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.