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Deep Panuke Blog

Day Two, Tuesday, March 6, 2007

EnCana Admits to CO2 Goof & The Flaws Get Deeper as David (Sierra Club Canada Team & Friends) Takes On Goliath (The EnCana Camp with the Sable Gang Piling On) on Day Two of the Deep Panuke Hearings

Marcocchio and Ruffman at Hearings

Bruno Marcocchio and Alan Ruffman put their heads together during the second day of Deep Panuke hearings
in Halifax.

The Deep Panuke story moved off the front page today and wound up under a banner headline on the front page of the Chronicle Herald’s Business Section on day two of the NEB/CSNOPB hearings at the Halifax Harbourside Marriott:

EnCana defends pipeline plan
Second line not needed, seafood producers tell hearing

By JUDY MYRDEN Business Reporter

EnCana Corp. of Calgary on Monday defended its plan to build a second pipeline off Nova Scotia to carry natural gas from fields near Sable Island to markets in Atlantic Canada and the energy-hungry U.S.

During the first day of regulatory hearings into EnCana’s $700-million Deep Panuke gas project, executives downplayed any potential environmental impact of building a pipeline parallel to an existing offshore line.

Dave Kopperson, EnCana’s vice-president of Atlantic Canada, said building a $200-million pipeline would not result in "significant adverse environmental effects."

The Calgary oil and gas company wants regulators to approve two transportation options and allow EnCana to make the final decision.

A ruling by regulators is expected in a few months. The project also requires sanctioning from EnCana’s board of directors.

An alternative to building its own pipeline is to tie in with the existing pipeline used by the ExxonMobil-led Sable gas project, which has been pumping gas since late 1999.

But Nova Scotia’s seafood producers question the need for a separate line when a pipeline already exists.

"To a layperson, if you’re putting down a second pipeline, it would seem that it must have impacts," Roger Stirling, president of the Seafood Producers Association of Nova Scotia, told reporters after cross-examining company executives.

Mr. Kopperson said in his opening statement that EnCana wants the National Energy Board to approve the option of tying in with the Sable line or allowing it to build its own line.

"EnCana . . . requests that it be allowed to determine which pipeline option is most suitable for Deep Panuke on technical and commercial terms," said Mr. Kopperson.

Mr. Stirling said so far his association has heard "vague wording" and generalities about the two pipeline options.

"Unless we get satisfactory answers, we’ll oppose the second pipeline," he said.

EnCana wants to extract natural gas from a reservoir about 3,500 metres below the sea floor through four existing gas wells and one new production well feeding into a central production facility. Initially, EnCana expects to produce enough natural gas to supply three million homes a year in Atlantic Canada and the U.S. northeast.

Nova Scotia’s Energy Department is expected to endorse the project today when the government makes its opening statement to government regulators.

In its two-page statement, the government says it believes that the Deep Panuke project is "good for Nova Scotians."

After being cross-examined by Mr. Stirling, Mr. Kopperson said the company is looking at broadening its compensation for fishermen.

"Well, it’s very significant," Mr. Stirling told reporters during a break at the hearings at a downtown Halifax hotel. "What they were offering was only damage to vessel or gear. That’s not the big picture. The thing we’re concerned about most is long-term impacts on the resource."

Another condition outlined by EnCana was the ability to abandon the flow lines and pipelines on the ocean floor after the project expires.

Mr. Kopperson said EnCana’s board of directors requires "certainty" when making decisions on projects and Deep Panuke is only one project in a portfolio of developments. The company has assets worth $45 billion.

Mr. Kopperson says leaving the pipeline is "consistent" with industry practice and represents the best option for safety, environmental and technical reasons.

"The environmental assessment for Deep Panuke has determined that leaving the infield flow lines, umbilicals and export pipeline in place will likely have no significant environmental effects. Removing this infrastructure would add significant unknown costs with no benefit to the environment."

Two years ago the provincial government allowed EnCana to amend its original development plan for the Cohasset Panuke oilfield off Nova Scotia that stopped production in 1999. Originally, it was supposed to clean up any debris from the oilfields but then the province allowed EnCana to leave two flow lines buried under the seabed, along with 1,735 tonnes of concrete. But the company did remove parts of other subsea equipment that might have posed a snagging hazard to commercial fishing nets.

The hearing resumes today. Two weeks have been set aside for the proceedings.

And the hearings indeed did resume, with our own Alan Ruffman due to take the podium for more questions for the three-deep EnCana mega-panel. 

But Miles Kehoe, antique munitions expert—like munitions discarded by the bargeload, including umpteem barrels of mustard gas, sunk offshore Nova Scotia after World War Two—was allowed to play through with a couple of motions, which were later rather summarily denied, to subpoena witnesses on his area of expertise. 

After Kehoe made his case and took his seat to wait for the hearing panel’s post-lunch decision, Ruffmann took off where Bruno had left off at the end of Day One.

Alan revisited a topic that drew considerable interest among some of the hearing participants and CBC Radio the day before. As reported here yesterday, Bruno expressed incredulity regarding EnCana’s labeling of yearly CO2 emissions equal a third of a percent of the total CO2 emissions of Canada (2003) as “extremely small.” Ruffman asked again if this could possibly be a typo:

MR. RUFFMAN: And just to close this [discussion of CO2 sequestration], there was some discussion of this yesterday and I would ask if we could put up Table 5.2 again on page 5-11.
This is called "Integration of Key Issues Overview" and Mr. Marcocchio raised this with you and we are just going to make sure we, with one question, understand it. So it's page 5-11, Table 5.2 that we had yesterday…Let me just read this and just make sure there is not a typo in this. We were concerned yesterday and we didn't ask the question specifically whether there was a typo:

"The estimated contribution of the Deep Panuke Project to the total estimated greenhouse gases by all Canadian human-made sources is extremely small (0.3 percent of 2003 Canadian total)."

Is that figure "0.3 percent" correct or is it possibly a typo?

MR. KOPPERSON: I'm glad you raised this question. We were going to make a clarification today ---


MR. KOPPERSON: We didn't have the opportunity this morning. Mr. Fudge is going to provide some clarification on that table.

MR. FUDGE: Thank you. During the cross-examination by Mr. Marcocchio, in the minutes on line 951, he referenced this very table, Volume 4, page 5-11, Table 5.2, and he noted that
the Deep Panuke greenhouse gas emissions are .3 percent compared to the Canadian national total for 2003, and that, basically, I understand was your question. So the point is we would like to make it clear that the project-related greenhouse gas emissions are shown as a cumulative 13-year total, so all the greenhouse gas emissions for 13 years, cumulative total relative to 1 year for the Canadian total. Do you understand what I'm saying, Mr. Ruffman?

MR. RUFFMAN: Yes, I do, but that's a needed clarification, I think.

MR. FUDGE: Yes. I'm glad you brought it up.

MR. RUFFMAN: I'm quite sure you wanted to make that.

MR. FUDGE: And actually, I'm very glad you made that because it's an important point.

MR. RUFFMAN: We were impressed by your greenhouse gas emissions prior to that. Okay, thank you very much.

--- (Laughter/Rires)

So, EnCana cannily corrected its own GHG accounting to reduce its CO2 emissions to a 13th of what it estimated in their own documentation. We are now looking for this “error”—not a typo but a somewhat less inadvertent omission of a critical qualifying time frame—elsewhere in other parts of EnCana’s submission and have a couple of Dalhousie students, who were taking notes at the hearings, crunching the numbers to see if EnCana’s explanation of their goof is itself goof-proof.

Earlier, Ruffman asked the EnCana panel about a possible motivation for wanting to have the option of running their own pipeline from their platform to shore rather than tapping into the existing Sable Offshor Energy Project pipeline:

MR. RUFFMAN: …Have you been in negotiations or are you in negotiations with ExxonMobil to gain access to the export line for your tie-in option?

MR. KOPPERSON: Yes, we are….

MR. RUFFMAN: Is it fair to say that these negotiations are rather difficult and tough right now?

MR. KOPPERSON: No, I don’t think so.

MR. RUFFMAN: You’ve expressed strong opposition both in the press and in your Opening Statement to any possibility of this Board or this Panel giving direction on which of these two options that should be used…Am I correct that that is your position?

MR. KOPPERSON: Yes, that is our position. I should say I haven’t talked to the press.

MR. RUFFMAN: Though it certainly was in your Opening Statement that you gave so it’s a matter of public record that that is your position. Is your position that you wish to retain the choice as opposed to allowing or requesting the Board to perhaps intervene -- the Panel?

Is that because, if the Panel was to make a recommendation on these two options, it would undermine your negotiating position with the owner of the present export line?

MR. KOPPERSON: I think, primarily, we wish to leave both options open because we have assessed both option and both, in our opinion, are acceptable from an Environmental Impact Assessment. Neither have significant adverse effects. I think, yes, it would be somewhat of a concern in our discussions, negotiations with the Sable Offshore Energy Project if we were forced in that direction. I think that’s a fair statement.

It would probably also be a fair statement that EnCana’s plan for a platform-to-shore pipeline of its own may have more to do with having a bargaining chip than with doing the right thing by the environment.

Later on in the morning, our David and Goliath tale unfolds. The updated hearing schedule, posted on the Secretariat Web site only that morning, indicated that Sierra Club of Canada might be required to convene its own panel far sooner than expected. The Sierra panel would take questions from EnCana and other intervenors, and Sierra Club of Canada would be required to have its experts available for questions when its panel convened—whenever that rather whimsically happened to happen.

In others words, we would need to have our experts—the exchange here involved the appearance of Daniel Green—available pretty much from the start of the hearings on, a period, in this case, of up to 12 days.  Bruno took the podium and made the point that the pockets of ENGOs such as Sierra Club of Canada, being not quite as deep as entities such as EnCana, made complying with such requirements less than easy:

MR. MARCOCCHIO: My point, Madam Chair, is that reasonable notice should be given and that we request that reasonable notice to bring our experts to testify at the hearing, if indeed EnCana wishes to pursue that cross-examination, be given with enough reasonable lead time, either later this week or early next week, that will give us an opportunity to bring that witness here. It places an onerous burden both with respect to the costs and the logistics when we find out eight hours before a scheduled appearance that we’re expected to produce our experts today.

THE COMMISSIONER: I think there was material sent out much earlier than that saying that the various panels would be called. I’m not clear and I certainly wasn’t under the understanding that Sierra expert panel was being called today. I wouldn’t have anticipated that. I would have anticipated though that later this week you would likely be called…

MR. MARCOCCHIO: …My point is that this process has been extremely unfair to nongovernmental organizations; that…the procedural fairness must provide for an adequate opportunity for all stakeholders to take part, and this process as it proceeds and unfolds has limited people’s willingness and ability to act as intervenors and continues to limit the ability of intervenors to meaningfully interact with the process. So we would seek some direction with some reasonable notice on when our witnesses can appear…So I seek some direction from the Chair asking please that we be given reasonable notice so that we can bring Mr. Green to the hearings.

THE COMMISSIONER: Thank you, Mr. Marcocchio.

MR. MARCOCCHIO: Thank you, Madam Chair.

The EnCana lawyer here enters the fray:

MR. GRANT: …I’m a little startled by the suggestion that Mr. Marcocchio made that he would come on the start of the hearing and not be ready to cross-examine the witness panels as they’re presented. I would have thought that that’s quite clearly the order of events for anyone that’s at all familiar with these types of proceedings…that anyone who is participating should be ready to cross-examine…that, once the hearing starts, the participants have to be ready to go when they’re called upon...I certainly understand that, from time to time, there are difficulties respecting availability of witnesses and I’m certainly happy to work with Mr. Marcocchio and Board counsel and other participants to try and reasonably accommodate any difficulties that may arise, but the overall concept is that the hearing has to proceed in an efficient fashion….So Madam Chair, I would submit that there is not any great misconception or should not be any great misconception on the part of any of the participants that this hearing has to proceed in an orderly and efficient fashion and participants have to be ready to go when their name is called, and that should apply not simply to the intervenors but to the applicants and to the other participants as well.

THE COMMISSIONER: Thank you, Mr. Grant. Mr. Marcocchio.

MR. MARCOCCHIO: ….the rules of procedure do set out that EnCana has the right to cross-examine our witnesses, it’s not clear that they would do that, and we frankly don’t have the resources to keep all of our people here and accommodated for the full two weeks; perhaps that might it be extended, as you pointed out, Madam Chair, to a month or more. So one would expect some reasonable communications about when one’s witnesses are expected to testify and make provisions for those arrangements….Because we can’t afford to have everyone accommodated for the entire length of the hearing. EnCana’s resources are many. Ours and all of the NGO participants are very few, very few by no small measure on the less than friendly and arcane rules of procedure and evidence and thresholds to take part in the process, financial and otherwise.

When Bruno, Mr. Grant and the Commissioner were done, a Mr. Holgate marched up to the microphone to support EnCana’s opinion: “We’re all here expecting due process, the Panel and the Applicant and the intervenors. You’ve given that in your directions on procedure and the ordinary process would be a witness, particularly an expert witness, who has filed evidence would be available when called upon. I quite frankly don’t see what the issue is here.”

Holgate took his seat and Bruno addressed the Commissioner: “Excuse me. I don’t know this gentleman.” The Commisioner replied: “Mr. Holgate is representing ExxonMobil, Imperial Oil, Shell Canada Limited.”

And so it went.  Later on Goliath (EnCana’s Grant) approached David (our Bruno) and offered to allow Daniel Green’s evidence, which had to do with mercury in drilling muds, and offered to accept the evidence without cross-examining Green as long as they could introduce the full text of one of the documents cited by Green. Done.


Offshore Oil and Gas Links

Deep Panuke Coordinated Public Review

SCC protecting marine areas from offshore oil and gas page

Atlantic Canada Chapter's Oil and Gas campaign page

Sierra Club of Canada National Office