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Enbridge boss stays cool Daniel goes head-to-head with First Nations leaders, environmentalists and dissident shareholders in defending Northern Gateway Gary Park For Petroleum News
Pat Daniel faced one of the sternest tests of his 11 years as chief executive officer of Enbridge on May 9.
As he winds down towards retirement later this year, the soft-spoken, 64-year-old took the stage at the annual general meeting of shareholders.
In other circumstances, it would have been a breeze.
He had plenty of good news to pass on, including company plans to invest C$26 billion on secured and risk-adjusted pipeline projects over the 2011-15 period, up C$6 billion from the previous estimate last October, along with word that Enbridge is reviewing another C$30 billion worth of opportunities.
The mix includes the Seaway pipeline from Cushing, Okla., to the Texas Gulf Coast that is now carrying its first oil, strong shipper backing for the Flanagan South pipeline from Flanagan, Ill., to Cushing and a series of possible pipeline expansions and additions to deliver crude from the Alberta oil sands and Bakken to refineries in eastern Canada and the United States.
But the spotlight wasn’t on this array of upbeat items that would normally have had shareholders beaming.
Protests outside Overshadowing everything was the knowledge that scores of First Nations leaders and supporters, along with environmentalists, were venting outside the Toronto hotel where the meeting was taking place, and the line-up inside of First Nations chiefs and disgruntled institutional shareholders wanting to challenge Enbridge’s planned Northern Gateway pipeline to carry 525,000 barrels per day of oil sands crude to Pacific Rim markets and import 193,000 bpd of diluents.
Displaying his reputation for grace under fire, Daniel was patient and sympathetic, without ever once wavering in his defense of Northern Gateway, emphasizing the importance to Canadian oil producers and the Canadian economy of opening up new export markets in Asia and insisting the pipeline can be built responsible.
“We have to do it safely and we can,” he said.
“We don’t want to proceed on this project with opposition. Our objective (is to) get your concurrence and your support” — a hope that seems increasingly forlorn, despite Daniel’s disclosure that 22 of 45 First Nations along the planned pipeline right of way have shown their interest in taking up Enbridge’s offer of a 10 percent equity stake that could generate C$300 million in earnings for those communities.
He also insisted that Enbridge has full commercial support for Northern Gateway and “have more who want in than we can accommodate.”
First Nations opposition Jackie Thomas, chief of the Saik’uz First Nation, told reporters before the meeting that aboriginal communities will not be swayed by offers of money or benefits.
“It’s about our way of life. We make business decisions based on the evaluation of risk and this risk is far too great,” she said, referring to the damage that could be done to the land and fisheries from an inland pipeline spill or a tanker accident in the British Columbia coastal waters.
Thomas said First Nations leaders will take whatever legal action is needed to stop the pipeline.
About 40 members of the Yinka Dene Alliance, who traveled to Toronto from British Columbia aboard their so-called Freedom Train, were quietly reminded by Daniel that the very rail line they used for that journey was strongly opposed at its inception in the late 19th Century, reinforcing his point that major infrastructure undertakings usually encounter protest.
“Can I stand here and say that if we have one person opposed (to Northern Gateway) that we will not proceed? I can’t, because that’s not the way that democracy works,” he said.
“Energy infrastructure has to be in somebody’s back yard, if we are going to take advantage of it,” Daniel argued.
Chief Martin Louie of the Nadleh Whut’en First Nation, challenged Daniel to say “How far you and the government are willing to go in trying to stop us, because we are not going to go away.”
Three institutional shareholders, led by Jamie Bonham of NEI Investments, pressured Enbridge to disclose what harm could be done to the company’s reputation if it faced extended litigation, but that demand for more information was defeated by 71.5 percent to 28.5 percent when put to a vote.
Committed to hearing all views However, Al Monaco, who will succeed Daniel as chief executive officer, said Enbridge is committed to hearing all views and treating the opposition with respect.
“We really think that with greater discussion, we can convince the First Nations of the merit of the project,” he said.
But the test of wills between Enbridge and the anti-Northern Gateway faction could quickly erupt into a more serious confrontation if the Canadian government — as some believe it will — applies its announced changes to environmental reviews to the current round of hearings.
Under legislation before the House of Commons, the government of Prime Minister Stephen Harper could restrict those who appear before regulatory panels to those deemed to be directly affected by a project and those with relevant expertise.
The “directly affected” provision would not retroactively remove any evidence presented since January, but could speed up completion of the remaining review process, affecting some of the 4,500 people and organizations who have registered to comment.
Daniel said he is “not an expert on exactly who can and cannot participate (in the National Energy Board hearings), but I wouldn’t expect that any rules of engagement would change from the start of the process.”
The NEB is not commenting on how the new rules might apply until the legislation before parliament is passed, meaning the real showdown has yet to happen for Northern Gateway, the parallel plan by Kinder Morgan to expand its Trans Mountain system and offer an alternative route to Asia and a host of other large-scale energy projects that are pending.
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