By JEREMY vAN LOON and ANDREW MAYEDA
The Canadian government approved Enbridges Northern
Gateway pipeline, eliminating the final major regulatory
obstacle for the conduit that would move Alberta oil to the
Pacific coast for shipment to Asia.
The approval of the C$6.5 billion ($6 billion) project by
Prime Minister Stephen Harpers cabinet is subject to
Enbridge satisfying the 209 conditions placed on the proposal
by a regulatory review panel in December, Natural Resources
Minister Greg Rickford said in a statement from Ottawa.
The proponent clearly has more work to do in order to
fulfill the public commitment it has made to engage with
Aboriginal groups and local communities along the
route, Rickford said in the statement.
Canadas petroleum producers are seeking ways to get
land- locked and price-depressed Alberta crude to world
markets, especially after delays to TransCanadas
proposed Keystone XL pipeline. Harpers government has
made building energy infrastructure a national priority, part
of C$650 billion of investment in more than 600 existing or
s over the next decade to
develop the countrys natural resources, including the
worlds third-largest pool of recoverable crude
Crude producers such as Canadian Natural Resources and
Cenovus Energy, facing a five-year average discount of almost
$20/bbl for their oil relative to US benchmarks, are seeking
new markets. Canadian oil-sands output is set to more than
double to 4.1 million bpd by 2025 from 2013, according to the
Canadian Association of Petroleum Producers, an industry
While the federal governments endorsement is the last
major federal regulatory hurdle for a project first proposed
a decade ago, the pipeline still faces opposition from environment
al and aboriginal
groups who have promised to delay its construction
The province of British Columbia, which controls local
permits, has also set five conditions that include financial
benefits and environmental protection before signing off on
The 1,177-kilometer (731-mile) conduit would start in the
eastern Alberta plains at Bruderheim, about 35 miles
northeast of Edmonton, and cross the Rocky and Coast mountain
ranges to the Pacific port of Kitimat, British Columbia,
carrying as much as 525,000 bpd of diluted bitumen. From
there, the fuel would be loaded onto tankers and shipped
through the Douglas Channel, a passage that narrows to less
than a kilometer.
Opposition lawmakers in Ottawa condemned the decision. Tom
Mulcair, leader of the main opposition New Democratic Party,
vowed to rescind the approval if his party wins elections
scheduled for next year.
You can no longer force projects like this from the top
down, Mulcair told reporters in Ottawa. We are
talking about a severe threat to social order, social
Liberal leader Justin Trudeau also said hed overturn
the decision if he wins the next election. This
government has from the very beginning been a cheerleader for
this pipeline when what we need is a referee.
Earlier today, Harper defended the process that led to the
decision, telling lawmakers in Ottawa the government makes
decisions based on the facts.
This government has approved some projects, not
approved others, conditionally approved some based on the
findings of panels, based on the findings of fact,
Alberta Premier Dave Hancock called the decision a step
forward in accessing new markets for Canadas energy
We recognize there is still much work to be done with
the Northern Gateway project
and we look forward to the
opportunities it presents for all Canadians, Hancock
said in an e-mailed statement.
Along with recommending approval of Northern Gateway in
December, a regulatory panel imposed 209 conditions, which
CEO Al Monaco said required Enbridge to recalculate the cost
of the project. The Calgary-based company hasnt
provided a timeline for when the new estimates will be made
Under the regulators conditions, Enbridge must have
liability coverage of C$950 million and lead research efforts
on heavy-oil spills in marine and freshwater environment
s. Other conditions
include building extra oil storage facilities
at Kitimat and
establishing an emergency-response plan with the ability to
handle a spill of about 230,000 bbl, more than three times
the legal requirement.
Aboriginal groups, including the Yinka Dene Alliance, have
threatened legal action to stop the pipeline or delay its construction
. Opponents fear an
oil spill would destroy their fisheries and shellfish beds.
al and aboriginal
groups have already filed lawsuits in federal courts seeking
review of the regulators recommendations.
Harpers government has introduced regulatory changes,
added safety regimes for pipelines and marine-oil tankers and
stepped up engagement with aboriginals in an effort to
bolster public support for the development of energy
Only a minority of British Columbians wanted Harpers
government to approve the project. Thirty-four percent of
residents said they want it blocked, while 33% want it
delayed for further review, according to a
Bloomberg-Nanos poll published on June 3.
Twenty-nine percent say they wanted Northern Gateway
approved, according to the poll.
The poll also showed fears of an oil spill are top of mind.
Thirty-six percent of respondents said the idea that the
pipeline might lead to a spill best represented their view.
Next was the perspective that the project will create jobs in
the province, at 25%. Only 15% said the idea that the
pipeline will contribute to climate change best represented
Forty-seven percent of respondents said theyd be less
likely to vote for Harpers Conservative Party if the
government approves the project, including 19% of those who
said they supported Harper in the 2011 elections.
British Columbia Premier Christy Clarks five conditions
for backing the project include being financially compensated
for accepting the risks associated with spills. In November,
British Columbia and Alberta signed a framework deal that
sets the ground rules for development of pipeline projects in
the nations westernmost province.
Northern Gateway is one of C$36 billion worth of commercially
secured projects that Enbridge, Canadas largest
pipeline company, is developing through 2017, including
reversing an oil pipeline to carry crude to refineries in
Quebec. The company expects earnings per share to grow 10% to
12% through 2017.
While crude producers say pipelines would ease transportation
bottlenecks that have suppressed the price of Canadian heavy
oil, efforts to build energy infrastructure have run into
opposition both at home and in the US.
President Barack Obama said in April he was delaying a
decision on the Keystone project
because of a court battle
in Nebraska, extending a review now in its sixth year.