British Columbia has formally rejected Enbridge Inc.'s proposed Northern Gateway pipeline to the West Coast from Alberta, saying the company has failed to adequately explain how to deal with a major heavy oil spill on land or in coastal waters.
In its final written response to the federal panel that has been conducting hearings for the past 17 months, the B.C. government said it cannot support the $6-billion project as currently presented because its concerns over potential environmental damage, and Enbridge's ability to respond to disasters, have not been addressed. However, the B.C. government says it is possible – though unlikely – that Enbridge can win it over.
Still, the thumbs-down is a blow to Enbridge and the Alberta-based oil patch, which is pushing intensively for increased oil exports. It shows the re-election of Premier Christy Clark's B.C. Liberals this month did not soften the government's opposition to the project, which is aimed at opening up lucrative new Asian markets for Alberta's growing volumes of oil sands crude – and helping reduce the deep discounts on the province's oil in North American markets.
B.C. joins a host of opponents to the 1,177-kilometre pipeline to Kitimat, B.C., from Bruderheim, Alta., including environmental groups and First Nations communities that warn of ecological risks. It does not have veto power over what would be a federally regulated project but its opinions carry much weight in the Joint Review Panel's deliberations, said Michal Moore, an economics professor at the University of Calgary and a former energy regulator.
"I would think that when they play a card like that, when they don't have direct control over the decision, that card is meant to be a place marker that says, 'This issue is really important to us and we want to make sure that you take it very seriously,'" Mr. Moore said. "It's the moral equivalent of throwing down a gauntlet, 'that you better address our concerns in your decision, no matter what the decision is.'"
The B.C. government had already laid down five conditions it said would have to be met before it would consider supporting the 525,000-barrel-a-day pipeline, or any others that would carry heavy oil across its rugged, mountainous territory.
They include spill-readiness provisions for land and for water, successful completion of regulatory processes, successful dealings on First Nations legal and treaty rights and a demand for a "fair share" of fiscal and economic benefits.
"We have some real concerns and we've been working on this file for a year and a half," B.C. Environment Minister Terry Lake said in an interview. "At the end of the day, we've summarized all of the concerns. This isn't the final say in terms of the British Columbia position, but it certainly indicates that it is a very, very tall order for us to be supporting this."
The government noted in its submission to the Joint Review Panel that Enbridge has testified it will effectively clean up all spills on land, and has committed to responding to a marine leak of up to 32,000 tons of oil in six to 12 hours. The company has said it could recover that amount within 10 days.
But the government said it is not clear from the evidence how Enbridge could guarantee such response. "'Trust me' is not good enough in this case," it said.
John Carruthers, president of Enbridge's Northern Gateway Pipelines unit, said the concerns are consistent with those B.C. voiced during the hearings, and not an insurmountable hurdle. There is still room for consultation and negotiation, he said. "Now, the key is that we sit down with the province of B.C. and work with them to address their concerns," he said. "The underlying concerns are legitimate. We've tabled some very significant plans over and above what's being done today, over and above what's required by regulation. But we do want to meet with the province of B.C. to understand if there's anything else we can do."
Alberta, whose economy has much riding on new routes to the Pacific for its oil sands, also said it believes an eventual agreement is possible. "This is an ongoing, federally regulated review and I expect that the concerns brought forward by the government of British Columbia will be discussed and addressed through that forum," Alberta Environment Minister Diana McQueen said in a statement. She declined to be interviewed.
Part of B.C.'s worry rests with uncertainty about what happens to diluted bitumen if it leaks into bodies of water, as was the case in the company's 2010 pipeline rupture in Michigan, which complicated the expensive cleanup of the Kalamazoo River system. In its submission, the B.C. government said Enbridge's evidence on the issue during the hearings is inconsistent.
Environmental groups across North America applauded B.C.'s tough stand on the project. "The government's detailed submission concluded clearly that Enbridge's project as proposed isn't worth the risk," said Eric Swanson of the B.C.-based Dogwood Initiative.
With files from Brent Jang in Vancouver and Kelly Cryderman in Calgary.