On a trip to Kitimat, B.C., where liquified natural gas will be shipped from Canada’s West Coast to Asia, TransCanada Corp. CEO Russ Girling said he hopped in a taxi and got a small taste of local opposition to the idea of a pipeline crisscrossing the province’s pristine wilderness.
Luckily for Mr. Girling, the opposition was not directed at TransCanada, which wants to ship natural gas through a pipeline from within B.C. to an LNG facility near Kitimat, where it will be shipped onward to energy-hungry emerging markets in Southeast and East Asia.
The cab driver’s opposition was to the “oil guys,” meaning Enbridge Inc.’s Northern Gateway pipeline, Mr. Girling said in an interview with The Globe and Mail’s editorial board on Thursday. The plan received approval by a federal Joint Review Panel, with conditions, to create a pipeline from Alberta’s oil patch through to the Douglas Channel on the West Coast for export.
Speaking a few hours before the National Energy Board’s decision, Mr. Girling said the panel’s choice will likely affect the political debate surrounding pipelines in North America, but that TransCanada’s gas pipelines project and Northern Gateway will still be treated differently.
“There are differences – the gas is produced in British Columbia” as opposed to oil being extracted in Alberta, as is the case with the Northern Gateway pipeline, Mr. Girling said.
At the same time, Mr. Girling said, the public tends to be more wary of transporting oil – because of high profile spills, both in open water and on land – than natural gas. “Generally speaking, people are less apprehensive about gas than oil,” he said.
Referring to a natural gas pipeline explosion in a residential area in San Bruno, Calif., and an oil pipeline spill on Michigan’s Kalamazoo River, he added, “I don’t know whether that’s warranted or not. You know, the San Bruno incident is as impactful to me as Kalamazoo, probably more so, because it involved human tragedy. That said, I think that because there’s more opportunities for British Columbians to participate in the economic prosperity that is generated from the production of natural gas in the province, it creates an opportunity.”
Mr. Girling, whose long-delayed Keystone XL pipeline in the U.S. has become a lightning rod for environmentalists concerned about greenhouse gas emissions from the oil sands, said there needs to be clarity and transparency from regulators surrounding approval processes for such projects. Pipeline companies face mounting costs on these projects, which then get passed down to consumers, a situation which also results in more oil shipped by rail – a route that is more expensive and worse for the environment, he said. But Mr. Girling said TransCanada learned from being caught flat-footed by opposition to the Keystone pipeline, and has worked hard with early, cross-Canada consultations on its planned Energy East pipeline to Atlantic Canada.
Juan Plessis, an industry analyst with Canaccord Genuity, said many pipeline companies have devoted more time and resources to community consultation as a result of what’s been happening with various stalled projects. But Mr. Plessis said that Mr. Girling is correct in that a B.C. natural gas project would likely run into much less opposition, particularly since any accident – such as a pipeline leak and explosion – would be sudden, and leave little in the way of long term environmental impact.
“Historically, the First Nations community, which has had a very significant push back on oil, has not had the same push back on natural gas pipelines,” he said. “I think all the pipeline companies are learning from – I wouldn’t say mistakes, but what’s been happening. They’re devoting more time and upfront costs.”
The industry also bears responsibility for the sometimes lengthy, often politicized approval process, Mr. Girling said, a process which can include lengthy public hearings such as with Northern Gateway.
“Our track record has to improve,” he said. “Industry players have had leaks.”