Development and delay [Ring of Fire/XL Oil Pipeline] Thunder Bay Chronicle-Journal Editorial (November 16, 2011)

The Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

TWO LARGE resource development proposals in this country highlight the difficulties in balancing economic opportunity with environmental protection. The addition of economic uncertainty and cultural considerations makes this balancing act even tougher.

Here in the Northwest, the proposal to develop the huge Ring of Fire chromite project is the subject of dispute over what form of environmental assessment is suitable. A comprehensive study of Cliffs Natural Resources’ proposal, by the Canadian Environmental Assessment Agency, is already under way. First Nations in the James Bay Lowlands withdrew their support of the project when the federal government opted not to conduct a higher-level joint review panel EA.

Matawa First Nations claims the comprehensive study EA provides “no realistic opportunity for First Nations to participate.” It says the current process will fast track the EA process for government and Cliffs, but put First Nation communities and their lands at serious risk.

In a project report, Cliffs Ferroalloys president William Boor states that the EA will be a thorough review of all components of the project.

“It will continue to include extensive discussions and consultation with all levels of government and communities, particularly the First Nations communities where the project is located,” he said.
While the CEAA calls for public comment, Cliffs is reportedly sending representatives to each affected First Nation for individual discussions.

The comprehensive study is one of three types of environmental assessments. It tends to be geared to large projects with the potential for major adverse environmental effects.
CEAA spokesman Celine Legault said the study could widen to a joint review panel if the federal environment minister deems there is sufficient public concern or considerable environmental impacts that can’t be mitigated.

A joint review panel involves an appointed group of experts who review and assess a project by inviting open discussion and exchange of views involving a large number of interest groups and members of the public.

Timing is important for a development of this size and delays can threaten the project. Just ask TransCanada Corp., whose massive Keystone XL oil pipeline proposal was dealt a serious blow this week when the U.S. State department told it to find a new route around environmentally sensitive land in Nebraska.
TransCanada quickly switched plans to a new route but still faces a political delay if President Barack Obama can’t escape threats to his re-election next year by powerful environmental interests including Hollywood celebrities.

This pressure is enough to strain relations between the world’s two largest trading partners and threatens Canada’s role as the leading energy supplier to the U.S. If Nebraska is satisfied with Trans-Canada’s new route, and it passes federal environmental muster, Obama will have little recourse short of making up some new reason for delay.

Here’s a suggestion. Rather than building a new pipeline from Alberta to the Texas Gulf coast, and assuming it wouldn’t contravene NAFTA, why don’t Canada, Alberta and the oilsands players build their own refineries and sell finished products in global markets?

Prime Minister Stephen Harper is already miffed enough by the pipeline delay to be suggesting we approach the Chinese to buy Alberta’s new oil. It’s got to go somewhere and it might just as well go overseas as to the United States which will have to continue buying from suppliers far less reliable than Canada. If we do go that route, why not refine the oil right here at home? Value-added indeed.