Enbridge Inc. is rejecting two key tenets of the B.C. government's position on the Northern Gateway pipeline – that compensation should be tied to environmental risk and the project is effectively dead if the New Democratic Party wins next spring's election.
"It's not a question of trading off risk and profit or risk and reward," Enbridge chief executive officer Al Monaco told The Globe and Mail. "Safety is the first thing. Once you have that, our job is to mitigate the risks as much as possible. So we're not looking at this as boy, if there are more benefits, there are more risks that can be taken."
In a wide-ranging interview, Mr. Monaco said he's not convinced that the election of an NDP government in B.C. spells doom for the project, as B.C. Liberal Premier Christy Clark and others have suggested. And he said that when he looks at what B.C. stands to gain from the project economically – something Premier Clark has complained loudly about – it's quite substantial. "If you take royalties off the table for a moment, when you look at the benefits – labour income, tax revenue, capital investment, all of it – B.C. has the most benefits out of this project," he said.
Asked if he thought the project would be effectively dead if the NDP gets in, he said: "I don't think so … we have to outline the economic rationale and sustainability rationale and let the project unfold through the regulatory process."
Mr. Monaco did concede that the company has made mistakes on a number of fronts that hurt the company's ability to build support for its Northern Gateway pipeline. But he says the West Coast remains the most attractive option for getting Canadian oil to Asia. To that end, Mr. Monaco opened the door to the possibility of building the pipeline to Prince Rupert instead of Kitimat – a move that would eliminate the need for oil tankers to traverse waters bordering the environmentally sacred Great Bear Rainforest.
Mr. Monaco's comments come against a backdrop of increasing uncertainty for the country's energy sector.
With the U.S. making rapid gains in oil production, there is pressure building on Canada to expand its customer base in Asia. At the same time, resource experts in China are warning that Alberta's oil sands risk becoming irrelevant if pipelines that would serve the Asian market aren't built soon.
Enbridge has been criticized for failing to recognize – and respond to – early opposition that was built in B.C.
Mr. Monaco said that the company could have done a far better job of laying the groundwork for success, such as consulting earlier with stakeholder groups and spending more time on the ground along the route of the proposed pipeline. He added that the project should not have been based out of Alberta, a mistake the company has since rectified, including by locating the project's main office in the province. "We should have had our own people working in the communities," he said. "They are our best ambassadors for what we do, especially in today's environment."
Much of the controversy that has enveloped Gateway has been generated by plans to have oil tankers load up at the pipeline's terminus in Kitimat and then head south through the narrow Douglas Channel before setting out across the Pacific. It is a route that poses a risk to some of the most ecologically pristine coastline in the world, with that risk fuelling widespread opposition in B.C.
Prince Rupert offers a direct passage to Asia and a port capable of handling large tankers. But it would mean the pipeline would have to navigate the dense forests of the Skeena Valley, which would be far more technically challenging than the Kitimat line from an engineering standpoint.
There is a natural gas pipeline, however, that has run through the Skeena area for more than 40 years.
Mr. Monaco said that while the Prince Rupert option might lessen opposition to Gateway, it's not without its own issues. "When we looked at Prince Rupert initially, we felt that while travelling along the Skeena was doable, we thought the risks to Kitimat were lower. Now, that doesn't mean that Prince Rupert wouldn't be possible. That's the decision we made at the time. Are we open to potentially going to other places? I suppose. But at the moment we have an application that goes to Kitimat."
Mr. Monaco downplayed any idea of building a pipeline north and transporting oil through Valdez, Alaska, or east, through the Maritimes and around North America to Asia.