Not a day goes by without Enbridge — and, indirectly, TransCanada and Kinder Morgan — feeling the heat of public and political opposition to their plans for shipping oil sands crude from Alberta to new markets.
Even a respected former regulator has discounted claims that the British Columbia government can do nothing to prevent a federally regulated pipeline from crossing its territory.
Neil McCrank, an attorney and former chair of Alberta’s energy regulator, said British Columbia can “put hurdles in the way if it really choose to do so,” effectively undermining the traditional role of Canada’s National Energy Board to approve and impose conditions on inter-provincial pipelines.
He told the Globe and Mail that a provincial government has “authority with respect to environmental components within a jurisdiction.”
That could raise barriers to Enbridge’s Northern Gateway project, Kinder Morgan’s plan to expand capacity of its Trans Mountain system from Alberta to Vancouver and proposals by Enbridge and Trans Canada to start carrying crude from Alberta to Eastern Canada and the Atlantic coast.
Delay tactics
Tactics the British Columbia government could use to delay Northern Gateway would include requiring the Northern Gateway twin pipelines to pass under the hundreds of streams and creeks they must traverse, or introducing a new rule mandating public hearings in communities that would be affected by the pipeline.
The province could also mount a court challenge of the National Energy Board proceedings if they resulted in approval for Northern Gateway, effectively raising the project costs to prohibitive levels or simply stalling progress to the point where Asian customers would look elsewhere for their crude.
Adrian Dix, leader of the British Columbia New Democratic Party and a clear favorite to win next year’s provincial election, has assembled a legal team to find ways to stop Northern Gateway.
“We’re looking at all of the options the province might use,” he said, but would not discuss specifics.
Under extreme pressure to take a stand on Northern Gateway, British Columbia Premier Christy Clark finally issued a warning to Enbridge about Northern Gateway in the wake of severe criticism by U.S. regulators about Enbridge’s handling of its 2010 pipeline spill in Michigan.
“I think the company should be deeply embarrassed about what unfolded (in Michigan),” she said. “If they think they’re going to operate like that in British Columbia, forget it.”
Clark said Enbridge needs to be asked more pointed questions about its operating practice “if they think they want to do business here.”
Confusing NDP message
Dix’s ally, federal New Democratic Party leader Thomas Mulcair, made a whistle-stop visit to Western Canada to declare that the U.S. National Transportation Safety Board report on the Michigan spill was “the final nail in the (Northern Gateway) coffin.”
But he caused confusion in Calgary by conceding that Alberta oil sands producers need wider market access for their production.
“Should we be looking for positive ways to find markets for oil from the oil sands? Of course we should. That’s part of our obligation,” Mulcair said. “Alberta’s companies in order to properly evolve and develop have to have access to other markets.”
He made no attempt to identify what markets he was referring to, or how that crude would be delivered.
In the face of what Enbridge President Al Monaco described as “unrelenting opposition,” he and Janet Holder, the executive vice president in charge of Northern Gateway, focused on easing fears about the project and leaving the door open to discussion.
Monaco said Enbridge has made significant improvements to its safety procedures in the wake of the 2010 spill, including changes to leak-detection systems.
He also said “we need to engage communities early and often and do a better job of explaining the benefits (of pipelines) at the local level. We need to put the public at ease and give them confidence that we can operate safely.”
Holder, conceding Enbridge is engaged in a struggle in British Columbia, said the company will continue seeking ways to help residents “understand that we can build this pipeline in a very safe, reliable and sustainable way.”
Bruce March, president and chief executive officer of Imperial Oil, which plans to double its output to 600,000 barrels per day by 2020 through investments totaling C$22 billion in the oil sands, said he is confident pipelines will be available when needed.
“Pipeline access is the best approach. It’s the cheapest, it’s got the least environmental risk when you transport oil over long distances,” he said.
