Oral Statement to the Enbridge Northern Gateway Pipeline Joint Review Panel

Here are the comments I made to the Enbridge Northern Gateway Pipeline Joint Review Panel on January 14, 2013, on behalf of my colleagues at Sustainability Solutions Group:

Introduction

Members of the Joint Review Panel and JRP team, I would like to thank you for this opportunity to speak to you about my thoughts on this project.

I am Adrian Mohareb, an associate at Sustainability Solutions Group. I am here with my colleague Geneva Guérin. SSG is a collective of some of Canada's leading sustainability professionals. Our workers’ cooperative of experts in energy, policy and design inspire and enable the creation of sustainable buildings, communities and organisations and help them become more resilient to future climate impacts. We seek sustainable solutions that create economic development. The measures we propose to our clients seek to reduce their total lifecycle costs. Our directors have backgrounds steeped in activism, and all members of SSG have dedicated our passion for these issues to create and nurture a values-based cooperative organization.

Like many of the others who are speaking to the process, we wish to register our concerns and desire to see that the Northern Gateway Pipeline does not proceed.

On behalf of SSG, I previously submitted a letter of comment to the JRP (document A46779). The purpose of this letter was to identify the financial cost of the environmental impacts of the project if it operates smoothly, with no pipeline or tanker spills, based on the costs of the environmental impact of the greenhouse gas emissions. We have concerns with many of the elements of this project, such as:

• The risks of pipeline spill onto land and into rivers, many of which, with the introduction Bill C-45, no longer are offered the protections they previously had under the Navigable Waters Protection Act. 
• Increased tanker traffic related to the project, and of the risk of a tanker accident in the Hecate Strait and the Douglas Channel; and 
• The asymmetry between the beneficiaries of the project and those facing the economic and environmental risks. 

Given our expertise is in greenhouse gases and climate change, we are most concerned about the impacts of the NGP, should it be built, on the climate that enabled civilization to flourish, the climate we are witnessing destabilizing.

Climate change and economics 

It has become clear that the climate that enabled the development of global society is changing.

In BC alone over the last 10 years, we have seen the wildfires near Kelowna in 2003, the storm that severely damaged Stanley Park in 2006, the floods of 2012 (where the Fraser River reached levels not seen in 40 years in my previous home of Prince George), and the mountain pine beetle infestation. All of these events take significant tolls on economic activity and communities.

I’d like to discuss the costs of the project to the environment. I estimated in the letter of comment submitted in August 2012 that, annually, approximately 130 million barrels of bitumen that would travel through the NGP. I estimated this as the result of a 70% bitumen/30% condensate mix travelling through the pipeline, a conservative estimate that would witness the lower range of bitumen travelling through the pipeline, and I estimated that the pipeline would operate for 350 days/year at the maximum 525,000 bbl/day capacity. The extraction, processing and use of the bitumen would result in over 68 Mt of CO2. For comparison, the entire economy of Sweden (with about $530 billion in GDP in 2011) emits roughly the same amount of GHGs per year. At average 2011 bitumen prices of $65.50 per barrel, as outlined by Andrew Leach, an energy and environmental economist, the gross revenue from the sale of bitumen would be $8.5 billion.

In the letter, I compared the economic benefits of the project to the economic costs, using the social cost of carbon (SCC). The SCC is the full cost of the damage that results from each tonne of GHGs emitted over its lifetime in the atmosphere. It is used to measure the externality that should be incorporated into decisions on policy and investment options. The SCC includes the cost of health impacts, the costs of droughts on agricultural outputs, infrastructure costs (e.g. from floods, landslides, wildfires, storm surges and freeze-thaw cycles, among other costs), the costs of emergency responses, and other costs related to climate change.

We used the average SCC found in the Intergovernmental Panel on Climate Change’s 4th Assessment Report (viewed as a conservative assessment of climate science); this average was $43/tonne, [with a range between -$10/tonne and $350/tonne]. The IPCC stated it is virtually certain (as strong a statement as the IPCC will ever make) that the SCC will rise over time in real value, likely between 2 and 4% per year, and that the SCC is likely underestimated because of costs not accounted for. The actual cost of the impacts are likely even greater than $3 billion.

For the 68 Mt of from the project annually, the economic impacts of the emissions of this project are expected to reach almost $3 billion. This is not insignificant; it’s about 35% of the value of the bitumen at 2011 average prices. If this cost were internalized in the cost of production, I doubt that the project would proceed. However, the costs of climate change are almost always borne by those that are not responsible for the emissions, those that are not benefitting from the project. A project like the NGP looks great from Enbridge’s and the oil producers’ standpoints, because they don’t have to pay for the damage.

While we recognize that the downstream impacts of the emissions related to the oil exported by the project are not under consideration by the Joint Review Panel, the NGP project should not be considered in isolation of the oil that will be extracted and transported. Based on many reports from business and industry sources, the expansion of oil sands production is becoming constrained by pipeline capacity. Any new pipelines will mean more oil sands being developed and more GHG emissions. Enbridge has already stated that the pipeline is fully subscribed - showing that new oil sands development is dependent on new pipelines to get the product to market. As reported in the Calgary Herald on Nov. 28, 2012 by Claudia Cattaneo, projects such as Suncor’s Voyageur upgrader and Joselyn mine have been deferred indefinitely due to insufficient capacity to transport oil. The NGP and other pipelines are required to increase the production from the oil sands, and doing so means an increase in GHG emissions at a time when we know we need to drastically curtail emissions.

Personal perspective

Members of the panel, we are fortunate to be Canadians, to live in the society we have in Canada. We wish that those that follow us are equally fortunate, able to live in a country that has strong environmental protections, embraces innovation, provides equal opportunity, and demonstrates sound democratic institutions and leadership. We wish that those in other countries will be able to benefit from similar opportunities. At SSG, we are worried that the decisions that the Canadian government is making is moving away from innovation, equality in opportunity, environmental protection and sound government; they have instead encouraged divisiveness. The current government has made decisions that exacerbate climate change; should the NGP be approved, it would be another example of Canadians, as wealthy residents of the developed world, profiting from exporting economic and environmental harms to others.

We have already witnessed the changing climate being introduced as a new variable in the development of conflicts, a potential trigger in places where the ingredients for conflict (poor governance and social and political instability) already exist. We recognize that the panel cannot consider Canadian energy or climate policy, but we feel that we must state our belief that our government is moving away from the global community on the moral issues of our time; the withdrawal from the Kyoto Protocol is demonstrative of a desire to either ignore or postpone dealing with a problem that will persist for our lifetimes, and likely the lifetimes of many of our successors. Voyageur upgrader and Joselyn mine have been deferred indefinitely due to insufficient capacity to transport oil. The NGP and other pipelines are required to increase the production from the oil sands, and doing so means an increase in GHG emissions at a time when we know we need to drastically curtail emissions.

Preferred outcome 

Members of the panel, I conclude by reiterating my desire and the desire of my colleagues to see this project be turned down for the reasons I have put forward. Ideally, we would see the brakes put on new projects in the oil sands, until we see much more significant progress in Canada and particularly in the oil and gas sector on reducing upstream GHG emissions.

We know the target we need to meet to achieve the goal of a climate that we are familiar with and able to manage; we need an 80% global reduction in GHG emissions by 2050. New, long- term commitments to carbon intensive infrastructure will not allow us to meet these goals; societies must limit the amount of carbon emitted through 2050 to less than 600 Gt of CO2, about 1/5 of the 2800 tonnes of carbon dioxide locked in fossil fuels on the books of companies now.

Rather than be a laggard, Canada can return to leadership and choose to encourage low- carbon infrastructure instead, and rejecting the NGP project is a means of achieving this. Members of the panel, I encourage you to reject this project, and help us begin the transformational change required to meet the challenge of stabilizing the climate.

Thank you very much.

Letter to Enbridge Northern Gateway Pipeline on behalf of Sustainability Solutions Group

Hi everyone,

I've been away from my blog for a while. So long that the draft that was sitting on my blog page was the November 2011 start of this letter to the Enbridge Northern Gateway Pipeline Joint Review Panel, that I submitted in August 2012 on behalf of my colleagues at Sustainability Solutions Group. I will also post my notes from my presentation Monday.

Dear Members of the Northern Gateway Pipeline Joint Review Panel,

My name is Adrian Mohareb. I am a professional engineer and an associate with Sustainability Solutions Group (SSG). I am sending this letter, on my behalf and that of my colleagues at SSG, as comments on Enbridge’s Northern Gateway Pipeline (NGP) project. We wish to, by way of this letter, register our disapproval with the project, and outline some of the reasons we disapprove of the project.

While this letter is informed by my personal experience and reflects my opinion, it represents the position of my colleagues at Sustainability Solutions Group as well. Sustainability Solutions Group (SSG) is a collective of Canada's leading sustainability professionals. We are an innovative worker's cooperative that collaborates with clients to develop meaningful, creative strategies to integrate ecological, economic and social sustainability in their projects, organizations and communities. We pride ourselves in working closely with our clients to achieve real, on the ground social and ecological change through projects of unusual integrity. Our vision is a world of just, sustainable and healthy communities everywhere. Our co-operative of experts in energy, policy and design inspire sustainable buildings, communities and organisations.

My colleagues and I believe there are myriad reasons to disapprove of this project from an environmental perspective. Notably, there are the risks of pipeline spills and incidents to inland waterways and fisheries and the risks of tanker incidents in the Douglas Channel, the Hecate Strait and the Pacific Ocean. The economic threats to tourism and to the fisheries of an incident are great, and from the perspective of British Columbians, the threats simply cannot outweigh these risks.

In my previous position as Community Energy Manager for the City of Prince George, I met many people with concerns about the pipeline and its risks to the terrestrial, freshwater and marine ecosystems of British Columbia, and the livelihoods of those dependent on these ecosystems, including the First Nations of the region, who are acutely aware of and vulnerable to these risks. There are also socio-economic reasons to be leery of this project, but as I am an environmental engineer by training, I will leave these issues to others more capable, such as Robyn Allen and The Royal Society of Canada’s Expert Panel, to describe how this and other oil sands-related projects create adverse social and economic impacts in Canada.

My professional path has led me to view this project as a threat to the environment that cannot be countenanced by the perceived economic benefits. Furthermore, most analyses of the economic benefit neglect the economic harm that is done by emitting greenhouse gases (GHGs), particularly the social cost of carbon, which I have estimated at just over one-third of the current value of the project. I will discuss this later.

I will speak from my experience as a professional engineer, and my comments are informed by my education (a Bachelor’s in chemical engineering from Queen’s University, a Masters degree in environmental engineering from the University of Ottawa, and a Masters in Strategic Leadership towards Sustainability from the Blekinge Institute of Technology in Karlskrona, Sweden) and my professional experience, which includes the role of Community Energy Program Manager at the City of Prince George, and now as an associate with Sustainability Solutions Group, a consulting cooperative that seeks to work with organizations, developers and local governments to reduce the environmental footprint of the built environment.

Most notably for this submission, I am a former employee with Natural Resources Canada. My first role was as a Greenhouse Gas Technology Officer for Technology Early Action Measures, a program that funded greenhouse gas emission reduction projects at the late development and early demonstration stage. I then worked in the International Environment Policy Division, where my colleagues and I were involved in international climate change negotiations. I was the Intergovernmental Panel on Climate Change (IPCC) focal point for the division, and was on Canada’s negotiating team at the Fourth Assessment Report (AR4) meetings for Working Group Three (WG3) on Mitigation of Climate Change and for the Synthesis Report. It is through this work that I feel I have gained the expertise to speak out against this project.

My deepest understanding of the project’s risks are based in the climate risks of this project, and the potential for increasing long-term damage to the climate that will result from it.

Enbridge’s Northern Gateway Pipeline is intended to move crude oil from the oil sands of Northern Alberta to foreign markets. In 2010, approximately 1.46 million barrels per day (bbl/d) of oil sands products were being moved for refining and end-use in the Canadian and American markets, with little export to other markets. It is a landlocked resource, since the resource must reach ports to be exported to other markets. While there remains some unused pipeline capacity (notably Kinder Morgan’s Transmountain pipeline), it is evident that there is a desire to move more oil sands crude to foreign markets. Enbridge has stated that the NGP is already fully committed. My understanding is that there is a goal to increase production of oil sands to 5 million bbl/d over the next 40 years, and sooner if possible. Achieving this goal will require an increase in pipeline capacity to move the product to other markets, as the Canadian demand is in the 3.5 million bbl/d range, and there is a desire to diversify recipients beyond the US market, after approval of the Keystone XL pipeline to the US Gulf Coast was delayed.

The twin pipelines are intended to move 193,000 bbl/d of natural gas condensates from Kitimat, BC to Bruderheim, AB., and 525,000 bbl/d of other oil sands products to Kitimat from Bruderheim. We can by and large expect this to be diluted bitumen (dilbit). Enbridge states that for pipeline transportation, dilbit is usually 25-30% condensate, and 70-75% bitumen. I’ll look at only the incremental GHG emission analysis resulting from the NGP in this letter, in order to demonstrate the additional impacts of this project. I define incremental as emissions that would not have happened without this project, as the oil sands resource is landlocked, and without pipelines to ports, cannot get to market. I have decided to be conservative with my assessment, and assume that natural gas condensates are not incremental (i.e., they would’ve found other markets for their purchase and use) and that the dilbit contains 30% condensates and 70% bitumen (i.e. the lower amount of bitumen). Therefore, in my assessment, the larger diameter pipeline, at full capacity, would transport 155,000 bbl/d of condensate and 370,000 bbl/d of bitumen to Kitimat.

A submission by Jacobs Consultancy and Life Cycle Associates to the Alberta Energy Research Institute outlined the well-to-wheel emissions factors for oil sands crude production. I have chosen to use well-to-wheel emission factors, on the assumption that the project would allow the increased exploitation of the oil sands, resulting in emissions that otherwise would not happen as the oil would be landlocked. I recognize that not all of these emissions would happen in Canada; in fact, only the extraction, mixing and pipeline transportation emissions would occur in Canada. However, the emissions are incremental, and combustion products are added to the global commons of the atmosphere, regardless of where the combustion occurs.

Life-cycle/well-to-wheel emissions for diluted bitumen produced from extraction by in-situ processes were estimated by Jacobs Consultancy to average of 105.4 g of carbon dioxide equivalent (CO2e) per megajoule (g CO2e/MJ). The energy content of dilbit is 5,020 MJ/bbl, meaning average emissions of 529 kg CO2e/bbl. For 370,000 bbl/day of bitumen being transported as dilbit, this means that there is an extra 196,000 tonnes of CO2e (t CO2e) emitted daily. Assuming that the pipeline operates about 350 days per year (i.e. assuming that there are the equivalent of approximately 15 days of downtime annually, this project results in 68.5 million t CO2e of incremental emissions (from the production of nearly 130 million bbl of bitumen annually). For comparison, the annual emissions of Sweden, a country of 9 million, have been lower than 67.5 Mt CO2e since 2005. Essentially, this project will result in the addition of a Sweden to the atmosphere. Based on the average 2011 bitumen price of $65.50/bbl, 130 million bbl/year of bitumen could be sold for approximately $8.5 billion. While it is not an equal comparison, the Swedish economy had a GDP of approximately $530 billion in 2011.

Let’s also consider the environmental cost of this project. The social cost of carbon, defined as “…an estimate of the economic value of the extra (or marginal) impact caused by the emission of one more tonne of carbon (in the form of carbon dioxide) at any point in time; it can, as well, be interpreted as the marginal benefit of reducing carbon emissions by one tonne” in the IPCC AR4 report, in chapter 20 of Working Group Two (WG2) on impacts, adaptation and vulnerability to climate change. In this report, it was estimated that the average social cost of carbon from peer-reviewed studies was $43/t CO2e. If we multiply this number by the 68.5 million tonnes resulting from the project, we end up with a social cost of carbon for the project at $2.95 billion. This is equal to 35% of the annual revenue from the bitumen produced in this project. I should note that this cost is expected to increase as time goes on, but I have not undertaken an assessment of future costs vs. revenues, as I cannot determine how much they will increase, nor can I determine how much the price of bitumen will change.

This external cost is passed along to Canada and to the rest of the world as the cost of the impacts of extreme events such as hurricanes, floods, heat waves, sea level rise and droughts, lost agricultural production from the changed climate, and illness brought on by vectors that are able to survive in new areas and infect people that were not previously threatened by the illness (e.g. the expansion of malarial zones). Quite literally, the economic value of this project will be gained by the few on the backs of many others, who will only suffer damage from the climate impacts of the project.

At the 2009 United Nation Framework Convention on Climate Change (UNFCCC) 15th Conference of the Parties (COP15) in Copenhagen, the Canadian government committed Canada to a 17% reduction in emissions from 2005 emissions by 2020, and the government has also announced a 65% reduction target for 2050. While great strides have been made in reducing emissions from electricity production, particularly in Ontario with the closure of most of the coal-fired generation, there remains much to do to achieve the carbon emission reduction goal. This target is a contribution to a global target of reducing emissions by 50 to 85% from 2000 levels by 2050 in order to avoid increasing global temperatures by more than 2ºC, the generally agreed threshold for avoiding dangerous anthropogenic interference in the climate system (outlined in IPCC AR4 WG3, and agreed by governments in Copenhagen). In order to meet this target, which would limit the worst of the impacts of climate change, society simply has no alternative – we must reduce the amount of greenhouse gases being emitted. Meinshausen et al. state that globally, we can only emit 900 gigatonnes (Gt) CO2e between 2000 and 2050 to have an 80% chance of meeting the 2oC target; global emissions between 2000 and 2011 were about one-third of this 900 Gt limit, meaning that we must greatly reduce our emission rate. We simply cannot emit the 2800 Gt CO2 that would result from burning all of the proven reserves of fossil fuels; In fact, we can only burn about 20% of those fossil fuels over the next 38 years. Some reserves must stay in the ground. Slowing the extraction of oil sands (perhaps a moratorium on new developments, as was called for on a temporary basis by the oil sands companies in 2008) would allow for Canada to play its part. As well, I would suggest the government put in place policies, such as carbon pricing, as called for by the Canadian Council of Chief Executives.

From a personal perspective, I have noted that the Federal Government’s activities have played a role in the decline in the morale of my former colleagues at Natural Resources Canada. Most civil servants I know enter the public service out of a sense of obligation to Canadian citizens, and to serve the public interest. They do not feel that their current mandate offers the opportunity to serve the interest of Canadians effectively.

Members of the Joint Review Panel, I urge you, as an independent body, to reject this project on the basis of the increased greenhouse gas emissions. Doing so would assist Canada in meeting its greenhouse gas emission targets, and would avoid a minimum of $3 billion of impacts per year, every year, for the lifetime of this project, borne on the backs of the global community. I would like to thank you very much for your time, and wish you all the best in making this undoubtedly difficult decision.

Sincerely,

Adrian Mohareb

On behalf of Sustainability Solutions Group Worker’s Cooperative