Five oil sands companies have revealed themselves as supporters of the controversial Northern Gateway pipeline, lending their names to a massive infrastructure proposal that has stirred intense opposition in Western Canada.
Cenovus Energy Inc., MEG Energy Corp., Nexen Inc., Suncor Energy Marketing Inc., a subsidiary of Suncor Energy Inc., and Total E&P Canada, the domestic arm of French giant Total SA, have each spent money to help develop the $6.6-billion pipeline, which if built will funnel massive volumes of oil sands crude to the West Coast for export to California and Asia.
Each has signed up as a “funding participant,” joining the others in buying some of the 10 units that make up a $100-million fund Enbridge Inc. sold in 2007 and 2008. The money was used to fund preconstruction development and engineering of the project.
The names were disclosed in National Energy Board filings made less than a week before the start of regulatory hearings that will examine Northern Gateway’s commercial and environmental desirability.
For years, companies declined to confirm their participation in Gateway, which has attracted substantial criticism that has, until now, been directed toward Enbridge itself. But now, with public hearings beginning next Tuesday, companies are emerging publicly as Enbridge seeks to buttress its argument to the NEB that there is substantial need for the pipeline.
“The more business partners that we have step up to the plate and add their voice to that momentum, the better we are for that,” Gateway spokesman Paul Stanway said. “We’re seeing a groundswell of opinion in favour of Northern Gateway.”
Opposition has also been swelling – more than 100 first nations groups in B.C. have categorically rejected the project. The prospect of bringing 525,000 barrels per day of oil to the coast, and importing a further 193,000 barrels of an oil-thinner called condensate, has stoked substantial concern among those who believe a spill will be environmentally catastrophic. Indeed, one letter to the NEB says the project will engender “ecocide.”
Resistance is especially strong among those who believe spills from Gateway will sully vital B.C. waters. And environmental groups have been eager to learn which corporations stand to profit from the project.
“It’s nice to know who British Columbians are dealing with,” said Eric Swanson, an anti-oil-tanker campaigner with the B.C.-based Dogwood Initiative.
Companies may suffer reputational risk from being identified, he said. “The industry has a lot of problems in Northern Alberta, image-wise, and I don’t think being associated with the first-ever oil supertankers through the Great Bear Rain Forest is going to help their image any,” he said.
Supporters, however, say Canada needs new markets for its oil, especially as U.S. demand begins to wane. Two recent studies have shown that the country stands to profit handsomely from accessing new markets, which could bring higher prices. One study showed a $72-billion gain, the other estimated it would be nearly double that. That financial imperative has brought support from the highest ranks of the Canadian government, and industry.
Gateway’s financial backers also include Chinese state-owned energy company Sinopec. And others have yet to step forward. Market sources have said they believe China National Petroleum Corp. also holds an interest in Gateway. Sinochem Group, another Chinese energy firm, is also believed to support Gateway.
“It is just all about that access,” Cenovus spokeswoman Jessica Wilkinson said. “It’s important for the industry to search out these new markets.”
For now, existing pipelines have plenty of spare capacity. But companies like Cenovus have huge growth plans – and are concerned that the coming flood of oil will overwhelm existing markets in the U.S. Midwest, which could become “saturated, and that might lead to decreases in price,” Ms. Wilkinson said.
And spokespeople for the newly disclosed corporate backers said it is not for them to decide what sort of environmental risk the project will create.
Such assessment is “not our role,” said Suncor spokeswoman Sneh Seetal, who said that is the job of the federal joint review panel that will assess it. “There is a comprehensive regulatory framework in place that governs development … of large infrastructure projects,” she said.
Enbridge says nearly two dozen first nations groups have also signed up as equity partners.