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Enbridge flow reversal on key Canada pipeline may save Quebec refineries

09.11.2013  | 

Enbridge proposed reversal of its Line 9 pipeline to move crude oil to Eastern Canada is a key element in keeping Quebec's two remaining refineries competitive. The Line 9 project is controversial in the province; critics say the risk of spills is too high and many Quebeckers are opposed to importing crude from the allegedly dirty Alberta oil sands.

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By BERTRAND MAROTTE

TORONTO -- Enbridge proposed reversal of its Line 9 pipeline to move crude oil to Eastern Canada is a key element in keeping Quebec's two remaining refineries competitive, says the company's CEO.

"If those two refineries aren't there, you can bet there is going to be an economic impact," Enbridge CEO Al Monaco said after a presentation to the Board of Trade of Greater Montreal.

"It's crucial that the Suncor and Valero refineries get better access to cheaper crude, and the ideal solution is reversing Line 9 to obtain it from Western Canada and the United States Bakken region," said Mr. Monaco.

Creating thousands of new jobs in the province's petrochemical industry is not the goal, he added. "I look at the project as really allowing the sustainability of the existing refinery base, the two refineries that are left in Quebec," he said.

The cost of reversing the 38 year old pipeline would be about $110 million, said Mr. Monaco, who spoke at a news conference with a pro-pipeline coalition that includes business, oil industry and union representatives from Quebec.

The Line 9 project is controversial in the province; critics say the risk of spills is too high and many Quebeckers are opposed to importing crude from the allegedly dirty Alberta oil sands.

Mr. Monaco said it's important at this point to move quickly to save the two refineries, which currently employ about 4,000 people.

"Over the last thirty years, five refineries in Montreal have closed. Thousands of well paying direct and indirect jobs were lost. We can't let that happen again," he said in his speech.

Securing more domestic oil would also help reduce Quebec's dependence on imported oil, he added.

"Today, more than a third of Quebec's total energy demands are met by imported oil, a massive outflow of wealth estimated at $14 billion annually," he said.

"Access to reliable western supply would serve to make the two remaining refineries, Suncor in Montreal East and Valero in Levis, more competitive," said Mr. Monaco, who took over as CEO of Enbridge last year."

Quebec Premier Pauline Marois has said she views the proposed pipeline reversal favourably but that a formal assessment of the project is necessary before it gets a green light.

The National Energy Board is set to conduct public hearings on the proposal next month and a decision is expected in 2014.

It's critical to win over public opinion, especially in light of the deadly rail crash and explosion of tankers carrying crude in Lac Megantic, Quebec, Mr. Monaco said in his presentation.

"If the energy industry has learned anything in recent years, it's that economic benefits alone are not enough to achieve public support. The pipelines and facilities we operate require public trust and confidence that we are transporting our energy resources responsibly. Frankly, that trust is being tested," he said.

TransCanada is also proposing a west-east pipeline project called Energy East to transport Alberta crude to refineries and export terminals in New Brunswick.

Keith Stewart, climate campaigner for Greenpeace Canada, is equally dismissive of the Energy East jobs promise. "We would create more jobs and build a better economy if we spent $12 billion on public transit and greener vehicles that reduce our oil consumption, rather than on building a pipeline that fuels climate change by deepening the world's addiction to dirty oil," he said.

Dow Jones Newswires



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