Enbridge. Northern Gateway. TransCanada. Keystone XL. You've heard the names. You've seen the headlines. But what is the controversy all about?
To understand the players, the issues and why they matter so much to people, here’s a backgrounder on the two corporations, their projects, their friends and their foes.
What is Enbridge?
Enbridge, Inc. is a Calgary-based energy corporation with a reach that extends across North America. Best known for its work in the oil and natural gas industries, it's also branched out to greener alternatives, operating seven wind farms in Canada and the U.S., and solar and geothermal projects.
Although environmentalists disagree, the Enbridge website claims the company is one of Canada’s Greenest Employers.
Established in 1949 as the Interprovincial Pipe Line (IPL), the company’s original pipeline ran from oil fields in Alberta to refineries in the east. Now, Enbridge operates the world’s longest crude oil transportation system, moving over two billion barrels per day and transporting 65 per cent of all western Canada’s oil exports. It controls more than 24,000 kilometres of pipeline across North America.
Currently, Enbridge’s most high-profile project is the Northern Gateway pipeline, intended to run from northern Alberta to the coastal community of Kitimat, B,C., where oil would be loaded on tankers for shipment overseas. Enbridge also has plans for a new line to carry tar sands oil from Fort McMurray, Alta., to the coast of Texas – a project said to be going head-to-head with TransCanada’s Keystone XL pipeline.
What is TransCanada?
TransCanada is another major North American energy company, also based in Calgary. Like Enbridge, the corporation is primarily focused on natural gas and oil transmission. TransCanada owns more than 57,000 kilometres of natural gas pipeline, spanning the continent and tapping into almost every major gas supply basin.
The company has more than 60 years' experience in the industry, particularly in gas storage and related services. With increasing production out of Alberta’s Athabasca tar sands, developing its oil infrastructure has become a priority.
TransCanada’s major project, Keystone, is a 3,460-kilometre pipeline transporting oil from Alberta to the American Midwest. The first phase of the pipeline began operating in June 2010; the proposed Keystone Gulf Coast Expansion Project (Keystone XL) aims to incorporate and extend the current pipeline, taking a more direct route through Montana and South Dakota to another delivery point in Texas.
TransCanada’s Keystone XL project has become one of the most controversial subjects on the environmental agenda this year. It is, in fact, the extension of an existing crude oil pipeline reaching from Alberta to the American Midwest, which began operating its first phase in 2010.
The second phase of the Keystone project became operational in February 2011, adding another arm that reached further south through Nebraska, Kansas and Oklahoma. Keystone XL – the Keystone Gulf Coast Expansion – encompasses phases three and four of the planned TransCanada project. The expanded leg would take a new route, cutting straight across from Hardisty in Alberta southwest to Nebraska, then down to the Texas coast.
The expansion proposes a 2,673-kilometre pipeline that would add as many as 500,000 barrels of oil to the system’s existing capacity of 591,000 barrels per day – meaning the entire Keystone pipeline system would be transporting over 1.1 million barrels a day. According to TransCanada executives, it would be the only pipeline situated to service both the Canadian oil sands and the Gulf Coast refineries.
TransCanada received approval from the National Energy Board for the Canadian portion of Keystone XL in 2010, but U.S. President Barack Obama recently delayed a decision on the American side of the deal. Obama requested a 12 to 18-month review for the pipeline, which analysts said will likely “kill” the expansion altogether.
The decision early in November to delay the Keystone plan came after months of intense activism and pressure from environmental organizations. The environmental group 350.org rallied more than 10,000 people – including several celebrities – to form a human chain around the White House, urging Obama to say “no” to big oil.
The Keystone debate:
The “anti-Keystone” contingent has convinced an increasing proportion of the public that the environmental impacts of the proposed pipeline vastly outweigh the potential benefits.
The fact that the pipeline would transport oil to the U.S. from Canada’s “dirty” tar sands is perhaps most detrimental to its cause. Scientists and environmental advocates all over the world have attacked the Alberta tar sands because the process for extracting the oil has a much higher carbon footprint than other methods.
Tar sands oil is also said to be heavier and more corrosive than other types of crude, meaning it could be more likely to cause pipeline leaks. And many protesters have focused on TransCanada’s poor track record when it comes to leaks; an infographic from the Huffington Post shows at least 12 reported incidents since the first Keystone pipeline went into operation.
Environmentalists in the U.S. also note the danger that the expansion poses in crossing over 1,900 waterways, including the Ogallala Aquifer, the country’s largest freshwater source.
Widespread opposition to the Keystone XL pipeline included a signed letterto the President from the Dalai Lama and a number of other Nobel prize winners.
"What they’ve been using to force this on the American people are two lies. One of them is that it was going to create 250,000 jobs. Well, that was an industry talking point. When we started to really look into those numbers, when we started to do the work that the media should be doing before they start repeating these bogus claims, we found out that it’s really 5,000 jobs.
- Mark Ruffalo; Actor
"Because this permit decision could affect the health and safety of the American people as well as the environment and because a number of concerns have been raised through a public process, we should take the time to ensure that all questions are properly addressed and the potential impacts are understood."
- U.S. President Barack Obama
"By ordering additional environmental review of the proposed Keystone XL pipeline, President Obama has made it clear that he has heard the concerns of Americans about environmental protection, climate change, and the need for the United States to create a clean energy future."
- Dan Woynillowicz; Spokesperson, The Pembina Institute
The most significant potential advantages of the Keystone XL project would be the thousands of union jobs it could bring to the U.S. economy. TransCanada claims the expansion would directly create more than 20,000 high-wage manufacturing jobs during construction, and up to 250,000 permanent jobs in the States due to the increase in stable oil supply. Keystone supporters also point to the $5.2 billion in property taxes that would eventually be paid to states along the route.
Canadian Prime Minister Stephen Harper said the Keystone decision in the U.S. should be a “no-brainer”, noting that on top of the job creation aspect, “the need for the energy in the United States is enormous.”
And that need for energy is key to another major talking point – reducing American dependence on foreign oil currently imported from outside North America. An early press release from TransCanada stated, “Once permitted and completed, the Keystone Gulf Coast Expansion project will supply roughly half the amount of oil that the U.S. currently imports from the Middle East or Venezuela”.
Canadian Environmental Minister Peter Kent famously used the term “ethical oil” to describe the tar sands product, suggesting that it’s guilt-free since it comes from a friendly North American neighbour. One surprising voice coming to Keystone’s defense was Patrick Moore, one of the co-founders of Greenpeace who later wrote the book Confessions of a Greenpeace Dropout.
"There has been a demonizing of a legitimate resource. It is ethical oil.
It is regulated oil. And it’s secure oil in a world where many of the free
world’s oil sources are somewhat less secure."
- Canadian Environmental Minister Peter Kent
"I have a suggestion for the president …Take a pen and sign one order and let the Keystone XL pipeline go through. He will create 120,000 jobs. No money on the part of the taxpayers and it is private industry that will do it, and why in God’s name is he not doing that?"
- Bernie Marcus; Co-founder, Home Depot
"Our oil is probably more ethically produced than just about any other country in the world, and we are a friendly country to the United States….The reason I support it is that it’s the safest way to transport oil. It’s not like there’s going to be a blowout in the oil sands like there was in the Gulf, there’s no pressure. This oil is just on sand, and it’s being taken off the sand in a kind of steam-cleaning process."
- Patrick Moore; Co-founder, Greenpeace
The Northern Gateway Pipelines:
Enbridge’s Northern Gateway plan is comprised of dual 1,172-kilometre pipelines that run from Bruderheim (just north of Edmonton) to the coastal community of Kitimat. One of the pipelines would carry oil for export; the other would be for importing condensate, a substance used to thin heavier oil products.
The company says the pipeline system could export up to 525,000 barrels of oil per day and bring in approximately 193,000 barrels of condensate. At the end of the line, the proposed Kitimat Marine Terminal would include two ship berths and 14 tankers.
The primary intention of the $5.5 billion project is to make Canadian tar sands oil available to international markets in Asia. The end location in Kitimat would put the oil industry in an ideal position along the shipping route, but it also raises environmental concerns about the possibility of oil tanker spills.
While environmentalists have called the Keystone XL delay “the beginning of the end” for the tar sands, for industry and political leaders in Canada the decision was seen as an opportunity to step up efforts in other markets. At the recent Asia-Pacific Economic Cooperation forum, Prime Minister Stephen Harper made it clear that selling oil to China would now become an “important priority”.
Before getting under way, the Northern Gateway project must be approved through a regulatory review by the National Energy Board (NEB) and the Canadian Environmental Assessment Agency (CEAA). The Joint Review Panel was established in the summer of 2010, inviting individuals and groups from a number of communities along the pipeline route to participate in the public consultation process.
The unprecedented number of individuals who have signed up to speak about the project is an indication of the intense opposition within Northern communities. Environmentalists have joined First Nations groups, citing many potential impacts and risks posed by Enbridge’s plans.
On the environmental side, legitimate concerns have been raised over the risk of pipeline leaks along the route. And even more worrying is the possibility of crude oil tanker spills with increased traffic in the coastal waters of BC.
Enbridge has offered an equity stake in the project to each of the First Nations bands affected, which would include about 50 groups, all situated within 80 kilometres on either side of the pipeline. While a few of these bands have agreed to support the project and accept the equity stake, many others have spoken out against it.
An impressive group of 150 organizations, businesses and prominent Canadians came together to run a full-page ad last year in the Globe and Mail, with signatories that included David Suzuki, Margaret Atwood and Randy Bachman.
"Enbridge's pipeline isn't happening, period. It doesn't matter who they get a deal with. They plan to come through our territories and we've already said no, and we'll use every legal means we have to stop them. Their proposed pipeline is against our laws because we refuse to put our communities at the risk of oil spills."
- Chief Larry Nooski of Nadleh Whut'en First Nation; member of the Yinka Dene Alliance
"The project is not in the public interest from a climate perspective, from a jobs perspective, and from a First Nations title perspective. There’s too much at stake. Why would we risk thousands of jobs in fishing and tourism for a few hundred jobs in construction of the pipeline, and the possibility of some jobs in oil spill cleanup?"
- Caitlin Vernon; Sierra Club of BC
"It will be a very, very, very nasty process [and] I’ll be the first one to lie down before a tractor."
- Rafe Mair; Former MLA and BC political commentator
Potential benefits of the pipeline, as listed by Enbridge, include employment, skills development, and “contributions to the community and the province through a secure tax base at local, provincial and federal levels”. Despite passionate resistance from community and Aboriginal groups on the Northern Coast, the project claims it will provide up to 1,150 long term jobs, with about 165 new jobs in Kitimat alone to operate the terminal.
Informational materials say the project will “raise the bar” when it comes to marine safety, using only double-hulled ships and adding navigational aids to the area to avoid collisions.
The government and industry have been adamant that transporting oil to Asian countries like China should be a priority, particularly if access to the American market is limited by the failure of the Keystone XL project.
"The success of a project on the scale of Northern Gateway depends on the support of the communities it impacts. We know that this support will depend on our ability to prove to communities that our project is safe, that it has been planned responsibly and that environmental protection will always be front-of-mind throughout both construction and the operational life of the project."
- John Carruthers; President, Enbridge Northern Gateway Pipelines
"If the environmental review process confirms that no harm will be done, these are the kind of direct community benefits that I would like to see happen in Kitimat and along the shipping route."
- Joanne Monaghan; Mayor of Kitimat
"This is an issue that takes on national importance…We're actually part of what will be particularly in the next two years a critical resource that will allow the Canadian economy to thrive in a way that many others in the world won't."
- Alison Redford; Premier of Alberta