Letter to the Joint Review Panel on the Enbridge Northern Gateway Pipeline Project

April 30, 2012

Secretary to the Joint Review Panel
Enbridge Northern Gateway Project
444 Seventh Avenue S.W.
Calgary, AB T2P 0X8

Dear Panel Members:

The British Columbia New Democrat Official Opposition is submitting this letter to the Joint Review Panel to formally register our opposition to Enbridge's Northern Gateway Project (NGP). We strongly believe that the NGP is not in the public interest and will cause significant adverse environmental effects. Our principal concerns regarding the NGP are these:

  • The tanker traffic to ship Alberta oil to Asian markets will require lifting of the current tanker moratorium and the Tanker Exclusion Zone, and will put the British Columbia coastline at serious risk of devastating environmental and economic damage from potential oil spills;
  • The NGP will traverse remote and highly valued areas of B.C., and will cross almost 800 streams. The risk of spills from the proposed pipeline will put these valuable environments and species, such as salmon, at risk;
  • The impact of an oil leak or spill would be most severely felt by First Nation communities. As has been affirmed by the Supreme Court of Canada, First Nations must be consulted effectively and be respected on a government-to-government level;
  • The greenhouse gas emissions generated by NGP-related oil sands development will contribute to the economic, social, and environmental costs of climate change; The NGP provides few long-term and sustainable economic benefits for British Columbia, while shipping raw bitumen forgoes important value-added economic development opportunities involving upgrading and refining the oil in Canada;
  • The NGP is forecast to increase Canadian oil prices for Canadian consumers.

Representing British Columbia's interests

The NGP will carry 525,000 barrels of oil and 193,000 barrels of liquid condensate daily between Edmonton and Kitimat, which will in turn bring approximately 225 oil tankers to the north coast every year to transport the oil to China, California and other foreign destinations. The NGP has the potential for significant and long-term negative impacts on British Columbia's economy, environment, and social and cultural fabric. Despite these significant impacts, the Government of British Columbia (the Province) has remained largely silent on the proposal.

While we acknowledge the role of the federal government in regulating interprovincial pipelines and marine transportation, we strongly emphasize the responsibility of the provincial government both to represent and to protect the interests of British Columbia and British Columbians at every opportunity. We are very concerned that the Province has not used its full powers to do this.

The Government of British Columbia agreed to the Joint Review Panel (JRP) process, limiting its ability to give voice to B.C.'s interests. In addition, the Province did not seek government participant status and has failed to exercise its intervenor status to fully represent the interests of British Columbians.

We note that other government agencies including an Alberta municipality, the Province of Alberta and Alberta's Transportation Ministry, as well as the federal Department of Indian and Northern Affairs, Department of Justice, Environment Canada, Fisheries and Oceans Canada, Natural Resources Canada and Transport Canada have registered as government participants in the JRP.

We also note that the Union of British Columbia Municipalities, and a number of local governments have passed motions opposing the NGP. These include: the Village of Queen Charlotte, Sandspit, Masset, Port Clements, Prince Rupert, Terrace and Smithers. As the Official Opposition, we take our responsibility to represent and to protect the interests of British Columbia and British Columbians seriously. We have listened to the concerns and diverse perspectives of constituents throughout the province and we have met with stakeholders and experts about the NGP.

Four New Democrat MLAs are actively participating in the JRP, as intervenors or as presenters. Three of these MLAs represent constituencies that will be directly impacted if the NGP proceeds. The fourth MLA is our environment critic. All of them, like the thousands of other British Columbians who are participating in the JRP, are doing so in good faith.

We are very troubled by statements of the Prime Minister and Minister of Natural Resources that have caused several commentators and JRP participants to question the objectivity of the process and ask if its outcome is predetermined.

The importance of sustainable economic development

International trade and responsible resource extraction are essential to B.C. and Canada's economy.

International trade creates good-paying jobs and vital communities. To this end, we are committed to building on our tradition of further developing trade relations with China and other Asia Pacific markets to build a strong B.C. economy.

Further, we have been clear about our support for the Kitimat liquefied natural gas project while emphasizing it comes with the serious responsibility to ensure strong environmental protections. We acknowledge that all resource development and extraction has inherent risks.

However, with all projects the benefits must be assessed against the risks.

The risks outweigh the benefits

Enbridge estimates significant person-years of employment in B.C. from the pipeline construction, but these jobs, while important, are only short-term. The NGP provides few longterm and sustainable economic benefits for British Columbia. According to Enbridge's estimates, the NGP will create only 78 permanent on-site jobs in B.C.. If a conventional multiplier effect is applied, the project will create about 561 permanent jobs in B.C.4, There is little ongoing benefit to local economies and small businesses in communities directly impacted by the NGP.

In contrast, it has been estimated that a major oil spill could put more than 7,000 jobs in B.C.'s fishing, tourism, and marine sectors at risks. In addition, the NGP could jeopardize innovative economic and conservation initiatives undertaken in the Great Bear Rainforest by the Coastal First Nations, in partnership with the Province, other local communities, the forestry sector, other business interests, and environmental non-governmental organizations.

After consideration, we have concluded that the environmental, economic and social risks associated with the NGP simply outweigh the benefits. This is in large part due to the increase in oil tanker traffic along the northern British Columbia coast.

Risks of oil tankers to B.C.'s northern coastline

The north and central coasts of B.C. and Haida Gwaii are home to remote, pristine and fragile wilderness ecosystems that have high ecological, cultural and economic value. Fully 44 per cent of the Pacific North Coast Integrated Management Area (PNCIMA), as the marine environment surrounding these areas is defined, has been identified as ecologically and biologically significant.

The area is home to more than 400 species of fish, including three of B.C.'s five major herring populations, 88 per cent of spawning rivers for eulachon in B.C. and valuable spawning habitat for over half of Canada's west coast anadromous salmon populations. In addition, there are 25 species of dolphins, porpoises, pinnipeds and whales, and over 100 species of marine birds that inhabit the area. The terrestrial area is home to the rare and indigenous Kermode Bear, as well as grizzlies and hundreds of other species. As recently as 2010, 39 species in PNCIMA are listed as threatened, endangered, or of special concern by the Committee on the Status of Endangered Wildlife in Canada (COSEWIC).

The area is of particular significance to First Nations people who have long made this region their home. Thousands of people and entire communities rely on these natural resources, from tourism to fisheries and other marine resources, to traditional subsistence harvesting. The total annual benefits of marine-dependent activities in the Coastal First Nation (CFN) traditional territories that could be impacted by an oil spill are significant. It is estimated that direct market use values related to fishing, seafood processing, aquaculture, tourism, marine transportation and other economic activities total $386.5 million per year, while the non-use or preservation value of the natural environment and its ecosystem goods and services could total as much as an additional $28.5 - $29.5 billion (2010 CAD).

We recognize that currently, tankers carrying up to 350,000 barrels of condensate, as well as barges bringing diesel to local communities, travel these waters. However, lifting the moratorium on oil tankers and the Tanker Exclusion Zone, and opening northern coastal waters to some 220 very large crude carriers, with a capacity of 2.2 million barrels of oil annually, poses significant risk to British Columbia. The topography, along with poor and unpredictable weather conditions, makes these waters a dangerous navigational route.

According to data compiled from the Transportation Safety Board of Canada, between 1999 and 2009 almost 1,300 marine vessel incidents were reported along Canada's Pacific coast. We also note that according to U.S. statistics there has been an average of one marine oil spill every two years while shipping oil from Alaska.

Many participants who have appeared before the JRP have emphasized the inevitability of marine accidents and the attendant crude oil spills. While we acknowledge that the risk of spills is reduced by safety measures such as double hulls, tug escorts, and improved navigational technology and other aides, the fact remains that there is still a significant risk of spills.

This was tragically demonstrated on March 22, 2006 when the ferry, MV Queen of the North, with 101 persons aboard, sailed off course, ran aground and sank off Gil Island near Hartley Bay in Wright Sound - 135 kilometres south of Prince Rupert. Two passengers were lost in the tragedy.

The vessel was loaded with 225,000 litres of diesel fuel, 15,000 litres of light oil, 3,200 litres of hydraulic fluid and 3,200 litres of stern tube oil, as well as 16 vehicles. Much of the fuel product was released when the vessel sank, creating an oil-slick that spread throughout the Sound. The ongoing chronic discharges and remaining oil from the ferry continue to be an environmental concern, in particular to the Hartley Bay and other local First Nations.

Technology and safety standards, while important, cannot eliminate the risk of a catastrophic oil spill.

It is for these reasons that public support for a moratorium on oil tanker traffic off the north and central coast is strong. A recent survey found opposition to oil supertankers in B.C.'s inside 17 coastal waters outweighs support three to one.

In 1977, when the Trans Alaska Pipeline was completed, the threat of oil spills off B.C.'s coast became a reality. What was feared back then, still holds true for today: the remoteness of the 4north and central coast makes rescuing a damaged and disabled tanker quickly enough to avoid environmental catastrophe challenging.

We noted with interest that the 2012 federal budget included $35.7 million over two years for tanker safety and marine spill science, as well as new legislation on oil spills. We welcome and support increased measures to improve the safety of oil transport.

Nevertheless, these measures do not change the reality that one spill could have devastating long-term and potentially irreparable impact on our coastal waters. We only have to look at Cordova, Alaska to see the lasting effect of an oil spill on the local environment, economy and social fabric.

Impacts of oil spills

The devastating impacts of an oil spill are well illustrated by the Exxon Valdez. The Exxon Valdez ran aground in Prince William Sound on March 24, 1989. Eight of 11 cargo tanks were punctured, releasing about 258,000 barrels of crude oil, most of which was lost in the first eight hours. There were widespread ecological and economic impacts, which more than 20 years later, are still being felt. To this day, vital shore habitats remain contaminated, the herring fishery has been closed for 15 seasons since the spill, and herring are not considered recovered. The clean-up costs alone are estimated at $3.7 billion and the economic costs of the spill on the region for fishing, socio-cultural impacts, wildlife and natural resource damages range from $8.5 billion to as high as $127 billion. Related to the economic hardship felt by families and communities, a wave of social problems followed - alcoholism, high divorce rates and even suicides swept through the Sound's small towns.

We simply cannot let this happen in British Columbia: the risk is just too great. Therefore, we are calling on the federal government to legislate a permanent moratorium on oil tankers and oil drilling activity on B.C.'s north coast to ensure the ecological integrity and economic and social vitality of the lands and waters of this unique region.

Pipeline risks

The NGP will travel almost 700 kilometres across remote parts of British Columbia. It will cross approximately 800 rivers and streams, most of which are salmon bearing. While British Columbia's wild salmon stock is already under considerable stress, it is still vitally important to our economy, ecosystems and cultural heritage.

In 2010, commercial fishing and aquaculture in British Columbia had a total wholesale value of approximately $1.4 billion, of which wild salmon accounted for approximately $240 million. This is in addition to sport fishing in B.C., which is a major tourist attraction and supports approximately 7,700 jobs and generates $288 million per year in GDP.

One major leak or spill into the Fraser or Skeena river systems will have a catastrophic impact on our wild salmon and other fish species.

We acknowledge that the 2012 Federal Budget included a modest investment of $13.5 million over the next two years to increase annual inspections and audits of existing pipelines24. We applaud the higher safety standards that may result. We note, however, that this followed a report from the federal Commissioner of the Environment and Sustainable Development that found the National Energy Board did not follow up on identified deficiencies in relation to pipeline safety and integrity in an alarming number of cases.

Modern leak detection systems may reduce the risk of leaks, but cannot eliminate them. As with the risk of an oil spill, it is a question of when, not if, the pipeline will leak. And when it does, the remoteness of the pipeline will make it very difficult to respond quickly and effectively to minimize the damage to these ecosystems. The clean-up will be further complicated by the dense, tar-like properties of diluted raw bitumen that is heavier than water and will sink and stick to stream bottoms.

Enbridge has reported that it experienced a total of 419 spills between 2006 and 2010 in Canada and the USA- totalling 65,047 barrels of crude oil. While most of these were smaller and took place at pump stations and terminals, there were some very significant incidents.

In 2010, an Enbridge pipeline spilled approximately 20,000 barrels of diluted bitumen into the Kalamazoo River in Michigan. Even though this spill occurred in a populated, easy-to-access location, it took Enbridge more than 12 hours to stop the leak once it was detected. The original clean-up was expected to be completed in two months, but in fact it took over a year to complete, and has cost over $700 million to date - double the original Enbridge estimate. Even now, almost two years later, sections of the Kalamazoo River remain closed to fishing and other recreational activities, and the impacts are still being felt by local residents.

Respecting First Nations' interests

The proposed pipeline traverses the traditional territory of a number of B.C. First Nations. It will thus directly affect the aboriginal rights of these Nations. These rights, whether or not proven, must be identified and addressed in accordance with the duty to consult set out in law. The impact of the pipeline, and even worse an oil leak or spill, will be most severely felt by First Nation communities who depend on the land and waters of their traditional territories for their economic, social and cultural well-being.

It is imperative that First Nations be consulted effectively and be respected at a government-togovernment level, in keeping with honour of the Crown and in the manner repeatedly affirmed by the Supreme Court of Canada. Aboriginal rights and title must be recognized through full and complete engagement in accordance with consultation requirements set out by the Court.

The future economic and social development of B.C. is dependent on respectful and mutually beneficial relationships between First Nation and non-aboriginal communities. The unity achieved by some 130 First Nations in rejecting the NGP project and opposing the lifting of the ban on oil tankers on the north coast is significant; it must not be ignored.

Need for national "value added" energy and climate protection strategies

Finally, we join with our federal colleagues in the Official Opposition in calling for national energy and climate protection strategies. These strategies must address not only how Canada is going to reduce its greenhouse gas emissions and meet climate targets, but also how we are going to use non-renewable natural resources to create long-term, sustainable jobs and national energy security.

The rapid development of the oil sands makes it increasingly difficult for Canada to shape and implement greenhouse gas reduction plans that will be both effective for climate protection and equitable to all provinces and all sectors of the economy. As increased emissions from the Alberta oil sands are 'locked in' with the massive expansions now underway, all other sectors of the economy and all other provinces lose options for effective and affordable emission reduction measures.

The pace of the oil sands development that is envisioned by the NGP represents a lost opportunity to ensure the development of crude oil resources in a way that captures real valueadded benefits for Canadians. The bitumen that will go through the pipeline and be shipped by tanker to China will be unprocessed, meaning Canada is losing out on the economic benefits and jobs that accrue from value-added activity. It has been estimated that a pipeline that transports 400,000 barrels of raw bitumen a day to the United States also transports approximately 18,000 refinery jobs out of Canada. Exporting high-wage, value-added jobs that could be held by Canadians is another aspect of the NGP project that is troubling.

Despite the increase in oil exports in recent years, Canada is still a significant importer of crude oil, with Quebec, the Atlantic Provinces, and small parts of Ontario dependent on imports. In British Columbia, there are only two oil refineries still operating, while five have closed in the past 30 years, Refineries are significant employers, and taxpayers, in their communities. At the same time, according to Enbridge's own analysis, the NGP will increase the price of domestic oil by $2 to 43 a barrel.

The rapid pace of development in the oil sands is taking us further along the 'volume rather than value' path of development. This in turn could make us increasingly vulnerable to a situation in which increased resource extraction leads to an artificially high dollar, reduced manufacturing as it is harder to sell value-added goods, and a rise in inflation and interest rates (referred to as "Dutch Disease" by economists). As economic consultant Arthur Donner and former Chief Economist for the Toronto Dominion Bank Doug Peters wrote recently in The Globe and Mail, "there's little doubt that it [the high Canadian dollar] has been heavily influenced by soaring resource and commodity prices, particularly that of oil.''

Former Alberta Premier Peter Lougheed has also said that the current pace of oil sands development drives up costs, including those for labour and consumer goods. He has called for "more orderly development in the oil sands" for this very reason.

British Columbia has not been immune from the negative consequences of this reality. The Business Council of British Columbia noted in a 2008 public presentation that every one-centrise in the Canadian dollar subtracted $150-$160 million from the B.C. forest products industry; and another $50 million from the mining sector.

Others have referenced the sage advice from the political scientist Terry Karl in The Paradox of Plenty, that if one conclusion can be drawn about the Dutch Disease it is that "a country's economic performance following a resource boom depends to a considerable extent on the policies followed by its government.''

As Canadians, we would be wise to heed this advice, and take the opportunity now to develop strong and sustainable national energy and climate protection strategies to guide us into the future.

The pace of oil sands development must be carefully managed so that increased processing capacity can be developed in Canada, thereby reducing imports of both crude oil in eastern Canada and finished petroleum products.

At the same time, much more work must be done to ensure Canada develops a climate protection plan that is credible and effective - something the current pace of oil sands development makes increasingly difficult and less likely. If we fail to do so, future generations will be the ones who lose out, and Canada's already declining international reputation will be further damaged.

Conclusion

In closing, we would like to reiterate that as the Official Opposition, we have carefully weighed the risks and benefits of the NGP to British Columbia, and to Canada. After much consideration and consultation, we have come to the conclusion that the risks of this project far outweigh its benefits. We believe that the NGP will cause significant adverse economic and environmental effects and is not in the public interest. Therefore the NGP should not be permitted to proceed.

Sincerely,

Adrian Dix
Leader British Columbia New Democrat Official Opposition

Signed,
British Columbia New Democrat Official Opposition Caucus