A few leaks in pipeline letter

Dear editor: Pipeline not reality just yet, Herald, Letters, May 16

Letter writer John Thompson from Kaleden suggests several things that should be challenged.

Yes, two of the four proposed oil sands pipelines have been cancelled. Northern Gateway’s approval was initially rescinded by the courts for inadequate consultation with First Nations groups, and then effectively killed by a federal tanker moratorium. Perhaps Thompson’s statement that Northern Gateway “did enjoy the support of numerous First Nations” should be revised to “some” or a “few.”

Kinder Morgan may have done a better job in its consultations, as it has agreements in place, or in principle, with all the First Nations that actually have the pipeline cross their land. The courts will rule on the adequacy of the other consultations that involve traditional lands.

Energy East is more complicated. Its distance, four times the length of TransMountain Expansion and twice the length of KeystoneXL, only made some economic sense with high oil prices and a hostile Obama administration. Both are gone.

It was never about eastern refineries replacing imported oil. No Canadian refinery east of Sarnia, Ont., including Suncor Montreal, can process more than a token amount of bitumen or even diluted bitumen.

Quebec is already connected to Alberta for up to 80 per cent of its requirements by Enbridge Line 9 for conventional crude. Irving, a partner in the EE export terminal, only committed to taking 50 thousand barrels a day of the 1.1 million barrels a day capacity.

Since pumping costs and pipeline amortization are paid by the oil producers, EE would have resulted in lower wellhead prices than shorter distance alternatives. It is also highly doubtful that TransCanada would have the financial and construction resources to develop both EE and Keystone XL simultaneously.

How many export pipelines does Canada actually need? With Enbridge Line 3 upgrades, only KeystoneXL through the increasingly unreliable U.S., and Kinder Morgan’s TME will be required to meet Canadian export demand until 2030, or longer.

McKinsey, an international consultant, believe the world’s liquid fuel requirements for road transportation will peak in 2025, and peak for all uses in 2037. I am more likely to believe them than Jason Kinney or Andrew Scheer.

Finally, Thompson swipes at Quebec and equalization payments. In any given year, taxpayers in Quebec contribute as much to the federal equalization payments as those in Alberta.

They do receive payments back, as do all less wealthy provinces, based on formulas revised in 2007 and 2009 by the Harper government. All provinces receive transfer payments for health, post-secondary education and other social programs based on population. David Flater Okanagan Falls