ALF V1

In approving the Keystone pipeline expansion, the National Energy Board (NEB) was not persuaded the project would threaten potential upgrading jobs in Alberta, the board ruled in a 98-page decision.

As reported last week, a three-member panel of the board allowed the application by TransCanada Keystone Pipeline GP Ltd. to expand the Canadian leg of its Keystone pipeline, ultimately boosting capacity by 156,000 bbls per day, to a projected 591,000 bbls, from the previously-projected 435,000 bbls per day (DOB, July 18, 2008).

During the NEB hearing on the matter, a lawyer for the Alberta Federation of Labour (AFL), one of several intervenors, argued the NEB lacked sufficient evidence on the "more important question of broader impacts on value-added production in Canada." Yet, on that point, the board said it had all the evidence it needed to decide the matter.

Turning to the merits of the AFL's argument, the board said it was "not persuaded ... that approval of the Cushing Expansion might mean a lost opportunity to generate thousands of permanent full-time jobs in Canada, particularly in light of Keystone's evidence that the expanded ... pipeline would have the capability to ship a full range of crude oil products including synthetic crude upgraded in western Canada, and could, if required, be modified to carry refined products."

The labour group, representing more than 100,000 unionized Alberta workers, also argued that, given the unsettled nature of public (i.e. government) policy at the moment, the board should deny the application or delay a decision until more information on Canadian energy policy objectives becomes available. Alternatively, the AFL argued the board should wait until more evidence could be gathered on the "value-added" aspects of the project.

On the topic of energy policy, the board ruled it could make a well-informed public interest decision, "notwithstanding the AFL's view that energy policy may continue to evolve." As for waiting for further evidence on value-added aspects, the board said it considered the "fact that no government body, refiners or upgraders expressed opposition to the application."

No one at the AFL's Edmonton offices was available to comment on the matter by press time this morning.

Daily Oil Bulletin, Mon July 21 2008
Byline: James Mahony

The National Energy Board has approved the TransCanada Keystone Pipeline GP Ltd. Cushing application to expand the Canadian portion of the Keystone pipeline.

The expanded facilities will allow Keystone to increase its transportation capacity by 24,800 cubic metres per day, equivalent to 156,000 bbls per day. The overall transportation capacity will increase from the previously projected 435,000 to 591,000 bbls per day.

The Canadian portion of the Keystone pipeline will extend from Hardisty, Alberta to a point near Haskett, Manitoba. The expansion, consisting of seven new pump stations, increased motor sizes at seven pump stations, and the addition of pumping units at 13 previously approved pump stations, has an estimated value of $348 million.

In making its decision, the NEB heard from intervenors on several issues. The Metis Nation - Saskatchewan stated that Keystone failed to identify it as an interested stakeholder and to provide information at the start of project consultation. The Alberta Association of Pipeline Landowners and the Hadwin Cattle Co. Ltd. expressed concerns related to land use, including noise impacts. The Alberta Federation of Labour stated that the project could have negative consequences for domestic industries and employment.

The NEB said it was generally satisfied with Keystone's consultation efforts with stakeholders. In order to monitor ongoing consultation efforts, the NEB directed Keystone to provide further updates on its consultation with all potentially affected persons and groups, including the Metis Nation - Saskatchewan.

The NEB also directed Keystone to provide information from the detailed comprehensive noise assessment to the Alberta Association of Pipeline Landowners and the Hadwin Cattle Co.

On balance, the NEB determined that the Cushing Expansion will likely provide a positive economic benefit for Canadians. The NEB also determined that Keystone's proposal is consistent with tolling and tariff requirements of Part IV of the NEB Act.

Daily Oil Bulletin, Fri July 18 2008