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Oil industry executives, as well as Alberta's Premier Ed Stelmach talk about how if US spurns dirty tar sands oil then they'll just ship it to new markets...like China via Enbridge's proposed Gateway project. As if they can just flick their wrist and get the pipeline built.

The author of this article cites China's waffling as the reason the Enbridge project has been delayed. But why was China waffling? Why were suppliers not committing to ship on the pipe? Largely because of uncertainty created by the many First Nations along the proposed pipeline and oil tanker routes who were having none of it.

What makes anybody think things have changed since then?

~ Eric

'Dirty oil' label spurs hunt for new markets

Enbridge speeds plan to supply Asia

Jun 26, 2008
By Jon Harding
The vilification of the oilsands in the United States is fuelling interest among producers of the so-called "dirty oil" to look at new markets overseas, said the chief executive of Canada's largest oil pipeline company.

Pat Daniel, CEO of Enbridge Inc., said the company will try to "expedite" its proposed $4.2-billion Gateway oilsands pipeline between Edmonton and Kitimat, B.C., due to mounting criticism about the oilsands in the U.S., the threat it poses and so Canadian producers can diversify their customer base.

Calgary-based Enbridge today transports one million barrels of Canadian crude oil to refineries in the U.S. It has a slew of new projects and expansions underway to boost its north-to-south capacity.

"The concerns around the dirty oil name have probably caused some further interest in Gateway," Daniel said Wednesday in an interview.

The Gateway project emerged seven years ago as a price guard for Canadian oilsands producers, who back then shipped most of their oil to refineries in the U.S. Midwest.

The project was shelved in 2006 by Enbridge after China, which was trying to secure supply contracts from oilsands producers and had signed a memorandum of understanding with Enbridge to work on Gateway together, walked away from it.

Alberta's oilsands producers then made the U.S. market, especially new terrain on the U.S. Gulf Coast, a higher priority.

Enbridge revived Gateway last February, however, saying it had enough support from potential customers in Southeast Asia -- from Japan to Singapore and parts in between, Daniel said Wednesday -- as well as from producers in Canada to start design work and prepare for the regulatory process.

Daniel said he is concerned about the way the oilsands are being cast in the U.S. and despite the "critical" and complex regulatory process that lies ahead of Gateway, Enbridge will attempt to have it up and running by 2014.

"I don't consider (the talk) an immediate threat and I think we have to recognize we have an election campaign underway in the U.S. . . . But I think a very important thing for Canadians to keep in mind is that we have to develop alternatives in light of this kind of discussion, so we are not left stranded and with insufficient markets for our crude oil," Daniel said.

Concerns about the higher level of greenhouse gas emissions created by oilsands development compared to conventional oil production have been percolating in Canada and abroad, along with apprehension about the industry's water use and its slow rate of land reclamation.

The issue boiled up early Monday when mayors of the largest cities in the U.S. called for a crackdown on the purchase of fuels derived from the "dirty tarsands" and other sources such as oil shale, which they say could cause catastrophic global warming.

U.S. presidential front-runner Barack Obama then joined the assault on the oilsands a day later, painting them as a potentially unacceptable energy source.

Daniel isn't the first this week to raise the notion that Canada should find a more accepting trade partner.

Rick George, the chief executive of Suncor Energy Inc., the world's largest oilsands company, said in an interview with the Herald that if opposition mounts, Canada could look to customers abroad.

"The only thing I can say is that the world is very tight on supply and if some people do not want to purchase our product, then we have the whole world as our market," George said.

Alberta's Energy Minister Mel Knight also suggested it would be prudent for the oilsands industry to look at expanding its customer base, but not to escape the responsibility of pursuing ways to reduce the sector's environmental footprint.

Daniel defended the oilsands industry and said it is so new that there has not been time for new environmental technologies to advance as fast as demand has grown.

"I feel very strongly this industry has done a remarkable job but we are dealing with a relatively new source of crude oil," he said.

"The industry is working very hard -- there are a lot of very bright people -- looking at ways to reduce the environmental footprint and impact of it.

"That will be done. It will happen.

"We are working on carbon capture and sequestration, we are working on tailings pond technology, we are working on restoration technology, but these things don't happen overnight."