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If it feels like new oil sands pipeline plans are being pitched with a sense of urgency, it’s because they are.
There are two primary reasons. With the northern portion of the proposed Keystone XL and Northern Gateway stuck in controversy due to environmental and First Nations opposition, and pipeline capacity out of Alberta expected to fill up in three years, oil companies are putting pressure on pipeline operators to come up with new options so production from places like the oil sands is not stranded or heavily discounted.
And, as tough as it is to get these projects off the ground, what’s also unfolding is a battle between pipeline companies as North American oil production rebounds.
The flurry of moves and counter-moves shows there’s a battle “between a couple of very large gladiators for market share in the oil transportation market in North America,” said Mike Tims, chairman of the Calgary-based investment dealer, Peters & Co., referring to Enbridge Inc. and TransCanada Corp.
Success will be dictated by speed in getting the right approvals, he said.
The combination adds up to “one of the busiest times ever for pipeline infrastructure development in North America,” said Pat Daniel, chief executive of Calgary-based Enbridge.
What’s still missing, though, is recognition that new pipelines are likely to be targeted by the now well-organized and experienced anti-oil sands movement, along with strategies to win and maintain public support that are as well thought out as routes and construction plans.
A good place to start is to build more convincing cases that the rewards of building pipelines are greater than the risks to the environment and those directly affected.
As Keystone XL and Northern Gateway have shown, it’s at this level that pipelines are decided.
The general case, that pipelines create jobs, provide secure energy and new markets for Canada’s oil, is important, but not enough. It certainly doesn’t resonate with the First Nations elders in Northern British Columbia who worry about who will pay if a spill contaminates Douglas Channel, nor the farmers in Nebraska who rely on the Ogallala aquifer.
For the rest of this ariticle, please go the National Post website: http://business.financialpost.com/2012/03/27/new-risk-spurs-oil-sands-pipeline-push/?__lsa=bf2638a3