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Harper’s throne speech addresses renewed pipeline push

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Hydrocarbon Engineering,

The Harper government will launch a renewed effort to ensure Alberta’s oilsands wealth can reach foreign markets via the British Columbia coast.

The pledge in Wednesday 16th October’s ‘throne speech’ comes as Premier Christy Clark and Alberta Premier Alison Redford accelerate their attempt to bridge differences over two major proposals to ship diluted bitumen to BC ports.

“For Canadians to benefit fully from our natural resources, we must be able to sell them. A lack of key infrastructure threatens to strand these resources at a time when global demand for Canadian energy is soaring,” Governor General David Johnston said in the Senate chambers.

“We must seize this moment. The window for gaining access to new markets will not remain open indefinitely.”

Both the Cdn$ 6.5 billion bid by Enbridge to build a new pipeline to Kitimat and Kinder Morgan’s Cdn$ 5.4 billion proposal to twin its pipeline to Burnaby have been highly controversial.

Government encourage pipeline projects

The Harper government is encouraging pipeline projects not only to the BC coast, but also to the US Gulf Coast as well as to Saint John, NB.

Ottawa argues that restricted pipeline capacity reduces the price Canada gets for crude from the massive and expanding oilsands sector.

The speech promised that a polluter-pay system would be enshrined into law, even though an Enbridge Inc. official recently stated that the principle is already contained in federal, BC and Alberta laws.

The government has pledged to bring in higher safety standards for pipeline operators and companies operating offshore, increase liability insurance for both, and create a “world-class tanker safety system in Canada.”

Commitments come in response to Clark’s hard line on pipelines

The commitments are in response to Clark’s hard line last year on the Kinder Morgan proposal and Enbridge’s bid.

She outlined a series of conditions, saying she wanted greater financial compensation for BC as well as “world class” pollution prevention and cleanup systems.

But Clark, who feuded with Redford last year, has stepped up efforts since her May majority election win to find common ground with her Alberta counterpart.

Plans to tighten safety, increase liability

The Conservative government plans to require companies shipping goods on railways to carry extra insurance – a law that would drive up the price of moving oil products.

Stephen Harper’s speech also said that Ottawa will tighten safety standards for companies operating offshore, running pipelines, and increase their required liability insurance.

The policies will eat into profit for oil and gas companies operating in Canada. The pledges surrounding insurance come as energy companies have been steadily cranking up the amount of oil they transport on railways because pipelines stretching to refining hubs are plugged, and new proposals are struggling to gain support.

By imposing more stringent regulations on pipelines, the government is hoping to mitigate the potential for spills and win over critics.

Lac-Megantic tragedy: trains or pipelines?

Pipelines have long attracted negative attention. The debate around shipping oil by rail, however, had been quiet until a train carrying light oil crashed in Lac-Mégantic, Quebec, killing 47 people, in July 2013.

The Thorne Speech said that while “new economic opportunities” – it did not specifically reference oil or gas – require rail in order to reach markets, the government intends to implement policies which it believes will make rail transportation safer.

“As efforts to clean up and rebuild Lac-Mégantic demonstrate, railway companies must be able to bear the cost of their actions,” said the speech, delivered by Governor-General David Johnston on Wednesday.

“Our government will require shippers and railways to carry additional insurance so they are held accountable. And we will take targeted action to increase the safety of the transportation of dangerous goods.”

Criticism from Kinder Morgan

The Harper government’s renewed pledge to pipelines coincided with rare criticism from the oilpatch.

Kinder Morgan’s President said Ottawa’s hard-line stand since early 2012 against the environmental movement has been counter-productive. “I was not a huge supporter of how actively the federal government was a year or two ago in promoting pipeline projects for its interests and taking on some of the opposers,’’ Ian Anderson told a Calgary business audience.

“I think that they have a role to play in setting regulations and policy, but don’t need them fanning the flames, I don’t need them making the grassroots opposition any worse than it might already be.”

Meanwhile, Greenpeace protesters on Wednesday chained themselves to Kinder Morgan’s front gate in Burnaby. But the attempt to block shipments had no impact because no vessels were scheduled to be at the facility.

Edited from various sources by Elizabeth Corner

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