EDMONTON, Alberta (Reuters) - Enbridge Inc’s proposed Northern Gateway oil pipeline to Canada’s Pacific Coast could cost thousands of high-paying refining jobs in Alberta, a labor group warned on Tuesday as the company faced its first day of grilling at public hearings into the contentious project.
Alberta Federation of Labour contends the C$6 billion ($6.1 billion) line, which would ship 525,000 barrels a day of oil sands-derived crude to tankers bound for Asia, would mean 5 percent less refinery throughput at home and the loss of 8,000 jobs.
Enbridge and the oil industry say it would open up lucrative new markets for growing volumes of Canadian crude in regions overseas where the producers can escape the deep price discounts their oil now sees in the North American market.
“China is in the midst of a building boom in terms of refineries and refining capacity, so our fear is that if our policymakers allow this pipeline to be built we’ll end up in a situation where our own homegrown refineries are no longer economic and they’ll close down,” federation President Gil McGowan said during a break in the hearings.
“We’ll end up in a situation where we’re sending our raw bitumen oil to China and then buying back the refined product.”
Enbridge’s evidence shows the project creating 907,067 direct and indirect jobs across the country through 2048.
The current phase of the hearing into the 1,177 km (731 mile) pipeline across the Rockies is examining its financial need and economic benefits to the industry and Canada. Enbridge’s numbers show a benefit to the industry of at least C$24 billion through 2035.
It is the first time since proceedings began in January before a federal review panel that Enbridge has had the chance to make its own case for the development, a key part of a strategy to diversify oil markets and forge greater energy trade ties with China and other Asian countries.
The other portion is inviting more Asian investment into the country, as shown by CNOOC Ltd’s $15.1 billion bid for Calgary-based Nexen Inc, an oil sands producer.
Until now, the company has watched as many aboriginal communities and environmental groups harshly criticized the proposal, saying it would bring unnecessary risks of oil spills, both along the rugged route and in coastal waters.
Enbridge’s case has been undermined by oil spills on other parts of its system and a highly critical report by U.S. regulators into a 20,500 barrel leak in Michigan in 2010.
Enbridge Northern Gateway President John Carruthers acknowledged the opposition in his opening statement, saying that the company has taken note of public concerns.
He compared Northern Gateway pipeline to others major infrastructure projects that have brought large economic rewards to Canada, including the Canadian Pacific Railway, St. Lawrence Seaway and TransCanada pipeline.
He said it was possible to highlight its major economic benefits while noting Embridge was taking its environmental responsibilities seriously.
“It involves assessing, in the same objective fashion, and according to the same standards, the information or evidence that has been presented by those who are opposed to the development of our project,” he told the panel. “And it culminates in approving the project under a framework of conditions that will promote reconciliation over division, and fact over rhetoric.”
Alberta Federation of Labour was first to grill Enbridge’s witness panel, made up of authors if its financial and economic reports, and its lawyer took most of the opening afternoon questioning them on the reliability of long-term forecasting.
The federation has been front and center calling for more plants to extract and refine bitumen oil from Alberta’s vast oil sands in order to create jobs, rather than shipping raw materials overseas. The industry has said the market should decide if processing plants are required and that there is enough oil to go around. ($1= $0.99 Canadian)
Editing by Eric Meijer and Paul Tait