Energy
Enbridge punches back on Line 5 challenge: ‘Nothing but counter-factual speculation’
This photo taken in October 2016 shows an aboveground section of Enbridge’s Line 5 at the Mackinaw City, Mich., pump station. The Bad River Band of the Lake Superior Chippewa wants a federal judge in Wisconsin to order the pipeline closed, fearing a rupture on its territory due to spring flooding. THE CANADIAN PRESS/AP-John Flesher
By James McCarten in Washington
Michigan joined the Line 5 legal fray unfolding just across state lines Wednesday as lawyers for Enbridge Inc. and an Indigenous band prepared to square off over whether the controversial cross-border pipeline should be shut down.
The stage is set for oral arguments Thursday in the Wisconsin capital of Madison as a federal judge contemplates whether to order the taps turned off and the pipeline’s contents purged to forestall a watershed-fouling rupture.
That hearing will now also include lawyers fighting a similar legal battle with Enbridge in Michigan, where Attorney General Dana Nessel has so far been thwarted in her three-year campaign to seal off Line 5 for good.
The Bad River Band of the Lake Superior Chippewa, through whose northern Wisconsin territory the line runs, has filed a motion arguing that spring flooding along the riverbanks has rendered the risk of a breach too great to ignore.
Nonsense, Enbridge argues back in an opposition brief that takes direct aim at the band’s claims of a looming environmental emergency, as well as the “drastic remedy” its lawyers are requesting.
“Despite having to prove both liability and grounds for an injunction, the band has done neither. The motion must therefore be denied,” the brief reads, describing their argument as “alarmist” and “counterfactual speculation.”
“No release of oil is ‘ready to take place,’ ‘happening soon,’ or ‘real and immediate.'”
The 50-page filing includes among its exhibits an email exchange between Enbridge and the band’s natural resources officials to support its argument that the band has been unwilling to allow the company to do any remedial work.
“This court should contrast the evidence before it of Enbridge’s persistent efforts and overtures to reach a solution … with the band’s refusal to meaningfully engage or act.”
Even if the risk was high, shutting down the pipeline would not be the appropriate remedy, Enbridge says, pointing to a court-ordered contingency plan that spells out the steps it would take if the threat were indeed urgent.
“Enbridge will pre-emptively purge and shut down the line well in advance of any potential rupture,” the brief says, adding that the area remains under constant 24-hour video surveillance.
“Any flooding and erosion has not, and would not, catch Enbridge by surprise.”
Heavy flooding that began in early April washed away significant portions of the riverbank where Line 5 intersects the Bad River, a meandering, 120-kilometre course that feeds Lake Superior and a complex network of ecologically delicate wetlands.
The band has been in court with Enbridge since 2019 in an effort to compel the pipeline’s owner and operator to reroute Line 5 around its traditional territory — something the company has already agreed to do.
But the flooding has turned a theoretical risk into a very real one, the band argues, and it wants the pipeline closed off immediately to prevent catastrophe.
Line 5 meets the river just past a location the court has come to know as the “meander,” where the riverbed snakes back and forth multiple times, separated from itself only by several metres of forest and the pipeline itself.
At four locations, the river was less than 4.6 metres from the pipeline — just 3.4 metres in one particular spot — and the erosion has only continued.
Michigan, led by Nessel, has been arguing since 2019 that it’s only a matter of time before Line 5 leaks into the Straits of Mackinac, the ecologically delicate waterway where it crosses the Great Lakes.
“The alarming erosion at the Bad River meander poses an imminent threat of irreparable harm to Lake Superior which far outweighs the risk of impacts associated with a shutdown of the Line 5 pipeline,” she argues in her brief.
“Without judicial intervention, it is likely that this irreparable harm will be inflicted not only on the band, but also on Michigan, its residents, and its natural resources.”
The economic arguments against shutting down the pipeline — which carries 540,000 barrels of oil and natural gas liquids daily across Wisconsin and Michigan to refineries in Sarnia, Ont. — are by now well-known.
Its proponents, including the federal government, say a shutdown would cause major economic disruption across Alberta, Saskatchewan and the U.S. Midwest, where Line 5 provides feedstock to refineries in Michigan, Ohio and Pennsylvania.
It also supplies key refineries in Ontario and Quebec, and is vital to the production of jet fuel for major airports on both sides of the Canada-U.S. border, including Detroit Metropolitan and Pearson International in Toronto.
“The implications (of a shutdown) are significant — not only to Pearson airport, not only to the Detroit airport, but to our mutual economies,” Transport Minister Omar Alghabra said Wednesday on Parliament Hill.
Talks about possible contingency plans have been taking place, he added, though he hinted at something Enbridge and pipeline experts have been saying for years: there are no real alternatives.
“There’s been ongoing discussion,” Alghabra said. “But I can tell you that our focus is making sure that Line 5 continues operations.”
That was the idea behind a lengthy statement issued Tuesday by the Canadian Embassy, which warned of severe economic consequences as well as potential ramifications for bilateral relations were the line to close.
“The energy security of both Canada and the United States would be directly impacted by a Line 5 closure,” the statement said. Some 33,000 U.S. jobs and US$20 billion in economic activity would be at stake, it added.
“At a time of heightened concern over energy security and supply, including during the energy transition, maintaining and protecting existing infrastructure should be a top priority.”
Talks have been ongoing for months under the terms of a 1977 pipelines treaty between the two countries that effectively prohibits either country from unilaterally closing off the flow of hydrocarbons.
Nonetheless, the embassy’s statement and the Enbridge brief tacitly acknowledge that the prospect of a shutdown order is very real.
In Enbridge’s case, the brief pre-emptively asks the judge to grant a stay of 30 days, should an injunction be ordered, to give lawyers time to mount an appeal.
And if “this specific, temporary flood situation” results in a shutdown, the embassy says, Canada expects the U.S. to comply with the treaty, “including the expeditious restoration of normal pipeline operations.”
This report by The Canadian Press was first published May 17, 2023.
Energy
Canadians will soon be versed in massive West Coast LPG mega-project
Welcome to the world of REEF
Most Canadians, know who Connor McDavid is.
Most Canadians, know who Connor Bedard is.
And, well … most Canadians know who Howie Mandel is, right?
Household words.
But do any Canadians, know what REEF is? Probably not.
The Ridley Island Energy Export Facility project, a large-scale terminal near Prince Rupert, B.C., being built by AltaGas to export liquefied petroleum gas (LPG) and other bulk liquids to global markets.
Did you know it is providing valuable propane to Japan? No, not for barbecues, but for crucial energy demands in the Asian nation.
Japan uses propane (LP gas) for a wide range of purposes, including household use for cooking, water heating, and room heating, as well as for a majority of taxis, industrial applications, and as a raw material for town gas production.
Construction is progressing, with a target startup around the end of 2026. The project involves building significant infrastructure, including large storage tanks.
And it just so happens that Resource Works CEO Stewart Muir, paid a visit this past week to get a close-up look at a part of Canada’s export story that almost nobody talks about: a brand-new accumulator tank built to hold chilled propane and butane.
“It’s the largest of its kind anywhere. Two more are on the way, and together they’ll form a critical piece of the AltaGas Ltd. REEF project,” Muir said in a report.
”What stood out to me is the larger pattern: projects like this only happen because of the crown jewel of the B.C. economy — the Montney Formation.”
“It’s the triple-word-score of Canadian resource development: LNG, valuable natural gas liquids like propane, and the diluent streams that help unlock Canada’s single biggest export category, crude oil.”
Like the oilsands, the industry has long known about the Montney formation, which stretches 130,000 square kilometres in a football-shaped diagonal from northeast British Columbia into northwest Alberta.
According to CBC News, underneath this huge tract of land, the National Energy Board (NEB) estimates there’s 90 billion barrels of oil equivalent (boe), most of it natural gas. That’s more than half the size of the oilsands, yet the Montney has received only a fraction of the attention, at least from the public at large.
For oil and gas types, the gold rush is on.
Without question, and despite the ire of green groups who seem to be against any kind of resource development in Canada, the Montney is the quiet force multiplier behind local jobs, municipal tax bases, and the national balance of trade.
And it’s all being done at the highest environmental standard, with producers like Tourmaline Oil Corp already posting a 41% reduction in CO2 emission intensity and a target of 55% less methane emission intensity.
”Congrats to AltaGas for pushing this project forward, and a nod as well to other major employers on the North Coast — Trigon, CN and Pembina, writes Muir.
“Quietly and steadily, they’re building the future prosperity of Canadians. And thanks to Mayor Herb Pond, who took the time to walk us through the regional dynamics that make this corridor such a strategic asset.”
Muir was gobsmacked by the size of the project.
Sources say Alberta’s midstream bottleneck and rapid growth of Shale oil and gas exploration and production, has created an absolute glut in ethane, propane and butane. Ridley Island takes this glut and transports it to the Prince Rupert region by railcar and exports to Asian markets.
Ridley Island’s current export capacity of 92,000 bpd is undergoing aggressive expansion to growth by another 115,000 bpd over the next few years in two more phases of construction.
Recent images detail active construction efforts of the storage, jetty and rail infrastructure.
Alas, every issue that threatens to derail the ambitions of Canada’s oil and gas industry — access to market, First Nations land rights, public acceptance of infrastructure projects and, especially, the climate consequences of burning fossil fuels — is writ large in the Montney.
There are now seven separate lawsuits, and threats of further escalation, centred on claims by the Lax Kw’alaams and Metlakatla First Nations (collectively the Coast Tsimshian) that they were misled and lied to by the Crown when they agreed to developments on their traditional lands at Prince Rupert, John Ivison at the National Post reported.
The dispute over a future propane export facility at the port has spread to other resource projects, and the two First Nations have launched lawsuits against the Ksi Lisims LNG project that was one of the Liberal government’s major projects announced by the prime minister last week.
Further, the conflict threatens to negatively impact any plans Ottawa and the province of Alberta have to build an oil pipeline to the port.
Prime Minister Mark Carney’s recent announcements giving the green light to Alberta’s oil & gas industry has stirred the energy pot to new levels.
B.C. Premier David Eby — who prides himself on Indigenous virtue signalling — is pissed off. It appears he was largely left out of the loop and he is digging in.
Eby said the B.C. government needs to make sure this pipeline project doesn’t become an “energy vampire.”
“With all of the variables that have yet to be fulfilled — no proponent, no route, no money, no First Nations support — that it cannot draw limited federal resources, limited Indigenous governance resources, limited provincial resources away from the real projects that will employ people,” Eby added.
B.C.’s Coastal First Nations also say they will use “every tool in their toolbox” to keep oil tankers out of the northern coastal waters.
It is now apparent that all roads, or, shall we say, pipelines, lead to Prince Rupert.
The feds now face an imposing uphill battle, to leverage their standing as a regulator and resolve a dispute that threatens Canada’s crucial growth agenda.
— with files from CBC News, National Post
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Alberta
Net Zero goal is a fundamental flaw in the Ottawa-Alberta MOU
From the Fraser Institute
By Jason Clemens and Elmira Aliakbari
The challenge of GHG emissions in 2050 is not in the industrial world but rather in the developing world, where there is still significant basic energy consumption using timber and biomass.
The new Memorandum of Understanding (MOU) between the federal and Alberta governments lays the groundwork for substantial energy projects and infrastructure development over the next two-and-a-half decades. It is by all accounts a step forward, though, there’s debate about how large and meaningful that step actually is. There is, however, a fundamental flaw in the foundation of the agreement: it’s commitment to net zero in Canada by 2050.
The first point of agreement in the MOU on the first page of text states: “Canada and Alberta remain committed to achieving net zero greenhouse gas emissions by 2050.” In practice, it’s incredibly difficult to offset emissions with tree planting or other projects that reduce “net” emissions, so the effect of committing to “net zero” by 2050 means that both governments agree that Canada should produce very close to zero actual greenhouse gas (GHG) emissions. Consider the massive changes in energy production, home heating, transportation and agriculture that would be needed to achieve this goal.
So, what’s wrong with Canada’s net zero 2050 and the larger United Nations’ global goal for the same?
Let’s first understand the global context of GHG reductions based on a recent study by internationally-recognized scholar Vaclav Smil. Two key insights from the study. First, despite trillions being spent plus international agreements and regulatory measures starting back in 1997 with the original Kyoto agreement, global fossil fuel consumption between then and 2023 increased by 55 per cent.
Second, fossil fuels as a share of total global energy declined from 86 per cent in 1997 to 82 per cent in 2022, again, despite trillions of dollars in spending plus regulatory requirements to force a transition away from fossil fuels to zero emission energies. The idea that globally we can achieve zero emissions over the next two-and-a-half decades is pure fantasy. Even if there is an historic technological breakthrough, it will take decades to actually transition to a new energy source(s).
Let’s now understand the Canada-specific context. A recent study examined all the measures introduced over the last decade as part of the national plan to reduce emissions to achieve net zero by 2050. The study concluded that significant economic costs would be imposed on Canadians by these measures: inflation-adjusted GDP would be 7 per cent lower, income per worker would be more than $8,000 lower and approximately 250,000 jobs would be lost. Moreover, these costs would not get Canada to net zero. The study concluded that only 70 per cent of the net zero emissions goal would be achieved despite these significant costs, which means even greater costs would be imposed on Canadians to fully achieve net zero.
It’s important to return to a global picture to fully understand why net zero makes no sense for Canada within a worldwide context. Using projections from the International Energy Agency (IEA) in its latest World Energy Outlook, the current expectation is that in 2050, advanced countries including Canada and the other G7 countries will represent less than 25 per cent of global emissions. The developing world, which includes China, India, the entirety of Africa and much of South America, is estimated to represent at least 70 per cent of global emissions in 2050.
Simply put, the challenge of GHG emissions in 2050 is not in the industrial world but rather in the developing world, where there is still significant basic energy consumption using timber and biomass. A globally-coordinated effort, which is really what the U.N. should be doing rather than fantasizing about net zero, would see industrial countries like Canada that are capable of increasing their energy production exporting more to these developing countries so that high-emitting energy sources are replaced by lower-emitting energy sources. This would actually reduce global GHGs while simultaneously stimulating economic growth.
Consider a recent study that calculated the implications of doubling natural gas production in Canada and exporting it to China to replace coal-fired power. The conclusion was that there would be a massive reduction in global GHGs equivalent to almost 90 per cent of Canada’s total annual emissions. In these types of substitution arrangements, the GHGs would increase in energy-producing countries like Canada but global GHGs would be reduced, which is the ultimate goal of not only the U.N. but also the Carney and Smith governments as per the MOU.
Finally, the agreement ignores a basic law of economics. The first lesson in the very first class of any economics program is that resources are limited. At any given point in time, we only have so much labour, raw materials, time, etc. In other words, when we choose to do one project, the real cost is foregoing the other projects that could have been undertaken. Economics is mostly about trying to understand how to maximize the use of limited resources.
The MOU requires massive, literally hundreds of billions of dollars to be used to create nuclear power, other zero-emitting power sources and transmission systems all in the name of being able to produce low or even zero-emitting oil and gas while also moving to towards net zero.
These resources cannot be used for other purposes and it’s impossible to imagine what alternative companies or industries would have been invested in. What we do know is that workers, entrepreneurs, businessowners and investors are not making these decisions. Rather, politicians and bureaucrats in Ottawa and Edmonton are making these decisions but they won’t pay any price if they’re wrong. Canadians pay the price. Just consider the financial fiasco unfolding now with Ottawa, Ontario and Quebec’s subsidies (i.e. corporate welfare) for electric vehicle batteries.
Understanding the fundamentally flawed commitment to Canadian net zero rather than understanding a larger global context of GHG emissions lays at the heart of the recent MOU and unfortunately for Canadians will continue to guide flawed and expensive policies. Until we get the net zero policies right, we’re going to continue to spend enormous resources on projects with limited returns, costing all Canadians.
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