Any day now, the federal cabinet is expected to make a final decision on whether to approve Enbridge Inc.'s proposed $7.9-billion Northern Gateway pipeline. The project has already been given tentative approval by the National Energy Board as long as it meets a long list of environmental, safety and financial conditions. But a stalwart group of project opponents promise to maintain the fight against the pipeline.
Here's what's at stake for the key players:
The Calgary-based pipeline company has a lot of skin in the game. Enbridge first contemplated shipping oil west in 1998 and submitted a formal application to the joint review panel – the independent body mandated by the National Energy Board to assess the project on environmental and economic grounds – for the Northern Gateway project in 2010. It has staked its corporate brand in British Columbia on the 520,000 barrels-per-day project, and with its oil company partners, the potential shippers, expects to spend $400-million on the regulatory process alone.
Western Canadian oil exports now go almost exclusively to the U.S., but because Canadian heavy oil is of lower quality than light oil, and must be transported greater distances to get to key U.S. markets, it typically trades at a lower price. The industry wants to boost its return per barrel of oil by shipping Canadian bitumen to new Pacific Rim markets, where better prices could be realized. Getting new pipelines built to new markets is crucial to the expansion of Alberta’s oil sands in the decades ahead, according to the Canadian Association of Petroleum Producers.
Federal Conservative government
Ottawa faces a tricky balancing act in making its decision. It wants to approve pipelines that diversify markets for Canadian oil. But giving Northern Gateway the green light could have political consequences. Recently, the Harper government has been circumspect about commenting on the pipeline but in 2011, cabinet minister Joe Oliver said: “Gateway, in our opinion, is in the national interest.” This week opponents of Northern Gateway started an “Enbridge 21” campaign, urging voters to contact the province’s 21 Conservative MPs to let them know they will “pay a political price” unless the project is rejected. If the project is approved, legal challenges from First Nations and environmental groups regarding the regulatory process are likely to end up in court this fall.
First Nations and environmental groups
Aboriginal groups, environmentalists and communities living along the proposed pipeline route say the project threatens wildlife habitat, and the risk of land and marine spills outweigh Northern Gateway’s economic rewards. B.C. opposition has crystallized around oil tanker traffic and the potential for oil spills in and around Douglas Channel and Haida Gwaii. Enbridge, however, promises that jobs and an offer to First Nations for a stake in the project will help British Columbia communities. Increasing greenhouse gas emissions from Alberta’s expanding oil sands production has also played a part in the opposition.
British Columbia and Alberta relations
If Jim Prentice wins the contest to lead the Alberta PC party and thereby becomes the next Alberta premier, expect a strong push this fall to get pipeline projects built to the West Coast. The former aboriginal affairs minister has credibility with many Canadian First Nation communities, but much of the opposition to the pipeline is entrenched. While British Columbia Premier Christy Clark says she wants resource projects to go ahead, and to work co-operatively with Alberta, she also maintains that no oil pipeline project will move forward until her province’s five conditions are met.