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B.C. seeks more oil pipeline safeguards, share of benefits

The B.C. government is demanding extensive pipeline and coastal tanker safeguards as well as a bigger share of cash benefits for the province and First Nations as preconditions for considering any new oil pipeline.

The announcement applies not just to Enbridge's Northern Gateway pipeline proposal across northern B.C. to Kitimat but also to the proposed twinning of Kinder Morgan's existing Trans Mountain pipeline that diagonals southwest through B.C. and runs through the Lower Mainland to a Burnaby terminal.

"This isn't tacit approval of the project," Environment Minister Terry Lake said Monday, referring to Northern Gateway, which is further in the review process.

"These are the minimum conditions we require in order to consider support."

Both projects would greatly increase the ability of oil companies to export crude oil through B.C. and via tanker to Asia, reducing reliance on the U.S. market.

The provincial government has found itself caught between a public deeply concerned about spill risks and enormous pressure from Alberta and the federal government to allow a new westward outlet for Canadian oil.

"We want a fair share of the benefits in order to be considered partners in a project like this," Lake said. "Given that British Columbia would shoulder 100 per cent of the marine risk and a significant portion of the land-based risk we don't feel the current approach to sharing these benefits is appropriate."

He did not spell out B.C.'s price on royalty sharing, but said that would rest on discussions between Premier Christy Clark and the prime minister and premiers of Alberta and Saskatchewan.

"It doesn't matter what that number is if we don't have adequate environmental protection."

B.C. wants Ottawa to insist industry provide provide a bigger marine spill response  – up from the current 70,000 barrel capacity to something closer to the 300,000 barrel spill response mandated by Alaska. (Spills larger than the local response threshold trigger mutual aid agreements with neighbouring states.)

The government also notes Alaska requires cleanup crews reach a spill site within 72 hours, while Canada's current 72-hour rule also allows travel time to reach a site, potentially adding days to a response.

The province also envisions a levy charged on each barrel of oil shipped that would – as is done in Washington State – help fund cleanup responses.

A land-based industry spill response co-op will also be proposed, similar to the Western Canada Marine Response Corp. that's charged with offshore response.

Ship owner insurance and industry funding available for a spill response totals $1.3 billion in Canada, according to the province's findings, while the equivalent U.S. fund is approaching $4 billion.

Aboriginal Relations and Reconciliation Minister Mary Polak said B.C.'s insistence on greater aboriginal participation and compliance with their rights does not extend to a First Nations veto over new pipelines.

Lake said B.C. can't simply make a yes-or-no decision on a project like Enbridge right now because the federal National Energy Board review is still unfolding and the project is evolving along the way.

He noted Enbridge last week committed to up to $500 million in further safety upgrades to Northern Gateway – including thicker pipe walls than previously proposed as well as more round-the-clock spill monitoring staff along the route. That move followed a damning U.S. report on the company's 2010 spill in Michigan.

B.C.'s five preconditions are successful completion of the federal environmental review; a world-leading marine oil spill prevention, response and recovery system; world-leading land spill prevention and response measures; the addressing of aboriginal and treaty rights, including First Nation participation and benefits; and a "fair share" of the fiscal and economic benefits of a proposed heavy oil project that reflects the elevated risk to B.C.

There are doubts as to whether B.C. could block a federally approved pipeline if it wants to.

Lake noted that even then Enbridge would require dozens of provincial regulatory approvals, which he said would be carefully considered.

The $5.5-billion Enbridge project includes one pipeline carrying heavy oil west to Kitimat and a second one to import condensate used to thin the bitumen.

Kinder Morgan's $4-billion Trans Mountain twinning would boost its capacity from 300,000 barrels per day now to 750,000. Most would go to export, bringing 300 oil tankers a year through Burrard Inlet.

The province calculates only eight per cent of the tax benefits would flow to B.C. while it would bear 58 per cent of the land-based risk and all the marine spill risk.

 

No change to Enbridge pipeline will sway NDP: Dix

NDP leader Adrian Dix, who has vowed to pursue a legal strategy to block the Enbridge project, said his party will continue to oppose it – no matter what deal might be struck to steer benefits to B.C. or reduce risks.

"We remain serene and determined to take steps to oppose this pipeline, which we don't see as being in British Columbia's interests," he said.

B.C. is just 10 months away from a provincial election that could elect the NDP, which opposes Northern Gateway under any circumstances but has yet to define a position on the Trans Mountain expansion.

Dix said Northern Gateway is a non-starter because it would require consenting to oil tanker traffic on the north coast.

Dix also accused the government of belatedly trying to catch up to public opposition after it ceded jurisdiction for the environmental review process to Ottawa and then failed to intervene earlier in the Northern Gateway review when it could have still tabled evidence.

"They gave up our jurisdiction, they missed the deadline for evidence," Dix said.

"Now having been pressured by us but mostly by tens of thousands of people – business groups, environmental groups and First Nations – and they feel they have to take some step to show they're defending British Columbians' interest."

Several environmental groups responded saying no amount of safeguards will offset the damage of a serious spill, especially one involving heavy oil sands crude.

The Union of B.C. Indian Chiefs Grand Chief Stewart Phillip said most First Nations remain deeply opposed to the Enbridge pipeline, adding "it’s not about the money, it’s about the environment."

Dix said it was too soon for the NDP to take a stand on Kinder Morgan's Trans Mountain twinning because the project has not yet been formally proposed.

BC Conservative leader John Cummins said his party would also try to negotiate a benefits sharing deal for oil that moves through B.C.

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