Optimism and anger as industry and environmentalists react to pipeline approvals

Industry in Alberta was quick to celebrate the federal government's approval of the Trans Mountain and Line 3 pipelines on Tuesday, but opponents vow to delay or kill the projects by any means possible.

Industry celebrates Line 3 and Trans Mountain decisions, Greenpeace predicts 'Standing Rock-type protests'

Tim McMillan, the president and CEO of the Canadian Association of Petroleum Producers, said he's pleased with the government's approval of two pipelines. (CBC)

Industry in Alberta was quick to celebrate the federal government's approval of the Trans Mountain and Line 3 pipelines on Tuesday, but opponents vow to delay or kill the projects by any means possible. 

"I think that Canada's reputation as a place that can move projects forward took a step forward today," said Tim McMillan, the president and CEO of the Canadian Association of Petroleum Producers. 

McMillan said this was a positive move toward reducing the price differential for Canadian oil. Producers face sometimes steep discounts on the price they receive for a barrel of oil in the U.S. compared with world prices.

With the ability to send more oil to Pacific markets, and increased capacity on a rebuilt Line 3 pipeline to the U.S., Canada's oil and gas companies should be able to get a better price.

University of Calgary economist Trevor Tombe said that without new pipelines, the National Energy Board predicted a shortfall of $10 per barrel. 

"That adds up to over $10 billion a year in forgone revenue for producers," he said. 

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Projects still face hurdles

McMillan was clearly happy with Ottawa's approval of the two pipeline projects, while expressing disappointment in rejection of Northern Gateway and a tanker ban off B.C.'s North Coast. 

When asked if these approvals remove the need for the Keystone XL pipeline to the U.S. or the Energy East pipeline to Canada's East Coat, McMillan said all are important. 

"Having access to the East Coast and additional access to the Gulf Coast are strategically imperative," he said. "I don't think we should aspire to always being in a traffic jam on a highway. We want to have an efficient system, which allows us to reach markets in a dynamic way."

McMillan, however, was cautious in his optimism, realizing there are still hurdles that need to be crossed before the pipelines are built, and he said his organization will work with governments to determine the effect of a national carbon tax on the bottom line. 

Chris Bloomer, president and CEO of the Canadian Energy Pipeline Association, echoed McMillan's optimism. 

"I think it's extremely big. I don't think you can underestimate how big the decision is," he said of Tuesday's announcement.

Alberta climate policy credited

Bloomer said it's important for these projects to be built, and he pointed to Alberta climate policies that helped the process along. 

"I think the prime minister was very emphatic that these approvals, this process, would not have had the outcome it had without Alberta's climate change plan. So clearly it fits within the climate policy and agenda of the government, so I think that was helpful," he said. 

Alberta has capped oilsands emissions at 100 megatonnes per year and will phase in a carbon tax starting at $20 per tonne in 2017, increasing to $30 per tonne in 2018.

But it's climate policy and the promises made at both a federal and provincial level that bother Mike Hudema, a climate and energy campaigner with Greenpeace Canada. 

Mike Hudema, with Greenpeace Canada, says the pipeline announcement was a 'devastating day for climate action in Canada.' (CBC)

"There's no climate leadership to be found by building two new tarsands pipelines," he said. 

"It's a devastating day for climate action in Canada and it's a devastating day for Indigenous reconciliation. By green-lighting these two massive tarsands pipelines, the prime minister, in one move, has broken his commitments to the climate, has pushed Canada's international  commitments under the Paris accord out of reach, and has broken his promises to Indigenous people as well."

Hudema said the projects would face entrenched and determined opposition, from protests and in the courts, and he predicted neither will be built. 

"If the prime minister wanted to bring Standing Rock-type protests to Alberta, or to Canada, he's done that today," he said. 

Greenpeace wants the government to focus on investing in green energy, rather than pipelines that would significantly increase Canada's carbon emissions. 

Carbon tax

For Tombe, simply opposing pipelines as a means to curb emissions isn't as productive as supporting national carbon pricing. 

"It's policies like that that will allow us to lower emissions in the cheapest possible way," he said of Ottawa's plan to reach a $50 per tonne price on emissions by 2022.

"Blocking a pipeline to lower emissions is amazingly expensive. It's a very inefficient approach. I think we should do is focus on good policy to lower emissions and not just the politically convenient ones like blocking pipelines."

Trans Mountain is expected to allow an additional 590,000 barrels per day to reach the West Coast, while Line 3 would increase its current capacity by approximately 370,000 barrels per day. 

The Canadian Environmental Assessment Agency estimates that Trans Mountain alone will contribute 20 to 26 megatonnes of new greenhouse gas emissions per year once it's fully operational.

With files from Carolyn Dunn, Andrew Brown and Laurence Martin