Northern Gateway: What's at stake when pipeline's fate is announced today?

Nearly a decade after it was first proposed and following a few years of environmental review, the fate of the controversial Enbridge Northern Gateway oilsands pipeline will be a lot clearer this afternoon.

The National Energy Board (NEB) joint review panel examining the proposed $6.5-billion pipeline from northern Alberta to the West Coast will release Thursday its environmental assessment and recommendation on whether the twin pipeline should proceed. The report will be released at 2:30 p.m. MT, 4:30 p.m. ET.

Here’s what you need to know.

The project:

The 1,177-kilometre Northern Gateway pipeline would transport up to 525,000 barrels of oil per day from Bruderheim, Alta. — near Edmonton — to the deep-water port of Kitimat, B.C., where the oilsands product would be loaded onto supertankers and shipped to new Pacific Rim markets.

A second, smaller eastbound pipeline would carry 193,000 barrels of condensate per day, a product used to thin oil for pipeline transport. It’s expected the twin pipeline would be operational by 2017.

Enbridge first envisioned shipping oil to the West Coast in 1998, when it conducted a feasibility study. The Northern Gateway project was formally announced in 2004 and, after some delays, an official pipeline application was submitted to the National Energy Board in May 2010. Community hearings on the project were held in several B.C. and Alberta cities and towns throughout 2012 and much of 2013.

The review panel:

The pipeline is being reviewed by an independent three-person panel that is mandated by the federal environment minister and the National Energy Board. The joint review panel’s job is to assess the environmental effects of the proposed project and consider the application under the Canadian Environmental Assessment Act and the National Energy Board Act.

If the panel approves the project, there could be a number of conditions attached to it, such as specific engineering requirements, oil spill response plans, restrictions on the timing of construction, and completing studies such as land use investigations. If the panel recommends the project not proceed, it would be extremely difficult for the federal government to approve the pipeline and effectively overrule the NEB.

The panel members include: Sheila Leggett, current vice-chair of the National Energy Board and former member of the Natural Resources Conservation Board; Kenneth Bateman, an energy lawyer and former senior executive in the Canadian energy sector; and Hans Matthews, a professional geologist with extensive experience in Aboriginal community development.

The politics:

Under changes made last year, the Harper government has given the federal cabinet final say on whether to approve some major pipeline projects in the “national interest” — including the Northern Gateway — stripping that power from the NEB. The federal government has 180 days to review the panel’s report and make a decision.

NDP Leader Tom Mulcair opposes the project, saying it’s a non-starter because of the environmental risks to land and coastal waters.

Liberal Leader Justin Trudeau also opposes the project, saying the government has failed to properly consult First Nations and answer environmental questions.

The political stakes are huge: The Conservatives hold 21 seats in British Columbia, the NDP 12 seats, the Liberals two and the Green party one seat — with redrawn ridings and six new seats in B.C. part of the 2015 federal election mix.

The B.C. government has also laid out five economic and environmental conditions for the project to proceed, including for the NEB panel to approve the application; “world-leading” oil spill prevention and response on land and water; addressing treaty rights and helping First Nations benefit; and giving B.C. its “fair share” of the economic benefits. Alberta and British Columbia, which had been at odds over the conditions, announced last month they have agreed to a broad framework to satisfy B.C.’s demands.

“The (federal) government has basically deemed it in the national interest,” said David McLaughlin, past chief of staff to Finance Minister Jim Flaherty and former president of the National Round Table on the Environment and the Economy. “It could be quite messy politically.”

The environmental questions:

The Alberta oilsands are the fastest-growing source of greenhouse gas emissions in Canada and account for approximately eight per cent of Canada’s total GHGs. Environmental groups say new oilsands pipelines will increase development of the resource and produce more GHGs. A number of B.C. First Nations and residents near the pipeline route oppose the project and worry about the potential environmental effects of an oil spill on land, air and water.

Oil producers are increasingly shipping more of their product by rail due to pipeline constraints and political battles about building new ones. If the Northern Gateway project is rejected, it’s expected companies would continue to ship more oil to the West Coast by rail, which is generally considered riskier than transporting by pipeline.

The economic impact:

Getting additional oil and gas to the West Coast is seen as critical for Canada to diversify its petroleum export markets beyond the United States and capitalize on China’s insatiable appetite for energy.

Tens of billions of dollars have been invested in the oilsands in recent years, but there are concerns the value and international attractiveness of the resource will sink if it remains landlocked and unable to get to tidewater.

A glut of oil from several sources, including the oilsands, and inability to move it to market due to pipeline bottlenecks, has resulted in large discounts for western Canadian crude compared to North American benchmark West Texas Intermediate and international Brent prices.

Alberta and Ottawa, along with a number of banks and business groups, say this has been costing various governments and the Canadian economy billions of dollars a year.

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