PIPELINE LINES DRAWN
Opponents of a proposed $5.5-billion oil pipeline to Canada’s West Coast have seized on a crude spill in Michigan to escalate their fight against Calgary-based Enbridge Inc., which is behind both projects.
Greenpeace activists yesterday occupied Enbridge’s office in downtown Vancouver in protest of its Northern Gateway pipeline project. Four Greenpeace protesters chained themselves to the door of the sixth-floor office—and used oil from the Gulf of Mexico to scrawl “B. C. Next” on the glass entrance doors.
Opponents of the Northern Gateway pipeline, which would move oil-sands crude from northern Alberta to a port in Kitimat, B.C., and then on to Asia via tankers, are using the Michigan spill to highlight the danger of shipping hydrocarbons using pipes and tankers. On Monday, a section of Enbridge’s Lakehead pipeline system sprung a leak, and the company estimates 19,500 barrels of oil, about three million litres, spilled into Michigan’s Kalamazoo River.
The Dogwood Initiative, a Victoria-based lobby group, said the spill is a reminder that it is “ridiculous” to say the Northern Gateway project will be safe.
Pat Daniel, Enbridge’s chief executive, who flew to Battle Creek, Mich., to monitor the cleanup, pledged yesterday to return the river to its original state. “We at Enbridge are committing to cleaning up anything and everything that that oil has touched along the way,” he said at a press conference about the leak.
The Calgary-based company is in emergency mode, doubling the number of employees responding to the spill to 300, increasing the length of the protective boom it is using to protect the waterways to 30,000 feet, with another 15,000 feet on hand, and hosting multiple press conferences with local and international media.
Some observers, meanwhile, said the fallout from the Michigan spill will hit the Northern Gateway project, which would, pending approvals, go into service in 2016.
“I’m personally of the view that the Gateway project—the Enbridge project—is dead,” said Michael Byers, an international relations professor at the University of British Columbia.
“This spill in Michigan will make it more difficult for the company to proceed,” said Prof. Byers, who studies U.S.-Canada relations, as well as Arctic issues.
TransCanada Corp., which has offered Enbridge emergency support, could also be caught in the aftermath of both this leak and BP PLC’s Gulf of Mexico disaster, Mr. Byers said. Its Keystone pipeline extension south of the border, which critics argue could damage the Ogallala aquifer and other areas in the United States, is already under political pressure as 50 members of Congress have asked Secretary of State Hillary Clinton to derail the pipeline’s reach into the United States.
“The spill in Michigan could be the straw that breaks the camel’s back in terms of one or both projects,” Mr. Byers said.
Enbridge said it has stopped the Michigan leak, is now excavating the busted section, and does not expect the spill to reach Lake Michigan. The pipeline could be back in service in “days” rather than “weeks or months,” Mr. Daniel said.
Local media took issue with how long it took for Enbridge to respond to Monday’s spill, and asked local and federal officials about air and water quality concerns.
Mr. Daniel defended Enbridge’s actions, noting its regulations stipulate that it could not report the spill until it had a grasp on how much crude product had escaped. Air and water quality is being monitored, parts of the river have been closed to boating, fishing and swimming, and there is the potential for further evacuations, officials said.
As for the Michigan spill’s implications for Gateway, Mr. Daniel said Enbridge will freely discuss concerns with its critics.
“We will [take] whatever time necessary ... to walk through with them the cause of the accident, what we can do to prevent similar incidents in the future through refinements on inline inspections, on inspection periods, on pipeline control,” he said during Enbridge’s second-quarter conference call.
Enbridge made $138-million, or 37ยข per share, in the second quarter, down from $393-million ($1.08) in the same period last year. An Enbridge affiliate also said it will acquire the pipelines and plants from Atlas Pipeline Partners LP for US$682-million.
_Financial Post, with files from Postmedia News_