Three North American pipelines hit significant to fatal setbacks in the dying days of 2017, with a Minnesota judge delaying approval of Enbridge’s Line 3 replacement project, TransCanada Corporation ducking media questions on its Keystone XL pipeline, and the consortium behind the proposed Mackenzie Valley pipeline announcing it had formally dissolved its partnership.
In Minnesota, Judge Ann O’Reilly determined the public would be best served “by investing a few extra weeks now to ensure that the law is followed and a comprehensive review of the project is conducted before a final decision is rendered in this important case.”
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State regulators had hoped for a final decision on the project by April. O’Reilly’s ruling could delay it to June or beyond, EcoWatch reports.
The US$7.5-billion project, the biggest in Enbridge’s history, would carry nearly 32 million gallons (762,000 barrels) of oil per day. But it faces “a growing Dakota Access-like opposition, with protests against the project on the rise,” EcoWatch notes. “Line 3 critics, including environmentalists and several Native American tribes, worry that the major tar sands project could cause a devastating spill across important waterways, wetlands, and sacred lands, and worsen climate change.”
“The proposed new route endangers the Great Lakes, home to one-fifth of the world’s fresh water, and some of the most delicate soils, aquifers, and pristine lakes in northern Minnesota,” Native-led Honor the Earth said in a statement. “It also threatens critical resources on Ojibwe treaty lands, where tribal members retain the rights to hunt, fish, gather, hold ceremony, and travel.”
In Washington, DC, meanwhile, iPolitics notes that TransCanada Corporation went uncharacteristically silent, after promising to announce in December whether it had lined up enough customers to proceed with its intensely controversial Keystone XL pipeline.
“TransCanada usually is keen to tout Keystone XL, but spokespeople for the company didn’t respond to multiple queries this week about the project’s prospects in 2018,” writes reporter Paul Koring.
Koring attributes Keystone’s troubles to “an array of opponents—from ranchers and Aboriginal peoples in Nebraska to major environmental groups and deep-pocketed climate change activists in California.” But he also notes that the cost of the project has doubled and oil prices have fallen sharply since the pipeline was first proposed for a 2013 completion date.
Two to three years is “the minimum period even optimistic backers of Keystone XL believe it will take to surmount the remaining regulatory and legal hurdles. Add on another two or three years for construction and you get a sense of when Keystone XL might (emphasis on might) be operational,” Koring notes. “But pipelines take decades to pay their investors back. TransCanada still needs to find billions in financing, predicated on whether Alberta’s producers will still be financially viable in 2040 or 2050.”
NRDC analyst Josh Axelrod said that won’t happen. “If TransCanada were to eventually prevail (in winning approvals after several more years), it would be stuck with a tar sands pipeline coming online at a time when Canadian energy regulators expect tar sands production growth to have slowed to almost zero in anticipation of a peak in the mid-2020s,” he told Koring. “If TransCanada is realistic, they wouldn’t move forward with this project.” [Disclosure: The Energy Mix curator Mitchell Beer is a part-time consultant with NRDC’s Canada Project.]
And in the Mackenzie Delta region of the Northwest Territories, a consortium that included Imperial Oil Ltd., ExxonMobil Corporation, ConocoPhillips Co., and the Aboriginal Pipeline Group (APG) announced they would abandon a C$20-billion joint venture to pipe natural gas. The Globe and Mail frames the decision as the end of a decades-long dream.
“We recognize this is a disappointing day for the people of the North,” said Imperial Vice President Theresa Redburn. “This is a disappointment to Imperial and the other members of the joint venture, as well.”
The 1,196-kilometre pipeline received National Energy Board approval in 2011, “after a six-year regulatory process that included public hearings across the North,” the Globe notes. “But by then, the shale gas revolution was in full swing, unlocking gas deposits in more accessible parts of the continent. That pushed down gas prices as development costs ballooned, making the project economically infeasible. Little work has been done since the approval.”
Imperial Oil spokesperson Gordon Wong told CBC the company initially expected a 22- to 24-month approval process, and Tuktoyaktuk Mayor-Elect Merven Gruben said the six-year delay was excessive.
“It was just a farce the way they wasted their time doing all these studies and all these meetings all over the North,” he said. “They wasted so much money and time. By the time they said it was a go, it was too late…all the [natural gas] prices had gone down.”
But Frame Lake MLA Kevin O’Reilly, who followed the project in his previous job with Alternatives North, an NWT social justice group, said the process was not the problem.
“I’d blame the poor planning the proponents themselves had undertaken and the amount of time they had taken to respond to information requests from governments, from Indigenous governments, from NGOs, and so on,” he said.
In the end, O’Reilly said the region dodged a bullet by not launching a massive megaproject that would ultimately fall victim to lower-priced shale gas. “Thank goodness this project did not go ahead,” he said. By now, “the companies would be looking to the taxpayers, no doubt, to bail them out.”