On Tuesday, Stephen Harper made a long-awaited announcement, approving the highly controversial Northern Gateway Pipeline project. At face value, the announcement seems like a massive victory for Canada’s Oil Sands, and a crushing defeat for its environmental opposition. It turns out, however, that the federal government’s approval does not necessarily mean the pipeline will be built. A number of hurdles and conditions remain that must be met before construction of the pipeline can begin.
The proposed pipeline will transport oil from Canada’s Tar Sands in Fort McMurray, Alberta to the Western Coast of BC, where it will be loaded on to super-tankers and shipped across the Pacific Ocean, and has the potential to be a vital upgrade to Canada’s energy infrastructure and overall economy. If completed, the pipeline is planned to carry 525,000 barrels of oil per day and create 3 000 construction jobs and 560 long-term jobs. Due to the advent of hydraulic fracturing, the United States – Canada’s largest trading partner – has exploded their production of oil, and thus, significantly reduced their energy imports from Canada. This trend will most likely accelerate in the coming years as the US seeks full energy independence. In order to adapt to the changing economic environment, Canada must diversify its export partners.
With its rapid growth and insatiable demand for energy, China has emerged as the most likely target for Canada’s increasingly diversified energy exports. Since 2005, China has made numerous attempts to make inroads into the Canadian market through corporate mergers or capital investments in pipelines. The Northern Gateway pipeline will allow direct and immediate access to the Chinese market, while diversifying away from a declining US relationship.
The pipeline’s main hurdle is its vocal pro-environment opposition, as well as First Nations groups, whose lands will be directly affected by the pipeline. The project will run through 45 different First nations communities, threatening to disrupt wildlife in the region. Most of the environmental concerns are regarding a potential spill along the coast of BC, where the oil must be transferred from the pipeline to a super-tanker. A potential spill would be exceedingly difficult to clean up and could cause a tremendous amount of damage to the coastal ecosystem. To insulate themselves, the BC government is seeking to collect some economic benefits in exchange for assuming “environmental risk”.
Notwithstanding environmental and First Nation’s concerns, the Northern Gateway pipeline also faces additional hurdles politically. The Harper government has been criticized for what has been described as ‘tepid’ approval, perhaps for fear of strongly supporting a disastrous project. The project still needs to meet 209 major conditions set forth by the National Energy Board before construction begins, and Enbridge must also reach an agreement on several issues with BC Premier Christy Clark before she will agree to issue construction permits. Stephen Harper also faces re-election in 2015; if the Conservatives were to lose ground to either the NDP or the Liberals, the pipeline project could possibly be dead in the water.
This project represents a pivotal moment in Canadian history, as we must collectively decide where our values lie in the near term: the economy or the environment. Neither argument is perfect, and nothing is certain as of yet; however, it would seem that, despite the high profile announcement, the Northern Gateway pipeline project faces considerable hurdles before shovels will ever hit the ground.