Hearing focuses on upgrading

The battle over upgrading oilsands bitumen in Alberta dominated Northern Gateway pipeline hearings Wednesday, with a government consultant arguing local upgrading is not economically viable given the high cost of construction.

But the Alberta Federation of Labour pointed to a 2009 Alberta government report that set a goal of upgrading two-thirds of bitumen in Alberta. Upgrader Alley would have involved $314 billion in capital investment, created two million jobs across the country over 20 years and added $5 trillion to the national GDP.

Harold York, a witness for the province and author of the Wood Gundy report commissioned by Alberta Energy, predicted oilsands producers would lose $8 billion a year if the pipeline does not go ahead, because they would not get access to world prices for bitumen. The proposed pipeline will carry 525,000 barrels a day of bitumen to the West Coast for shipment to refineries in Asia.

York told the Joint Review Panel his analysis was focused on the benefit to oil producers and did not consider other government policy goals.

In response to questions, York said he was unaware of a provincial government goal of upgrading two-thirds of the bitumen in Alberta - though the government did mention to him, without providing details, that it wanted to encourage value-added resource development, he said.

Asked if upgrading the bitumen locally is a viable alternative to exporting, York said no, because building costs are high.

"The capital cost in northern Alberta is large - up to $15 billion for a large upgrader capable of handling 200,000 barrels a day," he said.

Leanne Chahley, a lawyer for the AFL, asked York if he had seen the report of the 2009 hydro-carbon upgrader task force produced by the energy department. York said he had not.

That report outlines a vision of "world-scale industrial complexes" northeast of Edmonton, known as "Upgrader Alley," that would produce higher value products such as synthetic crude oil and petrochemicals.

If the Northern Gateway pipeline goes ahead, experts have told the panel the amount of upgrading here will decline to 26 per cent by 2025, Chahley pointed out.

Earlier in the day, energy department official Christopher Holly, the only other government witness, confirmed the province will not present any other information to the panel. Holly rejected the suggestion that the energy department should have considered new pollution regulations set out in the recently approved Lower Athabasca Regional Development Plan when calculating the economic benefits for the oil industry.

Barry Robinson, lawyer for a coalition of B.C. environmental groups, told the panel that documents filed for Shell's proposed Jackpine oilsands mine expansion show that air quality limits (set out in LARP) will be breached if all planned oilsands projects go ahead.

The levels of sulphur dioxide and nitrogen dioxide will exceed the limits set out in the LARP, according to the documents.

The Edmonton Journal, Thurs Sept 27 2012
Byline: Sheila Pratt


Be the first to comment

Please check your e-mail for a link to activate your account.