Go to the Globe and Mail homepage

Jump to main navigationJump to main content

(Andrew Querner)
(Andrew Querner)

The Big Pipe: Enbridge's plan to connect the oilsands and China divides locals Add to ...

Later, he apologizes. For him and his people, Gateway has stirred a deep antipathy born of a history of wrongful treatment by outsiders. “I’m sorry that I used the word ‘genocide.’ But that’s how I feel in my heart,” he says. “They’ve tried for years and years and years to remove us from our land so that projects such as these can go through.”



**********************************************

In January, 2010, the federal government created the joint review panel that will assess whether Gateway is in the public interest and whether it will cause environmental damage. The panel’s blessing is not assured. Similar processes have denied applications in the past—and the uncertainty surrounding public approval of Gateway has created an extraordinary circumstance for Enbridge. Unlike almost every other pipeline project in modern Canadian history, most of which are submitted for approval with the bulk of their capacity spoken for, Gateway has been brought forward without a single contracted crude shipper. In fact, approval is so uncertain that Enbridge has yet to buy any of the land along the Gateway route.

“It’s not a traditional pipeline across the prairies, where there’s very little risk that you won’t get approvals and get your permits, and where you can enter into those commercial agreements early,” says Doering, the engineer. Some of the shipping agreements with crude producers will, however, be presented to the panel before public hearings start, likely late in 2011, he says.

Still, Gateway remains many years from being built. Officially, Enbridge says it could be complete by 2016. Privately, company officials acknowledge timelines will likely stretch. Approval may be delayed by the lawsuits that are almost certain to erupt as First Nations use courts to thwart Gateway’s advance. The legal questions are tricky, since the duty to consult and accommodate native people lies with the Crown, rather than Enbridge. Since Enbridge will pay economic rent to the government for crossing Crown land—the majority of the route is on government land—it’s also largely the Crown that will then have to work out compensation to First Nations. Even if those issues are resolved, construction will likely be slowed by protest efforts.

Success also requires Enbridge to convince a skeptical oil patch. Its arch-competitor, TransCanada, has seriously looked at shipping oil to Kitimat—but has publicly dismissed the idea as being too difficult to get approved. Companies have other options to ship their product, too: Kinder Morgan has a plan to expand an existing crude pipeline from Alberta to B.C.’s Lower Mainland. That pipe is already sending roughly a tanker per month to Asia. CN Rail also has a “pipeline on rail” scheme that could see crude brought to Prince Rupert by train. CP Rail is pursuing a similar idea for exports from Vancouver.

And even companies that like Gateway—or at least, the idea of Gateway—aren’t ready to commit to it. “It’s really important to the Canadian economy to find new markets for its products,” says Steve Laut, president of Canadian Natural Resources Ltd., one of Canada’s most important oil and gas producers. “The only problem we have is that for a producer to sign up for 20 years to get a pipeline built, they have to have pretty strong assurances they have a 20-year market on the other side.”

And despite Asia’s growth story, companies like Laut’s are worried. If they sign a contract with a Chinese refinery, is there any assurance that the refinery won’t change allegiance within a few years? “You have to make sure you mitigate your risk,” he says. “It’s going to take some while to get that worked out.”





**********************************************

Ellis Ross and Sean O’Driscoll are not far from each other—at least not in distance. Just a 30-minute drive separates Kitimat, the B.C. coastal town that was built to house workers at the Rio Tinto Alcan smelter, from Kitamaat Village, home to the Haisla people. But the street signs speak to the gulf that divides them. In the village, Ellis Ross stands on Haisla Avenue, next to the waters his ancestors have fished for centuries. In Kitimat, Sean O’Driscoll is on Industrial Avenue, not far from the paper mill where he spent decades working.

Single page

In the know

Most popular videos »

Highlights

More from The Globe and Mail

Most popular