A daily news update on the National Energy Board hearings into the Keystone Pipeline proposal -- plans by TransCanada Pipelines to export 500,000 barrels of raw bitumen a day from Alberta’s tar sands to the mid-west United States.
By Fred Wilson
From the outset of the public debate around the proposed Keystone Pipeline to carry Alberta bitumen to upgraders and refiners in the United States, the number at the centre of the controversy has been 18,000. That is the number of Canadian jobs that would otherwise be created if 400,000 barrels per day of bitumen/heavy oil blend that the Keystone line will ship were upgraded and refined in Canada.
The dramatic number was based on an econometric model from the Canadian economic consulting company, Informetrica, on behalf of the Communications, Energy and Paperworkers Union. Michael McCracken, President and CEO of Informetrica, together with Dave Coles, National President of CEP, were the chief witnesses Friday, June 8, at the NEB Keystone Pipeline hearings.
McCracken and his model were clearly the main target of Keystone and the so-called “Shippers Group” (Conoco Phillips and Suncor Energy) and he was called upon to face down four hours of cross examination. When the smoke cleared, McCracken had withstood every attempt at discrediting the analysis. In fact, there were more details to add to the case. Alberta’s refining sector would increase its GDP by 60%, adding 1,600 permanent refinery jobs in the province. The increased economic output from upgrading and refining would be worth $2 billion per year in nominal terms.
CEP President Dave Coles was also put through an extensive questioning relating to the union’s 2002 energy policy. Under questioning by Keystone lawyer Kemm Yates, Coles was asked to elaborate and explain the union policy on a line-by-line basis. Yates took Coles through the CEP policy on subjects like globalization, continental integration, NAFTA proportionality and industrial policy.
It turned out to be certainly the most detailed reading of the union energy policy in several years - and the union policy is now Exhibit B36 of the Keystone Pipeline proceedings. The point of the questioning was to paint a picture of the CEP energy policy as being fundamentally opposed to current government policy, and by inference that the union’s intervention can be dismissed as an attempt to change government policy. However, it was bait that Coles deftly refused. NEB Vice-Chair Gaétan Caron asked Coles: “Are you asking the Board to re-do public policy?” “No,” Coles replied, “we are asking the NEB to interpret its mandate broadly to uphold the public interest.”
Friday also saw Parkland Institute Research Director Diana Gibson questioned by the Shippers Group, and her evidence also withstood the test. She was asked why the upgraders and refiners that would be impacted by the export of bitumen are not interveners against Keystone. One important answer is that while in the case of the Alliance pipeline petrochemical companies were not integrated with upstream gas producers, the oil industry is already largely integrated. Commercial upgraders not owned by major oil companies are mainly still in the proposal stage.
This is the last in a series of five reports from the Keystone hearings in Calgary June 4-8. The hearings this week move to Regina where several Dakota Sioux First Nations groups will deal with the impact of the pipeline route through their traditional territories. There will then be a review of technical and engineering issues before final arguments are made, most likely June 21 in Calgary.
Our goal in posting these blogs has been to shed some sunlight on the dark corridors of Canadian energy regulation and the important implications for the country arising from the expansion of the tar sands and the new export pipelines to the United States. If you have been following these reports, hopefully you will stay in touch and be a part of a public debate on these critical issues.
Stay tuned for a report on the final arguments from CEP and the Alberta Federation of Labour next week.