Enbridge Inc. is facing criticism that its $5.5-billion Northern Gateway oil pipeline is not necessary, with the Pembina Institute arguing that its addition will add to pipeline overcapacity in North America.
The Pembina Institute also said Enbridge's regulatory application has gaps, including that it has no commitments by shippers. As a result, a federal joint review panel should not convene public hearings until Enbridge, says Pembina, a Calgary-based think tank that is pushing for a shift to sustainable energy away from fossil fuels.
Enbridge immediately dismissed the Pembina Institute's arguments.
The proposed 1,170-kilometre pipeline, which would pass just north of Prince George, is meant to open up to new markets in Asia for crude oil from the Alberta oilsands.
The Pembina Institute, a Calgary-based think tank that is pushing for a shift to sustainable energy, released a 34-page report this week that outlines its argument.
The report concludes that if both the Northern Gateway and TransCanada's Keystone XL pipeline are approved and in operation, by 2016 there would be 41 per cent excess capacity of two million barrels per day in the export pipeline system. The Northern Gateway pipeline would have a capacity of 525,000 barrels per day of oil to be loaded at Kitimat on oil tankers for overseas shipment. Keystone XL would transport oil to the U.S.
The excess capacity estimate is based on 2010 figures from the National Energy Board and the Canadian Association of Petroleum Producers, and are "dependable," said Nathan Lemphers, a policy analyst with the Pembina Institute. "There will be significant export capacity for the next 15 years given current oilsands production estimates," he said.
Enbridge has been arguing that its project should not be judged solely on a capacity issue because it offers entry into new markets in Asia. Virtually all of Canada's oil is shipped to the United States.
Enbridge pointed to an analysis provided in its regulatory filing that showed potential market demand for Canadian crude in China, Japan and South Korea could be as high as 1.75 million barrels per day, more than three times the capacity of the proposed Northern Gateway pipeline.
Enbridge's assessment of new markets for Canadian crude, prepared by consultants Muse Stancil, said the Chinese market is the largest potential destination for oil sands crude.
Enbridge raised $100 million from supporters of the project to push it through the regulatory process, but will not name them. "These are companies that recognize and support the need for pipeline infrastructure to access new markets along the Pacific Rim," said Enbridge spokesperson Gina Jordan in a statement. "For commercial reasons our funding partners have asked not be named at this time," she said.
Enbridge also argued that there has never been a requirement for new pipelines to file commercial commitments.
