The approval of a groundbreaking pipeline to take diluent from the U.S. to Alberta is being slammed by critics who also blame the provincial government for standing on the sidelines, doing nothing to prevent job loss in Alberta.
The National Energy Board (NEB) announced Tuesday the approval of the Enbridge Inc. Southern Lights pipeline project, which has an estimated pricetag of $247.5 million.
"We are very pleased that this major milestone in the project has been achieved," said Patrick D. Daniel, Enbridge president and chief executive officer, in a statement. "By increasing diluent import capacity, Southern Lights is very important to the economic development of Western Canadian crude oil production. As the NEB acknowledged, Southern Lights is an innovative and cost-effective solution to transport diluent."
However, both the Alberta Federation of Labour (AFL) and the national Communications, Energy and Paperworkers Union (CEP) are opposed to the pipeline because they say it's the last piece of a puzzle enabling other pipelines to transport Alberta resources and jobs south. Diluents are lighter hydrocarbons used to dilute bitumen and heavy oil so they can flow through pipelines.
"The Southern Lights pipeline may seem innocuous, but it's providing the lubricant that will grease the way for massive bitumen exports," said Gil McGowan, AFL president.
He added synthetic oil can be used as a diluent, but Enbridge isn't going to bother upgrading enough in Alberta, choosing instead to bring diluent up from the U.S.
"The fact that this pipeline will be used to make it easier to export jobs from Alberta seems to be entirely lost on these industry people, and it baffles me," said McGowan.
The project involves reversing the flow of Enbridge's Line 13 for the diluent, which currently transports light synthetic crude oil from Edmonton to Clearbrook, Minn. It will have a capacity of 180,000 barrels a day. Compensating for the loss of the southbound pipe are two components: one conversion and one new pipeline. A new 20-inch diluent pipeline from Chicago to Edmonton via Clearbrook is planned, subject to U.S. regulatory approvals. To replace the crude oil capacity of Line 13, a 20-inch light sour crude oil pipeline will be built from Cromer, Man., to Clearbrook.
The project broke new ground as the first application to the NEB for a pipeline to transport diluent, which the board identified as an emerging market.
Jennifer Varey, spokeswoman, explained Enbridge applied for this project in answer to customer demand as diluent supplies were beginning to dry up. Construction is anticipated to begin by the end of the year.
McGowan says the approval highlights the need for a clear plan from the provincial government to keep oilsands jobs in Alberta.
"Frankly, I'm shocked that we're halfway through a provincial election campaign, and Premier (Ed) Stelmach has yet to unveil a plan to designed to promote Alberta-based value added oilsands production."
Don Boucher, administrative vice-president of CEP western region, shared McGowan's criticism, saying the union, though "very disappointed" by the decision, wasn't surprised by it.
"We feel this board is sleepwalking through the biggest decisions in history on our energy policies for our country. This is the wrong product going to the wrong place. There must be jobs created in Canada, not delivered to the U.S."
McGowan recalled that during the Tory leadership, Stelmach said allowing companies to export raw bitumen without first upgrading or refining it in Alberta was "like a farmer selling off his topsoil." Also, Stelmach gave a mandate letter to Energy Minister Mel Knight to develop a strategy to promote Alberta-based upgrading and refining. That strategy is still outstanding.
"All Premier Stelmach, and people like Guy Boutilier and Energy Minister Mel Knight have done is stand on the sidelines. If they continue to stand on the sidelines, pretty soon the game is going to be over, and Albertans will be the losers."
By keeping the product in Canada, Boucher said it helps provide jobs and keep communities viable. It also keeps the taxes in Canada. "People have to be more informed on the decisions that are happening with their National Energy Board to really realize that it's our resources that are being shipped out of the country."
Fort McMurray Today, Page A5, Fri Feb 22 2008
Byline: Carol Christian