This spring the president of the Canadian Association of Petroleum Producers, David Collyer, stood before a sold-out event at the Calgary Chamber of Commerce and pronounced that the oil sands had become the whipping boy for the “off-oil” movement and the greenhouse gas crowd. He then went on to tell reporters that makes it dangerous to leave all of Canada’s energy eggs in one basket, exports to the United States. With factions of the new Democratic Party regime in Washington, D.C., also drafting up legislation that may have the effect of restricting imports of “dirty” foreign energy, Collyer reckoned it might be high time to diversify.

It’s not just a crude oil issue. At the same time, U.S. natural gas production is expanding by making strides in adding unconventional sources like shale, threatening growth markets there for Canadian exports – particularly the potential billions of cubic feet per day promised out of northeastern British Columbia’s Montney and Horn River Basin geological formations.

The Alberta-based Canadian industry’s horizons are not just widening on the Pacific coast. On the Atlantic seaboard, a project is nearing completion that will launch participation in the global tanker trade in liquefied natural gas. In New Brunswick, Canada’s first ever shipload of overseas LNG is expected to dock soon at a new terminal called Canaport built beside Irving Oil’s Saint John refinery.

These are driving a whole new dimension for Canadian energy markets, and heading the country into one of the largest paradigm shifts since the great pipeline projects of the 1950s.

Pressure to chart a new trading course has been picking up steam for a while. Although potential U.S. climate change legislation “would be a consideration,” says Steve Greenaway, “the planning for this project started five or six years ago and has been talked about since the 1970s.” By “this project,” he means an entirely new route to different outlets for Canadian oil.

Greenaway is vice-president of regulatory and government affairs for Enbridge Northern Gateway Pipelines and figures what really lies at the heart of its driving force – emerging demand for west coast exports of oil sands production – is simply a quest for new customers. “There has always been a sense that it would be prudent for Canada to have a second market,” he says. “All of it is currently being sold in North America.”

The Northern Gateway pipeline Greenaway speaks of proposes to move 525,000 barrels of crude per day 1,170 kilometers from a Bruderheim inlet near Edmonton to Kitimat on British Columbia’s west coast through a jumbo pipeline 36 inches (90 centimeters) in diameter. The plan includes a parallel 20-inch (50-centimeter) line for returning condensate, the gasoline-like natural gas byproduct used to thin bitumen into flowing smoothly. Greenaway says the company hopes to submit its application to the National Energy Board by September this year. Taking the proposal through the regulatory process have been 10 funding partners (including oil sands producers and Asian refiners) who put up $10 million each. “And once that has been achieved, we will be looking to them and others for commitments for the construction and operation of the project,” says Greenaway.

Northern Gateway has had its hurdles, notably in relations with B.C. First Nations. The Carrier Sekani, a Prince George-based coalition of eight First Nations along about one-third of the Gateway route, is reported to be in opposition to the project, based on the potential for an oil spill that would threaten their fisheries. The Council of the Haida Nation of the Queen Charlotte Islands is also said to be opposing it. But negotiations continue, and the company is confident that agreements will be reached.

“We have a strong and active engagement process going on led by Roger Harris, our vice-president of aboriginal communities and partnerships,” says Greenaway. “We’ve had many meetings with individual First Nations on the pipeline corridor about protocol agreements – the first thing that would be part of building that relationship.”

He describes working with native communities as a gradual process. Protocol agreements set the foundation for how the relationship moves forward. From there, they discuss things like aboriginal equity agreements and partnerships. “They would become actual equity investors in the pipeline,” says Greenaway. As well, “we’re looking at comprehensive benefit agreements. It’s important that they become part of the long-term beneficiaries of the pipeline.” Greenaway says to date more than half of the protocol agreements have been signed.

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