Enbridge's Northern Gateway pipeline approved by energy board

Enbridge's Northern Gateway pipeline approved by energy board

The benefits of the Northern Gateway pipeline to bring Alberta crude to the West Coast outweigh its shortcomings and it should be allowed to proceed, a federal review panel says.

The much-anticipated report was released from National Energy Board headquarters in Calgary Thursday afternoon, 10 years after the $6.5-billion project was proposed and after more than a year of public hearings throughout B.C. and Alberta.

The final decision, however, rests with the federal government, which has 180 days to decide.

In April, the panel released a list of 199 potential conditions that the proponent, Calgary-based Enbridge Inc., might need to meet should the project be approved — the report contains 209 conditions.

Enbridge has scheduled a conference call response at 4:30 p.m. Mountain time Thursday.

The 1,170-kilometre project would deliver 525,000 barrels of petroleum a day from the Edmonton area in a 36-inch pipeline through northern B.C. to a tanker terminal in Kitimat, on the West Coast.

A 20-inch pipeline would move 193,000 barrels of condensate, a light petroleum liquid, per day east back to its starting point to be used to thin heavy oil for transport.

The project is a lightning rod in the debate over global climate change and raised concerns about the possibility of an oil spill on land or off the coast of B.C.

The British Columbia government told the panel it did not support the pipeline as it was proposed and more than 130 aboriginal bands signed a declaration against the project.

Enbridge has promised double-hulled modern oil tankers and 20 per cent thicker steel than required, on average, on the pipeline. It has agreed to set aside $1 billion to cover potential accidents.

The pipeline would allow Canadian oil producers to reach the emerging markets of Asia and free them from their sole major export market in the United States. Northern Gateway's volumes are effectively fully spoken for by Alberta producers under long-term contracts.

In a report Thursday morning, Scotiabank commodity expert Patricia Mohr said export oil pipelines are vital to Canada's future economic health.

"While probably not in place until 2018, the pipeline would help to narrow recently wide 'light' as well as 'heavy oil' price discounts off WTI (New York-traded West Texas Intermediate), which have been so costly for the Canadian economy," she pointed out.

The Kitimat terminal would have two ship berths and storage for three condensate tanks and 11 petroleum tanks. It would also include a radar monitoring station and first response capabilities.

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