Enbridge is now forced to defend its grand plans to ship Alberta oil sands bitumen to Asia and across North America from relentless fire, while its bottom line and public image take a hammering.
Things are so bad that the once low-key, civic-minded company is even facing the wrath of movie-goers in Vancouver.
As part of a C$5 million public relations campaign to sell its C$5.5 billion Northern Gateway project as “more than a pipeline, it’s a path to the future,” Enbridge has been delivering its message among the advertisements in movie theaters.
Instead, audiences have resoundingly jeered the effort and are gearing up to do the same to Enbridge’s plans for building pipeline capacity from Alberta to the Texas Gulf Coast, while offering an outlet for Bakken crude, and across Canada and the United States to the Atlantic coast.
The opposition has built to a crescendo since the U.S. National Transportation Safety Board, NTSB, delivered its findings July 10 on the causes of a spill two years ago from Enbridge’s Line 6B into Michigan’s Kalamazoo River.
That discharge of 20,000 barrels of heavy sour crude was the largest on-shore spill in North American history and NTSB Chairwoman Deborah Hersman pinned a label on Enbridge’s handling of the rupture that the company may never erase.
Keystone Kops analogy
She likened the handling of the episode to a Keystone Kops routine, referring to the fictional bumbling cops in silent films of the early 20th Century. Whether she saw the irony in the link with TransCanada’s own Keystone expansion plan was not clear.
Hersman also aimed strong disapproval at the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration, PHMSA, for lax regulatory oversight, saying it delegated “too much authority to the regulated to assess their own system risks and correct them … tantamount to the fox guarding the chicken house.”
The NTSB, in a preliminary report that made 18 recommendations for Enbridge, the PHMSA, the U.S. Secretary of Transport, the American Petroleum Institute and the Pipeline Research Council, identified pipeline corrosion as the probable cause of the spill.
NTSB investigator Matt Nicholson said corrosion fatigue “grew and coalesced from crack and corrosion defects under bonded polyethylene tape coating, producing a substantial crude oil release that went undetected by the (Enbridge) control center for over 17 hours,” adding the company had “insufficient margin of safety” and lacked an oil response plan.
In a statement, Enbridge Chief Executive Officer Pat Daniel, who is retiring later this year, said his company believed that “the experienced personnel involved in the decisions made at the time of the release were trying to do the right thing. As with most such incidents, a series of unfortunate events and circumstances resulted in an outcome no one wanted.”
That would represent the mildest possible assessment of the event, which has so far cost more than US$800 million in cleanup bills and landed Enbridge with a US$3.75 million fine from the PHMSA.
Focus on environmental hearings
Even worse for Enbridge, it has returned the spotlight to the Northern Gateway environmental hearings which have been quietly wending their way across northern British Columbia and Alberta for the past six months.
Although the final decision on Northern Gateway rests with the National Energy Board and the Canadian government, the project has given added momentum to a swing in British Columbia and across Canada to the left-wing New Democratic Party.
Adrian Dix, leader of the NDP in British Columbia, is increasingly viewed as a shoo-in to topple the Liberal government of Premier Christy Clark in an election next May, while federal NDP leader Thomas Mulcair has been edging ahead of Conservative Prime Minister Stephen Harper in the latest polls, although a federal election is still almost three years away.
Dix pounced on the NTSB report as proof Clark is derelict in her duty on Northern Gateway by failing to take a stand until the regulatory process has been completed.
If he were premier, Dix said he would intervene against Northern Gateway “with everything we had,” regardless of any offers Alberta might make to share its royalties from the 525,000 barrels per day of bitumen carried on the system.
Mulcair, who has become an avowed opponent of the oil sands, said evidence of Enbridge’s inept handling of the 2010 Michigan spill should the “final nail in the (Northern Gateway) coffin.”
He said the concerns being raised in British Columbia “now have to be listened to by everyone,” adding Northern Gateway “makes no ecological or economic sense,” especially because of the huge risks posed by tanker traffic on a “very delicate coastline.”
In the face of a gathering storm, Enbridge spokesman Paul Stanway tried issuing a calming message that Enbridge is “obsessive” about pipeline safety.
