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article imageOp-Ed: NWT touts northern pipeline — Is this a viable alternative?

By Karl Gotthardt     May 14, 2013 in Politics
Yellowknife - With the Northern Gateway and Keystone pipelines facing fierce resistance, Alberta is desperate to move its diluted bitumen and the North West Territories (NWT) is promoting a northern pipeline alternative to create jobs and improve its economy.
The pipeline is touted as a viable alternative to the southern proposed routes, which may not get the go ahead, especially in British Columbia (BC). The Calgary Herald reports that NWT Industry Minister says that a northern pipeline could transport Alberta crude oil through the NWT and Yukon to Alaska, from where it could be shipped to Asia by tankers.
The idea was run by Alaska Governor Sean Parnell during a conference in Houston last week and apparently the state is interested. Ramsay sees very little opposition from aboriginal communities, which bought into the shelved Mackenzie Gas Project, for which they negotiated a one third equity stake in the pipeline. Ramsay feels a similar model could be applied to an oil pipeline. He believes any opposition would only come from southern environmental groups.
"We've had stranded gas in the Mackenzie Delta for 40 years," Ramsay said, referring to the long-dormant 1,200-kilometre pipeline proposal to carry natural gas from near the coast of the Beaufort Sea to southern markets. Pipelines are of interest to us and we can be part of the solution."
Current projects awaiting approval to move Alberta crude
Two high profile projects are currently on the books, the XL Keystone pipeline, which would carry crude from Alberta to Texas was rejected last year by President Obama, claiming environmental concerns and the Northern Gateway pipeline, which may be scuttled by British Columbia and aboriginal groups. Whether or not President Obama will make a decision to grant the required presidential permit for Keystone is also up in the air, despite lobbying by both the federal and Alberta government.
As reported in Digitial Journal last week, Enbridge's Alberta Clipper Pipeline (Line 67) moves 450,000 barrels per day (bpd) of Alberta diluted bitumen from Alberta, Canada into the US. Enbridge Inc. plans to expand the capacity of the pipeline to 800,000 bpd, by installing new mainline pumps. The expansion project requires a presidential permit, which Enbridge says should not be a major obstacle.
After recent spills of pipelines carrying Alberta crude in Illinois, Michigan and Arkansas the approval of the XL Keystone pipeline is in question. TransCanada Corp, looking at options, has made a west to east pipeline a real possibility.
TransCanada pipelines announced on April 2, 2013 that it is looking for firm commitments to construct a west to east pipeline that would carry Alberta crude to from the Alberta oilsands to Montreal, Quebec City and Saint John, New Brunswick. The company is probably hedging its bets and sees the writing on the wall on the approval of the XL Keystone pipeline that has been tied up in bureaucratic red tape for over five years. There appears to be rare support of the project among provincial premiers, the federal government and opposition parties.
The announcement was welcomed by New Brunswick Premier Alward, who called the announcement historic. This project is not without criticism and although welcomed by the Leader of the Official Opposition, Thomas Mulcair there are major concerns about the environmental impact that comes with the reversal of line 9, which was utilized for natural gas.
The viability of a northern pipeline option
While the NWT government is enthusiastic about the prospect of a northern pipeline option, aboriginal groups may not be. The prospect of moving Alberta crude through their territory may give them second thoughts.
The Alberta government said it is studying the viability of the idea and for now the Yukon supports it as well. Enbridge Inc., which ships Alberta crude from Norman Wells, Alberta to Zama, Alberta said that it has no plans to ship crude the other way. CEO Al Monaco said last week that "we have no plans to look at that opportunity."
He said the company has its "hands full right now" trying to win regulatory approval to build its $6-billion Northern Gateway oil pipeline to Kitimat, B.C.
In plain speak, Enbridge has no interest in getting involved in yet another a long approval process.
Presumably, even though Alaska is open to the idea, the northern pipeline project would require a presidential approval and all the environmental studies that entails. NWT has no seaport nor icebreakers, thus for now Alaska is the only viable port option.
To build a pipeline you need a company like Enbridge or TransCanada to see it as a viable business option and for now, at least Enbridge doesn't appear interested. There are no quick solutions to move Alberta crude to Asian markets.
The federal and Alberta government should go back to the drawing board and develop a strategy that is viable, which would include more refining capacity. While there will be opposition to the reversal of TransCanada line nine, it appears to be the best option for now. If oilsand operators are intend on getting their product to market, they should plan on more refining capacity near the extraction site. This would go a long way to guarantee acceptance and a refined value added product.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
More about Canadian Politics, Environment, Alberta oilsands, Economy, North West Territories
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