Northern Gateway: Putting it all on the line

To the surprise of no one, Prime Minister Stephen Harper and his Conservative cabinet gave a conditional endorsement Tuesday of the Northern Gateway project to pipe heavy oil 1,200 km from the oil sands of land-locked Alberta to the Pacific Coast. The announcement came in a low-key news release by federal Natural Resources Minister Greg Rickford, who said Northern Gateway Pipelines Ltd., must abide by the 209 conditions that the National Energy Board (NEB) review panel cited in recommending approval of the project. Rickford praised the “rigorous, science-based review,” but added that, Enbridge “clearly has more work to do in order to fulfill the public commitment it has made to engage with Aboriginal groups and local communities along the route.” Janet Holder, leading the pipeline project for Enbridge, welcomed the announcement. She said community equity partnerships are signed representing more than 60 per cent of the Aboriginal population along the route. “We need to do more . . . we look forward to building on our progress.”

Harper claims there is a dire economic need to expand Canada’s energy markets beyond the U.S. to Asia, but the issue is certain to stick to his government like a giant ball of bitumen as it treads into the next election in 2015. For Harper, who cut his teeth as an Alberta Reform MP on the western alienation of the Ottawa-dictated National Energy Program of the Trudeau Liberals, Gateway is both a crisis and an opportunity. It is certain to win approval from his base in Alberta, pinched by generally low oil prices caused by an overreliance on U.S. customers. The decision is also consistent with his determination to win approval from a skittish Obama administration to green-light the 1,900-km Keystone XL pipeline from Alberta to Nebraska.

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Within minutes of the announcement, opponents of the project vowed that the pipeline will never see the light of day despite the nod from Ottawa.

The political risks, however, are substantial. Both NDP Leader Tom Mulcair and Liberal Leader Justin Trudeau said they would kill the project if they win the next election. Mulcair said the 21 Conservative MPs in B.C. are already “hiding under their desks” fearing the electoral fallout. An array of well-funded environmental groups and dozens of B.C. First Nations vowed to fight the project in the courts and, for some, through civil disobedience. Already First Nations and environmental groups have five legal challenges of the NEB decision on hold in Federal Court—cases certain to be reactivated and expanded now that the cabinet decision has come down. “Today we unequivocally reject the Harper government’s decision to approve the Enbridge Northern Gateway tanker and pipelines project,” said a joint statement from many First Nations in northern and coastal B.C. They vowed to “vigorously pursue all lawful means” to kill the project.

Larger public opinion in B.C. is also tilting against the project. A recent poll by Nanos Research for Bloomberg News shows a majority of British Columbians favoured either blocking the project or delaying it for further study, while 29 per cent wanted it approved. A majority of residents of Kitimat, B.C., the proposed site of the shipping terminal, also rejected Gateway in a non-binding plebiscite earlier this year. The twin pipeline is only part of the concern; for many the greater threat is the risk of an oil tanker accident in the narrows of Hecate Strait fouling the coast.

For Calgary-based Enbridge, ahead are obstacles that make traversing the Rocky Mountains seem a minor inconvenience. Before any pipe is laid, it must meet more than half of the 209 NEB conditions, including proving it has enough customers to make the $7-billion-plus project commercially viable. While it has invested 10 years and massive resources in the plan, which would ship more than 500,000 barrels of diluted bitumen a day from the oil sands to the deep-water port of Kitimat, there’s no guarantee even the thirstiest customers have the stomach for the uncertainty and delays caused by years of protest and litigation. Should Enbridge navigate the NEB’s conditions, there are still five more potential deal-breakers set down by normally Tory-tolerant B.C. Liberal Premier Christy Clark. Those include: “successful” completion of the environmental process, “world-leading” spill prevention and response, First Nations consultation and participation. Finally, Clark wants a fair share of economic benefits “that reflects the level and nature of the risk borne by the province, the environment and the taxpayers.” As of this week, she warned, none of the conditions have been met.