Alberta Labour Federation says Gateway project will make it harder to create upgrading and refining jobs in the oil-heavy province.
September 25, 2012
by The Canadian Press
EDMONTON—Comments made by the late Peter Lougheed hung over public hearings Monday about a pipeline that would ship bitumen from Alberta’s oilsands to Asian markets.
Both sides in the debate tried to claim the support of the former Alberta premier who died Sept. 13.
Rick Neufeld, lawyer for pipeline proponent Enbridge, suggested Lougheed backed the line’s construction.
“In one of his last interviews, didn’t he say the (Northern Gateway) pipeline was essential for Alberta?” he asked while cross-examining Gil McGowan, president of the Alberta Federation of Labour.
In response, McGowan suggested Lougheed was sympathetic to the federation’s concerns that too many oilsands projects were exporting raw bitumen and robbing Albertans of some of the benefits they would reap from upgrading it in the province.
“Lougheed took an activist approach to ensure we had a value-added industry,” McGowan told the National Energy Board. “It wouldn’t have been here without government policy and intervention.”
The federation’s previous testimony that the $6-billion project would make it harder to create upgrading and refining jobs in Alberta, as well as increase fuel prices throughout Canada, came under repeated attack in Monday’s cross-examination.
Neufeld pointed out there is no shortage of bitumen currently available for anyone interesting in building a refinery. Nor has Calgary-based Enbridge ever said it would restrict access to bitumen.
He disputed the notion that pipelines encourage the export of raw natural resources. He noted that the Transmountain pipeline originally built to transport crude now moves both oil and refined products.
McGowan responded that the labour group believes projects such as Northern Gateway help price Alberta out of the market for new industrial development. He said the pipeline would only help speed oilsands development, creating demands for labour and materials that drive up their cost.
Neufeld also grilled federation adviser Robyn Allan over her testimony that the 550,000-barrel-a-day pipeline would drive up fuel costs in the rest of Canada.
“So if Canadian producers get higher netbacks in Edmonton, refineries will have to pay more in New Brunswick?” he asked.
Allan responded that oil shipped to Asia would no longer be available to North Americans, which will eventually raise its price.
“When you take oil out of North America and take it to Asia the price increase is going to affect all markets in the long run,” she said.
Enbridge analysts have argued that the price of oil is set globally and the Gateway pipeline wouldn’t change the price of the Venezuelan, European and Middle Eastern oil on which refineries in Central Canada rely.
In afternoon testimony, federation lawyer Leanne Chahley revisited potential Chinese ownership shares in the pipeline.
Cross-examining a panel of energy producers who hope to ship on Gateway, Chahley pointed out that one of them—Nexen—is being bought out by the Chinese National Offshore Oil Corp. Nexen holds one of 10 shares that give it an option for a five per cent ownership stake.
MEG Energy—owner of another of the ownership options—is about 15% owned by the Chinese corporation.
Chahley also pointed out that Total E and P Canada, another hopeful Gateway shipper, is involved with two developments that include some level of Chinese investment.
©The Canadian Press