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Pumping Prosperity
September 19, 2016

Canada boasts the third-largest oil reserves on the planet.  However, insufficiently-developed energy infrastructure means Canadians are reliant on foreign oil and mostly export to the United States.

Developing an oil transport strategy is essential. However, such a strategy must take into account environmental concerns and the rights of Indigenous peoples who have land claims on proposed energy corridors.

The Senate Committee on Transport and Communications is travelling to Western and Eastern Canada with the goal of proposing a responsible strategy to facilitate the transport of crude oil within Canada.



DAY 1 – Pipeline benefits ‘outstanding,’ senators hear

EDMONTON – Investing in pipeline infrastructure will boost Alberta’s flagging economy, generate billions of dollars for federal and provincial governments, and create jobs across the country, senators heard Monday.

“The potential economic benefits are outstanding,” said David MacLean, policy vice president for the Alberta Enterprise Group.

Senator Michael MacDonald

MacLean was one of many witnesses who testified before the Senate Committee on Transport and Communications at a public hearing in Edmonton. The committee is on a fact-finding mission to Western Canada as members seek to develop a strategy to responsibly facilitate the transport of crude oil across Canada.

“We want to get it to market,” committee deputy chair Senator Michael MacDonald said during the hearing. “We want to determine how we’re going to get it there.”

MacLean’s Alberta Enterprise Group represents businesses employing 150,000 Canadians in every sector of the province. It is not an easy time for his workers.

It’s bad out there, it’s tough.” he said.

But he told the committee building pipelines would be “an incredible stimulus package.”

The proposed Energy East pipeline project alone — intended to connect Alberta with refineries and ports in Eastern Canada — would support an additional $31.9 billion in federal and provincial government revenues, MacLean said. Most of it would come from corporate income tax collection.

Senator Terry Mercer suggested the numbers made a compelling argument.

“Use the math,” Senator Mercer said. “The math is pretty simple.”

Senators expressed concern over the potential environmental impacts of so-called “dilbit” — heavy Alberta oil sands bitumen that’s been diluted to allow it to flow through pipelines — spilling into waterways.

Senator Mercer and Senator Mitchell listen to public hearings

But Natural Resources Canada senior research scientist Dr. Heather Dettman told senators her research suggests spilled dilbit is actually easier to clean up than conventional crude oil.

She has been simulating oil spills in special water tanks at her Devon, AB laboratory; Dettman found heavier crude tends to stay on the water surface, where it can be recovered relatively easily even days later.

Conventional crude, on the other hand, tends to disperse in water and get trapped in sediment on the bottom of waterways, making it much more difficult to remove, she said.

Red Deer Mayor Tara Veer told the committee that the safe and responsible transport of Alberta oil is in the environmental, economic and social interest of all Canadians.

“The discussion has really been focused on pipelines or no pipelines,” she said.

“Really what we need to do is reframe the conversation to discuss how do we safely transport domestic product to both domestic markets and international markets.”

She appeared before the committee with members of Alberta’s Industrial Heartland Association, a non-profit group of municipalities dedicated to sustainable eco-industrial development.

Residents in their areas have lived with pipeline infrastructure for years, the committee heard — most of buried and invisible beneath the earth.

“Energy royalties, income tax and federal equalization payments translate into essential public infrastructure,” Mayor Veer said. “All regions and all Canadians rely on energy.”

The committee will go on fact-finding site visits Tuesday before resuming public hearings in Calgary on Wednesday.


DAY 2 – Consultation no barrier to pipelines, senators hear

EDMONTON – Large pipeline projects can take place even with broad public consultation, senators heard during a fact-finding mission in Edmonton on Tuesday.

Members of the Senate Committee on Transport and Communications traded public hearings for a pumping station on their second day in Western Canada, paying an early morning visit to Enbridge Inc’s Edmonton South Terminal.

They got a tour of the sprawling facility, which collects various types of oil and distributes it through a network of pipes that spans much of the continent.

Enbridge engineering and projects vice president Scott McEachern — who had appeared before the committee as a witness the day earlier in his capacity as a director of the Edmonton Chamber of Commerce — took senators through an ambitious project to replace about 1,100 kilometres of pipeline.

All of the land required for the project has already been secured, the committee heard. They consulted anyone with about 300 kilometres of the line, including 150 Indigenous groups.

It’s estimated the project will directly and indirectly create about 25,000 jobs.

The committee is studying how to facilitate the transport of crude oil within Canada. On Wednesday they will be in Calgary to resume public hearings.


DAY 3: Energy Board, social licence dominate Calgary public hearings

CALGARY – The National Energy Board needs to do its job — and the federal government needs to trust it, senators said Wednesday.

Senator Doug Black

Energy board CEO Peter Watson appeared before the Senate Committee on Transport and Communications on Wednesday with promises to do better less than a month after three board panellists recused themselves from Energy East pipeline hearings.

“The board members in question all acted in good faith,” Watson said.

He told senators the panellists stepped back to avoid “an apprehension of bias.”

“Hindsight is 20/20,” Watson said

Senator Doug Black thanked Watson for his “honest reflections about how to improve the work you’re doing.”

Watson said the energy board assesses projects by weighing the benefits against the burdens and comes “to a conclusion about what we believe is in the public interest.”

But it is ultimately up to the federal government to determine whether a proposed project goes ahead.

“I encourage you to do your job,” committee deputy chair Senator Michael MacDonald said. “I hope the federal government has the courage and will use their authority to make the right decision.”

“This requires the leadership and direction of the federal authority in this country.”


Senator MacDonald

Peter Forrester, a senior director with Kinder Morgan, said proposed pipeline projects are already scrutinized by the energy board and he noted they face numerous other regulatory hurdles as well.

The Trans Mountain Expansion Project, which aims to expand a pipeline network linking Alberta with the west coast, required not just the energy board to sign off but also approvals from municipalities, Indigenous groups, and provincial bodies in Alberta and British Columbia.

Navigating these waters has taken “the better part of a decade,” Forrester said.

He spent much of his testimony deconstructing the concept of “social licence,” which he said presents a final, impassable barrier to those seeking to bring Alberta oil to market thanks to groups that consider social licence to be a veto power.

“Those in this category refuse resource development for philosophical reasons (and) refuse to engage in good faith in the work it takes to compromise,” he said.

“It matters not that the veto power they wish to exercise may be diametrically opposed to the public interest.”

He said the concept is more useful if it is understood as a general consensus that a project is in the public interest.

“This is democracy as determined by the consent of the populace,” Forrester said.

He quoted Abraham Lincoln: “A universal feeling, whether well or ill founded, cannot be disregarded.”


The committee also heard from engineer and energy expert Mike Priaro, who returned to the subject of the Energy East pipeline.

Senator Mercer during public hearings

He argued it should be extended beyond its proposed terminus on the Bay of Fundy in Saint John, NB to the Straight of Canso in northern Nova Scotia.

He got a sympathetic reception from Senators MacDonald and Terry Mercer who have repeatedly expressed concern for what might happen to the bay if Saint John remains the pipeline endpoint.

The Bay of Fundy is home to a delicate ecosystem, the highly-endangered right whale and massive tidal bores; more oil to Saint John would mean many more oil tankers moving through these fragile waters, Priaro said. 

The port at the Straight of Canso, on the other hand, is regarded as one of the best and safest deep-water ports on the East Coast and is hundreds of kilometres closer to European and Western Indian markets than the port at Saint John.

Moreover, a possible pipeline spur to Dartmouth, NS would revitalize the city’s existing refinery and help “spread the economic benefits of Alberta’s crude oil resource … to all the provinces of mainland Atlantic Canada,” Priaro said.

“If this industry’s booming, the country’s booming,” Senator Mercer said.

The committee is in Vancouver on Thursday for more public hearings.