Some calling for government to reverse Keystone XL pipeline decision

Alberta's biggest labour organization is calling on federal politicians to reverse the Keystone XL pipeline construction approval, but a representative of the local open shop association thinks the lobbying campaign is poorly conceived and futile.

The president of the Alberta Federation of Labour (AFL) thinks the pipeline shouldn't go ahead.

"Members of the Alberta and federal governments have been acting like sales executives for pipeline company TransCanada, travelling to the U.S. to persuade Americans what a great idea the raw bitumen pipeline will be, but they are ignoring what's best for Alberta and Canada," said Gil McGowan, AFL president.

McGowan and leaders from the Communications, Energy and Paperworkers (CEP) Union of Canada went to Ottawa on Sept. 22 to meet with opposition members of parliament and explain why Canada should oppose the Keystone XL pipeline.

"The whole development model for massive exports of raw bitumen, and the regulatory process that ignored the real issues has been botched from the start," said Dave Coles, president of the CEP.

"We are saying to the government that they should stop lobbying for XL in Washington and instead reopen this issue in Canada with a Parliamentary review."

TransCanada received approval for the Canadian section of the project from the National Energy Board in April 2010.

The federal government is required to reconsider the approval of the pipeline because construction didn't start within the period required by the federal permit.

Bill Stewart, vice president of Merit Contractors Association of Alberta, is critical of McGowan's lobbying efforts.

"McGowan has done a wonderful thing by going to Ottawa, but he is sucking and blowing at the same time," said Stewart.

"In order for him to say we don't need the Keystone XL pipeline, he needs to have a better idea of how he proposes to do it. It's an absurd position to be taking at this time because oil companies are not lining up to build refineries in Alberta anymore."

As a result of the recent recession, plans for the construction of about 10 bitumen upgrader projects were delayed or postponed in Alberta. Currently, there are plans to build only one.

"He (McGowan) fails to recognize that the province needs to be more competitive, in terms of construction costs, to develop these refineries," said Stewart.

"The fundamental problem is the costs of construction. These companies are not building because it costs a lot of money."

McGowan and Coles argue that the National Energy Board and the federal government need to address the issue of jobs.

A study by Infometrica in 2006 found that 18,000 jobs would be lost with the export of unprocessed bitumen at a rate of 400,000 barrels per day.

With reference to several reports, McGowan said the pipeline could provide 270,000 jobs in the U.S. by 2030 and 465,000 jobs by 2035. He estimated that Keystone XL will add only about a dozen permanent jobs in Canada.

"We have a one-time chance to take control of our own resources and build a value-added refining industry here," said McGowan.

"What we have instead is a mad rush to approve every application to develop the oilsands and ship our raw resources and good jobs down the pipeline."

Stewart pointed out the fact that the project is almost at the conclusion of a protracted political process in the U.S.

"We support the construction and development of upgraders in the province, but we are not against the Keystone XL pipeline either," he said.

"We would like to see it all refined in Alberta, but under the current circumstances, this is not possible."

The U.S. Department of State (DOS) is in the final stages of the approval process and is currently in a 90-day review period. The final Environmental Impact Statement was issued in August and found that Keystone XL would have no significant impacts.

A final decision to issue a Presidential Permit for the U.S. portion of Keystone XL will be made in December.

The Keystone pipeline expansion is a 3,200-kilometre, 36-inch crude oil pipeline stretching from Hardisty, Alberta and moving southeast through Saskatchewan, Montana, South Dakota and Nebraska, Kansas and Oklahoma to a delivery point near existing terminals in Nederland, Texas.

When completed, the US$12 billion expansion project will increase the capacity of the Keystone pipeline system from 590,000 barrels per day to about 1.1 million barrels per day.

Journal of Commerce, Wed Sept 28 2011
Byline: Richard Gilbert

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