Enbridge determined to push ahead with Pipeline despite opposition
Enbridge Inc. is plowing ahead with a controversial pipeline stretching from Alberta’s oilsands to the inside passage port of Kitimat to open new markets for Canadian oil, chief executive Pat Daniel said Wednesday.
The $5.5-billion Northern Gateway project faces heated opposition from aboriginal and environmental groups because of the possibility of a spill on land or sea—concerns that have deepened as bands of sticky oil approach the U.S. Gulf of Mexico coastline following a deep-sea rig explosion.
Enbridge came up with the concept to open new markets for Canadian crude oil and reduce the country’s dependence on trade with the United States, Daniel said during the company’s annual meeting.
“We’re doing it because it’s important for Canada, for our economy, for our energy security and for our nation’s role as a significant player on the world stage,” he said.
The key driver for the 525,000-barrel-per-day pipeline is to open new markets for producers by 2016, rather than increase pipeline capacity, Daniel said.
Northern Gateway is being backstopped by a $100-million commitment from undisclosed producers and refiners, primarily from the Asia Pacific region.
Daniel said the company was filing an official application with the National Energy Board this month after almost a decade of planning, false starts and initial community consultations.
He anticipates two years of hearings and three years of construction, for an in-service date of 2016.
Analysts cautioned backlash from the Gulf of Mexico spill could have detrimental effects on not only Enbridge’s plans but for the industry in general.
The recent explosion on a BP-owned and Transocean Inc.-operated offshore rig killed 11 people. The ruptured well is spewing almost 800,000 barrels of oil each day into the ocean, and currently threatens ecosystems along the U.S. Gulf coastline.
Already politicians have called for stringent rules to be enforced on drilling in Canada’s offshore east and west coast.
The blow-up in the Gulf could drag out hearings on the Northern Gateway pipeline for up to a year, but likely would not shut the project down, said Bob Schulz, director of the Petroleum land management department at the Haskayne School of Business.
“To me, the issue on this in terms of safety, which is what we’re really speaking of, is an issue of the age and condition of tankers,” Schulz said. “If they use old, single-hulled tanker, and there’s a typhoon and the tanker breaks up, that’s a higher probability [for a spill] than a double-hulled tanker that’s newer.”
Schulz said the biggest challenge to the project is gaining access to non-treaty first nations lands that stretch along more than half of the pipeline route.
Representatives of several dozen aboriginal bands in British Columbia say without their consent, the 1,172-kilometre project is dead in the water.
“We are the people ... who have title and rights to say what the land will be used for,” said John Ridsdale, a Wet’suwet’en hereditary chief from northwest B.C., following Enbridge’s annual meeting.
“This would be a detriment to the environment, to the people, to our culture, to our waters, to our land. So yes, we are not going to allow it. All it takes is one spill, which will happen, and you’ll never ever get your waterways back.”
Enbridge shares fell 53 cents Wednesday to close at $48.29 on the Toronto Stock Exchange.