Prime Minister Justin Trudeau has given the federal green light to the proposed expansion of Kinder Morgan’s Trans Mountain pipeline, crediting the Alberta NDP government’s climate change plan for paving the way for the project.
The decision is a key step forward in Alberta’s quest to open new markets for oilsands crude, though the Trans Mountain project is still likely to face major opposition and significant hurdles.
In Ottawa, Trudeau also announced the Liberal cabinet had approved Enbridge’s Line 3 project, which replaces an existing pipe running into the United States.
But the prime minister also confirmed that Enbridge’s Northern Gateway project — long opposed by the Liberals — won’t be approved. The Liberal government would also keep its campaign promise to ban tanker traffic along the northern coast of British Columbia, he said.
In his remarks, Trudeau said the government is trying to strike a balance between economic and environmental concerns.
“Let me say this definitively, we could not have approved this project without the leadership of Premier Notley and Alberta’s climate leadership plan,” said Trudeau, who was to meet with Rachel Notley following his news conference.
“Alberta’s climate plan is a vital contributor to our national strategy. It has been rightly celebrated as a major step forward, both by industry and the environmental community.”
The NDP government’s climate strategy includes an incoming broad-based carbon tax, a 100 megatonne cap on oilsands emissions and an accelerated phase-out of coal-fired power by 2030. In recent months, the Liberal government has announced plans mandating provinces to implement a carbon price and to phase-out coal as an electricity source.
While Alberta’s NDP government has strongly backed the Kinder Morgan expansion, it has faced fierce opposition in British Columbia from environmentalists, First Nation groups and municipalities along the pipeline route.
The British Columbia government has also set out five conditions for the approval of new oilsands pipelines in the province, not all of which have been met.
The $6.8-billion Trans Mountain project would expand an existing 1,150-kilometre pipeline than already ships oil from the Edmonton area to Burnaby, B.C.
If built, the project by Kinder Morgan would almost triple the existing capacity to 890,000 barrels per day, and provide an export outlet for Canadian oil to head into Asian markets.
About 89 per cent of the line would parallel the line’s existing right of way.
Much of the opposition has centred around concerns on its impact on greenhouse gas emissions, the possibility of a spill both on land and the ocean.
But the government and Kinder Morgan have touted for the economic benefits.
The Conference Board of Canada has pegged the project will create 678,000 person-years of employment and $18.5 billion in revenues for provincial and federal governments over a 20-year period.
In a study for Kinder Morgan, the board estimated petroleum producers would collect an extra $49.8 billion in after-tax profits by 2038 due to the industry getting higher netbacks for their oil.
With more money to invest, it’s projected petroleum producers would create an additional 29,400 jobs per year, with more than two-third in Alberta and 14 per cent in B.C.
Enbridge’s Northern Gateway has been the most contentious of the three pipeline projects.
The proposed line, which would move crude 1,178 kilometres from the Alberta oilsands to Kitimat, B.C., has faced stiff resistance from local residents who voted against it in a plebiscite in 2014, as well as First Nations and environmental groups.
Planning on the $7.9-billion project began back in 2002, although a formal application to the NEB wasn’t made until 2010. The project was to ship about 525000 barrels per day of oil.
It was approved with 209 conditions, by the former Harper government in June 2014.
Earlier this summer the Federal Court of Appeal overturned approvals for the project, citing a lack of meaningful consultation by the federal government with aboriginal groups.
Waiting in the wings for the oilpatch is Energy East, a $15.7-billion proposal from TransCanada, which would move western Canadian oil to New Brunswick. It remains in the regulatory process.
And the election of Donald Trump as U.S. president has revived the prospects for TransCanada’s proposed Keystone XL pipeline, which would run to Texas.
Enbridge’s Line 3 program meanwhile would replace existing pipe running between Hardisty in northern Alberta to Superior, Wis.
The $7.5-billion project would replace about 1,660 kilometres — including 1,067 km within Canada — of aging pipeline built more than four decades ago.
It would have initial capacity of shipping 760,000 barrels of oil per day, up from about 390,000 bpd today, transporting light and heavier grades of crude.
Last April, the National Energy Board concluded the project was in the national interest and it approved the development with 89 conditions dealing with safety and environmental issues, as well as consultations with affected parties.
“The board is also of the view that, with the implementation of mitigation measures, including the board’s conditions, the project is not likely to cause significant adverse environmental effects,” it states.
As an existing pipeline, the project does not need a presidential permit, unlike Keystone XL.
jwood@postmedia.com