Pipeline proposal is a 'realistic' option, expert says2/4/2013
A pipeline bringing crude oil from Alberta to New Brunswick could be more realistic than building a pipeline to the west coast, according to an energy expert.
Premier David Alward is in Alberta for three days to meet with Alberta Premier Alison Redford, oil executives and tour the oil sands in an attempt to drum up support for a pipeline to New Brunswick.
Warren Mabee, director of the Institute of Energy and Environmental Policy at Queen's University, said TransCanada Corporation’s proposal to convert an existing natural gas pipeline might be more realistic than other plans to move Alberta oil to the west coast.
“It's caught a little bit of the public imagination,” he said.
“This is something that really would bring together a lot of Canada. The real question is, will it bring us together? Or will it open up more wounds and more divisiveness?”
The energy expert said the terrain is relatively flat between Alberta and New Brunswick, making the idea feasible.
If the west-to-east pipeline were to be approved, it would still take several years before western crude would be flowing into Saint John's Irving Oil Ltd., the largest refinery in Canada.
Mabee said it would take five years if the project started now. But he said TransCanada is the proponent behind the Keystone XL project, which is the company’s main focus.
“We are still waiting to hear whether that will be approved and go ahead,” Mabee said.
“I’m thinking this will be their next big job.”
The $7-billion Keystone XL project, which would deliver oil from Alberta to refineries on the U.S. Gulf Coast, has run into considerable opposition in both countries.
Mabee said even if the Keystone XL project moves forward, a west-to-east pipeline would still be needed.
TransCanada Corporation has said it wants to convert an existing, underused natural gas line to do the job, but it would be up to the National Energy Board to approve the projects.
TransCanada has not yet formally submitted the proposal.
Northern Gateway controversy
The debate about bringing Alberta crude oil to the east coast is just starting as the controversy about taking the oil to the west coast is continuing to fester.
The National Energy Board is holding hearings in British Columbia over the proposed Northern Gateway oil pipeline.
Enbridge is proposing to build a 1,200-kilometre-long twin pipeline that would carry about 525,000 barrels of bitumen per day from Alberta to the B.C. coast for shipment by tankers.
That proposal has also sparked intense criticism and protests.
Mabee said many Canadians are uncomfortable with pipelines and oil sands products for many reasons, such as their environmental impact.
There is broad support, however, for the idea of sending crude oil to the east coast on the political level.
Federal Natural Resources Minister Joe Oliver has already given tentative support to the proposal.
Alward touted the pipeline project during his state-of-the-province speech last week and he is talking about the benefits of the project in Alberta.
“As a province on the east coast of Canada, we are open for business. We have a long history of refining petroleum products,” he said on Sunday.
“We've been importing it from all parts of the world. And for us it makes so much sense to be able to use our own natural resources to do that.”
Mabee said the pipeline project could create thousands of jobs during the construction phase, but it would likely be only a few hundred jobs over the long term.
He said the project would likely be financed privately.
“Most of the pipeline projects that are on the table today in North America are private projects and there isn't a huge amount of public money on the table,” he said.
“There may be incentives on the table, I don't know, I haven't heard any in this case, in terms of a reduced tax burden or in terms of maybe a waiver on property taxes or something like that.”