|October 08, 2014|
Keystone Delay Won't Slow Canada Pipelines, Kenny Says
|Canada's pipeline construction won't be derailed by the lengthy U.S. review of TransCanada Corp.'s Keystone XL conduit, the head of the industry's lobby group said. |
"The trade relationship in energy between Canada and the U.S. will continue to be strong and important in both directions" even if Keystone's expansion is rejected, Canadian Energy Pipeline Association President Brenda Kenny said in an interview yesterday in Bloomberg's Ottawa newsroom.
Natural resource companies are planning C$650 billion ($584 billion) of natural resource developments over the next decade, including pipelines, according to the Canadian government. Pipelines can be safely built through any part of Canada, including the Arctic, said Kenny, a metallurgical engineer. "We have handled those terrains many times over, whether they are mountainous, rocky challenges or permafrost," she said.
Prime Minister Stephen Harper's Conservative government has made it a priority to simplify the approval process for natural resource projects. Achieving that may require hiring more people at the National Energy Board, said Kenny said, who used to work at the regulator and who made the suggestion for more staff in a pre-budget submission to the government.
While the current capacity for review is "adequate," Kenny said "making sure our regulatory capacity is sustainable is key.'"
Members of Kenny's association include Enbridge Inc., Kinder Morgan Canada, Pembina Pipeline Corp. and TransCanada, which operate 115,000 kilometers of pipelines in Canada and 13,000 kilometers in the U.S. That network handles 1.2 billion barrels of petroleum and 5.3 trillion cubic feet of natural gas a year, including exports of C$81 billion in 2013, according to the CEPA website.
TransCanada's proposed $5.4 billion Keystone route would link Canada's oil sands to refineries along the Gulf Coast, broadening access to global markets for the world's third-largest crude reserves. The State Department is reviewing the project, which was first proposed in 2008 and requires President Barack Obama's approval.
Such disputes "are a good reminder that anyone who is smart about markets will have a diversified route" to ship energy, Kenny said.
Canada will find ways of exporting its energy, Steven Wieting, global chief strategist at Citigroup Inc's private bank, said in an interview in Toronto last week.
"There are just going to be a lot of North American energy infrastructure pipelines and investments," he said. Keystone "seems to get a bit more political attention and media attention than the actual impact."
Delays for Keystone and projects such as Enbridge's proposed Northern Gateway, which would carry oil sands crude to the Pacific Ocean and is facing legal challenges from aboriginal groups, are costing Canada billions of dollars a year because of delays in approvals, Kenny said.
The pipeline industry bears some of the blame for the lack of public trust over pipeline safety, said Kenny.
"Going back five years, we did drop the ball," Kenny said, citing a culture of engineers focused more on increasing safety than on explaining their work to the public. People expect companies "to show up at the coffee shop and answer questions and talk more openly," she said, and "we have been working very hard on trying to remedy that."