VANCOUVER, B.C. — A report
released by the Pembina Institute today reveals gaping holes in Enbridge's
application to build the Northern Gateway oilsands pipeline from Alberta to
B.C.'s North Coast.
The report
raises questions about the actual need for Northern Gateway given the uncertain
demand for the pipeline and it shines a spotlight on oil pipeline overcapacity
in North America. It also points out several significant information gaps in
Enbridge's application to the federal government, which is currently being
considered by a Joint Review Panel. Enbridge's application is the first of its
kind to have no shipper commitments and no refinery-specific information.
"The lack of
information creates considerable uncertainty over whether the Enbridge Northern
Gateway pipeline is actually needed and whether in fact it is likely to be
built — even if approved," said Nathan Lemphers, the report's author and a
policy analyst for the Pembina Institute.
"If the
Joint Review Panel proceeds with considering this project despite the
uncertainties and lack of information provided by Enbridge, it will establish a
new precedent that stands to erode the integrity and accountability of the
regulatory review process," Lemphers added.
One of the
report's key findings is that if both the Northern Gateway and TransCanada's Keystone
XL pipelines are approved and in operation (a core assumption of the Northern
Gateway application), by 2016 there would be 41% excess capacity — or two
million barrels per day — in the export pipeline system.
"Enbridge's
Northern Gateway pipeline would take 525,000 barrels per day of oilsands to the
West Coast of British Columbia by 2016, adding additional capacity to an export
pipeline system already awash in capacity," Lemphers said. "There will be
significant excess export pipeline capacity for the next 15 years given current
oilsands production estimates."
Compounding
concerns about pipeline overcapacity is the fact Enbridge has yet to secure and
disclose long-term shipper commitments. It is unprecedented for an export
pipeline that intends to use shipper commitments to go through a regulatory
review without any proven commercial support.
Enbridge's
application also fails to provide a refinery-specific demand analysis, as
conventionally provided in export pipeline applications. Potential refinery
demand in various export markets has not been correlated with specific oilsands
products (diluted bitumen and synthetic crude oil). Because refineries need to
be specially equipped to handle bitumen, this lack of information undermines
confidence in Enbridge's assertion that there is sufficient demand.
The report
concludes with one recommendation: the Joint Review Panel should not convene
public hearings until Enbridge has filled information gaps and addressed the
uncertainties present in its current application.
"Enbridge is
not respecting the time and resources of regulators and local communities with this
application. The public and government decision-makers require enough
information to make a reasoned and informed decision on the pipeline," Lemphers
said. "The onus is on Enbridge to address these gaps, make a solid business
case and prove that its project is needed and in the public interest of
Canadians."
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The
Pembina Institute is a non-partisan sustainable energy think tank.
Watch: View a slideshow highlighting the key points from the report
Read: Download the report
Contact:
Nathan Lemphers
Policy Analyst, Pembina Institute
Cellphone: 403-370-9292
