Extent of Chinese ownership in Northern Gateway questioned at hearings
By Sheila Pratt, Postmedia News September 10, 2012
The extent of Chinese ownership in the proposed Northern Gateway pipeline is still under negotiation but the issue is a "red herring," says Enbridge Inc., the Calgary-based company that wants to build the $6-billion pipeline to carry bitumen to the West Coast for shipment to Asia.
The issue of Chinese ownership was raised Saturday at federal hearings in Edmonton considering whether to approve the proposed pipeline from Bruderheim, northeast of Edmonton, to Kitimat.
China's state-owned Sinopec is among 10 companies expected to be in the group that would own the new pipeline company along with Enbridge. The 10 companies include French oil giant Total, along with Suncor, MEG, Nexen - currently in the midst of a potential sale to another Chinese national oil company - and Cenovus.
Enbridge is expected to own about 50 per cent of a new separate company to be called Northern Gateway Pipe-lines. The other 50 per cent would be owned by the group of 10 other owners, four of which have not been publicly identified.
Calgary lawyer Barry Robinson raised the issue of Chinese ownership at Saturday's session. Robinson also noted that state-owned Chinese companies do not always act "like rational free-market companies."
Robinson was acting for a coalition of B.C. environmentalists, including Forest Ethics Advocacy, Living Oceans Society and Raincoast Conservation Foundation.
Chinese state-owned companies already own some bitumen production in the oilsands, said Robinson. They also own the refineries in China that would handle the Alberta bitumen.
"Have you ever considered the scenario that China might want to close the loop and take a run at commercial control of the pipeline?" said Robin-son, in questions directed to Enbridge officials at the federal Joint Review Panel hearings.
Enbridge vice-president Paul Fisher replied emphatically: "Absolutely not."
Fisher also stressed that the nationality of any of the companies involved is not relevant to the regulatory hearing. He said it is more appropriately a policy consideration for the federal or provincial governments.
The $15.1-billion pending investment by a Chinese state oil company - CNOOC - in Nexen, a Canadian energy firm with mega-projects in Alberta's oilsands, is being scrutinized by Investment Canada to ensure that there is a "net benefit to Canada."
Outside the hearing Saturday, Enbridge spokesman Paul Stanway dismissed questions about China as "fearmongering" and "a red herring."
"Whoever owns this pipeline, it has to run it under Canadian regulations," said Stanway.
In his testimony, Fisher agreed that Enbridge's ownership could shrink "under commercial negotiations" and that any owner of the other 50 per cent of the pipeline company would be free to sell their share.
Robinson said the issue of Chinese ownership is relevant because the federal review panel must also consider the public interest in deciding whether to recommend approval of the pipe-line project.
In an interview later, Robinson said the concern is that China might want to lower the price it pays for Alberta bitumen to send to its state-owned refineries.
Robinson also noted the company's economic studies did not include costs such as the additional cost of maintaining clean air and water, and the range of municipal services such as new roads needed to meet demands of expanding oilsands production in Alberta.
The studies underestimate the cost of reducing greenhouse gases, he added.
Enbridge studies peg the cost of reducing carbon emissions at $20 a tonne. The last national study put that cost at $50 a tonne. Alberta charges a levy of $15 a tonne on excess green-house gas emissions.
The Northern Gateway studies calculate additional emissions from construction and operation of the pipeline.
Those studies do not look at increased greenhouse gas emissions from rising oilsands production that would likely result when the pipeline opens new markets, Robinson said.
The issue of Chinese ownership was raised Saturday at federal hearings in Edmonton considering whether to approve the proposed pipeline from Bruderheim, northeast of Edmonton, to Kitimat.
China's state-owned Sinopec is among 10 companies expected to be in the group that would own the new pipeline company along with Enbridge. The 10 companies include French oil giant Total, along with Suncor, MEG, Nexen - currently in the midst of a potential sale to another Chinese national oil company - and Cenovus.
Enbridge is expected to own about 50 per cent of a new separate company to be called Northern Gateway Pipe-lines. The other 50 per cent would be owned by the group of 10 other owners, four of which have not been publicly identified.
Calgary lawyer Barry Robinson raised the issue of Chinese ownership at Saturday's session. Robinson also noted that state-owned Chinese companies do not always act "like rational free-market companies."
Robinson was acting for a coalition of B.C. environmentalists, including Forest Ethics Advocacy, Living Oceans Society and Raincoast Conservation Foundation.
Chinese state-owned companies already own some bitumen production in the oilsands, said Robinson. They also own the refineries in China that would handle the Alberta bitumen.
"Have you ever considered the scenario that China might want to close the loop and take a run at commercial control of the pipeline?" said Robin-son, in questions directed to Enbridge officials at the federal Joint Review Panel hearings.
Enbridge vice-president Paul Fisher replied emphatically: "Absolutely not."
Fisher also stressed that the nationality of any of the companies involved is not relevant to the regulatory hearing. He said it is more appropriately a policy consideration for the federal or provincial governments.
The $15.1-billion pending investment by a Chinese state oil company - CNOOC - in Nexen, a Canadian energy firm with mega-projects in Alberta's oilsands, is being scrutinized by Investment Canada to ensure that there is a "net benefit to Canada."
Outside the hearing Saturday, Enbridge spokesman Paul Stanway dismissed questions about China as "fearmongering" and "a red herring."
"Whoever owns this pipeline, it has to run it under Canadian regulations," said Stanway.
In his testimony, Fisher agreed that Enbridge's ownership could shrink "under commercial negotiations" and that any owner of the other 50 per cent of the pipeline company would be free to sell their share.
Robinson said the issue of Chinese ownership is relevant because the federal review panel must also consider the public interest in deciding whether to recommend approval of the pipe-line project.
In an interview later, Robinson said the concern is that China might want to lower the price it pays for Alberta bitumen to send to its state-owned refineries.
Robinson also noted the company's economic studies did not include costs such as the additional cost of maintaining clean air and water, and the range of municipal services such as new roads needed to meet demands of expanding oilsands production in Alberta.
The studies underestimate the cost of reducing greenhouse gases, he added.
Enbridge studies peg the cost of reducing carbon emissions at $20 a tonne. The last national study put that cost at $50 a tonne. Alberta charges a levy of $15 a tonne on excess green-house gas emissions.
The Northern Gateway studies calculate additional emissions from construction and operation of the pipeline.
Those studies do not look at increased greenhouse gas emissions from rising oilsands production that would likely result when the pipeline opens new markets, Robinson said.
Read more: http://www.vancouversun.com/business/Extent+Chinese+ownership+Northern+Gateway+questioned+hearings/7216679/story.html#ixzz27915jLJj
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