Enbridge sees more work ahead, despite Northern Gateway OK - Action News
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Enbridge sees more work ahead, despite Northern Gateway OK

Enbridge Inc.'s Northern Gateway pipeline crossed a key hurdle on Tuesday, but executives with the Calgary-based pipeline giant said much more needs to be done to gain broad-based public support.

Safety, environmental protection trump economic case, CEO says

A protester in Kitimat, B.C., carries a sign opposing the Northern Gateway pipeline on Tuesday. Al Monaco, CEO of Enbridge, says safety and environmental concerns trump the economic case, so his company still has a lot of work to do to persuade skeptical Canadians to back the pipeline. (Jonathan Hayward/Canadian Press)

Enbridge Inc.'s Northern Gateway pipeline crossed a key hurdle on Tuesday, but executives with the Calgary-based pipeline giant said much more needs to be done to gain broad-based public support.

Ottawa gave the green light to the more than $6.5-billion Alberta-to-West Coast project, subject to 209 conditions recommended by a regulatory panel late last year.

Enbridge CEO Al Monaco described the economic case as "straightforward" for a pipeline that would connect growing oilsands crude with eager buyers on the other side of the Pacific, but acknowledged it's not enough to proceed.

"If we can't prove out safety and environmental protection on these projects, the economic benefits won't matter," he said in a conference call. "In other words, the economic benefits alone are not enough to sustain public support."

Enbridge will be working to meet the panel's conditions more than 100 of which must be met before shovels can even hit the ground during the next 12 to 15 months.

Important milestone

Monaco said while Ottawa's nod was an important milestone, there's still much more work to be done on winning over First Nations in British Columbia, many of whom are opposed to the project.

He said Enbridge won't put off building the pipeline indefinitely, but it's in no hurry to give it the final go-ahead.

The good news, some observers say, is that Enbridge has time to look westward.

Jack Mintz, with the University of Calgary's School of Public Policy, says demand from new markets isn't going to diminish.

"There's huge Asian demand for oil and I think that demand is not going to disappear," he said. "In fact, the Asian market is actually the growing market for oil products and there is a very big demand for Canadian oil."

Laura Lau, a senior portfolio manager with the Brompton Group, agrees the window of opportunity should stay open for some time, given the rate at which oilsands production is expected to grow.

If we can't prove out safety and environmental protection on these projects, the economic benefits won't matter- Al Monaco, CEO of Enbridge Inc.

"We still need as many pipelines as possible, so perhaps it would be past the end of this decade," she said.

However, Lau said, other pipeline proposals to the south and east, such as TransCanada's Keystone XL and Energy East, have a much better chance of going ahead than Northern Gateway, given the First Nations and political challenges that are specific to British Columbia.

A joint review panel, which made its recommendations to the federal government in December, set Dec. 31, 2016 as a deadline for Enbridge to start building the project, unless the National Energy Board says otherwise.