Reuters: Regulatory News: UPDATE 1-British Columbia wants more benefits from new pipelines

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UPDATE 1-British Columbia wants more benefits from new pipelines Jul 23rd 2012, 18:53 Mon Jul 23, 2012 2:53pm EDT * B.C. wants bigger share of Northern Gateway revenue * Sets out minimum conditions needed for pipeline approval By Nicole Mordant Vancouver, July 23 (Reuters) - The government of British Columbia said on Monday that it cannot support construction of Enbridge Inc's C$6 billion ($5.90 billion) Northern Gateway oil pipeline project unless it receives more fiscal benefits from the project. In its first official comment on new oil export pipelines planned by Enbridge and Kinder Morgan Energy Partners LP , the government of Premier Christy Clark said province will demand a bigger slice of some C$81 billion in overall tax revenue Northern Gateway is expected to generate in its first 30 years of operation. Under the current system, British Columbia would receive 8.2 percent of total tax revenue from the line, an amount it considers unacceptable. "Given that B.C. would shoulder 100 percent of the marine risk and a significant portion of the land-based risk, we do not feel the current approach to sharing these benefits is appropriate," Terry Lake, the province's environment minister told reporters. "A fair share of benefits will be the focus of negotiations should there be any interest in pursuing a new heavy oil pipeline in British Columbia." Canada's government and its oil producers are backing construction of new export pipelines to British Columbia's Pacific coast to take oil sands crude to high-paying markets in Asia and elsewhere. Rising output has resulted in a glut of oil and lower prices in the U.S. Midwest, which now takes nearly all of Canada's exports Along with a larger share of revenue, the Clark government laid out four other conditions that must be met before it can back any new line. Any proposal must successfully complete and environmental review; it must have top-notch marine spill prevention and response systems; it needs industry-best measures to prevent and mitigate spills on land; and the province's First Nations aboriginal communities must be consulted and must benefit from any new pipeline. Two new oil pipeline projects are currently being proposed to run through British Columbia. Enbridge's Northern Gateway pipeline would ship 525,000 barrels of oil per day derived from the Alberta tar sands to Kitimat, British Columbia on Canada's Pacific Coast, where it would be loaded onto tankers. A second line would take 193,000 bpd ultra-light crude and natural-gas liquids into Alberta. As well Kinder Morgan Energy Partners LP plans to expand its 300,000 bpd Edmonton, Alberta to Vancouver Trans Mountain line to handle 750,000 bpd. Though Enbridge could not be immediately reached for comment, a Kinder Morgan spokesman said the company will comply with the province's conditions. "It is certainly our intention to support the minimum requirements that have been outlined by the province," Andrew Galarnyk said. � Link this Share this Digg this Email Reprints

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