Keystone decision puts more pressure on Northern Gateway proposal

Actress Daryl Hannah protests in front of the White House in Washington

against the proposed Keystone XL pipeline August 30, 2011.

EDMONTON - The delay on the Keystone XL pipeline to the U.S. Gulf Coast has renewed calls to make the Northern Gateway pipeline from Alberta’s oilsands to the B.C. coast a Canadian national imperative.

The Harper government and U.S. Congressmen both said Wednesday’s move increases the likelihood that China will become a major new buyer of Alberta bitumen.

“Obviously, this whole episode underlines the importance of diversifying our market. We can’t have only one customer,” Foreign Affairs Minister John Baird told reporters in Toronto.

Prime Minister Stephen Harper has argued that Enbridge Inc.’s $5.5-billion Northern Gateway pipeline is a key strategic initiative for Canada in light of the political problems faced by TransCanada Inc., the proponents of the Keystone XL project.

But critics and analysts said another setback for the Canadian oilpatch — the official collapse Wednesday of Enbridge’s agreement with the Gitxsan First Nation — raises questions about the inevitability of the Alberta-B.C. megaproject.

Enbridge, which said last month the Gitxsan deal was a signal to Canadians of aboriginal support for the project, confirmed that hereditary chiefs had voted against the agreement.

“While we are disappointed at this shift in stance in relation to our 2009 protocol agreement with the Nation and in relation to 2011 meetings with Hereditary representatives, we respect this decision,” Enbridge spokesman Paul Stanway in a statement.

One B.C. aboriginal leader said the Harper government’s response to the Keystone decision is simply rhetoric that ignores the constitutional rights of First Nations.

“You play hockey? You know all the mouthin’ off that happens? That’s what’s happening right now,” said David Luggi, chief of the Carrier Sekani Tribal Council in Prince George. “It’s just chirpin’ by Prime Minister Harper. We have our game faces on and we’re ready.”

Wednesday’s decision will put new pressure on the joint review hearings for the Northern Gateway pipeline, which began earlier this month, say some observers.

“The federal government is going to be exerting more pressure on the National Energy Board to arrive at the decision it wants,” said Ed Whittingham, executive director of the Pembina Institute.

Instead, however, Whittingham said Stephen Harper’s government ought to look at the U.S. decision as a signal there needs to be a “credible plan” for sustainably developing the oilsands.

His Alberta-based think-tank, focused on energy alternatives, is opposed to both the Keystone XL and Northern Gateway proposals.

“When it comes to either Keystone or Northern Gateway or any other proposed pipeline attached to the oilsands, we say, ‘Listen, we want to see that credible plan for responsible development in place first, before we put in a bunch of additional pipeline capacity that frankly we don’t need over the short term.’”

Whittingham suggested the NEB-Environmental Assessment Agency panel reviewing the Northern Gateway proposal, which has launched a series of public hearings expected to continue for the next year and a half, could take inspiration from the U.S. decision.

The panel has been under fire from the federal government and the lobby group Ethicaloil.org for allowing 4,500 people to register to speak on the project, some of whom are opponents from outside Canada.

“They need to follow due process. The federal government has criticized process decisions they’ve made (but) I think they’ve got the right process, one that errs on the side of inclusivity, and giving them the evidence and information they need to come up with the right decision that’s in the best interests of Canada and Canadians,” Whittingham said. “So I’d say, ‘Steady on.’”

A U.S. policy analyst said the Harper government’s new focus on selling bitumen to China won’t have a huge influence on U.S. policy-makers.

Chris Sands of the Washington-based Hudson Institute said American decision-makers know Northern Gateway is far from imminent. The project just went before a National Energy Board panel for hearings this month, and the project isn’t set to be completed until late 2017.

“If Nebraska politics and American politics are tough, politics in B.C. are going to be tougher with the natives and so on,” Sands said.

“Nobody believes Harper can deliver on the threat, except in the longer term. So they say, ‘OK, we’ll delay your (Keystone) pipeline for another year. Get over it.’”

He said Harper’s message is almost certainly aimed at Canadian rather than American ears.

“It’s about standing up, it’s about national pride. It’s at a time when Canada quite rightly feels like you’re a political football, you are being pinged around as if what you think doesn’t matter at all, which is kind of true.”

Threatening to sell bitumen to China is the only “self-respecting position the government can take,” Sands said.