In a dramatic and symbolic manifestation of their intense opposition to the proposed Northern Gateway pipeline, first nations groups marched through the corridors of power in downtown Toronto to take their message to the annual meeting of the pipeline’s sponsor, Enbridge Inc.
Stopping traffic as they paraded, drums pounding, past the bank towers at the intersection of Bay and King streets, the elders and a couple of hundred followers made it clear they are adamantly opposed to the project, which would cut through native lands and see oil tankers ply the waters off the coast of British Columbia.
While the protesters rallied outside the hotel where the meeting took place, a handful of first nations representatives holding proxies attended the session, asking question after question of chief executive Patrick Daniel, mainly in respectful, but emotional, tones. All were firm in their opposition to the project, and warned that years of legal action will be involved if the company presses ahead.
Chief Martin Louie of the Nadleh Whut’en First Nation in the interior of British Columbia asked Mr. Daniel: “How far are you and the government willing to go in trying to stop us … [because]we are not going to go away.”
Mr. Daniel was conciliatory during the course of the two-hour meeting, again and again emphasizing the need to expand Canada’s export markets for oil and suggesting that the project can be built responsibly. “We have to do it safely, and we can,” he told the elders. “We don’t want to proceed on this project with opposition. Our objective … is that we want to get your concurrence and your support.”
Still, he said, “energy infrastructure has to be in somebody’s back yard, if we are going to take advantage of it.”
Mr. Daniel also accepted invitations to visit First Nations communities on the west coast, and in the Sarnia, Ont., area where one of Enbridge’s pipelines terminates.
He noted that, despite the vocal opposition to the pipeline, polls show a majority of Canadians want to diversify markets for Canadian oil. He also said that 22 of 45 first nations groups along the route of the proposed pipeline have signed on to take equity stakes in the project, although he would not reveal their names.
Still, those first nations leaders who spoke were firm that they will fight tooth and nail to stop the pipeline, despite the financial resources of the companies that want to build it.
“We are being bullied by companies who have billions of dollars at their disposal,” one leader said, while another suggested the company is trying to buy native support with “trinkets.”
Three institutional shareholders attempted to get the company to give more details on the potential damage to Enbridge from the First Nations opposition to the pipeline, by asking shareholders to force the company to disclose how it assesses those risks.
Jamie Bonham of NEI Investments – which made the shareholder proposal along with Desjardins Investments and VanCity Investments – told the meeting that the fight about the pipeline could result in extended litigation and “long-term damage” to Enbridge’s reputation. Consequently, he said, shareholders need to know more details how the board is going to mitigate those risks.
The proposal, while it garnered 28.5-per-cent support from shareholders, was defeated.
Al Monaco, the current Enbridge president who will take over the CEO position from Mr. Daniel later this year, said in an interview after the meeting that he finds the opposition to the project “daunting.” However, he said, “we have to be respectful of the opposition” and “we have to hear people’s views.”
The company hopes to avoid a legal fight, he said, and “we really think that with greater discussion, we can convince the first nations of the merits of the project.”
NEW PROJECTS IN THE PIPELINE
Enbridge Inc. is preparing to raise billions of dollars more as it works to finance a series of expensive new projects.
The pipeline company recently expanded its roster of “commercially secured and risked projects” – those plans it is confident it can build – to $26-billion from $20-billion.
To build those, it plans to raise $11.4-billion in debt and between $400-million and $600-million in equity between now and 2015. That comes on top of the $1-billion in equity it has already brought in through preferred share issuances this year.
The company is also looking to possible acquisitions, with chief executive officer Patrick Daniel saying Wednesday he is “definitely” interested in buying into the Capline pipeline, a 1.2-million-barrel-a-day pipe that currently carries crude from Louisiana to Illinois. Capline’s owners, including Marathon Petroleum Corp., have discussed reversing that pipeline to bring south the surge of new oil from Canada and northern U.S. states.
Enbridge might be interested into buying into such a project, as it did with the Seaway pipeline it is already working to reverse, with shipments from Cushing, Okla., to Texas expected to start May 17.
“Allowing access of Canadian crude to the eastern Gulf is something that we have looked at on a number of occasions,” Mr. Daniel said.
The rapid onset of new oil volumes in the West has triggered an industry-wide scramble to find ways to move that product to market. Part of Enbridge’s growth plans now include a bid to move oil to refineries in Montreal by sending it east from Sarnia, Ont. The company’s Line 9 currently runs in the other direction, and Enbridge, which has until now only discussed plans to partly reverse the line to Central Ontario, said Wednesday it is actively seeking commercial support to send oil to Montreal, and perhaps beyond.
Asked whether he anticipated sending oil to Irving refinery facilities on the Atlantic Coast, Mr. Daniel said, “I think it’s fair to say that we could foresee that.”
Sending about 250,000 barrels a day of oil to Montreal would cost the company more than $2-billion, for a project that would entail expanding a series of pipelines along the way.
Enbridge reported first-quarter profit of $264-million, or $376-million after accounting for mark-to-market accounting on risk management derivatives that performed poorly during the quarter. On an adjusted basis, that is a 14-per-cent rise over the same period in 2011. Corporate revenue for the quarter climbed 2 per cent to $4.8-billion.
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