It's claimed it will be the largest privately-financed infrastructure project in B.C. history, and the largest project of its kind in Canada.
It will take an estimated 650,000 tonnes or more of steel to construct -- more than 249 times the steel in the Simon Fraser Bridge.
Thousands of workers will be needed to build it.
It will cross more than 1,000 streams, creeks and rivers in two provinces, and require a pair of 6.5-kilometre tunnels through the B.C. coastal mountains.
If completed, it will be 1,170 kilometres long, just 50 kilometres shorter than the proposed Mackenzie Pipeline, a project that has been on the drawing board for more than three decades.
If you have not been paying attention, you may not know the project.
The colossus is Enbridge's proposed $4.5-billion twin pipeline, the Northern Gateway.
It is meant to carry oil from the Alberta tar sands to Kitimat for export by ocean-going tanker to Asia and perhaps the western U.S. seaboard.
Condensate, a kerosene-like liquid used to thin heavy oil for transport in pipelines, will be shipped back to Alberta in the second, smaller pipeline.
The condensate -- a leftover byproduct of liquefying natural gas -- could be sourced from a number of locations, including Russia, Australia and the Middle East.
By its very nature -- its size, and the fact it will bring the risk of an inland oil spill for the first time ever to a rugged wilderness area that stretches more than 400 kilometres west of Prince George -- the project is controversial.
And, while some business and municipal leaders have aligned themselves in favour of the project, an increasingly vocal group of First Nations are eyeing the oil and condensate pipelines with apprehension. They are fearful of the impacts an oil spill could have on their traditional territories, particularly on salmon.
On the regulatory side, the project faces a lengthy two- to three-year process and is already the object of criticism from environmentalists.
Even before a review gets underway, it is unclear if the project is necessary.
Pipeline capacity for the Alberta oil sands is expected to outstrip production until the end of the decade. Enbridge has not revealed whether any companies have provided the necessary commercial backing.
Indeed, in a seemingly contradictory stance, Enbridge argued last year in National Energy Board hearings that one of its competitor's projects, TransCanada's Keystone XL project, meant to take Alberta oil to the Gulf Coast region of the United States, shouldn't go ahead because there is already too much pipeline capacity.
And in a recent development, a legal dispute has heated up between major oilsands players like Suncor Energy over the start up of the southern American leg of Enbridge's Alberta Clipper pipeline. Essentially, the oil producers say the new capacity is not needed at this time.
But, viable or not, it is clear that consideration of the project puts northern British Columbia, and particularly the region west of Prince George to the North Coast, at the nexus of powerful energy forces for the first time.
Thanks to the oil sands, Canada is now considered to possess the second largest oil reserve in the world behind Saudi Arabia. As a result, the oil sands are considered a key Canadian strategic economic asset.
World oil resources are expected to eventually peak and decline while demand continues to grow, which is expected to increase the value of unconventional energy sources like the Alberta oil sands. At the moment, virtually all of the exported oil from the oil sands goes to the United States. Enbridge, and perhaps the federal Conservative government, wants to give the Alberta oil sands a new outlet: the Northern Gateway. The thinking is that if there is more than one market for the oil, there are more profits in it for oil companies and more incentives to develop the oil sands.
That expansion is forecast to create more economic activity and jobs to the benefit of all of Canada. A recent report from the Canadian Energy Research Institute -- a government and industry think tank based in Calgary -- estimated the oil and gas sector would add an additional one million jobs to the country over the next 25 years.
But oil from the tar sands leaves a significant environmental impact and produces more greenhouse gases per barrel than other conventional oils, which is why an array of environmental voices continue to cry foul over the development of this "dirty oil."
There's even a suggestion that the ultimate destination of bitumen from the Alberta oil sands is an issue of energy security for the United States, some arguing that America doesn't want to see the oil go to China.
Enbridge first began examining the idea of accessing markets like Asia more than a decade ago. It started promoting the Northern Gateway project publicly in 2003 before it was shelved in late 2006 because, said the company, it had decided to focus on pipeline projects to the U.S.
The project was resurrected in 2008 when Enbridge secured $100 million from unnamed potential suppliers and consumers of the oil. The money is being used to steer the project through the regulatory process that involves Canada's National Energy Board and the Canadian Environmental Assessment Agency.
Enbridge will take the first big step in seeking regulatory approval when it files its application to the National Energy Board, possibly before the end of March.
"You can see strong support from a conceptual level from the industry and the government of Alberta," said John Carruthers, president of Enbridge Northern Gateway Pipelines, a subsidiary of Enbridge Inc.
However, the global economic slowdown has led to reduced oil production forecasts from the oil sands.
A recent Canadian Association of Petroleum Producers report noted that lower estimates in western Canadian crude-oil supply growth means the main driver behind the proposals for new pipeline projects has "diminished substantially." Pipeline projects that have already been approved or under construction will add more than one million barrels per day in pipeline capacity by the end of 2010. That pipeline capacity will meet and exceed the forecast oil supply through 2019, said the CAPP report.
Enbridge's timeline -- which would bring an additional 500,000-plus barrels a day of oil capacity on stream -- has the pipeline in service by the end of 2015 or early 2016. The timing and capacity issues put a question mark on the project. But Carruthers argues the benefit of the project should not be judged strictly on the basis of a capacity increase.
It goes beyond that, he says, because it offers entry into new markets throughout Asia and along the Western U.S. seaboard, particularly California. "There will be just a fundamental ability to access large and growing markets. That gives us market diversification," says Carruthers.
Canadian oil industry analyst Steven Paget says there's no question that a pipeline from the oil sands to the northwest coast of British Columbia would have strategic implications for all of Canada.
"This pipeline is very real," said Paget, who is an analyst with FirstEnergy Capital Corp. in Calgary. "It will give shippers an additional option on where to send their crude. It gives them many options. It gives them California, Korea, Japan, China, countries all along the Pacific Rim."
Without passing judgment on the project, Greg Stringham, a spokesman for the Canadian Association of Petroleum Producers, had a similar observation: "I don't think it's ever too early to have companies evaluating those options."
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You only have to look to China, a country of 1.3 billion, to see the kind of pull there is on the Alberta oil sands.
China's appetite for oil has been growing, a product of its rapidly expanding economy.
It is the second largest consumer of oil behind the United States.
China's oil consumption has grown much more rapidly than that of the United States, more than tripling since the early 90s when it became a net importer. Chinese consumption is forecast to grow in 2010, even though global consumption, including in the U.S., is expected to drop slightly, according to data from the Paris-based International Energy Agency.
Last September, PetroChina announced it was spending $1.9 billion on two undeveloped oilsands projects owned by Athabasca Oil Sands Corp.
It's the first large Chinese investment in the oilsands. University of Alberta economist Andre Plourde said PetroChina's investment gives new life to Enbridge's Northern Gateway project. "Chinese corporations -- especially those that are owned by the government -- essentially don't walk around the world buying financial plays in things. They really do want access to the resource when they buy it," said Plourde.
PetroChina had shown an interest in the Northern Gateway project as early as 2005, signing a memorandum of understanding with Enbridge that was believed at the time to be an agreement to take half of the crude from the pipeline.
In 2007, PetroChina's parent, China National Petroleum Corp., said the company was tired of waiting for support from Canada and walked away. But in 2009, the China National Petroleum Corp. signalled its renewed interest, stating during a forum in Geneva, Switzerland attended by Alberta Premier Ed Stelmach that it was seeking the support of Canadian political leaders to help create a major energy corridor linking Western Canadian oil supplies to the Chinese market.
Canada's Conservative minority government has said developing the oil sands is important for Canada, and even hinted at support for providing access to markets other than the U.S. "Doesn't it help Canada's exporters to have alternative market choices?" Canada's Environment Minister, Calgarian Jim Prentice, said last fall.
Prince George-Peace River Conservative MP Jay Hill said the federal government encourages the private sector to look at these types of projects, also noting the pipeline would develop alternate markets for the Alberta oil sands. "The Enbridge pipeline, if done right, can be both environmentally-friendly and certainly a huge economic benefit to northern British Columbia," said Hill, who is a member of the Conservative cabinet.
The B.C. Liberal government has also shown an interest in pipeline development.
In a 2008 throne speech, the Liberal government stated that a new northern energy corridor from Prince Rupert to Prince George would be pursued. The ruling Liberals said the corridor held the potential for billions of dollars in new investment that would create new high-paying jobs for the North.
And at least one B.C. Liberal from northern B.C. has made no secret of his support for the $4.5-billion Enbridge project. Nechako Lakes MLA John Rustad, the minister of state for forestry, issued a news release last fall lauding the economic benefits of the project.
Provincial and federal NDP politicians from northern B.C. have already voiced concern over the project. Skeena-Bulkley Valley NDP MP Nathan Cullen, the party's environment and energy critic, said the risks of the project are unacceptable. Concerned over the impacts of an oil spill, Cullen, whose riding stretches from the coast to just west of Prince George, also does not like the link to the Alberta oil sands.
"The tar sands are an environmental disgrace. You can see the toxic tailings ponds from outer space they are so large," he said.
But before any political push or a federal review decision is reached, observers say a critical issue that must be resolved is the support -- or lack thereof -- by First Nations.
The route in northern B.C. crosses the traditional territories of First Nations that have largely not resolved treaties. The McLeod Lake Indian Band north of Prince George and the Nisga'a in northwest B.C. are the only exceptions. It means the remaining First Nations have claims to land and resources along the pipeline route.
First Nations like the Haida, the Wetsuwe'ten and the Carrier Sekani Tribal Council have already voiced their concerns -- the Haida over the prospect of a tanker spill, the Wetsuwe'ten and the Carrier over the potential of pipeline ruptures.
A chief area of concern, said Carrier Sekani Tribal Council chief David Luggi is the threat to salmon from a spill, particularly given the low returns last year. "I think it actually seals the argument that we can't have this pipeline because whatever dwindling salmon we have left is at risk," said Luggi.
The pipeline would cross the Stuart River, an important sockeye tributary in the Fraser River watershed. Prime Minister Stephen Harper recently announced a public inquiry into the decline of the Fraser River sockeye.
While there are environmental groups in northern B.C. opposed to the project, or at the least in favour of a public inquiry, the pipeline also has the attention of the wider environmental community. Among them are: ForestEthics with offices in Toronto and San Francisco; the Calgary-based Pembina Institute; and Vancouver-based West Coast Environmental Law. Also on the list are RainCoast Conservation and the Dogwood Initiative, both based in Victoria.
Greenpeace, which has offices throughout the world, has an oil sands campaign underway. Last September, a group of their activists chained themselves to a three-storey dump truck at Shell's Albian Sands mine about 80 kilometres north of Fort McMurray, Alta.
The oil sands have also attracted farther-reaching global attention, including notice at the recent climate talks in Copenhagen.
There have also been exaggerated claims at the political level.
Former U.S. vice-president Al Gore -- best known for his climate-change movie and book, an Inconvenient Truth -- has declared that the development of the Alberta oil sands will bring the demise of mankind.
Dogwood Initiative representative Eric Swanson -- whose group outright opposes the pipeline -- contends the Enbridge project is being used as political leverage against proposed climate change legislation in the U.S.
The idea is that the threat of losing Alberta oil sands production to Asia will push the U.S. to reconsider efforts to limit greenhouse gas emissions that would put restrictions on oil sands bitumen.
Emission caps considered under a bill passed in the U.S. House of Representatives are expected to drive up the cost of refining Canadian oil sands crude. The Senate, which must also approve the bill to enact it into law, is not expected to make a decision until later this year. Oil from the tar sands is expected to be penalized by such regulations because the effort required to extract and refine oil sands produces more greenhouse gas emissions than conventional oil, according to various studies, including by the Canadian government. More critically, says Swanson, the 200 permanent jobs promised by Enbridge are not worth the risk of a spill inland or on the coast, particularly for a project that is not necessary from a capacity point of view.
"It's certainly not about what's best for British Columbians or Canadians," he argues.
That view is not shared by some municipal and business leaders in northern B.C.
Initiatives Prince George CEO Tim McEwan believes projects like pipelines can have a "big" public benefit. "Environmental issues are legitimately put on the table, but they have to be weighed against economic interest and public interest," said McEwan, who heads the city's economic development agency.
"There's the jobs, but also the underpinning for health and social programs," observes McEwan.
The oil sector remains largely unfamiliar territory for the 175,000 or so people in northern B.C. that live along the pipeline corridor route. Names like Enbridge and TransCanada do not resonate with northern British Columbians in the same manner as Canfor or West Fraser, two major forest products companies with extensive operations in the region. Even with a severe downturn in the forest sector, the two companies employ more than 3,000 people in northern B.C.
Josh DeLeenheer, a Prince George resident who recently has become involved in examining Enbridge's Northern Gateway project, says his sense is that the average person has not paid much attention to the project and simply is not aware of its implications.
"We can really get walked over," says DeLeenheer, who recently helped create the Prince George-based Sea to Sands Conservation Alliance.
Enbridge is hoping there is not a rush to judgment on the pipeline project.
Enbridge spokesman Steve Greenaway stresses there are many months of hearings and testimony ahead, as well as reports that will detail environmental, social and economic issues.
"All of those things have yet to come, and so I think people should stay tuned and watch the process as it unfolds," he said.
TOMORROW: What is the pipeline spill risk versus the economic benefit to northern B.C.?
WHO IS ENBRIDGE?
Enbridge is a big company.
In Canada and the U.S, it operates the world's largest crude oil and liquids pipeline system.
The company also operates natural gas pipelines.
Its system includes Canada's largest natural gas distribution company, which provides gas to customers in Ontario, Quebec and New York State.
Enbridge, which started operating in 1949 as Interprovincial Pipe Line Co., has 13,500 kilometres of pipeline. The pipelines deliver more than two million barrels a day of crude oil and liquids.
Based in Calgary, the company employs about 6,000 people in Canada and the United States.
The head of Enbridge is president and CEO Pat Daniels, who has been a senior executive of the company for 14 years. He was named CEO in 2001.
Enbridge is also a profitable company.
In 2007, it had a profit of $700 million on revenues of $11.9 billion, while in 2008, the company posted a profit of $1.32 billion on revenues of $16.1 billion. The positive financial results have continued in 2009 when Enbridge posted a profit of $1.55 billion.
Said Daniels: "From the strong base we've achieved in 2009, we are confident in delivering continued growth of 10 per cent per year on average into the second half of the decade."
Enbridge has $14 billion in projects under development through to 2012, has secured another $5 billion after 2012, and has a "pipeline" of opportunities of more than $30 billion.
Among those opportunities is the proposed $4.5-billion Northern Gateway pipeline project through northern B.C.
The Northern Gateway project is headed up by John Carruthers, president and CEO of Northern Gateway Pipelines, who has more than 20 years experience in the energy and resource sectors.
Last year, Enbridge said it will move towards a neutral environmental footprint by 2015 for new projects.
For every tree the company removes in a right-of-way, it will plant another. For every acre used in creating a right-of-way, it will put an acre in a nature conservancy. For every kilowatt of energy it consumes in its operations, it will generate a kilowatt of renewable energy.
-- Source: Enbridge website, financial reports and 2009 Toronto investor day conference
WHAT ARE THE ALBERTA OIL SANDS?
- The oil Enbridge will carry on its 1,170-km pipeline will come from the Alberta tar sands.
- Oil from the tar sands does not start out life as a liquid. The tar sands are a mixture of sand, sandstone and bitumen.
- Bitumen is a black, sticky form of crude oil so heavy that it will not flow unless heated or diluted with lighter hydrocarbons. At room temperature it is much like cold molasses.
- Unlike conventional crude oil, which flows naturally or is pumped from the ground, oil from the tar sands must be mined or recovered from deeper beneath the ground by injecting steam to make the oil flow, a process known as "in situ." When mined, about two tonnes of oil sands must be dug up, moved and processed to produce one barrel of oil.
- The Alberta tar sands, with proven reserves of 173 billion barrels (about 13 per cent of total global oil reserves), are now considered the second largest oil reserve after Saudi Arabia, which has conventional reserves of 264 billion barrels of oil.
- Alberta tar sands take more energy and water to convert into useable synthetic oil than conventional oil. The milling process also creates more greenhouse gases than the conventional oil.
- The production of bitumen from the oil sands -- mining and processing -- can produce 3.2 to 4.5 times as much greenhouse gases as conventional crude oils. However, a full life-cycle greenhouse gases analysis, which includes burning the fuel in a vehicle (which accounts for 80 per cent of GHG emissions), showed that oil from the Alberta tar sands have emissions 10 per cent higher than competing U.S. crude imports. A similar comparison showed oilsands' GHG emissions were 16.5 per cent higher than conventional oil produced in the U.S.
- Environmentalists say greenhouse gas emissions from the oil sands are worse because oil companies and governments don't account for GHG emissions from forests destroyed to get at the tar sands.
- The oil sands make up about five per cent of Canada's overall greenhouse gas emissions, and about 0.1 per cent of the world's emissions.
If oil sands production increases as expected, and the emissions per barrel are not reduced, the contribution will roughly triple by 2030.
- GHG emissions per barrel of oil from the oil sands have been reduced an average of 38 per cent since 1990.
- In 2008, Alberta exported 1.51 million barrels of oil per day of crude oil to the U.S., supplying 15 per cent of U.S. crude oil imports, or 8 per cent of U.S. oil demand.
-- Sources: Alberta government, U.S. Energy Information Administration, Enbridge, Alberta Energy Institute, U.S. Department of Energy, Global Forest Watch, Britannica online encyclopedia, Council on Foreign Relations.
