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Enbridge dangles more Gateway incentives
Gary Park For Petroleum News
Enbridge is stepping up its efforts to gain First Nations support for its Northern Gateway project as it prepares to face public hearings before Canada’s National Energy Board.
It has followed up its offer of a 10 percent equity stake to aboriginal communities along the pipeline right of way by announcing plans to set up a community trust built from 1 percent of Northern Gateway’s pre-tax earnings.
In addition, it estimates First Nations could supply 15 percent of the construction labor force for the C$5.5 billion venture.
The equity stake, which Enbridge is prepared to finance in full, is projected to generate C$280 million in net income over 30 years, while the trust would receive an estimated C$100 million over the same period.
Northern Gateway is designed as a twin-pipeline system, exporting 525,000 barrels per day of oil sands crude to the Asia-Pacific region and importing 193,000 bpd of diluents to aid the flow of heavy crude. The scheduled in-service date is 2015.
In recent months, Enbridge has presented a benefits package to about two-thirds of 40 First Nations along the right of way for the crude export line and is now meeting with the remainder to discuss project employment and business opportunities worth C$400 million, plus C$200 million to First Nations towns and businesses on the British Columbia coast.
Enbridge Chief Executive Officer Pat Daniel said the proposals have been “well-received.”
Carrier Sekani opposed But the Carrier Sekani Tribal Council, whose eight member communities cover about half of the 720-mile Northern Gateway route, remains the most stubborn opponent of the project.
It does not believe the projected benefits are worth the risk of pipeline spills and potential damage to fish in salmon rivers and the Native lifestyle, said vice tribal Chief Terry Teegee.
Daniel said Enbridge is hopeful it will soon have signed “precedent agreements” with potential shippers covering 90 percent of Northern Gateway’s design capacity.
Opposition to tanker traffic off the British Columbia coast has been reinforced by the Canadian Coast Guard, which concedes that its radar systems can only monitor ship movements south of the zone from southern Alaska to the southern end of Vancouver Island through which Northern Gateway vessels would move.
The federal Department of Fisheries and Oceans, to which the Coast Guard reports, concedes it relies heavily on shippers to accurately report the location of their vessels and admits it has no “historical” data on the number of tankers that enter the zone.
A Tanker Exclusion Zone in the area was created in 1988 under a non-binding agreement between the Canadian and U.S. coast guards to lower the risk of a tanker running aground on the B.C. coast.
The Canadian government has also acknowledged that a 1972 moratorium on oil and gas activities offshore B.C. does not apply to tanker traffic.
However, Transport Minister Chuck Strahl has insisted the exclusion zone is “closely monitored and strictly enforced” to ensure no crude tankers come down the Inside Passage.
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