A bi-provincial resource committee aimed at establishing a mutually acceptable economic and environmental arrangement for new pipeline construction from Alberta to British Columbia has released its terms of reference.
According to a government press release, the committee, formed in July, will focus on "harmonizing marine and land spill response, ensuring fair fiscal and economic benefits to both provinces, consulting First Nations, exploring resource and transportation options and increasing public awareness of responsible resource development."
Leading the group is Steve Carr, deputy minister in the province's Ministry of Natural Gas Development, and Grant Sprague, deputy minister in the Alberta Ministry of Energy.
Fazil Mihlar, B.C. assistant deputy minister in the oil and has strategic initiatives division, and Al Sanderson, Alberta assistant deputy minister, are also part of the committee.
The group will draft a final report and submit it to Premier Christy Clark and Alberta Premier Alison Redford by December 31, 2013. For a full breakdown of the committee's mandate, terms of reference and meeting schedule, click here.
The committee was created after B.C. opposed the construction of Enbridge's controversial Northern Gateway project in May based on environmental concerns.
The co-operative nature of the committee is a departure from last year’s more confrontational tack taken by Clark on the issue of pipelines.
In 2012, Clark outlined five requirements any proposal for a heavy oil pipeline in B.C. would have to meet before the B.C. government would support it.
The most contentious was for B.C. to receive a “fair share” of the fiscal and economic benefits of a proposed heavy oil project that reflects the level and nature of the risk borne by the province, the environment and taxpayers. But at the time, Clark had no answers on how this could be accomplished.
“Until somebody decides they want to start having a discussion about the total benefits that are available there, it’s really impossible to know," Clark said during a visit to Calgary last year. “When I say a fair share, I mean a fair share of the total benefits that are going to be flowing across the country. We don’t really have a good sense of what that number is right now.”
According to the committee’s terms of reference, “B.C.’s fifth condition is the most misunderstood condition. Oil pipelines and projects are forecast to provide significant benefits to governments, communities and individuals through taxation, royalty revenues, employment and indirect and induced jobs.
“It is not about royalty sharing but rather about receiving a fair share of the economic and fiscal benefits of a proposed heavy oil project that reflects the levels, degree and nature of the risk borne by B.C., the environment and taxpayers.”
Given the risk to B.C. from land-based and coastal bitumen spills, “B.C. does not believe an equitable distribution exists for fiscal benefits. This imbalance must be addressed.”
Suggested areas to explore include:
- to establish the range of views on the fiscal and economic benefits relative to the costs and risks borne by each province;
- to identify potential means and mechanisms that would create an equitable sharing of fiscal and economic benefits that reflect the costs and risks resulting from the projects; and
- to define next steps in developing a strategy for enacting the appropriate mechanisms.
The Northern Gateway pipeline, if built, will run from north of Edmonton, Alberta, to Kitimat, B.C. Enbridge forecasts shipping 525,000 barrels of oil per day west to Kitimat and 193,000 barrels of condensate (gas used to thin oil in pipelines) per day east to Edmonton.
- With files from dailyoilbulletin.com
