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Burrard Inlet in Vancouver (LAURA LEYSHON For The Globe and Mail)
Burrard Inlet in Vancouver (LAURA LEYSHON For The Globe and Mail)

The energy bridge to China Add to ...

In response, Enbridge has argued that it is a safe operator, moving two million barrels a day and last year spilling just 2,800. It has vowed to build navigation upgrades on the B.C. coast that would make shipping safer for all vessels, not just crude carriers. It has also promised thousands of jobs and millions in annual property tax revenues, and offered first nations a 10-per-cent equity stake - though not one has yet signed up - and says support is building.

But the Prince brothers and many others don't think the reward matches the risk. Water, says Vince, has an incredible power to destroy, whether it's the Exxon Valdez or a pipeline river crossing. He also believes he has a responsibility to stop a project that, he says, will increase global dependence on oil. Most important of all, he doesn't think he should have to sacrifice his land so a Calgary oil company can transport oil sands crude to Asia.

"They don't have to destroy my territory so that they can have more lights and bigger cities and more people," he said. "There's so many pipelines already. Why do they need a new one? Why spoil more land? Greed?"

The China factor

Mr. Carruthers is confident Enbridge can persuade its critics, but across northern B.C., the wall of anti-Gateway criticism is so thick that some observers believe the company may have difficulty breaking through it. "Gateway is going to be facing some incredible opposition," said Vincent Lauerman, president of Calgary-based Geopolitics Central. "The [first nations]aspect of it, especially on the land route, could preclude its construction." He believes the Kinder Morgan option may have an easier path forward.

The politics in other parts of the world are already favourable. Under the Bush administration, some U.S. policy makers saw Gateway as a threat - the U.S. often considers Alberta crude a domestic source of oil and doesn't want to see it go elsewhere. The Obama administration has developed a more-open stance, according to a spokeswoman for the U.S. State Department and Canadian lobbyists in Washington.

An even bigger shift may be the advent of Chinese ownership in Canada's oil sands. In the past few years, Chinese firms, including PetroChina and CNOOC, have poured billions into the oil sands. Chinese executives in Calgary have said their primary ambition is profit, which may mean selling oil to the U.S.

Some, though, ultimately aim to send at least some oil to China, where a network of refineries is waiting to fuel a nation's growing ambitions. CNOOC Canada, for example, has said it hopes Asian export options develop quickly - although it is not interested in investing in the infrastructure.

Analysts say the allure is clear: Overseas companies could increase their profits by extracting Canadian oil sands crude and refining it in China, creating an energy bridge between the two countries that would provide China with a secure supply for decades to come.

In the corporate boardrooms of Calgary, discussions have already begun.

"We're seeing and expecting more Chinese interest," Mr. Anderson said. "Over time we would expect that will underpin more significant repatriation of those barrels back to China."

______

THE CONTENDERS

Enbridge Northern Gateway

Cost: $5.5-billion.

Length: 1,172 kilometres.

Details: Two pipelines, a 525,000 barrel-per-day crude pipeline (expandable up to 800,000) and a second 193,000-barrel line to import condensate, which is used to thin oil sands bitumen so it can flow into a pipeline.

Amount already spent: $250-million.

Timeline: Regulatory application filed May, 2010; regulatory approval expected by the end of 2012, with construction beginning early 2013 and oil flowing by 2016.

Proposed benefits: 62,700 person-years of construction employment, 1,150 long-term jobs, $2.6-billion in local, provincial and tax revenues.

Pros: Offers large capacity, access to larger and more efficient crude carriers.

Cons: Must build a new pipeline, at substantial cost, through territory claimed by first nations, many of whom oppose the project.

Kinder Morgan Transmountain

Cost: Undisclosed.

Length: 1,150 km of existing TransMountain system; expansion would affect much of that length.

Details: A staged expansion of TransMountain, starting with an additional 80,000 barrels per day, then a subsequent 320,000 barrels, to bring the system capacity to 700,000 barrels; option for a further 400,000-barrel-per-day expansion with new "Northern Leg" to Kitimat.

Project began: 2004.

Amount already spent: Millions.

Timeline: Depends on demand, but 80,000-barrel expansion could be in service by 2014; the additional 320,000 increment by 2017 or 2018. No date on Kitimat option.

Pros: Uses existing pipeline right-of-way, lessening environmental impact and construction costs. Kinder Morgan believes it can ship a barrel to China from Alberta more cheaply on TransMountain than through Gateway.

Cons: Offers less capacity; brings more crude on to tankers in Vancouver, the heart of Canada's environmental movement.

Nathan VanderKlippe

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Follow on Twitter: @nvanderklippe

 
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