After identically a decade since the last major oil pipeline was built, and with happening ones brimming with crude, Canada’s energy industry is musing when and if any new lifelines to foreign markets will go into the ground.
Those concerns were amplified last week after Kinder Morgan effectively put its Trans Mountain distension project on hold until it can be assured British Columbia won’t continue stressful to block the pipeline.
After a crucial meeting in Ottawa this weekend between Prime Dean Justin Trudeau and the premiers of Alberta and B.C., Trudeau said the federal rule will take financial and legislative actions to make it happen.
But as Trans Mountain’s destiny was put in jeopardy after the B.C. NDP’s election win, pipelines heading south to the U.S. have been propped up by the appointment of U.S. President Donald Trump, who has tied himself closely to the oil and gas industry.
Both TransCanada’s Foundation XL — which will run from Hardisty, Alta., to Steele City, Neb. — and Enbridge’s Set up 3 — which links Hardisty to Superior, Wis.— should avoid the state pitfalls that have sunk Energy East and Northern Gateway and beget put Trans Mountain in doubt, said Zachary Rogers, a research analyst at Wood Mackenzie.
“While there certainly is hazard, and nothing is 100 per cent certain … Line 3 and Keystone XL are likely to proceed,” held Rogers in an interview.
Drive East, which would have delivered bitumen from the oilpatch to Eastern Canada, was repealed by TransCanada Corp. in October 2017 after strong opposition from metropolises and Indigenous groups. Northern Gateway would have sent bitumen from Bruderheim, Alta., to Kitimat, B.C., for transportation to Asian deal ins. It too faced strong opposition, and was rejected by Trudeau in 2016.
Trump’s issuing of a presidential permit for Necessity XL revived a pipeline that had become a galvanizing symbol in the battle against weather change and the carbon footprint of oilsands production that ultimately led then-President Barack Obama to deem the stand out as not in America’s best interest in 2015.
But with state approval in Nebraska keep up with Trump’s permission, Rogers now ranks the 830,000-barrel-a-day pipeline as the most fitting to go forward.
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“There are some difficulties obviously, on the regulatory front, but Keystone XL has generally cleared its last major regulatory hurdle at the end of last year,” he thought.
Those difficulties include landowner permissions and local permitting, as satisfactorily as court challenges in Nebraska from some of the many groups tranquil opposed to it, but overall the regulators involved look to be on board, said Rogers.
“The Foremost Court of Nebraska and the State Legislature and the Nebraska Public Service Commission father all repeatedly been in support of the project. So we view the regulatory risk on Foundation XL as relatively low compared to Trans Mountain.”
Meanwhile Enbridge’s Line 3 project, which aims to replace its duration pipe with a more robust new one, has run into its own opposition as environmental and Local groups look to stop any pipelines that would allow or urge more oilsands growth.
Replacing Line 3 would allow the players to restore the original 760,000-barrel-a-day capacity, adding about 375,000 barrels of despatching capacity because of current pressure restrictions on the line.
The regulatory process for the employment has taken longer than expected as regulators in Minnesota take a closer look at the activity’s safety details, but the company should have a final decision from the ceremonial in June.
Energy sector wants more direction
The progress on in the works to the U.S. is encouraging, but producers need access to new markets and predictability in building conjure ups after several failed attempts, said Canadian Energy Passage Association president Chris Bloomer.
“We really are at a crossroads as to how we go forward as a fatherland … What we’re looking for from the federal government is leadership, concrete guidance as to where this is going.”
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He said the U.S. administration has a clear vision on pipelines and the energy sector, and that the series of weakened pipelines has hurt investment in Canada.
“We’ve had the investment fleeing the energy sector in Canada for wholly a while, given the uncertainty and the regulatory process. Since Energy East and the Northern Gateway cooking, that’s been an ongoing situation, but maybe the situation with views to the Kinder Morgan situation has kind of put an exclamation point on that,” give the word delivered Bloomer.
U.S. pipeline opposition
However, U.S. pipelines are not without their foes, as the towering protests against Energy Transfer Partners’ Dakota Access in work demonstrated in 2016.
Already groups like the Treaty Alliance Against Tar Sands Spread and others who oppose the industry have said they’re preparing to encumber development of the pipelines heading to U.S. markets.
Greenpeace campaigner Keith Stewart replied both pipelines can expect continued resistance on all fronts, on both sides of the wainscoting.
“Kinder Morgan is not alone in facing a sea of troubles, as all three pipelines are front stiff resistance on the ground and in the courts. This is because there’s starkly no role for these kinds of new fossil fuel megaprojects that imprison us into a high-carbon, high-risk economic model if we are serious about dispensing with our climate crisis or respecting Indigenous rights.”