and the authors of two reports which received by far the most attention in the first five days of hearings.
The “Market Prospects and Benefits Analysis”, frequently referred to as “Muse Stancil”, was in large part written by Neil Earnest. The “Public Interest Benefit Evaluation” was represented by Robert Munsell and Jack Ruitenbeek.
Mr. Carruthers’ opening speech extolled the benefits of the NGP, comparing it to the Canadian Pacific Railroad and the St. Lawrence Seaway. He proposes benefits to many, though excluding those who would impede oil sands development. “Our project presents a tremendous opportunity for our country. What is required is an approval.”
The first two and a half days were taken up by the examination by Leanne Chahley, counsel representing the Alberta Federation of Labour. Ms. Chahley used her time for a broad ranging exploration into a large number of topics, with many of her questions related to the concern about “shipping away jobs.” For example, she wanted to know why it makes sense for NGP to ship unrefined “dilbit” and “synbit” to refineries outside of Canada, why it does not make sense to build refineries in Canada and ship refined products instead, and why doing this is in the public interest. The answer to the first two is that it is not economic to do the refining in Canada because markets are looking for unrefined cruce as feedstock to their own refineries. It is not in the public interest, NGP argues, because no-one could make money doing it, and there would be no benefit at all to Canada.
Ms. Chahley spent time examining the “price uplift”, which NGP claims will be approximately 90% of the benefit to Canada and a consequence of the pipeline. The nub of this concept is that by creating the possibility to deliver oil sands product to non-American markets, NGP will cause an increase in the selling price for all Canadian oil producers.
She highlighted the increasing use of railroads to move crude oil around North America, and established that with or without NGP, substantial quantities of crude will be moving from Canada to Asia in the next twenty years.
Late on the third day, Elizabeth Graff for the Province of British Columbia came to the podium with Terry Lake, BC’s Minister of Environment, and Geoff Plant, the newly appointed “legal strategist” for BC’s intervention. Within minutes, Ms. Graff had made it apparent that she had not read some important evidence, and that her questions about insurance were not appropriate for these witnesses. The Chairperson, Ms. Leggett, interrupted, suggested that Ms. Graff take the evening to read the evidence, and “come back tomorrow with the ability to have us understand how the questions that you're seeking to ask today fit within the issues that we've outlined for the Edmonton hearings, and not where we've outlined them to be dealt with in Prince George.”
Day four was more orderly for Ms. Graff. She established that NGP has not talked yet to insurers and doesn’t know many specifics about the coverage it will obtain. She did determine that NGP is “looking at an exposure” of about $60 million for cleanup costs for a pipeline spill once every 250 years, but was unable to get confirmation that $60 million might be what the company is considering for coverage. The Wright Mansell analysis put a figure of $14,000 per barrel for cleanup of a pipeline spill. Ms. Graff pointed out that that works out to $280 million for a 20,000 barrel spill – which is the size of Enbridge’s in Michigan in 2010 which has already cost more than $767 million.
The witnesses explained how costs will be covered in the event of a spill that exceeds the insured limits. A commitment by Enbridge to guarantee 100% of cleanup and damages is not being considered.
Robert Janes representing the Gitxaala Nation was the next questioner. His questions were about the cost benefit analysis and the public interest relating to Aboriginal interests, risk, and “certain particular things.”
Mr. Janes cites a statement by Roland Priddle, also a member of the first witness panel, “These [public interest] benefits are indisputable certainties.” Mr. Janes asks whether Mr. Priddle is suggesting that the public interest analysis should stop once those benefits are disclosed. Mr. Priddle replies, “That is not my position.”
Asked about the statement that “all Canadians are to be treated equally,” Dr. Ruitenbeek explains that the statement refers to the cost-benefit analysis. Aboriginal interests and title and impacts on specific Aboriginal values are considered at the base level, but once brought up into the cost-benefit analysis, lose their differentiation.
Noting that Dr. Ruitenbeek drew significantly from a report written by a Christos Kontovas, Mr. Janes discusses a citation in Kontovas that insurance payouts only cover 2% of the costs of a spill, leaving 98% to be borne by the public.
Considerable discussion took place when Mr. Janes questioned the adequacy of the Wright Mansell assignment of $15,000 per barrel for cleanup costs of marine spills, $22,500 per barrel for environmental damage costs, and $37,500 for a total spill cost.
The final questioners were Barry Robinson and Tim Leadem for “the Coalition” of ForestEthics Advocacy, Living Oceans Society, and Raincoast Conservation Foundation. Mr. Robinson reviews information about potential markets for oil shipped on NGP, on the price uplift. He asks why there are no costs related to the social and pollution impacts of oil sands expansion and is told those typically are not included in a cost-benefit analysis. He also asks some questions about Line 9 from Sarnia to Montreal and Trans Mountain. Specifically, why is the 450,000 barrel per day Trans Mountain Expansion not considered. Mr. Earnest’s reacts strongly to that question, saying, in effect, that it is not a real project yet.
Through a series of questions relating to the ownership of NGP, Mr. Robinson is told that has ten potential funding participants who may each acquire a 4.9% interest, and there is an Aboriginal equity offer for 10% interest. He asks whether that would leave Enbridge no longer holding a controlling or majority interest in the project. Mr.Carruthers agrees with this, but later says that the corporate structure would be arranged such that Enbridge would retain controlling interest.
Mr. Leadem begins his questioning with a quote from Mr. Priddle’s 2004 report on oil and gas development in the Queen Charlotte region: “It does not appear likely that currently available mitigation measures would be effective in reducing residual effects to insignificant levels.” He then asks to have the Priddle Report admitted as evidence. NGP objects. The Chairperson says we’ll let you know our decision on September 17. With that, the session comes to an end.
More detailed notes can be accessed through the following links: