Northern Gateway Blog Feed

Marshall tour corrects spill misperceptions

Fri, 10 May 2013 16:14:57 -0600

A group of leaders from communities along the Northern Gateway route joined Enbridge for a tour of the areas directly affected by Enbridge’s 2010 spill of crude oil into the Kalamazoo River.

“Having worked all over the proposed Gateway route for many years, I’ve answered many questions about the Kalamazoo clean-up efforts,” said Michele Perret, Northern Gateway’s senior manager of community relations. “There are all kinds of myths out there about the incident and the clean-up. We wanted to give these community leaders an opportunity to see the facts for themselves. So we organized a tour, arranged experts to answer questions and opened ourselves up to some very skeptical scrutiny of our efforts in Marshall over the past few years.”

Dave Jephson is the deputy fire chief for the city of Terrace, BC. He spoke to CBC Radio the day after touring the Kalamazoo River, May 10, 2012.

“Our city felt that it would be an important trip, a fact finding trip to find out who Enbridge is,” Dave told the CBC. “[To] find out how they handled this spill, and to get rid of some of those myths that possibly are out there that are floating around a lot, you know in many places.”

Given the trip was arranged and paid for by Enbridge, there is skepticism that participants were given complete access to the area and provided with straightforward answers to their questions. The CBC asked Dave if he felt he received an unbiased view while on his tour.

“I can tell you overwhelmingly yes we did,” Dave told CBC’s listeners. “…we were introduced to a whole bunch of Enbridge staff and some other community members. We were able to review pictures and slides, before and after photos. That generated a lot of questions, a lot of pointed questions directed at Enbridge—the good, the bad and everything like… They were very open, they were very free with all questions, with all input requested on them.”

For some people living along the Northern Gateway route, the misperceptions surrounding the Marshall incident conjure up images that don’t match reality.

Dave’s description of what he saw while in Marshall and on the Kalamazoo River is in stark contrast to many of the misconceptions we hear and read from some who have never seen the river for themselves:

“We traveled five miles through the river…. and honestly we can tell you that we found nothing. Some [tour] members dug into the sand and, you know, again, a lot of people at home say ‘dig into the sand because you are going to find clumps of oil.’ Well, we dug into the sand. We went to one of the sites where the EPA says needs to be re-dredged. We stuck a paddle down into the rock and gravel and silt and mud. They found one fleck [of oil] the size of the top of a pin… the State of Michigan and the scientists say don't [dredge] it anymore… [Enbridge has] done a great job…. So there is controversy right there on how much more that needs to be cleaned and honestly we could not tell, and you would not know that there was a spill there unless you were told…. many of us and many of the local officials from Marshall all unanimously have said that if [a spill] does happen let's hope it happens with Enbridge because what they did and how they cleaned it and how they responded was simply amazing.”

The Deputy Chief of the Terrace Fire Department says the tour will allow him to deliver a factual message to his community on Enbridge and the Northern Gateway Project:

“…I’m going to go home and I’m going to give the facts. Councils and communities are taking a position on this, individuals are taking a position, you know I’m going home and when people ask me I’m going to say, you know what, look for the facts, you know, dig deeper into the facts on who Enbridge is… don't believe everything you hear, don't believe everything that you read because in fact there are a lot of myths out there which are actually untrue… We asked very difficult questions involving Northern Gateway…. It’s a big issue. It’s not a northwest issue it’s not a BC issue. It’s a national issue and I would say everybody has the right to their opinion… But make the decision based on good facts….”

Understanding Gateway’s risk assessment work

Fri, 03 May 2013 14:46:54 -0600

The purpose of the Project’s Quantitative Risk Assessment (QRA) is to inform project construction and operational design; while we have spent enormous effort and resources modeling the possibility of an incident, our number one priority is safety and preventing incidents from occurring in the first place by adopting suitable mitigation measures.

It’s important to understand how the QRA came about. At the core of Northern Gateway’s values are inclusiveness and collaboration. Long before our project application was submitted to the National Energy Board, we began an extensive process of consultation with potentially affected communities and groups we identified as having an interest in our project, including First Nations and other aboriginal communities, local civic organizations and Environmental Non-governmental Organizations (ENGOs).

A 2008 survey of ENGOs provided the following direction for the Project’s ongoing consultations:

the process should be open and transparent
resourcing should be made available to assist organizations with their participation
a reasonable schedule for consultation should be established collectively
feedback received should have the ability to influence project decision-making
opportunities to provide meaningful input should be provided
participation should not preclude an organization’s ability to represent its views or objections to the Project in future regulatory proceedings

In accordance with these suggestions, the Project established the Quantitative Risk Analysis (QRA) Working Group, Community Advisory Boards and other Advisory Working Groups to work on collaborative initiatives.

Invitations were sent to the following groups to participate in the QRA Working Group:

British Columbia Canadian Parks and Wilderness Society
Coastal First Nations Turning Point Initiatives
City of Prince Rupert
Council of the Haida (Old Masset Village Council, Skidegate Village Council)
David Suzuki Foundation
District of Kitimat
Dogwood Initiative
Hartley Bay (Gitga’at Nation)
Gitxaala Nation (Kitkatla)
Kitamaat Village Council (Haisla Nation)
Kitasoo/Xaixais Nation
Lax Kw’alaams First Nation
Living Oceans Society
Metlakatla First Nation
Nature Conservancy of Canada
Pacific Marine Conservation Caucus
Panel Manager, CEA Agency
Pembina Institute
Pacific North Coast Integrated Management Area Coordinator, Fisheries and Oceans Canada (“DFO”)
Sierra Club of Canada, British Columbia Chapter
Skidegate Band
Watershed Watch Salmon Society
West Coast Environmental Law
World Wildlife Fund

Despite our willingness to involve them in the process, a number of these groups declined to participate in the QRA Working Group. Those organizations that did participate helped to select the vendor who would conduct the Marine QRA, the world-leading specialists in this area, Norway-based Det Norske Veritas. The QRA Working Group also reviewed the methodology and approach that would be used by DNV to complete the QRA, which included the following six stages:

system definition
hazard identification
frequency assessment
consequence assessment
risk evaluation
risk mitigation

The working group then had an opportunity to discuss and present questions to DNV and present concerns or suggestions regarding DNV’s approach and methodology throughout the study period.

Following detailed discussion of DNV’s methods and analysis by the QRA Working Group, DNV outlined a preliminary schedule for completing the remainder of the QRA work, and it was discussed how the QRA Working Group would review and provide comment and input into draft materials being prepared by DNV.

In addition to the QRA Working Group review, several government organizations also examined the QRA report through the Transport Canada-led TERMPOL review process. Furthermore, intervenors in the Joint Review Panel process have also rigorously tested the methodology and findings of the QRA during technical public hearings in Prince Rupert.

Recently, self-declared Gateway project opponent, Tom Gunton of Simon Fraser University, author of a seriously flawed analysis of the Gateway QRA, and an expert witness for the Coastal First Nations intervenor group—who had every opportunity to question technical aspects of the report during the public hearing process, but chose not to do so—told journalists that the Project needs to “go back and redo its risk assessment” to allow for the input of other parties and experts to help select its methodology and vendor. Clearly, this has already occurred in an open and transparent manner.

Spill study inflates risk, misrepresents Gateway

Fri, 26 Apr 2013 14:18:27 -0600

A study released today by Tom Gunton, of Simon Fraser University, comes to a flawed set of conclusions about the likelihood of an incident related to the proposed Northern Gateway Pipeline.

Here is our position on the issue of safety: Northern Gateway has demonstrated an unwavering commitment to marine and pipeline safety. Our efforts are focused on ensuring safe operations coupled with rigorous emergency response capability in the unlikely event of an incident. While we have spent enormous effort and resources modeling the possibility of an incident, our number one priority is on safety and preventing an incident from occurring in the first place.

We are very concerned about the misleading report released by Mr. Gunton, who was a witness for the Coastal First Nations organization during the Northern Gateway Joint Review Panel process.

Mr. Gunton should have made his study available to the JRP process, the most thorough review of a pipeline that’s ever taken place in Canada. All of Northern Gateway’s conclusions have been subject to peer review, information requests and questioning by intervenors and the Joint Review Panel.

However the author chose not to participate in the JRP process with this study. Instead, he chose to release this study after the process ended. Given the timing, we can only conclude this study was purposely kept off the evidence record to avoid being tested in the hearing process.

Our experts have identified a number of omissions, flawed assumptions and modeling errors in the study and have serious concerns with its conclusions:

The spill probability numbers are inflated: The author uses oil throughput volumes that are nearly 40 per cent higher than those applied for in this project which also inflates the number of tanker transits using these inflated volumes
The pipeline failure frequency methodology adopted by Mr. Gunton is flawed, and does not approximate what would be deemed a best practices approach to the scientific risk analysis of a modern pipeline system
Mr. Gunton based his failure frequency analysis on a small subset of historical failure incident data. Why would he limit the source of his data to two pipelines with incidents not reflective of the industry experience and not reflective of the new technology proposed for Northern Gateway?
The study results are not borne out by real world tanker spill statistics. Based on Mr. Gunton’s estimates we should expect 21 to 77 large tanker spills every year worldwide while in reality after 2000 it has been below 3 per year and in 2012 there were zero.

We question why Mr. Gunton chose to exclude this report from the JRP process when he has had ample opportunity to submit evidence through his longstanding relationship with registered intervenors Coastal First Nations. He could have also tested our risk assessment evidence through this lengthy, rigorous and transparent process, however, both he and Coastal First Nations chose not to.

Furthermore, this flawed study appears to be a follow up to a March 2012 report Mr. Gunton wrote for the Coastal First Nations which was widely used in their public relations efforts but not submitted as evidence in the Joint Review Panel process—which leads us to question Mr. Gunton’s suggestion today’s report wasn’t filed as evidence because of its date of publication.

We’d like the public to know that our Quantitative Risk Analysis work provided ample opportunity for project opponents like Mr. Gunton and the Coastal First Nations to influence design methodology as well as help select the experts contracted to conduct the work.

It’s unfortunate that studies like the one by Mr. Gunton do more to mislead than inform.

Guest opinion: Canadians don't understand how important oil sands are to our future prosperity

Tue, 23 Apr 2013 15:13:36 -0600

This opinion editorial first appeared in Troy Media on April 23, 2013

At its core, Canada is an export nation. And our largest export is oil and gas.

As Canadians, we’re lucky to have the third largest oil reserves in the world – 97 per cent of them located in the oil sands in Northern Alberta.

We’ve gained the skills to exploit these reserves in an environmentally-friendly manner and to export them primarily via pipelines using innovative technology and tough environmental regulation.

During the next 25 years, the oil sands are expected to contribute over $2.1 trillion to the Canadian economy – about $84 billion a year. That’s money that goes to all parts of Canada and creates jobs and industry.

Over that same period, the oil sands are expected to contribute about $311 billion in federal taxes to help pay for Canada’s health, education and social programs.

And new oil sands investments are predicted to grow Canada’s oil sands-related jobs from 75,000 in 2010 to 905,000 in 2035 – creating 126,000 jobs in provinces other than Alberta.

The energy sector remains the largest employer of Aboriginal people in the country, and in 2010 purchased about $1.3 billion in goods and services from Aboriginal-owned businesses.

So why, given the enormous importance of this industry, does the energy sector need to apologize or suggest it can do better? Sure it can do better – it are still in the early stages of developing this resource, but it must stop apologizing.

Canada has some of the toughest environmental and human rights laws and regulations on the books. Oil sands greenhouse gas emissions account for 1/600th of the world’s carbon emissions and, through the ingenuity of Canadians, those emissions have been declining. Since 1990, carbon emissions intensity from the oil sands has been reduced by 26 per cent.

Canada is developing world-leading carbon capture and storage projects. In fact, a Calgary-based company is amongst the finalists in the Virgin Earth Challenge for carbon negative technology – further reinforcing our technical expertise and commitment to the environment.

Alberta’s oil sands and Canada’s extensive pipeline network are highly regulated and closely monitored.

New proposed pipelines like Northern Gateway will be among the most advanced, safest pipelines in the world, and will include sophisticated computerized monitoring systems, aerial patrols, routine inspections and detailed education outreach to local landowners and communities.

Unfortunately many Canadians simply don’t understand how important the oil sands – and the pipeline networks that transport this oil – are to the future strength of the nation.

A recent study by the University of Calgary on energy literacy demonstrates how much work needs to be done to educate Canadians on energy issues.

As the University of Calgary’s Jean-Sebastien Rioux notes, “Canada is in danger of having a general population that is divorced from the process of wealth creation via the responsible development of our plentiful natural resources – both renewable and non-renewable – which account directly for over 15 per cent of our Gross Domestic Product, and about 20 per cent if we include the indirect contribution to our GDP through the purchase of goods and services such as construction, machinery, professional services and transportation.”

We need to vastly improve energy literacy in this country so that we can have intelligent debates about energy policy.

We must begin to realize the importance of diversifying our energy market beyond the United States. Canada loses $50 million a day or $17 billion a year because our only customer, the United States, demands a discount on the international market price.

If Canadian oil could reach tidewater via pipelines, like Northern Gateway, to the West Coast, we could eliminate this discount, meaning more money in provincial and federal coffers – and more jobs across the country. Similarly moving product east via TransCanada’s converted gas pipeline to Quebec and New Brunswick provide opportunities to get to tidewater.

The risks of building and operating pipelines are manageable; it can be done in a safe and environmentally-sound manner.

The real risk is a public that’s been and continues to be misinformed on energy matters.

The focus must now be on better educating Canadians on our natural resource and energy abundance – and on the transportation networks that get these resources to market.

No less than the future prosperity of this country depends on it.

Bruce Graham is President and CEO of Calgary Economic Development.

Questionable evidence

Mon, 15 Apr 2013 11:09:36 -0600

The environmental assessment of Northern Gateway is an expert-driven scientific process. Typically, the scientific evidence that is submitted in the proceedings is written and compiled by subject matter experts on a wide variety of technical information related to engineering, environment, economics, socio-economics and marine-related matters.

The larger conversation around the Northern Gateway project is not limited to the science, however. In fact, groups opposed to the project often stray far from science in developing and communicating their arguments on the project.

At the Joint Review Panel hearings in Prince Rupert, a document submitted by Living Oceans Society – that was also relied upon as evidence by several other intervenors – came under questioning.

The report on tanker technology was authored in 2011 by the then Living Oceans' Energy Campaign Manager. When questioned at the hearings on April 11, 2013, the report’s author admitted she has no academic or working background in naval architecture, marine, maritime, mechanical or any other field of engineering.

Further reading: Strict regulations set course for tanker industry

According to its author, the report “was made possible thanks to the generous support of the Tar Sands Campaign Fund of Tides Foundation.”

When asked at the hearings: “by ‘made possible’, do you mean that the report would not have been prepared without that funding?” the report’s author stated “that’s correct.”

Tides Canada and the Tides Foundation are not intervenors in the JRP process.

This isn’t the first report submitted through the Joint Review Panel process with questionable science and authorship.

Forest Ethics submitted a report authored by individuals with no expertise in pipeline, nor chemical engineering, nor any related fields. This report, written by members of the Natural Resources Defense Council activist group, has been stridently quoted by campaigners outside the hearing room as “proof” diluted bitumen is corrosive to pipelines.

This is a myth pushed by pipeline opponents despite no scientific evidence supporting the claim. In fact, many scientific studies have demonstrated that diluted bitumen is not corrosive to pipelines. Even further, one scientific study found that diluted bitumen is less corrosive than some other crude oils commonly transported by pipeline.

Facts take a back seat to hyperbole in online petitions

Tue, 09 Apr 2013 08:57:19 -0600

When embarking on an ambitious project like the Northern Gateway, it is expected that there will be a diversity of views. A few organized groups opposed to this project sometimes express their views in petitions designed to build contact lists and pressure politicians.

From our standpoint, we want to make sure the discussions about this project are based on the facts about the project and the risks and benefits to Canadian communities and the country as a whole. There is much more to this project than what is presented in petitions.

We want to address some of the concerns raised in the petitions head on. For example:

This project means jobs: The economic benefits of a pipeline connecting Canada’s resources to the West Coast are considerable, including supporting well-paying jobs for more than 1,100 Canadians, generating $2.6 billion in annual tax revenue for local, provincial and federal governments and supporting employment and community development in Aboriginal communities.
We’ve responded to concerns on potential impacts: The facts show that we are going to achieve these benefits with minimal impact to our natural environment. In fact, the feedback we have received from the public has resulted in changes to the design and routing of the Northern Gateway Pipeline, including modifications to the route of the pipeline and changes in the locations of various pump stations.
We’ve acted on Climate Change: Enbridge has dedicated considerable resources to its efforts to address climate change. That is why we have initiated a Neutral Footprint Program and have emerged as a leading producer of renewable energy in Canada.
We’re using existing routes where possible: The Northern Gateway route was carefully selected to, as much as possible, take advantage of existing forest service roads and cut blocks that have already been created by the logging and forestry industry. There are very few segments where we need to create a right of way through “undisturbed” forest, a conscious decision to minimize our impact on the environment. It is one of the first considerations Enbridge takes into account when planning pipeline routes.
We’re partnering with First Nations: First Nations have been active in planning this project and will benefit from a comprehensive package of environmental and economic commitments -- we have so far signed equity agreements with approximately 60 per cent of the Aboriginal communities along the proposed route that will see them benefit from a 10 per cent share of this $6 billion project. It will mean an estimated $280 million for aboriginal communities over the first 30 years of the pipeline’s operation. And to date, almost $3 million has been dedicated to education and training opportunities to help First Nations and Metis gain the skills and training necessary to work on the project.

As activist groups mobilize online and collect digital signatures on petitions, we prefer to embrace conversation over confrontation. We remain willing to talk to all parties about this project in an open, respectful and transparent manner. This is all part of the process.

Energy is indispensable in our lives. How to get the most benefit from Canada’s energy resources is an important starting point for a broader dialogue on the economic future of the country. We are working with people who oppose this project to explain our position, its benefits, and also to be responsive to concerns. We have proven to be flexible enough to modify our plans when change was required, and we are proud of the work we’ve done to advance this very important project that will benefit all Canadians.

Export market access increasingly needed: report

Wed, 03 Apr 2013 14:51:08 -0600

Video: Enbridge CEO discusses the changing markets for Canada's energy industry

The CIBC is one of three of Canada’s big banks calling for new export oil pipelines to tap into the energy-hungry markets in Asia. TD and Scotiabank have also previously weighed in on this critical Canadian issue.

In a report released April 3, CIBC urges a re-calibration of Canada’s energy infrastructure to add export focus to markets beyond the U.S. The banks have weighed in on a major issue facing not just the energy industry, but all of Canada.

“The US shale supply revolution and an inexorable tilt in demand towards Asia are just two of several forces transforming the world oil industry,” says a new report from economists at the Canadian Imperial Bank of Commerce.

Changing global realities will have important implications for governments, industry and other stakeholders in Canada—we are the world’s fifth-largest producer of oil.

In a press release highlighting the key findings from its most recent CIBC World Markets Report, CIBC explained that Canada’s long-held trading advantage—its neighbor status to the United States, the largest importer of oil in the world—isn’t expected to last. China is expected to lead demand for oil beginning this year, 2013. The report calls this shift “seismic.”

“The world will still need Canada's crude, given still ample demand growth ahead for Asia,” said Avery Shenfeld, CIBC Chief Economist. “But it’s increasingly important that Canada move on one or more of the alternative pipelines to get our product headed Asia’s way.”

In February 2012, a study from the University of Calgary’s School of Public Policy suggested that Canada only has a short window—two to five years—to get its oil to Asian markets before economic opportunities narrow.

The Northern Gateway Project is the best opportunity to advance Canadian energy exports to Asian markets:

Once constructed, the marine facility would be one of the closest North American oil exporting terminals to key Asian markets like Japan, South Korea and China.
With almost 10 years into planning and engineering, and over 2 years into the most comprehensive environmental assessment for a pipeline project ever held in Canada, the project could be into construction before rival projects complete their regulatory processes.

CIBC’s report found lack of market access for our oil meant Canada lost out on nearly $25 billion in oil revenues last year. The report expects losses to compound in 2013 by another $20 billion and then at around $15 billion annually until new pipeline infrastructure is built, assuming the oil price differentials return to historic norms.

The Governor of the Bank of Canada said in the summer of 2012 that the oil price discount Canada suffers from is a key threat to the Canadian economy.

Strict regulations set course for tanker industry

Wed, 27 Mar 2013 10:21:32 -0600

Experts at the Northern Gateway technical hearings say the tanker industry is a safe industry – and getting safer due in large part to world regulations that are getting stricter all the time.

Keith Michel, one of Northern Gateway's naval architecture and risk assessment experts on the Shipping and Navigational Panel at the hearings, relayed very positive trends in the tanker industry which has seen both the number of tanker incidents causing oil spills and spill volumes dropping dramatically.

Michel said data published annually by The International Tanker Owners Pollution Federation Limited (ITOPF) illustrates how the enhanced safety management schemes embraced by the tanker industry and more rigorous international regulations are impacting the environmental performance of tankers.

Large spills, of 5,000 barrels or more, had an average of about 8 spills per year around the world from 1990 and 1999, a figure that dropped to under 4 per year from 2000 to 2009. Currently, that average is 2 to 3 per year. No large spills were recorded in 2012, said Michel.

And the declining numbers of spills happened at a time of increasing tanker traffic worldwide.

“So the downward trend has been steady for 40 years and I believe strongly it's going to continue in its downward direction,” Michel said on March 21 at hearings of the Joint Review Panel assessing the NGP project application.

The transition from single-hulled to double-hulled tankers (over 95% of the tanker fleet is now double-hulled), better tanker operational procedures, greater technology aboard the ships and a host of other factors have all contributed to a steady fall in tanker spills. And strict regulation will set the course for an industry much of the world relies upon for accessing energy. A majority of the oil transported worldwide is done with tankers.

Michel provided the JRP with detail around new regulations that have come into force in recent years, including:

2005 – Enhanced intact stability requirements for tankers
2006 – Harmonized, more rigourous structural rules for tanker construction
2006 – Coating of ballast tanks on tankers
2007 – Increased inspection frequency for tankers
2010 – Requirements for subdivision of tanks to mitigate oil outflow in the event of collisions and groundings
2010 – Requirements for double-hulled protection of fuel tanks, in addition to double-hulled cargo tanks mandated in the 1990’s
2010 – Adoption of international “Goal Based Standards” for the design and construction of tankers
2013 – Requirements for coatings on the top and bottom of cargo tanks

“So there's continuous improvement and -- and those are the reasons I think we'll see the number of spills continue to decline in the future,” said Michel.

Canada has a very good safety record when it comes to transporting oil and gas on our coasts: tanker oil spills have been driven downward from 18 in the 1980s to zero in the 2000s.

Oil and petroleum products have been safely transported along Canada’s west coast for almost a century, primarily to and from port facilities at Vancouver and Kitimat, and also by tug and barge movements to coastal mills and communities..

“We have one of the most stringent regulations [regimes] here in Canada,” offered longtime mariner, Capt. Al Flotre.

Northern Gateway is a boots on the ground partnership

Tue, 26 Mar 2013 13:35:32 -0600

Through an estimated $1-billion total Aboriginal benefits package including an unprecedented 10-per-cent Aboriginal equity ownership offer and access to an ongoing $3-million Aboriginal education and training fund, Enbridge recognizes Northern Gateway’s right-of-way Aboriginal communities as full-fledged partners in this nation-building infrastructure project.

Recently, Northern Gateway’s Aboriginal & Stakeholder Relations team gave another demonstration of the company’s trust-building philosophy — inviting 10 representatives from five project corridor First Nations from B.C. and Alberta to join a team of Enbridge engineers on a 17-day winter field trip along the pipeline route.

"The best way of building trust," notes Morgan Yates, Northern Gateway’s Vice President of Aboriginal & Stakeholder Relations, "is to get people from the local communities rubbing shoulders with our technical team — really understanding the project from a boots-on-the-ground level."

Through late February and early March, the group visited sites along the proposed pipeline route, on forestry roads and cut lines, as well as future construction facilities, camps, pipe storage areas, and pump station locations — about 50 locations in all, from the Edmonton area to Kilometre Post 1,043 in northern B.C., about 100 km from the Pacific Coast.

Following safety training and snowmobile operator certification, the group visited these sites on skidoo, on snowshoe, even via helicopter.

The primary purpose of this winter field trip was construction reconnaissance and cost estimate refinement work, with engineers checking water conditions and terrain, and anticipating specific requirements for the construction stage. But during each site visit, the engineering group also made presentations to First Nations representatives, with the guests asking questions about the potential construction process as it passed through their lands.

"The idea of this tour was to involve and inform community members, and answer any questions they may have," says Dale Swampy, Northern Gateway’s Aboriginal Consultation Director for the Central B.C. region, who accompanied the group on its trek through the proposed project corridor in the B.C. and Alberta.

"For most of these groups, this is probably the first time an extended field trip of this sort with industry has ever happened."

This winter field trip marked the second such "technical partnership" session organized by Northern Gateway. Last summer, 15 representatives from seven project corridor First Nations groups joined a team of Enbridge environmentalists, biologists, and engineers on a SWAT (Strategic Watercourse Assessment Team) tour that focused on evaluating and determining the most environmentally friendly watercourse crossings for the pipeline throughout north-central B.C.

During this recent winter field trip, says Swampy, the discussions went beyond technical topics to include questions focused on Aboriginal employment and contracting opportunities — for example, clearing contracts for test drilling work near watercourse crossings and pump station sites.

"The leaders of these First Nations sent senior staff members, youth members — individuals they felt would positively participate and transfer the information regarding the trip back to their communities," says Swampy. "I think it said a lot that four chiefs attended a short meeting with our engineering team before we started the trip.

"Some people wonder, do we really have that much interest from project corridor communities? We can see from events like this tour that yes, we do. These Aboriginal groups are highly interested and engaged in the project. Their leaders are behind this vision of engaged and informed project partnership and proactive environmental stewardship.

"They want to work with us to make this project the best it can be, and to define a new approach to partnership."

Exxon Valdez: 24 years later

Mon, 25 Mar 2013 12:30:35 -0600

The Exxon Valdez incident was a tragic accident. No one wants to see it repeated—not the people of British Columbia, not the international maritime community and not Northern Gateway.

Yesterday, the Coastal First Nations organization released an advertisement to mark the 24 year anniversary of the Exxon Valdez incident. They say that oil can’t be transported safely off Canada’s west coast. They don’t tell you that oil is safely transported in to and out of ports in British Columbia—and has been since the 1930s.

A lot has changed in the oil tanker industry over the past 24 years. These are changes the industry can be proud of, because they are changes that have led to vast improvements in the safe transportation of oil in tankers.

And many of these improvements are a direct result of the Exxon Valdez accident at Bligh Reef. Keep in mind, the Exxon Valdez was a single-hulled tanker, had no pilots on board, had no escort tugs and Prince William Sound had very limited emergency response capabilities. Things have changed.

In Canada, major marine oil spills have been driven downward from 18 in the 1980s to zero in the 2000s. Canada is a leader in marine safety.

One of the most significant improvements was the introduction of double hulled tankers. Double hulled tankers add a protective layer to prevent breaches of the inner hull and cargo tanks that lead to oil spills. All commercial tankers calling at Canadian oil ports must be double hulled. Northern Gateway will further require tankers calling at our terminal be modern—ships older than 20 years will not be allowed.

Another important safety improvement was the introduction of tethered tug operations with tankers in coastal waters. This operational safety requirement has led to over 11,000 safe oil tanker transits through the Prince William Sound since the Exxon Valdez accident.

Laden tankers calling at the Northern Gateway terminal will have two tugs escorting them, one tethered. These tugs will be ocean-going and have first response equipment on board and will be available to assist other mariners in distress. Fast emergency response is key to minimizing damage to the environment.

Canada requires that all industrial marine traffic use professional pilots to safely navigate in coastal waters as well. Ships calling at the Northern Gateway marine terminal will have two, professional, Pacific Pilotage Authority certified pilots on board.

Improved weather monitoring and navigational aids like bouys, beacons, and land-based radar will also make Canada’s Pacific north coast safer for all mariners.

The federal government has committed to additional improvements towards a World-Class Tanker Safety System.

Northern Gateway’s commitments to marine environmental protection are unprecedented in Canada. Our marine safety planning is led by experts with first-hand knowledge of the Exxon Valdez accident. It is an incident that serves as a constant reminder of the importance of ensuring we have the safety measures in place to protect Canada’s coastline.

Metis youth working to realize dream

Tue, 19 Mar 2013 14:10:45 -0600

Tyrel Sulzer, vibrating with excitement, approached Northern Gateway’s Shane Kelly asking if he could help him realize his dream – becoming an engineer.

The sharp-minded Metis teen from Fernie, B.C. informed Kelly, a project geotechnical engineer, he had taken in his presentation at a Northern Gateway information seminar and made up his mind on his life’s ambition.

Kelly and others worked tirelessly to help him find a summer job.

And Sulzer did – at WorleyParsons engineering firm. He’s now nearly completed his first year of studies at the University of British Columbia and hopes to join the firm again this summer.

That was one anecdote the Northern Gateway (NGP) Aboriginal and community consultation panel relayed to the Joint Review Panel at the technical hearings March 18. It is one of many positive stories that the NGP Education and Training Fund has spawned, NGP’s Catherine Pennington told the Panel reviewing the project application.

The fund is about more than money, said Pennington, as in the case with Sulzer.

“That really wasn’t a financial investment, it was a human investment,” said Pennington, Northern Gateway’s specialist in connecting willing job seekers with existing and emerging opportunities.

Northern Gateway earmarked $1.5 million in November 2011 for Aboriginal skills and training. It has been such a success, NGP has now doubled it – even before project approval.

The intent of the program, said Pennington, was to work with First Nations and Metis communities to identify ways in which they might be able to prepare for work on the construction and operations of the project. NGP has set the target for Aboriginal employment on the project at 15%.

NGP has held discussions with numerous colleges and universities in Northern BC to identify programming needs to help Aboriginal people take advantage of the surge in energy projects in the region. NGP has also spent much time in communities to tailor programming to the needs of the individual communities.

“These are only enhanced by community involvement,” said Pennington, who added essential life skills are a critical part of the program. “They’re going to know best what they need in the short, medium and long term.”

Northern Gateway President John Carruthers spoke emotionally in the hearings about conversations he’s had with members of First Nations communities who are looking for solutions to some serious social challenges. He said one of the measures of success for the project is making real positive impacts on neighbouring communities.

He said the project can make a difference.

“It really hit home,” said Carruthers, of those conversations with community leaders.

Northern Gateway estimates its economic benefits package for Aboriginal groups and communities at $1 billion, including labour and procurement, a community investment fund and equity partnerships.

NGP has already engaged large contractor companies to involve Aboriginal people, including environmental field monitoring and work, geotechnical programs, logging, road building and more.

A key feature of the project is also helping Aboriginal businesses boost their capacity to fully take advantage of the opportunities afforded to them by NGP. Several business summits have been held with considerable success to do just that.

By building up Aboriginal businesses, you’re putting the foundation in place for Aboriginal employment, along the project corridor and beyond, said Pennington.

“Aboriginal businesses will, by and large, employ Aboriginal people,” said Pennington.

Community-focused training initiatives

Thu, 14 Mar 2013 15:52:14 -0600

“We really try to listen to communities and implement skills and training programs that will meet their needs… this is not a cookie cutter program.” Catherine Pennington, Northern Gateway’s community-based training specialist told the Joint Review Panel, March 13, 2013.

A lengthy discussion took place this week at the Joint Review Panel hearings in Prince Rupert, BC, between members of the Project’s community relations team and intervenors from the Fort St James Sustainability Group who wanted to better understand how the Project’s skills training programs are developed.

“We’ve heard from communities and certainly from communities in your region, in central B.C. and beyond is that they want us to be respectful of what their communities are facing. And so we have designed a program that means a lot to me personally and I know means a lot to the company,” Catherine continued. “I grew up in an Aboriginal community, I am Aboriginal. And I think, you know, the value of getting that first labour market connection, the importance of a job is really critical. Certainly community-based training is critical. Getting people connected to the workforce and connected to the job. And then that really means that individuals can move from that job into other opportunities…”

Many of the job opportunities that will be available will occur during the construction phase of the Northern Gateway project—as they would be for any major infrastructure project. This is the nature of the construction industry as a whole. A focus on transferable skills and industry sustainability is necessary in order to ensure workers will have long careers applying their skills.

Another key component to Northern Gateway’s efforts in this area is our focus on connecting workers with unions and contractors who could become their long-term employers.

“[We] connect with employers, [to] be a broker between us and the real employment opportunities that are out there today and that will be there in the future, that are long-term and sustainable and really support trades and technology,” explained Catherine. “So those really reflect some of these activities that we’ve undertaken and we continue to undertake and certainly are committed to for the short, medium and long-term for this project.”

Northern Gateway’s efforts to help people prepare for employment on the project are unprecedented in our industry. We’re the only pipeline project that has invested the resources we have to-date without having project approval first.

“I think it’s really important to understand that what we’re talking about here is a component of what we believe is a larger framework. We really are—Gateway is really about creating sustainability in the communities along our right-of-way, whether that [would] be the municipal communities or the Aboriginal communities,” Janet Holder, Enbridge’s Executive Vice President of Western Access told the Joint Review Panel. “So what we’re trying to do, everything… the foundation of what we’re trying to do here is create sustainability in the North.”

Skills training leads to jobs

Wed, 13 Mar 2013 12:25:28 -0600

At the technical hearings examining the Northern Gateway project in Prince Rupert, BC—where the topic has shifted from world class emergency response to Aboriginal and community engagement matters this week—one intervenor’s questions led to some interesting insights on the project benefits that are already happening in BC.

Working quietly on the ground throughout right-of-way communities, Catherine Pennington, Northern Gateway’s specialist in connecting willing job seekers with existing and emerging opportunities has created some impressive results.

Northern Gateway has committed to ensuring that jobs and business opportunities will be available to people living near the right-of-way. Catherine’s work is also helping the project to meet its goal of having 15 per cent of the work force come from Aboriginal communities.

Responding to questions from the Fort St James Sustainability Group, Catherine made it clear the project is working inclusively to meet the lofty Aboriginal employment objectives:

“...the unique approach that we’ve taken is very inclusive in nature…. to meet the 15 percent target that we’ve set for Aboriginal employment for the construction phase of this project… and the 15 percent operational employment for this project.”

Northern Gateway links Aboriginal people to current employment opportunities in the pipeline and construction sector. We are working with contractors and union organizations in advance of this project’s approval as a mechanism to build skills in the Aboriginal community. Building skills in advance of the project will ensure we meet or exceed the targets established for the project.

The Fort St James Sustainability Group wanted to know whether or not these opportunities and programs were only available for the communities that had expressed support for the project.

“Even in cases where communities are, at this point, still considering the Project or uncertain about the Project or have made a choice to not participate at this time, I think the understanding that we have is that there remains an interest to think about skills and training and employment opportunities,” Catherine explained. “So I think the ongoing engagement will continue to show and prove fruitful around skills and training initiatives that will help us reach that target and be mutually beneficial for both parties.”

In 2012, Northern Gateway employed an Aboriginal liaison from the Haida Nation to work on the construction of the Enbridge Woodland Pipeline Project in northern Alberta. Through this Aboriginal liaison, Enbridge was able to facilitate 28 members from 8 different terrestrial and coastal British Columbia First Nations to work on a crew for the Woodland Project. This provided First Nations members an opportunity to gain experience in the pipeline industry, which resulted in connecting them to union contractors who could facilitate future opportunities on other projects. Long-term, sustainable employment is the primary goal of our efforts.

Opportunities are available to a diverse group of communities, including union members, First Nations and other Aboriginal communities, and are not limited to only Northern Gateway project supporters. We anticipate the skills developed would position these workers well for jobs on the Northern Gateway and other pipeline projects planned for BC.

Living our values

Mon, 11 Mar 2013 15:44:09 -0600

For months now, the technical hearings examining the Northern Gateway project have focused primarily on economics, engineering and potential environmental impacts associated with what would be the largest private investment in BC’s history. This week, a new panel will be sworn in to give evidence to the human elements of the project—primarily First Nations and community consultation matters.

A common question we’ve been asked for many years in our public consultation efforts is “Why is Enbridge the company that should build the Northern Gateway project?”

In the video above, Janet Holder, the Enbridge Executive Vice President Western Access, the leader of the Northern Gateway project team for Enbridge, and long-time resident of Prince George, BC, answers.

“I took this tough job because I believe in this project,” explained Janet. “I understood and knew the value this project has to Canada and understood the reason it needed to be built. But as important, I knew that Enbridge was the company to build it.”

At $6 billion, Northern Gateway would be the largest private-sector infrastructure project in British Columbia’s history. We’ve worked hard to ensure that the project will create a lasting legacy of local investment, tax revenue, and jobs for the North, over and above the tremendous benefits created by access to new and growing markets for Canadian natural resources.

Over the next week, Enbridge employees will be questioned about our work: talking to people who live along the right of way about the project, listening to and addressing their concerns; and Northern Gateway’s efforts to support communities to enhance their members’ opportunities to access employment, business and skills training opportunities.

“I wanted to work on the team that was going to make this happen,” Janet said. “We have a core team that is very committed, dedicated and very upbeat… they keep their drive and passion for the project, and I suspect the only way they could do that, and the only reason they are doing that is because they do believe they are doing the right things.”

Protecting the environment is one of our core values at Enbridge—and for Janet it’s the value at the top of her list of reasons for joining the project team.

“The environment means a lot to me,” Janet stated. “I do believe we've hired the best in North America to help us ensure that we are building a pipeline that will protect this environment.”

Whether we’re examining the land-based aspects of the project—from geotechnical engineering considerations, environmental monitoring to route modifications arising from public consultation—or the marine components, every practical effort is being made to ensure the environmental footprint is small, risks are mitigated and that emergency planning and preparedness is world-class.

“I believe in this company, I believe in our values, they align with my values and I think we do live to our values,” said Janet.

Report says dilbit not more corrosive than other crudes

Tue, 26 Feb 2013 15:30:15 -0700

Diluted bitumen (dilbit) and synthetic crude bitumen blends (synbit) have been safely transported in pipelines for more than 20 years; pipelines are the safest and most efficient way to transport Canadian crude oils to market.

Despite this fact, misinformation about dilbit and pipelines continues to be wide-spread—some organizations wrongly claim that dilbit is more corrosive to pipelines than other conventional crudes.

A new report released February 25, 2013, examined the oft-quoted corrosivity claims and found:

“some of the literature is ill-informed and wrong: both Dilbit and Synbit in a crude oil transmission pipeline environment is no more corrosive than comparable heavy sour crudes and in many cases may be less corrosive”

The report, authored by pipeline integrity experts UK-based Penspen Integrity, examined a broad spectrum of corrosivity claims, including sulphur, sediment, acidity (TAN) and pipeline operating temperature, and their effects on both internal and external corrosion in transmission pipelines.

Here are some highlights:

Dilbit and Synbit have similar characteristics as conventional heavy sour crudes in terms of density, TAN and sulphur content
The TAN number, sulphur and salt content are important parameters for refineries, but cannot be used to assess the corrosion threat to an oil transmission pipeline, and these parameters are not used by pipeline corrosion engineers
Crude oil transmission pipelines including those that carry Dilbit and Synbit are operated at flow velocities above that at which water and sediment drop out tend to occur but below the velocities where erosion corrosion can occur
The corrosion risks associated with Dilbit and Synbit are considered to be no greater than with conventional crude oils in transmission pipelines, and existing integrity management techniques are capable of mitigating these risks.

The Penspen Integrity report follows-up on earlier reports released by the scientists at Natural Resources Canada and Alberta Innovates, which also came to the conclusion that dilbit is not more corrosive to transmission pipelines than conventional crudes.

In a press release, President of the Canadian Energy Pipeline Association, which commissioned the third-party study, Brenda Kenney said: “It is important to have scientific evidence in front of Canadians, so they can make their own informed decisions, and not rely on misinformation. We have always known, based on scientific facts and our pipelines operational histories, that diluted bitumen is no more corrosive than conventional crude.”

Polluter pays: it’s the law

Wed, 20 Feb 2013 14:50:15 -0700

There is a well-established legal and regulatory framework governing pollution and the environment in Canada. On land and at sea the polluter pays.

A recurring theme in the broad commentary around the Northern Gateway project asks the question “Who’s responsible if a spill happens on the water?” While the public discussion includes a lot of misinformation and “what ifs”, the factual answer is well-established in domestic and international law.

The Northern Gateway project combines two pipelines—an import condensate pipeline and export crude oil pipeline—with a marine terminal. The Northern Gateway partnership will own and operate the pipelines and marine terminal. As the owner of these facilities, the responsibility to maintain and operate these safely lies squarely on the Northern Gateway partnership.

Third-party tankers will ship products to and from the Gateway marine terminal—this is common practice at all Canadian marine oil terminals.

The law is equally clear about tanker operations. It’s the owner/operator of the tanker carrying oil or condensate that is responsible for their safe operation and protection of the environment. Companies who wish to operate in Canadian waters must meet a rigorous set of regulations in order to do so, including compliance with the Canada Shipping Act and the Marine Liability Act (MLA) along with international maritime conventions.

Transport Canada, the federal Department responsible for enforcing the MLA says “The MLA places absolute responsibility and liability for safety, damages, and pollution on the owners and/or operators of vessels; and on owners of docks, canals and ports. Vessel owners and operators are responsible for such things as the safety of their crew and passengers, their cargo, and any pollution created.”

Whether the operations are on Canada’s west coast at Port Metro Vancouver, in the Great lakes, Montreal, Bay of Fundy or Newfoundland and Labrador, they’re all governed by these very same legal obligations.

It’s not surprising questions on this theme arose at recent Joint Review Panel hearings in Prince Rupert, BC, examining the Northern Gateway Project’s comprehensive marine emergency response planning.

Some intervernors have questioned why Northern Gateway’s liability is limited only to the operations it will be directly responsible for.

John Carruthers, President of Enbridge Northern Gateway Ltd, explained it to the JRP this way:

“If you looked at it from a principle basis, you would ask: Would a transportation company be liable for something they didn’t own once they transferred it to a different transporter or to its customer?”

This is an important point. Enbridge Northern Gateway is a transportation company—it doesn’t own the product it ships via pipeline or loads onto tankers at the marine terminal. Carruthers expanded:

“…nowhere do we have [rail] or truck companies assuming liability for things that they delivered once they’ve delivered it and especially for something they don’t own. It would be just like a gasoline truck delivering oil to your local station. It doesn’t assume a liability for when you drive off and if you have an accident.

…there [are] regimes put in place where society works that, once you take responsibility—and, certainly, Northern Gateway takes responsibility when it moves the crude oil through the pipeline system and at the terminal—but when it gets to the terminal and goes onto the tankers, it is deemed by convention, both national and international, that that liability goes to the ship owner. “

That said however, the Project, like all Canadians, wants to protect Canada’s west coast from potential adverse environmental effects, despite the remote chance of a major spill occurring—which is why the Project is committed to extended responsibility for Project-related tanker operations.

Gateway committed to marine safety

Wed, 20 Feb 2013 14:39:21 -0700

Canada has an enviable safety record when it comes to transporting oil and gas on our coasts: oil spills have been driven downward from 18 in the 1980s to zero in the 2000s.

Oil products have been safely transported along Canada’s west coast for almost a century, primarily to and from port facilities at Vancouver, Prince Rupert and Kitimat.

Recognizing the deep attachment Canadians have with their environment, and our desire to protect our natural spaces while providing for our economic development, Enbridge Northern Gateway is committed to extended responsibility for the Project’s tanker operations.

Northern Gateway’s Manager of Emergency Response, Owen McHugh described ‘extended responsibility’ to the Joint Review Panel examining the Project as:

“…a term that we use to capture the commitments that Northern Gateway is making above and beyond what would typically be done in a project like this or as required by Canadian regulations.

…Northern Gateway is committed to entering into the unified command for a tanker-based spill. And that’s a huge commitment. This is not a Northern Gateway liability under the Canadian law.”

During the same examination of the Northern Gateway marine emergency response plan, Dr. Edward Owens, an expert in the area of oil spills and oil spill response, stated:

“The project has taken a very unique step and decided that, in the best interests of the community of northern B.C., it is appropriate to take responsibility to ensure that the shipping aspect is one of prevention and mitigation at the best available technology level and the best management practice level. This does exceed, basically, what anybody else has ever tried to do.”

Specifically, extended responsibility refers to the enhanced safety measures the project will implement:

Operational safety limits will be established to cover visibility, wind and sea conditions
The purpose-built, powerful, ocean-going escort tugs—one tethered to laden tankers—will have extensive first response capabilities to provide immediate assistance if required (available to any ship in distress)
Northern Gateway will work with the Canadian Coast Guard and others to install an advanced radar system to cover important route sections to provide guidance to pilots and all marine traffic on the Northwest coast
Additional navigational aids will be installed, such as navigation beacons, buoys and lights throughout the confined channel area
Prior to arrival in Canadian waters, all vessels will be vetted by independent, third-party agencies and will be required to meet Northern Gateway's safety and environmental standards
Vessel speed will be reduced in the marine channels to between 8 and 12 knots
While docked at the Northern Gateway Kitimat Marine Terminal, tankers loading export oil will be surrounded by a containment boom
Information from new weather stations along the route will be available to all vessels
Northern Gateway will significantly increase the emergency response capabilities along the main northern shipping routes, making the routes safer, not just for tankers but for everyone

Additionally, existing tanker regulations also require:

only the use of modern double hulled tankers
two certified, professional Coast BC pilots on board while tankers are traveling in Mandatory Pilotage Zones
tankers must be insured and provide proof of insurance

An overview of Transport Canada’s Oil Tanker Safety and Oil Spill Prevention efforts can be found on their website.

The BC Chamber of Shipping has also produced a series of videos explaining Canada’s tanker management practices to help you better understand the strict regulatory regime governing safe oil and tanker transportation in BC.

Enbridge solar power business on track for growth

Thu, 07 Feb 2013 12:43:25 -0700

While Enbridge's history may be firmly rooted in the transportation of carbon-based energy, with more than 160 years of experience in providing natural gas to customers in Ontario and Quebec and more than six decades of transporting western Canadian oil to markets in the American Midwest and Eastern Canada, we have always been a company that looks to the future.

And these days a big piece of that future is renewable energy.

While conventional sources of energy will be with us for decades, with public concern growing over the consumption of fossil fuels and widespread unease about greenhouse gases and climate change, the era of renewable energy has dawned.

Enbridge first dipped its collective toe in the renewable pool in 2002 with an early investment in wind power at the SunBridge facility near Gull Lake, Saskatchewan (Canada). From that modest beginning our renewable generation capacity has grown exponentially, from 11-megawatts (MW) with our first investment to almost 1,000 MW today, with interests in projects generating more than 1,300 MW of power from wind, solar, and geothermal energy sources.

In the last decade Enbridge has become one of the largest producers of renewable energy in Canada and a growing player in the United States, with plans to double our total capacity in the next few years.

Read more about green energy on Enbridge's Corporate Social Responsibility website.

New studies say Canada must act fast to access markets

Thu, 07 Feb 2013 11:51:45 -0700

A new study, released February 6, 2013, by the University of Calgary’s School of Public Policy says Canada has a short window—two to five years—to get its oil to Asian markets before economic opportunities narrow.

The UofC report echoes statements made late in 2012 by the chief economist of the International Energy Agency, Fatih Birol, who said, “The global energy foundations are shifting and there are countries that are going to win from that, and there are countries that are going to lose from that. But there are some countries who have the potential to win but if they do not take the necessary steps, they can be losers. And I believe Canada is one of them.”

Author of the UofC study, energy economist Michal Moore, told the Calgary Herald, “If we can get our products into the market in that stream we're going to be competitive.”

The Canadian economy, at current oil prices, is missing out on around $70 million dollars each day according to another study published this week by the Canada West Foundation, due to the deeply discounted oil prices we’re receiving as a result of our lack of tidewater access to global markets.

Other economists have projected the annual cost to the Canadian economy at over $18 billion. The Canadian Energy Research Institute said last year, that over a two-decade timeframe, the cost to the Canadian economy would be as high as $1.3 trillion, with lost government revenues nearing $276 billion.

"There's a lot of that oil out there in the market,” Moore also told the Calgary Herald. “There's plenty of capacity in the Pacific Rim/Asian markets for heavy oil like ours, but it's not infinite and it's certainly competitive."

Arab nations and Mexico also produce crudes with similar characteristics to Canada’s.

The Governor of the Bank of Canada said in the summer of 2012 that the oil price discount Canada suffers from is a key threat to the Canadian economy.

In a speech last week, Enbridge CEO Al Monaco said “There is no more critical issue facing Canada today. Failure to develop a consensus around energy development will have serious consequences, for this generation and generations to come.”

Diluted bitumen in sea water – some basic science

Wed, 06 Feb 2013 18:21:53 -0700

A lengthy discussion on the subject of diluted bitumen’s behavior in sea water took place in Prince Rupert this week at the Joint Review Panel hearings examining Northern Gateway’s marine emergency response planning. The evidence on the record shows that diluted bitumen acts like many other common oil types in water.

There are significant adverse effects when crude oil is spilled in the ocean. This post is not meant to down-play this reality. The post is meant to outline the density science—crude oils, including diluted bitumen are less dense than water and therefore float.

Project opponents have said that diluted bitumen sinks in open water and is therefore next to impossible to clean-up. This isn’t true and there is no evidence on the record to support this claim.

It is important to understand the physical properties of water and oil, because these properties determine how the two liquids will behave when they come into contact.

Dr. Alan Maki, an oil spill response expert testifying at the JRP hearings in Prince Rupert on February 5, 2013, told the hearing, “It's fundamental physics that everything has a specific gravity relative to water. Water is 1.0. All the compounds we're talking about range from .75 up to .92, .93. It is an immutable fact of physics that they will float.”

The products Dr. Maki was referring to are the crude oil products Northern Gateway intends to ship: diluted bitumen and synthetic crude oil. It’s also important to note that sea water’s density is higher than 1.0, more like 1.02. Compounds with densities lower than 1.02 will float. That’s the basic science.

But there are other factors at play here as well. All oils weather when exposed to the environment. Oil’s physical properties are changed by wind, waves, sunlight and other environmental exposures over time. As oil weathers, it can become denser. So what matters is the answer to this question: Does weathered diluted bitumen become denser than sea water?

Some have suggested that diluted bitumen weathers rapidly, with diluent evaporating leaving bitumen behind to sink. This isn’t true. Diluted bitumen does not weather to a pure bitumen state.

Northern Gateway conducted tests to measure the density of weathered diluted bitumen under simulated conditions. At no time during the two-week-long tests, did diluted bitumen weather to a density greater than water. You can read the full report here.

It’s also a fact of reality that pockets of submerged crude oil have occurred when crude oil—and here we’re speaking of all crude oil types including, but not specifically isolated to, diluted bitumen—has been spilled into moving bodies of water like oceans, lakes, rivers and streams.

Water in the ‘real world’ is not plain water. Sediments—sand, silt, biomass, etc.—are often suspended in water because of energetic physical motions like waves.

Have you ever been to a sandy beach that had waves lapping at the shore line? That water, in motion, has the energy needed to lift the fine grains of sand up from the sea bed into the wave and move it about. When crude oil particles and sediment particles combine, together, they can become denser than water and sink. It’s important to understand that this physical interaction isn’t unique to diluted bitumen. Sediment is most prevalent in near-shore, shallow areas, which can be isolated using booms.

Agitation will separate oil from sediment, the oil then floats back to the surface—this has been a successful tactic for cleaning up submerged oil in the Kalamazoo River.

Northern Gateway’s first priority is to ensure that oil is not spilled. In the unlikely event of a spill, Northern Gateway’s world-class, science-based emergency response planning will be there to act quickly to minimize any adverse environmental effects.

Changing Markets – Evolving Expectations

Wed, 30 Jan 2013 11:12:13 -0700

Changing Markets – Evolving Expectations… that was the theme of a speech given by Enbridge CEO Al Monaco to a packed room at the Westin Hotel in Edmonton, Alberta today, January 30, 2013.

Central to the presentation, Al highlighted the considerable challenges of capturing full value for Canada’s most important economic resource – crude oil.

“We’re facing a perfect storm of change and challenge,” Al explained. “The good news is that rapid technological advancements have revolutionized the energy industry across North America, creating not only a massive surge in oil and gas production but also excellent progress on environmental protection; The bad news is that lack of access to markets for that production means that Canada is hemorrhaging billions of dollars a year – a result of the huge gap between world prices and what we receive for our oil and gas; And at the same time we’re seeing unprecedented opposition to all forms of energy development and transportation.”

Crude oil represents 15 per cent of Canada’s exports annually, contributing more than $50 billion to the Canadian economy and providing taxes and other revenues used to fund the social programs all Canadians value, like healthcare, education and retirement funds.

You may be surprised to learn that Canadian oil exports are hampered by a lack of pipeline infrastructure in the US; it should come as no surprise that not being able to access the fast-growing Asian markets is already hurting our economy.

“In my view, there is no more critical issue facing Canada today,” Al stated emphatically before outlining two thoughts to solve the problem. “We must build the infrastructure to connect our production with the best North American refining centers. And we need to come to grips with the fact that tomorrow’s energy growth lies with the economies of Asia – requiring export capacity to the West Coast.”

Northern Gateway is designed to be a world-class project in every respect – from safety, to community consultation, to environmental protection – and will play a key role in reversing the harmful oil price gap.

Recognizing the considerable challenges ahead for the Gateway project, Al spoke of the importance of listening to and engaging with all stakeholders in the project.

“All stakeholders – regulators, employees, shareholders, political leaders and the public – expect more of energy companies… As an industry, this is our new reality – and in my view a positive evolution, and we’re all the better for it.” Al explained. “We should welcome the active participation of First Nations and environmental groups in this discussion. The reality is that we need all forms of energy development to support our economy and growth. We can use their help to make projects better.”

The Northern Gateway project team has been consulting with right-of-way communities for much of the past decade. In the past two years, the Gateway conversation has expanded to include all Canadians – rightly so given the critical need for Canada to get its most valuable resource to the best international markets. It’s a conversation that Enbridge and Northern Gateway believe is vital; failure to develop a consensus around energy development will have serious consequences for this generation of Canadians, and generations to come.

“With so much at stake, this is no time to be standing on the sidelines,” said Al. “By working together we can get full value for the energy resources we’ve been blessed with – not simply for the energy industry, but for all Canadians. And, just as important, that we do that in an environmentally sustainable way.”

You can read the full text of Al’s speech here.

Protest disrupts citizens’ Oral Statements

Tue, 15 Jan 2013 17:32:49 -0700

An organized activist disruption on day two of the Oral Statement hearings held in Vancouver, BC, interrupted proceedings where citizens have the opportunity to have their voices heard on the proposed Northern Gateway project.

The National Energy Board describes Oral Statements as the public’s opportunity “to provide the Panel with knowledge, views or concerns on the proposed Enbridge Northern Gateway Project in person during the community hearings. Oral statements should describe the nature of [the presenters’] interest in the application and provide any relevant information that explains or supports [their] statement. Panel members will listen to and consider all oral statements given throughout the joint review process.”

The Oral Statement hearings are a formal part of the National Energy Board’s Joint Review Panel process. While the Oral Statement process required participants to register in advance (the deadline was October 6, 2011), it is an opportunity for wide participation—nearly anyone, from anywhere, could register to give an oral statement to the panel.

Northern Gateway, even a number of environmental groups, expressed disappointment at the disruption by a handful of activists as it merely diverted attention away from those who have decided to participate and put in much effort to articulate their views.

Northern Gateway supports all Canadians’ right to free expression and to make their voices heard in a respectful and legal manner.

We’re in attendance every day at the JRP’s Oral Statement Hearings listening to each and every statement given by the presenters. We hope that the voices of British Columbians are the focus and that we all give them the respect they deserve.

Lack of market diversity to cost Canada $1.3 Trillion: study

Mon, 07 Jan 2013 15:29:05 -0700

In a report released November 2012, CERI (Canadian Energy Research Institute) calculated the cost to Canada’s GDP at as much as $1.3 trillion if major pipeline expansion projects don't get built.

That means the loss of $276 billion in tax revenues over the next two decades.

No wonder that Canadians are taking notice: the Governor of the Bank of Canada, key ministers in the federal and provincial governments, economists and other leading thinkers on the Canadian economy have all warned on this critical issue.

At the core of the problem is a lack of market access. Without new pipelines to Canada's west coast, this problem will continue and may even worsen.

The Canadian Natural Resources Minister told the Calgary Herald: "The situation is screaming out for us to diversify, and we need pipelines to do that. This whole area is incredibly important to the economy of the country and it is so dynamic and changing - not only in Canada, but globally - that I expect it will be top of mind as an issue through (2013)..."

The Canadian Senate has also been studying this issue. Senator Daniel Lang wrote to the National Post on January 4, 2013, stating:

"The energy sector plays a vital role in keeping Canada strong, free and prosperous. It employs over half-a-million Canadians and contributed a staggering $94-billion to our country’s exports in 2010. It also contributed $35-billion in taxes and royalties in 2008 to various levels of government. With oil production set to double by 2030, these contributions to our tax base and our living standards will prove crucial to all Canadians. I stress all Canadians. Even provinces without abundant oil resources will share in the wealth through transfer payments.... Canada must seek out and embrace new opportunities and new markets or risk a reduction in our living standard."

It's not just Canadians who are taking notice either. The chief economist of the Paris, France-based International Energy Agency also weighed in late last year:

"The global energy foundations are shifting and there are countries that are going to win from that, and there are countries that are going to lose from that. But there are some countries who have the potential to win but if they do not take the necessary steps, they can be losers. And I believe Canada is one of them."

JRP hearings shift to Victoria for Oral Statements

Fri, 04 Jan 2013 11:18:02 -0700

The National Energy Board’s Oral Statement hearings in Victoria and Vancouver are about to begin. They are an important phase in what is a rigorous, thorough and open Joint Review Panel (JRP) process assessing the Northern Gateway Project.

The NEB’s community hearings have been ongoing for a year and are a comprehensive means by which people across BC, Alberta and Canada can provide evidence and have their say both in writing and in person on this project that is of national importance.

The JRP conducted hearings in early 2012 to hear oral evidence from registered intervenors and to hear oral statements from people along the proposed right-of-way and those living near the proposed shipping routes. Communities, including Comox, Prince George, Prince Rupert, Grande Prairie, Smithers, Klemtu, Terrace, Skidegate, Old Massett, Kitimaat Village, Burns Lake, Bella Bella, Port Hardy, Fort St. James, and now Victoria, Vancouver and Kelowna, will all have had an opportunity to voice their views once these hearings conclude in May.

We attend all of the hearings whether we have a formal role in them or not. While we have no formal role in the community hearings, it is an opportunity for us to listen to the public.

For those of us working on the Northern Gateway project, public consultation activities aren’t limited to the JRP hearings, however.

We’ve been actively engaging with communities along the right of way for years. We have an innovative Community Advisory Boards (CAB) program holding regular, regional meetings along the transportation corridor throughout the year.

Participation in the CABs allows organizations and individuals to learn about the project and the option to put forward their own opinions. Participation in the CAB process is not representative of support for the Project either. The CAB members represent the full range of opinion on Northern Gateway – supportive, neutral and opposed. Meaningful dialogue is encouraged, opportunities for learning are created, and respectful relationships are developed. The CABs won’t end once the pipeline is built; they’re expected to remain, influencing operations and community engagement throughout the lifetime of the project.

In addition to CABs, we’ve also met people during community meetings and events, and through direct engagement with civic leaders, business and community groups. We have a team of people working on the project dedicated to ongoing community engagement and we outline all of our activities for the JRP in regular updates to our Project application filed with the National Energy Board.

While listening is important, people also want to see action taken on their input. We have altered the pipeline route some two dozen times on input we’ve received from the communities and in July 2012, we announced a suite of enhancements to increase pipeline and operational safety. This pledge was a result of the concerns we’d heard through our consultation activities and is meant to provide additional comfort to those concerned about environmental protection—which is all of us.

Enbridge invests in Massif du Sud wind farm

Thu, 20 Dec 2012 13:59:01 -0700

Video above: Enbridge's green energy investments include wind, solar, and geothermal

Enbridge Inc. and EDF EN Canada Inc. announced today that they have entered into an agreement under which Enbridge will invest approximately $170 million to acquire a 50 per cent interest in the 150-megawatt (MW) Massif du Sud Wind Project in Quebec.

"Massif du Sud is Enbridge's second wind project in Quebec following our co-investment with EDF EN Canada in the 300-MW Lac Alfred project," said Don Thompson, Vice-President, Green Energy. "The Government of Quebec's continuing support of renewable energy generation with a wind capacity target of 4,000 MW by 2015, combined with our successful partnership with EDF EN Canada is an attractive combination for Enbridge."

"The project also demonstrates Enbridge's interest in investing in renewable infrastructure across Canada," Mr. Thompson added. "We're pleased to again partner with EDF EN Canada Inc. on the Massif du Sud Wind project."

"The partnership we initiated last year with Enbridge on the Lac Alfred project has proven to be very successful and we are pleased to once again engage in a co-ownership relationship with Enbridge," said Tristan Grimbert, President and CEO of EDF EN North America. "As an integrated operator we take a balanced approached to our project portfolio and this agreement provides an opportunity to further our ambition as a world-class renewable project developer. The mutual confidence and collaboration between our two companies demonstrates solid business practices and secures a strong Quebec and Canadian presence."

The project, located in the municipalities of Saint-Luc-de-Bellechasse and Saint-Magloire in the MRC des Etchemins and in the municipalities of Notre-Dame-Auxiliatrice-de-Buckland and Saint-Philémon in the MRC de Bellechasse, consists of 75 wind turbines supplied by REpower, and made with regionally-manufactured blades, towers and converters in accordance with the power purchase agreement with Hydro-Quebec.

Construction began in November 2011, and is expected to be completed in December 2012. When fully operational, the project will generate enough clean electricity to meet the needs of about 35,000 homes.

EDF EN Canada Inc.'s operation and maintenance affiliate, EDF Renewable Services Canada Inc. will provide long-term operations and maintenance (O&M) services. Hydro-Quebec will buy the power under a 20-year power purchase agreement (PPA).

Massif du Sud will also contribute to helping Enbridge meet its Neutral Footprint commitment to generate a kilowatt of renewable energy for every kilowatt of conventional electricity that the company's operations consume.

Massif du Sud Wind Project at a glance:

Location:	Chaudiere-Appalaches Region (100 kilometers east of Quebec City)
Capacity Peak:	150 MW
Expected Annual Yield:	500,000 MWh
Equivalent Homes Served:	About 35,000
Technology (turbines):	75 REpower turbines
Construction:	Began November 2011/ Expected completion December 2012
Energy Purchaser:	Hydro-Quebec Distribution (under a 20-year PPA)
Interconnection:	Hydro-Quebec TransEnergy
Estimated Peak Work Force:	More than 250 jobs during peak construction; up to 10 local, full-time operational jobs

Related blog post: Riding the green energy wave

A forum for open dialogue: the FLC

Tue, 18 Dec 2012 13:42:48 -0700

Image above: fishing and shipping industries share Prince Rupert-area waterways

Following in the footsteps of successful programs implemented on Canada’s east coast, Northern Gateway has committed to participate in the development and establishment of a Fisheries Liaison Committee (FLC).

The committee would facilitate effective communication between all stakeholder fishers and the project. The principal purpose of the FLC will be to provide a forum for open dialogue among its members for identifying and resolving potential conflicts through the development of proactive management and mitigation strategies.

In Canada, vessel movements are subject to the Canada Shipping Act and its associated regulations. Large vessels and fishers already operate without conflict in the same waterways proposed for use by Northern Gateway.

The concept of an FLC is being used in Atlantic Canada to assist industry fishers and others in identifying potential conflicts and arriving at acceptable solutions. Two examples where fishery advisory committees have been established include One Ocean and the Canada Nova Scotia Offshore Petroleum Board.

“One Ocean is one example of a regulatory based program that includes individuals sitting together and participating in a collaborative, cooperative way to identify the basis for potential conflicts and, more importantly, a means of resolving potential conflicts,” Dr. Tom Watson told the Joint Review Panel hearings in Prince Rupert recently. “And the end result of that is that they’ve been shown to be effective, both in terms of multiple groups and interested parties as far as fishing, getting together, talking about potential conflicts and avoiding them.”

No industry group, government agency or other project proponents, except Northern Gateway, have proposed an FLC for BC’s north coast.

Membership in the FLC would be one or two representatives from each affected party and may include but not necessarily be limited to the following:

Each coastal First Nation (Food Social and Ceremonial and quota fisheries);
Representatives from each fishery (commercial, commercial-recreational and recreational);
Government agencies (Department of Fisheries and Oceans, Transport Canada, Canadian Coast Guard);
Northern Gateway; and
Other affected parties.

In addition, Northern Gateway would welcome participation by other shippers and vessel operators in the area.

Pipeline expansion is a national priority

Mon, 17 Dec 2012 15:42:43 -0700

Pictured above: the Port at Kitimat near the proposed Gateway marine terminal

When Canada’s top economic thinkers speak their mind—we should all listen.

New reports out on December 17, 2012, from some of Canada’s top economists say new pipeline capacity is critical for Canada’s economic health and should be a “national priority.”

Oil is Canada’s most lucrative export. And Canadian oil trades at a significant discount to global prices because of our reliance on a single market—a situation that the Bank of Canada warned earlier this year was a considerable threat to the health of the Canadian economy.

Both TD Economics and CIBC World Markets issued warnings that if new pipeline capacity isn’t built … and soon … impacts will be felt not only with energy producers but the country as a whole.

The TD Economics Special Report notes: “Canada’s oil sector can be a major contributor to Canadian economic growth over coming decades. The realization of its potential is particularly positive for oil-rich provinces; but, it can also provide enormous benefits more broadly across the country. Investment and growth in the sector can create jobs, fuel industrial production, boost income growth and generate tax revenues to help fund many social priorities.”

I agree wholeheartedly. While Northern Gateway is often viewed through the ‘heated debate lens,’ this issue is far bigger than just one pipeline project proposal. If the Canadian economy is to withstand the economic challenges gripping many developed nations, it must take advantage of the fast growing markets in Asia. It makes perfect sense that Canada’s most lucrative export, crude oil, leads that push—we can lead with energy.

TD Economics recognizes this economic reality; their Special Report also notes: “In order to access rapidly growing overseas markets, Canada needs access to a port where oil can be shipped by supertanker. It is surprising just how economic it is to ship around the world once loaded on today’s largest tankers.”

They point out that western ports are the “natural location” for this marine terminal to be built.

The CIBC also put out a paper, warning new pipeline projects in the near term will not be enough to move all the crude being produced out of Western Canada in the years ahead.

Their news release notes “Pipeline capacity out of Western Canada is adequate for the short term, but substantial progress must be made on this front in 2013. Progress, or lack thereof, will have a big impact on sentiment towards Canadian oil producers.”

TD, CIBC and the Bank of Canada aren’t the only economic leaders calling for increased market access. Scotiabank economist Patricia Mohr told news outlets in October of this year that West Coast access is critical if Canada is to tap the faster-growing markets of the Pacific Rim. And recently, the chief economist for the global think tank International Energy Agency said Canada should pursue Asia as its next major market for growing supplies of oil sands crudes.

Building the energy infrastructure necessary to promote fair-market value for our most lucrative commodity is in everyone’s best interests. It creates jobs, boosts economic development and government revenues which are essential to supporting the services we rely on such as education, health care and infrastructure.

Related video

TANKER SAFETY
Northern Gateway will implement a world-class marine safety program to protect the environment and people who call the north BC coast home—watch the video to learn more.

WWF-funded report deeply flawed

Wed, 12 Dec 2012 11:06:49 -0700

Northern Gateway’s experts believe there are key aspects to the World Wildlife Fund study that are deeply flawed and Northern Gateway has a number of concerns about the assumptions and the methodology used in the report. The available documents do not permit testing the conclusions and assertions on a scientific basis at this stage.

The WWF-funded paper also does not challenge the fact that a spill of this scope is a 1 in 15,000 year event as determined by credible, world-renowned experts. Yet, the conclusions taken in the study do not account for the highly improbable nature of this event despite the fact this is standard practice in economic modeling exercises.

When you look at the initial conclusions from the report, they conclude that there will be a net benefit for BC even in the highly unlikely event of a spill. The report compares the economic benefits of the marine terminal—which are a certainty with this project—to unmitigated costs which are extremely unlikely to happen.

We question the logic of comparing certain benefits with highly improbable losses. Nevertheless, the report did so, and concluded that the benefits were twice the costs—that’s like trading a chance to win a $50 lottery prize for $100 cash.

As the Globe and Mail accurately noted in their story on the report, the costs to the commercial fishery are estimated to be up to a worst case around $300 million while Northern Gateway’s marine terminal benefits alone are over $620 million.

At the end of the report the approach took a sharp turn: Unrealistic factors and costs that will not be borne by the fishing industry are added into the calculation to conclude that costs are greater than the marine terminal benefits. The report rolled back into the analysis hypothetical spill response and cleanup costs to result in a hypothetical cost, for a 1 in 15,000 year event, of around $9 Billion.

To calculate cost estimates, the report took two of Northern Gateway’s own numbers provided as evidence to the JRP, a per barrel estimated clean-up cost of $15,000 and an estimated punitive damage cost of $22,500 per barrel, and simply added the two together and then multiplied them by the total barrel size of the spill scenarios.

These costs aren’t borne by the fishing industry either.

The cost calculations also use a scenario reflecting zero response—Northern Gateway does not believe it is credible to assume an event of this nature could occur without any emergency response whatsoever. The reality is simply that, because of the preparedness and mitigation efforts of the project, these impacts would not be of such a scale as represented in this report.

The report also notes that “An actual spill may also affect a smaller area than that projected by models, due to spill response activities and containment” but these factors aren’t included in the report’s calculations—this deviates considerably from the economic cost benefit analysis usually found in the published literature.

Northern Gateway has put in place the most comprehensive suite of marine safety and emergency response measures ever proposed in Canada. Even without Northern Gateway’s industry leading commitments, existing legislation governing maritime transportation is well established and clear responsibilities are outlined on this matter.

It’s important to understand, that despite over 20,000 oil tanker movements each year on Canada’s coasts, a spill of this magnitude has never occurred in Canadian waters; the Canadian marine oil transportation industry has a world-leading safety record, with zero spill incidents since 2000.

For a credible and methodologically sound analysis of project costs and benefits, and one that has been tested under cross-examination, people should refer to the Cost Benefit Analysis undertaken by Dr. Ruitenbeek. It was filed as part of the Reply Evidence by Northern Gateway in July 2012. Dr. Ruitenbeek's analysis clearly showed the enormous economic benefits of the Project even when potential spill costs are taken into account.

BC Government announces spill plan consultations

Wed, 28 Nov 2012 16:47:11 -0700

The Government of British Columbia announced public and industry consultations alongside a plan to “develop world-leading practices for all land-based spill prevention and response.”

Launching with a discussion paper, and following with industry and public consultations, the BC Government will take a strong look at energy pipelines, but also energy storage (home oil tanks) and other means of transportation (trucks and rail).

“Our government is committed to protecting the environment and that means, regardless of future pipeline opportunities, we need world-leading standards for spill preparedness and response in place immediately for all hazardous material spills,” said BC Environment Minister Terry Lake in a press release. “This is why we are developing a plan, in partnership with industry, which will put B.C. at the forefront of environmental protection, while at the same time working with the federal government to develop a world-leading marine-spill response."

“We welcome the opportunity to work collaboratively with BC and all governments in addressing policy solutions to these issues," said Janet Holder, Enbridge Executive Vice President Western Access. "Northern Gateway is fully aligned with the BC Government’s priority of ensuring comprehensive and robust spill response preparedness and response—pipeline safety and environmental protection has always been the first priority for Northern Gateway.”

The Canadian Energy Pipeline Association and the Canadian Association of Petroleum Producers are expected to play an active role in consultations on behalf of their members.

"We support the government of British Columbia's policy which re-enforces an effective spill preparedness and response framework for the Province,” stated Brenda Kenny, President and CEO, Canadian Energy Pipelines Association. “It mirrors the transmission pipeline industry's commitment to excellence in emergency management and pipeline safety. The Canadian pipeline industry already follows strict national standards and regulations which enable the industry to operate in the safest and most environmentally sound manner. However, any opportunity to review and continuously improve on these standards and regulations for the benefit of Canadians and the environment is always encouraged."

The consultative process and the policy intentions paper can be accessed online at: http://www.env.gov.bc.ca/epd/codes/spr_eep/response.htm

Click to read more about Northern Gateway's emergency response plans on the pipeline and marine operations.

Related videos

MARINE SAFETY
In this video, marine safety expert Jerry Aspland talks about the simulations used to evaluate the suitability of the Kitimat port for Northern Gateway's marine terminal.

EMERGENCY RESPONSE
Rapidly responding to incidents and coordinating with local first responders are key parts of our emergency response strategies. This video follows along with an emergency response exercise near Toronto in 2011.

The world needs Canada’s oil

Wed, 28 Nov 2012 14:58:14 -0700

The Chief Economist of the International Energy Agency, Fatih Birol, told the Financial Post “Oil demand is growing so strongly worldwide that I think the world needs every single drop of Canadian oil.”

He also told the Post that Canada should pursue Asia as its next major market for growing supplies of oil sands crudes.

Right now, almost all of Canada’s oil exports head to the United States market, a market that is seeing exponential growth in domestic supply and experiencing flat to declining demand partly due to efficiency increases. Because of this dependence on a single, well-supplied market, Canadian oil trades at a deep discount to the global price of oil—approaching $30 per barrel recently and costing Canadian producers millions each day.

It’s a situation that current Bank of Canada Governor Mark Carney has described as a key threat to the Canadian economy.

Alongside producers, the Alberta Government is already feeling the economic sting of depressed oil prices. Alberta’s Finance Minister told the Calgary Herald:

“This isn’t a good situation to be in and it’s costing us. Right now the difference between the world price for a barrel of oil and what our producers can get for their bitumen is about $28. Multiply that by about 2.5 million barrels a day and the math adds up very quickly.”

Opponents of oil sands development are quick to point to climate change as a key reason to restrict or shut down oil sands and pipeline projects in Canada.

Birol didn’t shy away from sharing his thoughts on this issue—the IEA includes considerable climate change discussion in its annual World Energy Outlook reports—and told the Globe and Mail:

“If the necessary [mitigation] measures are taken in terms of the production and transportation of oil sands, this will not have any significant impact on CO2 emissions growth. Compared to the major emitting countries, this is not peanuts, it is a small fraction of peanuts.”

Canada faces critical choices for its energy exports Birol also noted:

“The global energy foundations are shifting and there are countries that are going to win from that, and there are countries that are going to lose from that. But there are some countries who have the potential to win but if they do not take the necessary steps, they can be losers. And I believe Canada is one of them.”

Related video

TANKER SAFETY
The Northern Gateway project will open new markets for Canada's oil, creating economic growth while protecting the environment through world-class safety plans; watch the video to learn more.

New study confirms dilbit safe for pipelines

Sat, 24 Nov 2012 15:45:23 -0700

Natural Resources Canada (NRCan) has confirmed that diluted bitumen does not present additional corrosion risks in transport pipelines in a study set to be posted to their website next week.

If you’ve followed the pipeline debate in Canada, you’ve likely heard pipeline and oil sands opponents say that dilbit is highly corrosive and causes pipelines to rupture more frequently than conventional crude oil. Industry has, of course, disputed these nonsensical claims publicly—it’s illogical that companies would risk their massive investments in pipeline infrastructure transporting products with significant corrosion risk to pipeline steel. But you don’t need to take our word for it…

Government researchers have been testing oil corrosiveness for almost two decades. The latest study, conducted in 2012 for NRCan, concluded that diluted bitumen is not corrosive—it was rated 3 on a scale of 20, where anything 4 and below on the scale is considered non corrosive to pipeline steel.

If you’re inclined to believe dilbit is more corrosive than conventional crude oil given what you’ve been told by oil sands and pipeline opponents, you might be even more surprised to learn that NRCan’s study could not establish any difference between dilbit and other oil types:

"We did not see any difference whatsoever. We could not differentiate" [it from other types of oil] Sankara Papavinasam, a research scientist with Natural Resources Canada, told the Globe and Mail.

As for the claims that heat could cause diluted bitumen to be corrosive, the Canada Research Chair in Pipeline Engineering at the University of Calgary stated, "it's not an issue."

Alberta Innovates, an independent government body, published a literature review study in 2011 that also came to the conclusion that there is no scientific evidence supporting the claim that diluted bitumen presents a higher internal corrosion risk to transport pipelines.

Canadian oil export pipelines full

Thu, 22 Nov 2012 09:46:24 -0700

At a recent event, an Enbridge Vice President, Vern Yu, told oil industry watchers “All of the crude oil export pipelines are pretty much full, running at maximum capacity. And we’re not likely to see any meaningful capacity added to these networks until the end of next year.”

For Canada’s energy industry—providing almost $100 billion in export value each year—limited access to export markets is already causing significant consequences.

In a Globe and Mail article, journalist Nathan Vanderklippe, using data from CEPA, outlines the considerable cost to the Canadian economy:

“Canadian light oil is now selling for some $30 (U.S.) a barrel below comparable international crude; heavy oil faces a roughly $28 discount. If the pipes stand full for a year, the pain is likely to be significant. According to the Canadian Energy Pipeline Association, a $15-a-barrel discount decreases energy company revenues by $16.4-billion a year, and a $2.46-billion loss to governments. Today, the discounts are double that.”

Current calculations peg the lost revenue to Canadian governments at $4.92 billion per year. That’s a massive number. To help put it into perspective, consider this…

Capturing lost revenue due to this price differential—something that would be addressed significantly by accessing world oil markets—would provide governments with additional funds for the social programs and infrastructure we depend on. For example, according to the Journal of Commerce, BC’s Children’s and Women’s hospital building costs are expected to come in at around $700 million... $4.92 billion is enough to fund about seven similarly costed projects.

To address this issue, Canadian producers need to create additional market access outside of the USA primary market—keep in mind the US market is seeing exponential growth in supply that is projected to continue while demand remains flat or declining. The lost revenues to producers, totaling nearly $32 billion annually, means less revenue for re-investment and lower payouts to shareholders, many of whom are hardworking Canadians trying to save for their retirements either directly, through investment funds or through pooled pension funds like the Canada Pension Plan and others.

This issue is truly pan-Canadian—it directly affects all of us whether we choose to recognize it or not.

Gateway opens new office in Prince George

Fri, 16 Nov 2012 12:02:02 -0700

Today we celebrated the grand opening of our new office in Prince George British Columbia. I was delighted to see so many familiar faces from the community that came out to help us kick off our grand opening!

The new office is really spectacular. I am so impressed with the renovation crew - the space has really been transformed into a functional office that will serve as the base of operations for Northern Gateway in British Columbia.

When I returned to Prince George last year after spending a number of years working across Canada, it was a decision I was happy to make - for two reasons: It was a chance to come home – something I had always planned to do, and it gave me the opportunity to work on a project that I believe is vitally important for both BC and Canada. I have to admit, when I told friends and even some colleagues that I was leaving my Toronto office to work out of my basement they all thought I was nuts!

Well the day has finally arrived when I can move out of my basement, and I am really excited about that! The new office will be home to a number of Northern Gateway employees that are based in Prince George.

I am proud that Northern Gateway’s headquarters will be in my hometown. This demonstrates our commitment to Northern Gateway while contributing to the community and local economy through presence, partnerships and employment opportunities.

The new office will be located at C103 Parkwood Place 1600 -15th Ave, Prince George, BC.

Kitimat: a safe option

Wed, 14 Nov 2012 16:34:06 -0700

There’s no mistaking the importance of Kitimat, B.C., to the Gateway project. It’s where the pipeline ends, and it’s where marine operations begin.

I’d like to set the record straight on why we chose Kitimat, at the head of the Douglas Channel, as the site for Gateway’s marine terminal. The answer took thousands of hours of research, planning, engineering, environmental science, oceanography consultation, weather monitoring, and simulation. But the simple reason is . . . safety, all the way.

The Douglas Channel is one of the widest and deepest inland waterways on North America’s west coast. Government research had already determined Kitimat to be among the safest ports in B.C., and about 1,500 tankers carrying petrochemicals have docked safely at Kitimat over the past quarter-century.

Strategically speaking, Kitimat provides the lowest environmental risk for all aspects of Gateway operations. It offers a safer endpoint for the pipeline route, from a geotechnical perspective. The marine terminal at Kitimat also provides safe approaches for tanker traffic — with a suitable turning basin in Kitimat Arm, and natural deep-water berths that are sheltered from open-water wave conditions.

At its very narrowest, the Douglas Channel is 1.4 kilometres wide — three times wider than Transport Canada’s recommended width for two-way tanker traffic. Water depths in the marine channels are up to several hundred metres.

As an added measure, full simulations of vessel traffic in the Douglas Channel were carried out at a world-leading facility in Denmark. It tested the largest proposed vessels in environmental conditions that tankers would experience in the marine channels. The result was a thumbs-up on the shipping route, endorsed by both government departments and the British Columbia Coast Pilots.

Why Kitimat? Why the Douglas Channel? It’s the safe option for Gateway.

This post also appeared in select publications as part of a weekly series of Northern Gateway advertisements

Related videos

TANKER SAFETY
Northern Gateway will implement a world-class marine safety program to protect the environment and people who call the north BC coast home—watch the video to learn more.

MARINE SAFETY
In this video, marine safety expert Jerry Aspland talks about the simulations used to evaluate the suitability of the Kitimat port for Northern Gateway's marine terminal.

Energy 101

Tue, 06 Nov 2012 12:37:50 -0700

The world consumes approximately 90,000,000 barrels of oil every single day.

So how does the world get all this energy?

The supply is concentrated in just a few areas… with approximate reserves of 1.5 trillion barrels.

However, the world’s greatest demand for energy is largely in areas with limited supply - 90,000,000 barrels of oil a day - for necessities like:

transportation
agriculture
housing
heating
power generation
plastic
medicine
and the countless other things we count on every day

So just how much is 90,000,000 barrels of oil? Well, if it were gasoline, that’s enough to put 56 litres in every one of the 254,000,000 passenger cars in the United States.

And therein lies the problem… how do we get such a vast amount of energy from where it is found to the people who need it every day in the safest most efficient way possible?

The solution is a combination of Tankers, Pipelines, Trains and Trucks.

Tankers are used to transport crude oil from fields in the Middle East, North Sea, Africa, and Latin America to refineries around the world.

Over half of the world’s oil supply is shipped by tanker, on board a fleet of over 10,000 vessels.

On land, pipelines carry the load.

Pipelines are the safest most cost-efficient way to move such large volumes.

Every day tens of millions of barrels of petroleum products are safely shipped around the world through nearly 2 million kilometers of pipelines.

Finally, trains and trucks do their part, distributing the energy to refiners and factories where it is turned into the vast array of products we count on every day.

We rely on energy for heating our homes, growing our food, transportation, power generation and manufacturing the countless other essentials in our lives. And thanks to the safe and efficient movement of energy, the world can count on these essentials being delivered every single day, providing the opportunity to grow and prosper.

Going the distance to prevent spills

Tue, 06 Nov 2012 09:38:08 -0700

I want to share a few things with you about the crude oil pipeline industry. Despite what you have undoubtedly heard from various corners of the news media, pipelines are the safest, most economical, and most environmentally sensitive method of transporting petroleum on the planet.

Here’s another thing I can tell you — there are no absolutes in life, and that also applies to the pipeline industry. With the Gateway pipeline, we have gone to incredible lengths — extensive geotechnical investigation, special pipe design, tunnels and deep burials — to avoid any possibility of a spill.

At the end of the day, however, we can’t guarantee zero spills. No one can. That’s why we’ve also mapped out detailed contingency plans in the areas of preparation and response in the very unlikely event of a spill along the pipeline route.

To start with, we announced in July that we will add nearly 100 remotely operated isolation valves along the Gateway twin pipelines, bringing the total to 264 — and we’re continuously updating their locations to ensure optimal placement. That means our control-centre operations staff, and remote pump station employees all along the line, can shut down and isolate sections of the pipeline at the first hint of a possible leak.

Because all our remote pump stations are also staffed 24/7, response to a potential spill will begin immediately. With response equipment stored at those pump stations, our manager of engineering Ray Doering tells me that at least half a dozen local operations staff, joined by additional personnel and local trained response contractors, would be mobilized and attempt to establish containment of any potential leak as soon as possible, based on accessibility.

We have designed Gateway to the highest standards of pipeline safety and integrity. Our goal is zero spills. And we’ll still be ready, just in case.

This post also appeared in select publications as part of a weekly series of Northern Gateway advertisements

Related videos

ROUTE SAFETY
Drum Cavers is an expert in pipeline engineering. He is part of a team of over 200 technical and environmental experts who worked on the plan to make Northern Gateway the safest pipeline built.

Understanding spill response planning

Thu, 01 Nov 2012 17:48:26 -0600

There’s been some chatter in social media this week suggesting Enbridge has no spill response plan for the Northern Gateway pipeline. This suggestion is completely false.

The chatter was started by organized activists. Unfortunately for members of the unsuspecting public, the misinformation has been spread far and wide causing fear and confusion about the project—it’s an all-too-familiar tactic used by project opponents that adds no value to the ongoing discussion about the project.

Here’s a link to our publicly available General Oil Spill Response Plan.

It’s a regulatory document that we filed with our National Energy Board application. It’s been publicly available on our website and on the National Energy Board website for well over a year.

With over 100 pages, it contains significant detail about how we plan to mitigate risks to the environment and respond to emergencies in the unlikely event of a spill.

Northern Gateway is operating under a National Energy Board approval framework which requires additional levels of detail as a project advances through the various stages of that process. This process anticipates and accommodates additional work in an effort to make this project as safe as possible.

The NEB process allows us to continue to provide opportunity for Aboriginal and community engagement, and to refine and conduct exercises for emergency preparedness and response before operations start. Northern Gateway makes no apology for this commitment.

Notwithstanding the incredible amount of work on record to date, on a scale unprecedented in Canada and probably anywhere else in the world, a Joint Review Panel decision isn't the end, but really the beginning of even more work, more detailed proposals, and better outcomes.

To help intervenors better understand the planning process, Enbridge Northern Gateway, yesterday, provided the Joint Review Panel with an additional framework document outlining when and how additional, detailed, site-specific response plans are developed.

Canadian pipeline regulations require pipeline operators to submit a detailed emergency response plan at least 6 months prior to commencement of operations. Regulators require this document to be updated throughout the operational lifetime of a pipeline. Our emergency response plans and capabilities are subject to constant regulatory oversight.

We work closely with emergency response organizations in the communities we operate. We exhaustively consult with landowners, community representatives and other potentially affected stakeholders. There are many opportunities for the public to have input into and ask questions about our emergency response plans.

Building a strong, safe pipeline

Thu, 01 Nov 2012 10:28:06 -0600

Recently, in this post, I wrote about the extra care and attention that have gone into the planning of the Gateway pipeline route. I’d like to tell you now about another largely untold piece of the Gateway pipeline story — and that’s all the work we’ve done on pipeline integrity in order to prevent a spill.

Recently, we announced a series of safety enhancements that push Gateway far beyond the stringent standards of the pipeline industry. Put simply, they make what was already a very safe project even safer.

To begin with, the overall wall thickness of the oil pipeline will be increased by 19 per cent, and the condensate pipeline by 14 per cent. For water crossings such as major tributaries to the Fraser, Skeena, and Kitimat Rivers, that number will be bumped up by another 10 to 20 per cent. During the construction phase, we’ll ensure serious quality control during fabrication, ultrasonic or radiographic testing of every weld, hydrotesting and extra care in the backfill process.

All of our remote pump stations along the route will be staffed 24/7. That means an extra level of security — with on-site personnel, in addition to remote control-centre operators, keeping tabs on video security monitoring, intrusion alarms, pipeline pressure, temperature, and vibration level, and several forms of leak detection technology.

We’ll be making more in-line inspection surveys across the entire system — at a minimum of 50 per cent above current standards — plus full biweekly air patrols.

We’ll also be fitting the pipeline with dual leak-detection analysis systems. That means two entirely different means of highly accurate data analysis along the route, giving us a computerized model of pipeline flow, with information constantly being captured, updated, and monitored.

As a British Columbian, I know how seriously you value this strikingly beautiful province. I do too — and I have every confidence that Gateway’s pipeline integrity measures will keep it that way.

This post also appeared in select publications as part of a weekly series of Northern Gateway advertisements

Women are doing a lot to build stronger, more vibrant communities in Northern BC

Thu, 01 Nov 2012 09:13:06 -0600

Hello. My name is Michele Perret.

I have been working for Enbridge for 21 years and am the Senior Manager of Community Relations for Northern Gateway. In my job I have been fortunate to travel to many beautiful communities in northern Alberta and British Columbia as I talk about the Northern Gateway project. I want to tell you about a new project that I’m proud to be involved in—it’s called Women Building Communities.

Women Building Communities is an initiative sponsored by Northern Gateway to bring together women who are passionate about making a difference in their community. The initiative is currently in its second round; six WBC's have already been held in the communities of Terrace, Kitimat, Burns Lake, Prince George and Houston. This second round of WBC events has a different theme tailored by feedback and ideas that were brought forward from the women in these communities.

I was thrilled to attend the Women Building Communities event in Burns Lake last Saturday.

Wow, those women in Burns Lake are fun and Linda Edgecombe led an excellent laughter-filled discussion about how to enrich our life. For those of you not familiar with Linda, she is an internationally renowned, award-winning humorist, inspirational, speaker. I had never met Linda before but on Saturday night, I felt like I was hanging out with my best friend because she made me feel so good. She instructed all of us to write down questions to ponder our lives such as "How are you doing considering”, and “When was the last time you did something for the first time?" She challenged us all to do something different by Tuesday, October 23, and although I'm a little late, here I am writing my first blog! I hope you are reading this Linda!

Lots of money was raised for charity that night—a big THANK YOU to everyone who bought a scarf from Linda to support her charity to provide education opportunities for underprivileged young women in Nepal. You'll be happy to hear that Linda raised $750 from the event! Another thank you to Lisa from our Prince George office who found a new calling selling $500 worth of raffle tickets for prizes generously donated by Kelly of Aksenz, Louise of Smithers and Linda herself. The money from the raffle was matched by Northern Gateway to generate a total donation of $1000 to the Burns Lake Food Bank.

Inspiration and contribution to two worthy causes; no one does it better than a group of wonderful women who get together for even just a few short hours.

Northern Gateway was happy to sponsor this positive energy generated from the organizing efforts of Shelly from the Chamber and Kelly from Aksenz. The ladies working at the Burns Lake Legion that night did a great job keeping our bellies full! Thank You!

One last thing, I want to thank Kelly for opening her Aksenz store after the event—I'm wearing the turtleneck I bought as I type this!

Changing the route to respect BC

Wed, 31 Oct 2012 13:08:29 -0600

The Gateway pipeline route has already seen a decade of planning and testing, and thousands of hours of work, to ensure maximum safety and minimal environmental disturbance. And I’m proud to tell you that the work isn’t finished yet.

First of all, I want to set the record straight on recent claims that the Gateway pipeline runs through the Great Bear Rain Forest on British Columbia’s coast — they are categorically false. As it happens, our team of engineers has taken great pains to ensure that the proposed pipeline route is almost entirely made up of pre-existing corridors of activity — such as logging roads, forestry roads, cut lines, or other “pre-disturbed” areas — to reduce its footprint as much as possible.

Our engineers, and experts familiar with B.C.’s terrain, have also spent years using the most advanced technology available to identify the potential for geohazards — landslides, rock fall, avalanches, seismic issues, and marine clays. As a result, we’ve worked hard to minimize the risk, and ensure the safest pipeline route possible, with extra measures such as deeper pipe burial, tunnels, and special pipe design.

Our engineering team is constantly refining the Gateway pipeline route. Years ago we started with Route A, and nearly two dozen route amendments later, we’re working on Route V. Many of those changes have come, and others will come, as a result of working with environmental groups, Aboriginal communities, and government agencies.

Along the entire length of the pipeline in B.C., we’ll minimize impact to sensitive fish and animal habitat, reclaim the right-of-way for wildlife, and strictly control and manage access.

Safety, and respect for the environment, have been our primary considerations in charting the Gateway pipeline route over the past 10 years. And that’s not about to change.

This post also appeared in select publications as part of a weekly series of Northern Gateway advertisements

Opening new markets ‘critical’

Wed, 31 Oct 2012 08:54:27 -0600

Two recent reports from leading Canadian thinkers highlight the critical need to open new export markets for Canada’s oil resources.

Patricia Mohr, a commodities expert with the Bank of Nova Scotia, gave prominence to the issue in her recent research report published on behalf of her employer:

“Changing oil market dynamics highlight the increasing ‘commercial risk’ for Western Canada’s ‘oil patch’ of relying largely on one major export market — the United States — and the critical need to build additional pipeline & rail capacity to the B.C. Coast to tap the faster-growing markets of the Pacific Rim. Greater export optionality would allow producers from time-to-time to divert supplies from weaker to stronger markets.”

Right now, Canada, sells almost all of its oil resources into a single market: the United States. Canadian oil currently trades at a discount, nearing 20 per cent, to the global market price—meaning Canadians don’t receive full value for their oil—laregly due to the single-market dynamics of our oil exports.

Mohr’s analysis follows on the heels of another report issued by the MacDonald Laurier Institute, which describes itself as “rigorously independent and non-partisan.”

In their new study released in October 2012, the Institute says “Canada must take action today to be positioned for competitiveness tomorrow” amongst other highlights, including:

Canada is a net energy exporter
Pipelines are the most efficient means of shipping crude oil and natural gas
Canadian producers need access to tide water to reach Asian markets
China and India are increasing their capacity to refine bitumen
The first step towards creating a competitive Canadian energy sector is developing distribution channels

At nearly $70 billion last year, oil was Canada’s single biggest export in 2011. Little wonder then that researchers are focusing on this vital Canadian economic health issue.

In a press release on their website, MLI wrote:

“Canada must be able to get its oil and gas and other energy products to new markets quickly and efficiently… Our ability to raise the standard of living for people across the country depends on it. Finding environmentally responsible and efficient ways to transport energy products is a lynchpin in our future success as a global energy leader.”

Recent related posts:

Earthquake on the Queen Charlotte Fault

Mon, 29 Oct 2012 12:42:52 -0600

The earthquake that occurred in the evening of October 28th originated on the Queen Charlotte Fault, a fault line known for its seismic activity. This fault line is west of Haida Gwaii and well away from the proposed pipeline route, marine terminal, and Northern Gateway shipping routes.

A great deal of care is being taken in every aspect of every physiographic region along the pipeline route, to protect the environment and communities, and to ensure the highest standards for pipeline safety.

The potential for seismic activity along the Pacific Coast is well known and there is no reason this recent earthquake should surprise anyone. Northern Gateway’s geotechnical engineering plans for exactly what happened on Saturday. The size of Saturday’s earthquake, in fact, is well below the seismic ground accelerations already incorporated into the Project design. We have conducted extensive geotechnical and risk analysis to calculate the impact of potential seismic or tsunami activity. We have incorporated this active fault line in our analysis and this is well documented in our application.

Saturday's earthquake validates the pre-engineering work we've done based on the existing seismic reports and to calculate response times to tsunami warnings. The seismic reports generated by Saturday's earthquake will give us an enormous added amount of material to study and modify our plans accordingly. Early analysis suggests that the ground motions in Kitimat were between 10% - 15% of what our design capacity would incorporate.

Northern Gateway is confident that given the amount of work that has been done, as well as the third-party analysis being completed, that we have a very safe route. We wouldn't have proposed this project if it wasn’t safe. But don’t just take our word for it: All of our assertions and our comprehensive plans are being assessed by the National Energy Board’s Joint Review Panel in a robust, thorough and transparent process.

Even though there has been a lot of work already done on seismic analysis, our studies will continue to incorporate the valuable information provided by Natural Resources Canada. We are committed to adapting the project in a continuous drive toward greater safety for people and the environment.

Some people are probably wondering ‘but what about the potential for a tsunami?’

There was a tsunami advisory issued as a result of Saturday’s earthquake. The West Coast Alaska Tsunami Warning Centre activates automatically with responses for all events over 7.5 on the Richter Scale as a precaution. But it’s important to understand that large tsunami waves are not commonly generated from the Queen Charlotte Fault given the mostly lateral nature of the associated seismic movement.

Tsunamis are typically generated by impulsive disturbances to a water column; meaning they need some up and down motion relative to the fault displacement, or a resulting landslide from the shaking.

The seismic activity along the Queen Charlotte Fault line is commonly referred to as strike-slip—the force on the tectonic plates, and the resulting shifts, are primarily lateral with little vertical movement, and therefore tsunami activity is expected to be low in this area.

In the case of any issued tsunami warnings, like what BC’s north coast experienced over the weekend, ships moored at the marine terminal would immediately leave berth and relocate to deeper waters, to further minimize risks to vessels and the terminal.

Ships in open water, or even deep water in the case of Douglas Channel, would not be at significant risk of damage by an approaching tsunami wave. A vessel is unlikely to notice the waves in deeper water due to the relatively long periods of the wave. If the ship does observe the wave it will appear as nothing more than a "swell" where there might not have been one.

Enbridge Posts 2012 CSR Report

Wed, 24 Oct 2012 15:31:52 -0600

For the ninth year in a row, Enbridge has released its annual Corporate Social Responsibility (CSR) Report.

The full report, which is only available at www.csr.enbridge.com, provides details of our performance in 2011 and of significant events that took place in the first half of 2012, focusing on our environmental and social performance, as well as on the economic benefits we provide to communities.

“As a leader in energy delivery, CSR is the bedrock on which we’re building Enbridge’s long-term sustainability,” said Al Monaco, President and CEO. “It guides how we operate and grow our business – whether we’re talking about our delivery of oil and refined products, distribution of natural gas to customers, or generation of electricity from renewable and alternative sources.”

As in previous years, this year’s CSR report highlights material topics of importance for Enbridge, such as our performance in the areas of:

Pipeline Integrity
The Environment
Community Relations and Development
Health and Safety

We invite you to check out the report and other aspects of the www.csr.enbridge.com microsite where you will also find feature articles and videos that highlight enterprise-wide sustainability initiatives including, our pipeline integrity programs, EGD’s energy conservation programs, diversity at Enbridge and profiles on our various partnerships with different stakeholders.

The report was prepared using the Global Reporting Initiative (GRI) G3.1 sustainability reporting guidelines, which serves as a generally accepted framework for reporting on an organization’s economic, environmental and social performance.

The most comprehensively scrutinized pipeline ever

Thu, 18 Oct 2012 18:39:40 -0600

The Joint Review Panel Process is conducted under the auspices of the National Energy Board and the Canadian Environmental Assessment Agency. It’s their process, not Enbridge’s, and they determine the requirements of the application and the examination process they will use to make their decisions.

The BC Government has suggested to media that more information is necessary to determine whether or not the Project will meet their demands.

Enbridge Northern Gateway has filed the most comprehensive application for a pipeline ever put forth to the National Energy Board in Canada. Our application, numbering over 20,000 pages, compiling nearly a decade of detailed and exhaustive study covering engineering, environmental assessments and public engagement, will be the most thoroughly and effectively scrutinized oil pipeline project ever.

Since the application was filed in May 2010, over 3500 questions about our application were answered through the JRP Information Request process. Before issuing their Hearing Order in May 2011, the JRP had hearings along the proposed right of way with respect to the sufficiency of the information filed and the issues addressed in our application. There was plenty of opportunity by everyone to raise concerns—which resulted in Northern Gateway filing significant volumes of further information.

To some extent, the BC Government’s recent demands for more information appear to be based on a misunderstanding of the sequence of work ordinarily done in developing a pipeline project, and the way in which the National Energy Board regulates such projects.

Northern Gateway is operating under an approval framework which requires additional levels of detail as a project advances through the various stages of that process. This will anticipate and accommodate additional work to make this project as safe as possible.

This process allows us to continue to provide opportunity for Aboriginal and community engagement, and to refine and conduct exercises for emergency preparedness and response before operations start. Northern Gateway makes no apology for this commitment.

Additional National Energy Board approvals are required in detailed route decisions and to proceed into operations after the regulatory authorities have had a chance to review the construction and proposed operating procedures, including emergency response plans. There's also ancillary permitting by agencies such as the Department of Fisheries and Oceans.

The Province would be aware the Pacific Trails Pipeline BC Environmental Assessment had over 500 post-approval conditions including preparation of an Environmental Management plan, wildlife mitigation, additional geotechnical engineering and monitoring of the Morice River watershed. In addition, the Province would also be aware that the route approved in the initial decision of the BCEAO in June of 2008 was subsequently amended in 2012. The amendment incorporated seven route alignment changes which were the result of additional work by the proponent following the receipt of the 2008 approval.

The process Northern Gateway is currently in is consistent with previous NEB pipeline proposal decisions. The reasoning behind this process is not to defer difficult decisions; this process ensures the most current body of deeply detailed work forms the basis for project approvals.

In addition to condition compliance, detailed routing and construction methods are also subject to approval under the NEB Act. Participants in these processes include affected landowners, which in this case would include the Province of BC.

Northern Gateway would like to work proactively with the Province of BC. Northern Gateway shares the objective to have world-class operational safety and spill response capabilities. If the BC Government has any ideas for improvements, any features they would like to see built into the project, any suggestions for different routes, techniques, or technology, we would love to discuss this.

However, BC Ministers and the Premier's office have declined all invitations to meet since February 2012. Many of the issues being raised in the hearings could be effectively addressed through dialogue.

We believe that B.C. Government officials should see the proposed route for themselves, see our control room and go to Michigan to see how we addressed our spill at Marshall. Northern Gateway is having ongoing dialogue with all other stakeholders whether they support the project or not.

There is a need for direct discussions rather than interchanges through the media. This is the time for the BC Government to be working with Northern Gateway to create the best possible solution for British Columbians.

Gateway takes pipeline design to new lengths

Tue, 16 Oct 2012 14:50:19 -0600

There was a lot of testimony given at the technical hearings in Prince George on issues related to route design and pipeline engineering. Participants in the hearings into Northern Gateway’s regulatory application are broadly trying to ask and answer: How will the Northern Gateway design address the hazards that may be present along the proposed pipeline route?

The lawyer representing the Haisla Nation — their traditional territory includes the area around the terminus of the Project at Kitimat, BC — asked questions about how the Project evaluates risk and incorporates analysis into its design.

Responding to Haisla questions, James Mihell, P. Eng, the Vice President, Engineering at Dynamic Risk Assessment Systems, Inc., told the JRP that Northern Gateway is putting an enormous amount of energy into designing a project that addresses risk – first and foremost:

“The process that is being adopted here is one that is far more rigorous and I don’t think that any of us should feel apologetic about the fact that it’s a very protracted process. It takes time, it takes a lot of study.”

There have been questions in the hearings and statements in the media over the last few days of how frustrating it has been for some who seek answers that will be further refined with more detailed engineering.

It’s important to understand the stage of the environmental assessment process currently underway. At this time, the panel is hearing cross examination related to the proposed one-kilometer-wide pipeline corridor.

If the project is approved, the project will then enter the next prescribed step in the regulatory process, the detailed route phase with hearings before the Board. At that time the precise location of the pipeline within the approved corridor will be determined—and the proposed corridor will be narrowed to a 25-meter-wide pipeline right of way. Additional detailed work will be done to support that determination—work that will be subject to regulatory approval with hearings in front of the NEB.

Northern Gateway, to date, has filed some 20,000 pages of documentation and technical data – more than any other pipeline application ever. A number of reports have also been filed that are not required, or not yet required, in the regulatory process. Yet, those reports have also already been put onto the public record.

“And, you know, I was listening to a lot of the discourse yesterday and today about: Why don’t you have final design yet? Why isn’t it done yet? Why haven’t you figured everything out yet?” said Mihell. “Because these guys have been working on it for years. The geotechnical engineers are constantly re-evaluating, collecting more information and striving to see whether there are — whether or not there are — hazards that can be avoided. It’s a long protracted process.”

Despite the frustrations of some, the testimony in the hearings has shown loud and clear the commitment by Northern Gateway to present as much information now as is possible, but then to go further in studying the issues and adopting new learnings into the design of the project. This makes what is a safe project even safer.

“The point of the process is not to establish a reliability metric for the pipeline as a whole,” explained Mr. Mihell. “It’s not to try to claim social license, it’s to inform design… That’s the process. That’s why we do this… We’re trying to develop the most robust, rigorous design possible that is risk optimized.”

Ray Doering, Enbridge Northern Gateway’s manager of engineering answered similar questions earlier from lawyers representing a coalition of environmental groups:

“You indicated that perhaps, you know, we’re making changes late in the process but really, this is a natural progression of the design.

We are incorporating feedback from the regulatory process, from ongoing consultation, discussions with Aboriginal communities. So this is a -- really a natural evolution of the design. So we can’t suggest that we will have a final design because this process really is meant to continue to include that feedback and inform the design.

And so what we’ve provided to the Panel is a detailed design that we think is at the appropriate level to determine whether there are any potential significant adverse effects that would be associated with the design and construction and operation of this project.

And again, we’ll maintain that we’ve been at this for about 10 years now to get to this point so, it’s not something that just happened in the last few months. We’ve been continuing to inform the design and add to our fieldwork.

You know, large volumes of material have been filed, unlike any project I’ve ever seen, that are really supporting some of the decisions and work that we’ve done. And really, this is all meant for the JRP to evaluate the proposal, and really, for them to come to the conclusion whether there are any significant adverse environmental effects that could be associated with this project.

And we believe we’ve got a very full record here to help them make that decision.”

Safety trumps cost: Enbridge expert tells JRP

Thu, 11 Oct 2012 16:01:16 -0600

“We will have one of the best instrumented pipeline systems not only in North America, but probably the world,” Barry Callele, director of pipeline control systems and leak detection for Enbridge Pipelines Inc. told the JRP. “We’ve made the commitment numerous times to a multitude of different intervenors, on the record that, if we find technology that substantively improves our leak detection capability, cost will not be the factor; it will be where is it best applied… for not only Northern Gateway pipeline but all of our pipeline systems.”

Lawyers for the Province of British Columbia continued their questioning of Enbridge’s expert witness panel at the technical hearings in the quasi-judicial phase of the Joint Review Panel process examining Enbridge Northern Gateway’s application to build and operate the Northern Gateway project. Much of their focus was on Enbridge’s ability to detect and respond to possible release incidents.

Some people have expressed concerns about pipeline safety. They want to be confident that, despite pipelines being the safest method to transport large volumes of liquids over distance, Northern Gateway will be able to identify and respond to any incident in order to protect people and the environment.

The Northern Gateway project has proposed a world-class leak detection system with overlapping layers in order to detect possible leaks and rapidly respond by shutting down the pipeline system. Immediately after shutdown, first responders would work to contain any released hydrocarbons and mitigate any potential environmental impacts.

“We actually have, in the industry and in Enbridge, five overlapping methods of leak detection,” Mr. Callele told the JRP, expanding his explanation further. “[We use] an extremely powerful tool that models pressures and temperatures and flow rates and pipeline conditions all along the pipeline. And what it does is it compares actual conditions to the theoretical or calculated conditions, and if there is a difference… we get an imbalance alarm. So every pipeline segment and overlapping segments have imbalance alarm thresholds.”

Pipeline pressure is continuously monitored by our control centre operators to identify any pressure changes. They are trained to respond to any pressure fluctuation and take pump stations off-line and remotely close valves to protect the environment.

Routine visual patrols are also planned to be conducted—either from the air or on the ground along the entire right of way—every two weeks, which is more frequent than the regulatory requirement of three week intervals.

Awareness, education and outreach campaigns will also inform people in the area of the pipeline and teach them how to identify potential risks or signs of incidents.

“And so if they smell something or see something, [they] phone it in,” Mr. Callele explained to the Panel. “That sort of a leak trigger—well that sort of a leak indication in our system causes us to immediately shut down the pipeline, no questions asked. We shut it down and then we go and investigate.”

Once any potential release is detected, Enbridge Northern Gateway would act immediately to shut down the pipeline and isolate the area. Remote-operated emergency containment valves can be closed in as few as three minutes—it is a very comprehensive system that also protects us during start-up and shutdown of pipeline operations.

The Province of BC also questioned Enbridge Northern Gateway’s experts on the technologies we are investigating for use on the Project.

“…Those technologies are external sensors basically and there’s so many vendor claims out there that we took the approach that we want to substantiate those,” said Mr. Callele. “We want to compare vendors in the industry in our own tests and determine the best way forward for not only Northern Gateway pipeline but for all of our pipeline systems.”

While leak detection is a critical component of pipeline operation, much of the failure risk can be mitigated through rigorous design and operational standards. Regular in-line inspection using smart tools—industry calls these ‘PIGS’—is a crucial part of operational safety. Enbridge Northern Gateway has committed to running in-line inspections 50 percent more frequently than regulators require.

BC Chamber of Commerce Energy Summit

Thu, 11 Oct 2012 14:42:26 -0600

I was extremely pleased to be asked by the BC Chamber to give the keynote address at the Chamber’s Energy Summit in Vancouver this past Tuesday. The theme of the summit: “What’s in a Pipeline for BC?” gave me an opportunity to explain why – as a British Columbian – I believe the project can be built and operated safety, for the benefit of BC and Canada.

When I made the decision to return to my hometown of Prince George and work out of my basement people thought I was nuts! I’m pleased to be able to tell you that Enbridge will shortly be opening an office in Prince George to serve as our base of operations – not just for Northern Gateway, but also for our growing involvement in energy development across northern BC.

I know you’ve been hearing and reading a lot in recent months about the Northern Gateway project, and I want to address what you’ve heard.

One of the things I get asked about the most is: what does Northern Gateway mean for British Columbia, and for Canada? In order to answer that question we need some context. Right now we stand on the brink of a potentially historic shift in Canada’s trading relationships: From an overwhelming focus on north-south trade with the United States to a broader, more stable mode, that would see Canada expanding trade with the growing markets of the Pacific Rim. For the most trade-dependent nation in the G8, this is no small issue. It’s an effort to support and maintain the prosperity that has made Canada the fastest growing economy in the G8, and potentially an economic star of the 21^st century.

I say “potentially”, because there’s a catch to expanding oil exports from western Canada to the Pacific Rim: We do not have the necessary pipeline infrastructure to grow that trade.

This is important for all Canadians because oil exports have become the cornerstone of Canada’s economy. In 2010, Canada’s single largest export was crude oil. We exported $50 billion worth of it, and nearly all of that went to just one customer – the United States. Our most valuable commodity and only one market – you don’t have to be an economist to know that is not a smart strategy. We have the oil needed by the growing economies of the Pacific Rim, but we don’t have the infrastructure. For Canada, pipeline capacity is the key to increased energy market diversity – the ability to link increased production with changing global patterns of demand.

To make this happen we need two things. We need approval from the regulator – the National Energy Board and the Canadian Environment Agency – that Northern Gateway can be built and operated safety and is in the public interest, and we need the support of British Columbians.

I believe that we have a responsibility to all stakeholders: communities, regulators, and the public to engage with them about what this project means. Northern Gateway has included the most extensive consultation process ever undertaken for a Canadian pipeline project. Over 2,500 meetings, 123 open houses, 150 presentations and 64 workshops. In total, we’ve consulted directly with more than 17,000 people. That far exceeds anything required by the regulator, but it’s what Enbridge felt was necessary. We’ve invested 10 years of research and planning into Northern Gateway, and now that work is subject to a rigorous public review that is examining all aspects of our proposal.

Starting at the beginning of September the JRP panel began hearing expert testimony from Enbridge and from a range of interested parties to examine evidence on the commercial need and economic benefits of the project. Yesterday, in Prince George they began several weeks of hearings to review engineering and environmental issues. In November and December they’ll sit in Prince Rupert to examine all aspects of our marine terminal plan and the impact of Northern Gateway on the north coast. It’s a rigorous and lengthy review – likely approaching four years by the time a decision is made. I’ve personally attended many of the hearings, and believe me it’s a process Canadians can have faith in: A process that will result in an informed decision on the benefits and risks involved in our project.

One criticism I’ve been hearing lately is that there are far too few benefits for BC – I’d like to address that. At six billion dollars, Northern Gateway is the largest private infrastructure project in our province’s history. And we’ve worked long and hard to ensure that the opportunities for BC are real and substantial – amounting to over $800 million in goods and services sourced in northern BC during the construction phase alone. Our regulatory application contains a detailed breakdown of what this means in dollar terms across Northern BC: Local goods and services spending estimated at $318 million for the Coastal Region, $400 million for the Prince George region, and $112 million for Northeast BC. Once Northern Gateway is built it will support at least 560 permanent long-term jobs in BC, and generate $1.2 billion in provincial tax revenues. This does not include the impact, for example, of potential spending associated with building the ocean-going tugs we will need, or the upgrading of marine safety facilities on the north coast. I don’t know about you, but to me that seems like a lot of good jobs, economic activity, and tax dollars flowing directly into our province.

I also believe it’s important for First Nations to benefit from the project. Based on input from Aboriginal groups and stakeholders, we developed a package of environmental and economic commitments for Aboriginal communities. As you may know, Northern Gateway has offered a 10 percent share in the ownership of the project – establishing long-term income for Aboriginal communities. I’m very pleased that, to date, 60 percent of those communities have agreed to be partners with us in the ownership of Northern Gateway. Let me be clear, that doesn’t mean these communities have no concerns or questions about the project. It does mean they’ve decided to work with Enbridge in addressing their concerns and securing real benefits for their communities.

What I’ve heard most from British Columbians is that when all is said and done, the key to public support is safety and the protection of the environment. That is your major concern – as it is mine.

Northern Gateway will be the most advanced pipeline system ever built. For example, in our planning route we have made extensive use of LIDAR – a laser mapping system that has been used extensively by NASA to create high resolution digital images that have allowed us to identify the safest route possible. You can read more about our pipeline integrity and route safety here.

We’ve also taken the same approach to tanker safety. Northern Gateway’s marine plan proposes working with the Canadian Coast Guard to enhance navigational aids and introduce land-based radar to the BC north coast. We’ve also looked at well-established oil terminal operations in Norway, Scotland, and Sweden – where tankers have for decades operated safely alongside existing tourism and fishing industries. Based on best practices from these areas, we developed what we believe to be a realistic safe marine plan – which was presented in our TERMPOL submission to Transport Canada as well as in our application. In February, Transport Canada filed a positive review of that plan.

We are proud to be the first project on the BC north coast to make these commitments to marine safety. I know it’s important to the public, particularly BC residents to know that we’ve done our homework and that our marine plan has been thoroughly reviewed.

Now it’s the task of the federal panel reviewing Northern Gateway to decide if the project is in the public interest – and if it can be safety built and operated. I believe it is in the best interests of British Columbians, I feel passionate about that – and that’s why I returned home to take this job. It can help ensure energy security for our country and it can help British Columbia cement its place as Canada’s gateway to the Pacific Rim, generating new opportunity and prosperity for years to come.

Conservative pipeline route design

Wed, 10 Oct 2012 16:46:07 -0600

The technical hearings in Prince George, BC, examining pipeline safety and integrity, among other pipeline design related topics, kicked off October 9^th with an examination of the land-based risks to pipeline integrity.

The hearings in Prince George are part of the Final Hearings, the quasi-judicial phase in the regulatory review of Northern Gateway that allows registered intervenors to ask questions of project experts and gives Northern Gateway the chance to question intervenors.

Lawyers representing the Province of British Columbia questioned the geotechnical reports presented as part of the Northern Gateway application, largely authored by geotechnical expert Drum Cavers. Mr. Cavers has extensive experience in pipeline design work related to land stability, including having worked in assessing the geotechnical causes in multiple landslide related incidents in BC.

Mr. Cavers told the Joint Review Panel that the guiding principles for route design in the case of Northern Gateway are very conservative.

“We want to design something which is going to be as free from problems over the design life of the pipeline as it possibly can be,” explained Mr. Cavers, “and to that end, for example, these [areas of potential risk we’ve identified on the maps] are probably larger than they will be as we progress with the detailed design…. that’s good engineering practice in general.”

This is the genesis of the two proposed tunnels in the Coast Mountain range east of Kitimat, BC. The Project determined that the best possible mitigation to the risk of slides in this area was to avoid the risk by tunneling—at an estimated cost of nearly $1 billion. This is an example of the considerable design measures, and cost implications, that the Northern Gateway project has demonstrated it will develop in order to ensure pipeline integrity.

“We have measures that we can use to deal with them,” Mr. Cavers stated. “They include changing the route if we have to, to avoid a problem area. We have a variety of tools available to us, for example, to go underneath them. We can drill underneath them. We can tunnel underneath them. We can go around them. There are a lot of different tools in our toolbox.”

Pipeline route assessment and safety isn’t a once and done process either. Lawyers from the province questioned Mr. Cavers on whether or not the JRP had all the information they needed in order to make a recommendation on project approval; their argument being that more study is necessary in order to give British Columbians confidence that the Project will live up to Enbridge Northern Gateway’s safety commitments.

Recognizing that pipeline safety doesn’t end with initial design, Mr. Cavers explained to the panel that the process is ongoing.

“We are committed to following a process through this stage of the project, through detailed design, indeed into construction and operation to better and better define these [potential issues],” said Mr. Cavers. “As we get into the details, then that starts to indicate what’s our depth of cover, what’s our hazard here, do we need to build berms over the pipeline. It starts to get towards what we need to do as mitigative measures to protect the pipeline against those… hazards on a specific segment-by-segment basis along the pipeline.”

Hobbema School Builds Confidence, Cultural Ties for Students

Thu, 04 Oct 2012 12:47:16 -0600

Sometimes good things come in small packages.

That’s certainly true for the Ermineskin Ehpewapahk Community School. The little blue school house in Hobbema, Alberta, south of Edmonton, is a modest building with two classrooms. But what it lacks in size is made up in terms of the big difference this school—named for the Cree word for the bright morning sun—is having on the lives of 45 students.

“A lot of our students have not done well in traditional schools,” says school principal Wendy Solland of the special education students who range in age from 14 to 21. “Many have dropped out before. Some have learning disabilities. A lot are teen parents. Ehpewapahk is a small, family-oriented school. Our atmosphere gives our students an opportunity to feel secure and have excellent support at all levels.”

Like other outreach schools, Ehpewapahk provides students with literacy and math skills needed for employment. It works with community agencies to increase awareness of different career paths. But here the similarity ends. At Ehpewapahk, the vision is also to build personal wellness while fostering the students’ awareness of their Cree identity.

Solland credits Enbridge’s School Plus program for providing the extra funding that’s helping to make this vision a reality. Thanks to a School Plus grant, the school has introduced the Virtues Project, a character education program. Through discussion each day, the teachers and students explore a different virtue like caring, cooperation or courage. The students talk about what each virtue means and how they need to improve on that behavior. Posters in the classrooms provide a daily reminder of the more than 50 virtues that are closely tied to traditional Cree teepee teachings.

“A lot of our students have heard negative things about themselves and their community,” says Solland, referring to the negative media coverage that has surrounded Hobbema in the past. “This program instead teaches them a positive language. It really helps them to positively reflect on who they are and their potential.”

Ehpewapahk encourages students to connect with their cultural roots in other ways as well. The school has two Elders who visit once a week to provide counseling and lead sharing circles with the students.

Today the older students at Ehpewapahk mentor first-year students and make breakfast each day for students at the community’s elementary school. Students also volunteer to talk about their culture as part of First Nation studies at an elementary school in the nearby City of Wetaskawin.

“Our students are really focused on being leaders in the community and improving themselves. They’ve become more confident, more independent. Just to see the change makes me very proud,” says Solland of the school, which had 12 students graduate this past June.

BC will benefit

Thu, 04 Oct 2012 08:46:53 -0600

In recent months, there’s been plenty of economic discussion surrounding our Gateway Project. As a British Columbian, you want to know: What’s in it for B.C.? From one British Columbian to another, I feel strongly that you’ve got every right to know. And a recent independent report makes it abundantly clear that Gateway will provide significant economic benefits for our province.

The Canadian Energy Research Institute is an independent, not-for-profit research establishment, and it recently released a report on the economic impact of exporting our oil/resources to countries in Asia. In pretty clear terms, CERI’s calculations suggest that we will be Canada’s biggest beneficiary of the Northern Gateway pipeline through the next 25 years — in key categories such as gross domestic product (GDP) impact, employment impact, employee compensation, and tax revenue generation.

According to the report, over the next quarter-century, construction and operation of the Northern Gateway pipeline itself will create an additional $8.9 billion in GDP to the Canadian economy—with $4.7 billion of that amount, or 53 per cent, heading to B.C. Our province also stands to benefit the most in terms of employment impact, since 70,000 person-years of construction and operations employment will be created in British Columbia, compared to 37,000 for Alberta and 8,000 in Ontario. In addition, we would see 55 per cent of the total $5.1 billion in Canada-wide Northern Gateway employee compensation, or just under $2.9 billion.

I’m proud of the economic value that Gateway will bring to Canada. I believe our province should receive its fair share. And as these reputable numbers clearly demonstrate, we will.

This post also appeared in select publications as part of a weekly series of Northern Gateway advertisements

Gateway opens new markets

Thu, 27 Sep 2012 10:19:47 -0600

The Alberta Federation of Labour (AFL), and their friend Robyn Allan, have both suggested the Northern Gateway project will restrict domestic access to Canadian crude oil. Ms. Allan, in her evidence submitted to the Joint Review Panel, argues:

“The proponent maintains that the purpose of Northern Gateway is to restrict crude oil supply to Canadian and US markets, thus raising the price of Canadian crude oil.”

This statement is false—which is perhaps why legal counsel for the AFL did not ask Northern Gateway’s panel of economic experts to confirm this when they cross-examined them just two weeks ago during the ongoing technical hearings in Edmonton.

Enbridge Northern Gateway isn’t the only party to the JRP process that took exception to this claim. This week, as registered intervenors had the opportunity to cross-examine each other at the technical hearings, legal counsel for MEG Energy asked Ms. Allan: “Could you point me to a reference on the record where the proponent states that to be the purpose of the project?”

After attempting to explain away her allegation, Ms. Allan finally conceded: “I cannot point you to a reference where the proponent says that.”

Gateway is about opening new markets for Canadian energy products. The project will not restrict domestic supply, which is forecast to grow exponentially while domestic demand remains relatively stable.

Once tidewater access is created, Canadian producers of oil will be able to sell some of their products on the global market at higher prices than they currently capture. These higher netbacks are shared with Canadian investors and Canadian governments through dividends, resource royalties and income taxes.

Deanna Zumwalt, representing Canadian energy company Nexen, told the JRP panel at the technical hearings in Edmonton this week:

“The key for us, if we can get access to tidewater, is now we’ve got choice. So not only do we have market diversity, we’ve got choice in the market that we can take it to at a given time to try and maximize our value. So it’s a key reason we want access to tidewater….

I don’t think any market’s going to go short barrels in North America. I think there’s very little threat of that happening or occurring.”

Suncor, which is one of the largest oil sands producers, also operates upgrading and refining facilities in Alberta, Ontario and Quebec. When asked by representatives of the AFL whether Suncor anticipates any supply shortages in Canada, Suncor’s representative told the JRP:

“…we’ve got refining assets in Eastern Canada. We’re looking to also get supplies out of Western Canada. We don’t see our participation in Gateway… is going to impact that…

So I would say, no… I think supply to Canadian refineries is going to be quite healthy both from Canadian and potentially our own eastern offshore production as well.”

Keeping an open mind

Wed, 26 Sep 2012 15:50:31 -0600

I’m from British Columbia and I’m proud of that. I’m also proud to lead the Northern Gateway Project. It’s been in development since 2001—over a decade of intensive engineering, environmental study and planning has taken place with over 200 experts from around the world.

I’ve been looking forward to the beginning of September for a while because it marked the first time Enbridge had the chance to make its case and address concerns about the project in the final stage of a lengthy, rigorous federal review. Since January, the federal panel reviewing our application has travelled throughout BC and Alberta to hear what residents have to say and to listen to Aboriginal communities about their rights and interests and how Northern Gateway might affect them.

It’s a great process, very Canadian—because everyone affected has the chance to give their opinion. Through this process we’ve heard lots of questions and concerns about the project. And along the way we’ve met with over 17,000 people across BC and Alberta.

We have continually incorporated feedback into the project plans to address the public’s concerns. We have moved the route after hearing from some of the communities and First Nations. We have increased the thickness of the pipe. And we’ve increased the frequency of in-line inspections by a minimum of 50% over and above current standards. We’re not just listening. We’re responding.

I believe in this project because I know it will have benefits for British Columbia and that our environment can be protected. Northern Gateway is the result of years of careful examination and research, and I’m confident we can reach a decision about it based on facts, as well as mutual understanding and respect. And that’s very Canadian too.

This post also appeared in select publications as part of a weekly series of Northern Gateway advertisements

Building skills

Wed, 26 Sep 2012 15:00:03 -0600

Respect has been the cornerstone of our relationships with Aboriginal groups across Canada. That’s respect on their terms, not ours. And that means having an understanding of, and sensitivity to, the values and the issues that are important to them.

When we started talking to Aboriginal communities about the Northern Gateway Project, they told us, unequivocally, that they wanted meaningful, long-term involvement in the labour force. That’s why we established a $1.5-million Gateway Education and Training Fund — and it’s not dependent, in any way, upon Northern Gateway regulatory approval.

This fund supports training initiatives based in the pipeline, construction, and energy sectors. It is not training for the sake of training; it is totally focused on employment outcomes. And along Northern Gateway right-of-way communities, Enbridge is already connecting industry and community to help create Aboriginal career opportunities.

Catherine Pennington, Northern Gateway’s Supervisor of Community Education, Training, and Skills Development, reports that we’re already co-funding training programs for surveyors and ironworkers. We’re purchasing seats in existing Aboriginal trades programs, and partnering with provincial and federal bodies to help develop skilled tradespeople in the areas of heavy equipment operation, pipefitting, welding, and construction craft labouring. We’ve also co-ordinated the first of many “workforce connections” workshops, bringing together representatives of Northern Gateway equity First Nations and companies with labour-force needs for some meaningful employment discussion.

We’ve heard, loud and clear, from Aboriginal communities that they don’t want to be bypassed anymore by economic opportunities created within, near, or around them — and we’re doing something about it. The Gateway Education and Training Fund shows our commitment to community and workforce development.

We want to be connected to the Aboriginal community and not just because it makes good business sense. It’s about partnership. It’s about responsibility. And, ultimately, it’s about respect.

This post also appeared in select publications as part of a weekly series of Northern Gateway advertisements

NGP economic benefits examined

Mon, 24 Sep 2012 15:56:38 -0600

As many of you already know our project started the technical phase of the National Energy Board’s Joint Review Panel hearings in Edmonton on September 4, 2012.

I’ve been looking forward to the beginning of the technical hearings for a while because they offer the first opportunity since we filed our evidence to the Joint Review Panel to make our case and address concerns about the project during this lengthy, rigorous federal review process.

In Edmonton, we presented a panel of expert witnesses who spoke to the economic benefits of our Project, as well as tolls and tariffs. The format is similar to a court room proceeding as members of the witness panel are cross-examined by intervenors who question their research and reports in an effort to clarify and challenge their findings. All responses are made under oath.

Economic experts—like Dr. Robert Mansell from the University of Calgary, and Neil Earnest, who is a well-known oil market expert—have been asked to a barrage of questions about their reports, submitted as part of Northern Gateway’s application.

The Alberta Federation of Labour challenged us on the effects Northern Gateway will have on the oil market in Canada. Dr. Mansell explained to them how gasoline is priced in Canada and how his reports incorporated the gasoline market realities into our benefits case using a conservative estimate. The price uplift we anticipate will happen to oil produced in Canada isn’t expected to have a measurable impact on retail gasoline prices because retail gasoline prices already reflect the world price of oil. You can read more about this here.

I’m glad our benefits case is subject to such rigorous examination. Canadians should be reassured by the robustness of the JRP process as each and every piece of our application is subject to fact-checking and scientific examination. Ultimately the JRP will decide whether or not our application satisfies their requirements—I’m confident that the JRP will thoroughly review the evidence and hope that Canadians following this process will gain confidence in our project as a result of this examination.

The Northern Gateway project is important for Canada. I’ve called it a nation-building project and I firmly believe that the benefits of opening new markets and capturing more value for Canadian resources will be realized all over our great country.

Aboriginal Canadians have also been offered a unique ownership opportunity and other benefits that are the result of nearly a decade of consultation with communities along our proposed pipeline and marine routes. We believe Northern Gateway offers new partnerships that can serve as a model of Aboriginal engagement.

Our conservative economic projections identify a boost to Canadian GDP of more than $270 billion over 30 years. That’s a large sum that will help fund retirements, help pay for education and healthcare and create significant economic spin-offs across Canada.

The next round of hearings will begin in early October in my hometown of Prince George. These hearings will focus on the pipeline route and the significant safety measures we’ve included in our project design. Protecting people and the environment is our number one priority and I’m confident our expert witness panel in this area—a few of them engineers like me—will provide answers and information that will help you gain comfort with our project.

Robyn Allan’s flawed analysis misrepresents Gateway economic benefits case

Mon, 24 Sep 2012 15:25:02 -0600

Robyn Allan is an independent economist from B.C. She is the former head of the province-owned Insurance Corporation of B.C. and was appointed to that position in the 1990s by the then NDP government.

Ms. Allan wrote an analysis of thePublic Interest Benefit Evaluation of the Enbridge Northern Gateway Pipeline Project. Ms. Allan’s analysis was submitted to the Joint Review Panel as evidence by the Alberta Federation of Labour and was subject to cross examination at the hearings in Edmonton today.

Since writing her report, Ms. Allan has been giving media interviews, writing opinion pieces for newspapers and giving talks to various groups in an effort to influence the public. Unfortunately for those listening to her and reading her opinion pieces, her analysis contains several errors and flawed assumptions that she incorrectly attributes to Enbridge Northern Gateway’s economic reports.

At a talk she gave to Simon Fraser University’s Carbon Talks Forum earlier this year, Ms. Allan said:

“…the economics only work if the price of oil goes up by 2 to 3 dollars per barrel, in Canada, on every barrel produced, every year for 30 years…”

Let’s be absolutely clear, Northern Gateway’s economic case outlines a one-time uplift in price for oil produced in western Canada.

One-time uplift… not every year… and not compounded over 30 years.

This incorrect assumption, wrongly attributed to Northern Gateway by Ms. Allan in various media on multiple occasions, was concerning enough to Wright Mansell Research, who prepared the detailed economic analysis in support of Northern Gateway’s application, that they responded directly to Ms. Allan’s suggestions in an update to their report submitted to the JRP in July 2012:

“Contrary to Ms. Allan’s allegation, a one-time price increase does not cause higher rates of inflation in every future year thereafter.”

In the same SFU talk, Ms. Allan also claimed: “…my research has shown that these price increases apply to every barrel produced, every barrel produced, including that sold in Canada, and that these price increases will be passed on to Canadian consumers and Canadian businesses…. Enbridge confirmed that this indeed what’s behind their case.”

This claim may surprise you as much as it did us. Again, Wright Mansell Research felt compelled to clear the record and stated:

“Contrary to Ms. Allan’s assumption, the Northern Gateway project cannot affect the world price of oil and therefore cannot affect the prices paid for crude oil by Eastern refiners serving approximately one half of the Canadian markets for refined products.”

This gets to the heart of Ms. Allan’s argument: that Northern Gateway is an inflationary risk to Canada and will mean you’ll pay more at the pumps for gasoline (more on that issue here). Her arguments, wrongly attributed to Enbridge Northern Gateway’s application, are flawed.

When asked by a JRP panel member at the end of questioning whether or not Ms. Allan had done any of her own economic modeling, Ms. Allan confirmed that she had not.

Canada’s Building Trades Unions support Gateway

Mon, 24 Sep 2012 09:20:50 -0600

In a statement on their website, Canada’s Building Trades Union (BCTD) says “the Northern Gateway project is a game changer for construction workers in the coming years.”

Recognizing that infrastructure investments create wide-spread economic benefits, the (BCTD) writes

“Canadian construction workers will benefit not only from the initial build but also from oil and gas infrastructure expansion in Alberta of Canada’s reserve of petroleum products. As we already know, when oil and gas investment is made in Alberta, all regions of Canada benefit. When the Gateway is finished it opens up new markets to Canadians in every industry.”

The BCTD believes Canada’s regulatory requirements provide the necessary safeguards for people, including First Nations, and the environment, and set the conditions necessary to ensure that project benefits outweigh any drawbacks.

Canada’s Building Trades Union provides essential coordination and support to the work of its affiliated national and international unions in order that, through inter-trade solidarity, organized construction workers achieve a powerful voice in government, in bargaining, and in their communities. For nearly a century, the BCTD has secured the trade jurisdiction and autonomy of its affiliates as the respected arbiter of trade issues and through that work has contributed to the continuity of employment and economic security of organized construction workers in the United States and Canada.

For more information on the Building Trades and their position on the Northern Gateway project, please visit the following links:

Canada’s Building Trades Union position

Project Impact

FAQs

Foreign investment helps grow Canada’s economy

Thu, 13 Sep 2012 13:21:57 -0600

Canada's oil and gas industry is a massive wealth generator for the Canadian economy.

In 2010 alone, Canada exported nearly $50 billion worth of oil. The oil and gas industry is also a capital intensive industry that requires significant investments to develop new resources and production facilities, and to build upgrading, refining and pipeline infrastructure.

Simply put, without foreign investment in Canada's oil and gas industry, it's very likely our resources wouldn't contribute to the Canadian economy at the same levels they do today.

All aspects of Canada's oil and gas industry are regulated by Canadians.

Regardless of the activity, be it production, transportation or refining of our oil resources, industry is subject to oversight by a wide variety of actors including federal and provincial governments who establish policies and legislation, and regulatory bodies who provide oversight and enforcement to protect people and the environment. Regulators also oversee financial markets and establish rules on investment, pricing, royalties, taxation and tolling.

Canada's pipeline industry is part of this regulatory environment. Every aspect of pipeline construction and operation is subject to oversight and control from federal and provincial bodies. The toll amount charged to shippers who want to use pipelines to move their products, and even the nomination process to determine shipper schedules, are subject to regulation by the National Energy Board at the federal level and various provincial utilities commissions and energy boards.

At the Joint Review Panel technical hearings in Edmonton on September 8, 2012, the lawyer representing Forest Ethics Advocacy, a political activist group with an environmental agenda, asked questions suggesting Enbridge is considering selling the Northern Gateway pipeline to Chinese government controlled interests.

In reply to this line of questioning, Paul Fisher, Enbridge Vice-President Western Access, stated "Absolutely not."

Suggesting eventual Chinese control of the Northern Gateway project is fear mongering. By constructing a red herring argument, opponents of the project hope to create a misleading issue meant to distract Canadians from the significant benefits the Northern Gateway project will bring to the Canadian economy.

Sinopec, which has self-identified as one of Northern Gateway’s funding partners, along with companies like Suncor, Cenovus and the French oil company Total, is a publicly traded company with shares listed on the New York and London stock exchanges as well as Hong Kong and ShangHai markets, and as such is subject to financial regulations, including disclosure and transparency requirements.

Roland Priddle, the former Chairperson of the National Energy Board and an expert witness on Northern Gateway’s economic and national benefits panel, provided the following responses to earlier questions at the Edmonton hearings:

“…the managements of those companies have an enormous vested interest in openness -- well, they're subject to SEC disclosure rules…

…if you check their annual reports -- and I did so in the last few weeks -- it's, for me, striking how much information you can find about the companies.

In fact, I thought to myself, looking at Sinopec, there's perhaps more information than you would find in the annual report of some western companies.

And I also noticed that, particularly Sinopec… were openly critical of the Chinese government’s control of oil products prices…

The control by the Chinese government is on the selling price of oil products within the country... They can't do anything about the import price of crude oil.

So it's a little bit of an over-simplification to say that they're controlled by the Chinese State.”

An independent study recently found that state-owned Chinese enterprises behave in a manner that isn’t all that different from corporations in free-market economies around the world.

The Canadian Chamber of Commerce identified restrictions on international investment as one of their Top Ten Barriers to Competitiveness.

Actions speak louder than words

Tue, 11 Sep 2012 13:22:50 -0600

Talk is cheap for former NHLer Brantt Myhres.

What matters most for Myhres are the actions of the people who have made it through hard times and turned their life around.

The retired pro hockey player is now President and CEO of Greater Strides Hockey Academy. Taking positive action is at the core of the Greater Strides mission, which is all about assisting Aboriginal student athletes to flourish, develop their skills and become leaders while remaining grounded in their cultures and developing life skills.

“[The program] consists of a hockey academy, skill classes, some team bonding, some cultural grounding,” explains Brantt.

Greater Strides has held two hockey camps – one in Spruce Grove, Alta. in July and another in Prince George, B.C. in August. But these kids – who range in age from Atoms to Midgets – learn more than passing, and shooting. They learn about their culture and they learn life skills. Hockey becomes a conduit for teachings on how to be a confident Aboriginal person.

Brantt is in a unique position to share with the hockey academy’s youth participants. Of First Nations decent himself—his grandmother was a member of the Frog Lake First Nation—Brantt grew up in Cold Lake, Alta. before finding himself on a hockey journey with stops in Portland, Ore. playing for the Winterhawks Major Junior team in the Western Hockey League before spending a decade playing in the NHL with the Tampa Bay Lightning, San Jose Sharks, Philadelphia Flyers, Nashville Predators, Washington Capitals, Boston Bruins and Calgary Flames.

As a role model and visionary, Brantt´s passion is providing practical support and equipping young aspiring Aboriginal student athletes with the necessary skills to achieve their dreams.

Brantt also leverages other Aboriginal and hockey leaders through his hockey academy.

Dr. Reg Crowshoe, an Elder with the Piikani Nation in Southern Alberta, offers a unique cultural perspective for youths attending the hockey camps.

“As a group, they can identify with each other, they know we have our own language and distinct culture and those belief systems are a part of the hockey school,” explained Reg. “Some of these kids are at a point where in their mind they need to make decisions of where they want to be and what they want to do. They have challenges - today’s youth have big challenges - not only at school [and] at home, but also in their communities.”

“[The program] really gives you a sense of, that there’s another way of going,” said aspiring hockey star and camp participant Chandler Knibb. “I really want to go to college … so I have an education to fall back on, and get a good job. And that gives me a sense of stability to know that I’m trying my best and no one can put me down for that.”

Meagan Bigsnake is an instructor at the academy. Having attended college in the United States, she’s a bright-eyed, articulate role model for young female Aboriginals.

“It was a challenge getting off the reserve, and being the first female aboriginal from my community to do that,” said Meagan. “And to leave and get my bachelor’s degree and play NCAA hockey, I’m pretty sure that I pathed the way for some of the kids.”

It’s apparent from the feedback she receives from youth through social media that her lessons for them are being understood. Program participants contact her through Facebook to ask questions about school and hockey, and about her experiences playing in the U.S.

“For me that was what came first, school, and then hockey,” Meagan stated.

Dallas Stars forward Vernon Fiddler also lends his time and talents to the program, joining George Laraque, Sheldon Souray and Mike Green as its high-profile NHL player-supporters.

“Hockey taught me a lot of life lessons,” said Vernon. He lists those lessons as being “committed to your team, never quitting, showing up to not only represent yourself, but what’s on your jersey, and that’s your team name.”

The program’s ultimate goal is to create leaders, to equip the participants with the skills they’ll need to grow and benefit from life’s experiences. Academy officials hope the program will equip these youths to return to their communities and create lasting, positive impacts on other young people.

“The old people always said our young people are going to leave, and when they come back, we’re going to live a lot better in our communities,” said Reg, the Elder. “And I still hold onto that dream.”

Enbridge Northern Gateway is proud to support the Greater Strides Hockey Academy

Gas price hikes not expected

Fri, 07 Sep 2012 22:05:00 -0600

The Joint Review Panel technical hearings in Edmonton began this week with cross-examination of Northern Gateway’s economic case. Some interveners questioned whether Canadians would pay a higher price for gasoline if Northern Gateway leads to higher prices for Canada’s oil.

In testimony to the Panel, Dr. Robert Mansell, a University of Calgary professor, economist and contributing author to the economic analysis of the Gateway project, said:

“We have incorporated the increased cost to refiners using Western Canadian oil, and so that -- and let's just use a round number -- that increase of $2 or, to look at it differently, the reduction in the price discount on Western Canadian crude of $2 feeds in to affect the cost of feed stock for refineries.

If you look at the impact of that today, that would be absorbed by the refineries. It would not be passed on. And the reason, basically, is that the gasoline prices, for example, tend to be set by the competition from imported gasoline.

So it would be the producing sector, so to speak, that would have to absorb that cost.”

Many people want to know what the cost could be if refiners passed on increases in Western Canadian crude oil costs to consumers. Wright Mansell Research had this to say in their 2012 study update included in Northern Gateway’s application to the National Energy Board:

“In the case of the Western Canadian refineries, the impact of Northern Gateway would, at most, be a one-time increase of about 1.5 cents per litre in the price of gasoline. Indeed, under conditions such as those prevailing in recent periods, there would be no increase in refined product prices. In any event, an increase of between zero and 1.5 cents per litre in the price of gasoline is well within the range of regular short term price movements.”

In other words, gas prices already fluctuate more from current market forces than Northern Gateway might create.

Chambers state support for Gateway

Wed, 05 Sep 2012 16:27:36 -0600

In Letters of Comment to the JRP, the Edmonton Chamber of Commerce and World Trade Centre Edmonton indicated their support for Gateway:

“We view this project as an exercise in nation-building, as was the St. Lawrence Seaway project which successfully opened the entire country to international trade routes and markets,” writes Ken Barry, volunteer chair of the Edmonton Chamber’s board of directors. “It is imperative to expand access to crude oil markets beyond just one customer. This expansion is crucial in order to sustain economic growth in Canada and avoid a land-locked glut of Canadian crude oil.”

With the support of nearly 3,000 members, the Edmonton Chamber of Commerce is Canada’s largest chamber.

Northern Gateway’s economic case demonstrates the profound positive impacts the project will bring to the Canadian economy—a 2012 update to the study found:

almost $312 billion added to Canadian GDP, or an average annual gain of $9.2 billion;
an increase of $70 billion in Canadian labour income, or an average annual increase of $2.1 billion; and
a gain of $98 billion in government revenues, or an average annual increase of $2.9 billion.

This presents a staggering positive impact for the Canadian economy that also translates into significant benefits for right-of-way communities and other local economies that also benefit from Canada’s immense oil resources.

The World Trade Centre Edmonton, which is the international arm of the chamber, has a membership of over 9,000 businesses belonging to chambers of commerce from northern Alberta (including Edmonton and Red Deer), northern British Columbia, Yukon, Northwest Territories, and Nunavut. They write:

“Canada has a small window of opportunity to take advantage of its position of having the largest, secure source of oil reserves. If we aren’t able to get those reserves to market in a timely fashion, the Canadian economy will lose out to other nations who are more nimble.”

In a separate Letter of Comment to the JRP, the British Columbia Chamber of Commerce also announced their support for the Gateway project:

“Northern BC is in desperate need of new investments and new opportunities for its residents to earn a living. Northern Gateway will help bring economic security and hope to the region. BC alone seeks to benefit from about 3000 jobs during construction and about 560 long term jobs. Projected BC tax revenue from the Project is $1.2 billion which can go to support education, health care and training. In terms of local goods and services alone, the BC Coast would benefit from about $318 million in local goods and services, the central coast would benefit from $400 million and North East BC would benefit from about $112 million, all this in the absence of a collaborative agreement with Alberta.”

Established in 1951, the BC Chamber now represents over 32,000 businesses over every size, sector and regions in the province.

Baseball Canada's Senior Championships in Prince George

Thu, 23 Aug 2012 09:51:31 -0600

I am proud of my hometown, Prince George, for their winning bid to host Baseball Canada’s Senior Championship. This is Baseball Canada’s premier event, and this is the second time Prince George has won the bid to host the Championship. Along with the help of dedicated local volunteers this championship will bring together players and fans from across Canada to create positive spirit in Prince George. We share the same positive vision for the communities we do business in and with.

Enbridge is proud to sponsor the 2012 RE/MAX Baseball Canada Senior Championship, and we’re even more proud to be part of the Prince George community as they host this three day event. Enbridge supports organizations that contribute to the economic and social development of communities near the company’s operations. Enbridge believes these investments are essential to being a good neighbour and proud member of the communities in which we operate.

Growing up in Prince George I spent a lot of time on the baseball diamond with my father. From little league to this senior championship, baseball has a long-standing tradition in Prince George and I am so excited to see this tradition continue in our community. Over the next three days, eight teams, including the Prince George Axemen will compete to win the prestigious gold medal. I cannot think of a more terrific way to end the summer. I wish all the players good luck! – Go Axemen!

Activists misleading the public?

Wed, 15 Aug 2012 16:22:03 -0600

In an online campaign, a group of activists are suggesting our animated pipeline route illustration is meant to misinform the public about the Douglas Channel.

Our pipeline route animations were never meant to provide you with information about our proposed marine operations, the Douglas Channel or the B.C. coast.

In the animated pipeline route flyover video we provided the following disclaimer:

"The animation is for illustrative purposes only. It is meant to be broadly representational, not to scale."

Segments of the pipeline route flyover video were also used for illustrative purposes within another video discussing the safety planning that went into our proposed pipeline route design. This video does not discuss marine safety or the Douglas Channel.

For people interested in marine safety and the Douglas Channel, we produced another far more detailed video (above) discussing our marine plans. The video is accurate geographically and its illustrations are to-scale where noted. The video contains a comprehensive discussion of our proposed marine operations and B.C.’s north coast, including the Douglas Channel. Our comprehensive marine safety plan discussed in this video went through Transport Canada’s TERMPOL review process successfully.

For those seeking more detail, Volume 8A of our regulatory application – available on our website – provides an extensive overview of marine and terminal operations with detailed maps. As noted in the TERMPOL report, “Since 2009, the proponent has completed 16 studies and submitted close to 3,500 pages of surveys, studies, technical data, analysis and other information related to the marine transportation components of the Northern Gateway Project." The measures we’ll implement will enhance safety for all shipping on BC’s north coast.

The marine environment Northern Gateway is proposing to use is no stranger to industrial shipping, including tankers.

From 1982 to 2009, some 1,560 vessels carrying methanol and condensate called on the Kitimat port—which is actually over 3,100 transits of vessels dedicated to the transport of petroleum products.

When you add all industrial vessel activity into the Kitimat port, the number jumps to 6,112.

To be clear, the number of ships servicing industry arriving at the Kitimat port between 1978 and 2009 is 6,112. That’s 12,224 transits of the Douglas Channel. That’s a long history of safety.

And it’s a safe history that opponents of the project will rarely, if ever, acknowledge publicly. Is that because it’s the intention of some activists to mislead you about our project and the safety of the Douglas Channel?

Our pipeline route animations were never meant to provide you with information about our proposed marine operations, the Douglas Channel or the B.C. coast.

In the animated pipeline route flyover video we provided the following disclaimer:

"The animation is for illustrative purposes only. It is meant to be broadly representational, not to scale."

For people interested in marine safety and the Douglas Channel, we produced another far more detailed video in 2011 (above) discussing our marine plans. The video is accurate geographically and its illustrations are to-scale where noted. Its illustrations are also included in this marine safety video. These videos contain comprehensive discussion of our proposed marine operations and B.C.’s north coast, including the Douglas Channel. Our comprehensive marine safety plan discussed in these videos went through Transport Canada’s TERMPOL review process successfully.

For those seeking more detail, Volume 8A of our regulatory application – available publicly on our website – provides an extensive overview of marine and terminal operations with detailed maps. As noted in the TERMPOL report, “Since 2009, the proponent has completed 16 studies and submitted close to 3,500 pages of surveys, studies, technical data, analysis and other information related to the marine transportation components of the Northern Gateway Project." The measures we’ll implement will enhance safety for all shipping on BC’s north coast.

The marine environment Northern Gateway is proposing to use is no stranger to industrial shipping, including tankers.

From 1982 to 2009, some 1,560 vessels carrying methanol and condensate called on the Kitimat port—which is actually over 3,100 transits of vessels dedicated to the transport of petroleum products.

When you add all industrial vessel activity into the Kitimat port, the number jumps to 6,112.

To be clear, the number of ships servicing industry arriving at the Kitimat port between 1978 and 2009 is 6,112. That’s 12,224 transits of the Douglas Channel. That’s a long history of safety.

CERI study confirms B.C. benefits from pipeline

Fri, 10 Aug 2012 16:12:43 -0600

According to a new study released this week by the Canadian Energy Research Institute (CERI), British Columbia will benefit most from the construction and operation of the Northern Gateway project and is expected to collect more than half of the $8.9 billion the project is expected to add to the Canadian economy over the next 25 years.

This is in stark contrast to claims made recently about B.C. being short-changed on pipeline benefits.

CERI focused their analysis on the construction and operation of the pipeline. This is an important distinction as the debate around the Northern Gateway project has become blurred by wider issues related to oilsands development.

CERI’s analysis found:

Construction and operation of the Northern Gateway pipeline will bring more than $8.9 billion in total additional GDP to the Canadian economy over the next 25 years; $4.7 billion of that amount will go to BC, $2.9 billion to Alberta, and $608 million to Ontario.
Of all regions in BC, Nechako, closely followed by North Coast, will see the most direct GDP benefit from Northern Gateway construction and operation – Nechako earning $655 million over the next 25 years; North Coast – $575 million.
Of all Alberta regions, Upper Peace will see the most direct GDP benefit from Northern Gateway construction and operation – $502 million over the next 25 years.
Employment in Canada (direct, indirect and induced) is expected to ramp up to 30,000 jobs at the peak of construction and settle down to 2,500 jobs during the operation phase.
Northern Gateway will generate over $2.3 billion in tax revenues over the 25-year period, with $1.45 billion going to the Government of Canada, $545 million to provincial and regional governments in BC, $162 million to provincial and municipal governments in Alberta, and $83 million to provincial and municipal governments in Ontario.

An earlier CERI analysis combined the construction and operation benefits with the economic impacts of oilsands development.

Both CERI studies highlight the vital importance of opening new diversified markets through British Columbia for Canadian energy products.

A river returns to its people

Tue, 24 Jul 2012 15:25:34 -0600

On July 26, 2010, an estimated 20,000 barrels of crude oil leaked from Enbridge’s Line 6B pipeline near Marshall, Michigan. Oil from the spill entered Talmadge Creek and the Kalamazoo River. The US Environmental Protection Agency and the Michigan Department of Environmental Quality closed sections of the river system to public use, along with Morrow Lake, while clean-up operations were conducted.

The leak in Michigan was a humbling and dark day for our Company. We failed to deliver energy safely, which is not acceptable. We apologize for not living up to the expectations of our customers, communities and the public. At the time of the incident in July 2010, we immediately accepted full responsibility and committed to do whatever it took to make things right in the community, to fully understand what happened, and to do what was necessary to work with all parties to improve procedures and technology so that this wouldn’t happen again.

“They said they were actually not only going to get it back to normal, but make it better than what it was, was what I was told,” Battle Creek resident Kristin Whitworth recalled.

On June 21, 2012, the river was returned to its people—Morrow Lake and the Kalamazoo River were opened for recreational use. Enbridge produced the video above to show the beauty and splendor of a river system the people of the area are now enjoying again.

“It tells me that the clean-up has been successful to the point where we can reestablish a beautiful river environment and bring back not only the wildlife but the people are going to be back on the river and I think they’re going to be real happy with what they see,” Durk Dunham, Calhoun County Director of Emergency Management explained in the video.

Through community consultations with local residents, community leaders and recreation groups Enbridge learned that access to the river is a high priority. Our community investment efforts focused on increasing access and building new facilities like Saylor’s Landing, Paddlers Grove and Angler’s Bend. These access points have created additional recreation opportunities making the Kalamazoo River more available and accessible for Marshall-area residents and visitors to enjoy.

While the river has been reopened for recreational use, the clean-up work is not yet complete. The public may encounter ongoing work activities at several locations along the river. Locations with sediment traps, research equipment, or active work may have restricted access. The public could see oil sheen or flecks of oil in the river, even after sections open. Remaining oil found in the river is not hazardous upon incidental contact, according to the results of a study conducted by the Michigan Department of Community Health. In addition to ongoing remediation activities we have committed to monitoring the river system to ensure it has been returned to its pre-spill state.

“This is not something we want to erase from our memory,” said Steve Wouri, Enbridge President of Liquids Pipelines. “And that we not waste the opportunity to learn from an incident like this. So by no means do we want to forget this. We want to actually memorialize it.”

“It’s cleaner now than what it was before,” confirmed Jesse Jacox, a local resident and river enthusiast. “I’m satisfied that they’ve made the effort they have.”

Gateway announces safety and operations improvements

Fri, 20 Jul 2012 11:50:37 -0600

A safe project gets even safer.

Enbridge is listening and responding to stakeholder feedback about the Northern Gateway Project, today (July 20) committing to additional design and operational measures that go above and beyond anything that has ever been done before by the pipeline industry.

Janet Holder, Executive Vice President Western Access, Enbridge Inc, said in a press release that the safety enhancements were in response to what the Northern Gateway team has heard through meetings with thousands of stakeholders along the proposed right of way.

“We recognize that there are concerns among Aboriginal groups and the public around pipeline safety and integrity. We had already planned to build a state-of-the-art project, using the most advanced technology, safety measures and procedures in the industry today,” Janet said. “With these enhanced measures, we will make what is already a very safe project even safer in order to provide further comfort to people who are concerned about the safety of sensitive habitats in remote areas.”

The application currently before federal regulators already far surpasses industry codes and standards. The details of the enhancements released today have been filed with regulators as part of the formal application for this unique project.

The extra safety measures, estimated to cost an additional $400 to $500 million, include:

Increasing the pipeline wall thickness of the oil pipeline;
Additional pipeline wall thickness for water crossings such as major tributaries to the Fraser, Skeena and Kitimat Rivers;
Increasing the number of remotely-operated isolation valves by 50 per cent within BC to protect high-value fish habitat;
Increasing frequency of in-line inspection surveys across entire pipeline system by a minimum 50 per cent over and above current standards;
Installing dual leak detection systems;
And staffing pump stations in remote locations on a 24/7 basis for on-site monitoring, heightened security, and rapid response to abnormal conditions.

“After years of consultation with stakeholders and after personally attending many regulatory hearings for Northern Gateway, it has become clear – we have to do everything we can to ensure confidence in the project,” said Janet. “We’ve listened. We have often been asked if we could guarantee that we would never have a significant pipeline failure over the years on Northern Gateway. These initiatives will put us closer than any pipeline operator in the world to providing that guarantee.”

API president comments on pipeline integrity

Thu, 19 Jul 2012 15:42:30 -0600

Association of Oil Pipelines president Andy Black gave an interview with Environment and Energy TV recently. He spoke to the report released by the NTSB last week on the Marshall, Michigan spill in 2010 and also covered some broader issues around oil sands crude transportation.

Since the NTSB report was released last week, there has been no shortage of media coverage and commentary about the incident and its causes.

From the beginning, Enbridge has taken full responsibility for the incident, apologized to the residents of Marshall, Michigan and other stakeholders, and worked extensively to clean-up the affected areas—in June 2012 the Kalamazoo River was re-opened.

In 2010 and 2011, we made improvements and initiatives in integrity, safety and operations as a result of the incident and we’re committed to continued improvement in an effort to achieve our goal of zero spills.

Despite having made improvements, pipeline opponents continue to make claims about Enbridge—and the pipeline industry—that are not supported by the facts.

In his interview, Andy Black highlighted the facts to refute some claims you may be hearing.

Andy Black: …The NTSB made a specific finding that internal corrosion was not the cause of the accident. And the allegations are that oil sands crude is more corrosive than other crude oils and that's just not the case… Bitumen is produced in the Canadian oil sands and, yes, it comes out sandy. But it's processed up there in Alberta. It's separated from the sands, the other sediment, the water. It's diluted by being mixed with natural gas condensate and then the diluted bitumen that's ready for pipeline transportation is just like any heavy crude…

Pipelines are very expensive to build and the operators expect them to have long lives. Refineries are expensive to build and retrofit and are expected to have long lives. It's just not logical that a pipeline operator or a refinery would put into it an asset like crude oil that is too corrosive for it to handle.

An oil pipeline doesn't want a corrosive product to enter its pipeline and ruin the pipeline… What moves through a pipeline is like any other heavy crude, say from Mexico, Venezuela, the Bakersfield area of California. Those have been moved safely for decades.

Following the Marshall incident, Enbridge further substantially increased pipeline integrity management spending to over $450 million in each of 2011 and 2012, and has performed more than 175 inline inspections and nearly 3000 pipeline excavations during that time.

Enbridge CEO Talks About NTSB Report on Radio Show

Wed, 18 Jul 2012 15:45:21 -0600

Enbridge CEO Pat Daniel took to the airwaves in Calgary yesterday (July 17) to discuss the findings that the US National Transportation Safety Board (NTSB) recently released in its investigation of the pipeline accident on Line 6B in Marshall, Mich. in July 2010.

Appearing on the Canadian Broadcasting Corporation’s Calgary Eyeopener radio show, Pat was quick to reiterate Enbridge’s responsibility for the accident and talk about the efforts Enbridge took to cleanup the spill and improve the company’s reliability and safety performance.

“Two years ago, when the incident occurred, I went to Michigan, I spent two months in community halls and schools and homes apologizing to the people in Marshall, Michigan and Battle Creek for the mess that we made and giving the commitment to clean it up, and we have followed through on that commitment in what has been one of the largest cleanups ever,” he said.

“That was a very dark and humbling time two years ago in our history,” Pat added. “(As) a company that has prided itself over the years on being the best operator in the crude oil pipeline business in the world it really hit our pride very, very hard. And we have worked diligently since to make sure that we don’t have any such reoccurrence.”

Asked about the provocative characterization of Enbridge as the Keystone Cops by the Chair of the NTSB, Pat hastened to defend Enbridge.

“We don’t consider that characterization to be valid at all. We participated with the NTSB and PHMSA in the investigations and the facts which came out a month ago, a little bit over a month ago now, we were a participant in and we agreed with the facts, but that characterization, I think, is quite unfortunate.”

Pat also spoke about the Northern Gateway Pipelines project and was asked if Enbridge could guarantee that there would never be a spill on the proposed pipeline to the west coast.

“Enbridge can’t provide a guarantee, nor can anyone,” he said. “What I can guarantee the Canadian public and those in British Columbia with regard to Gateway is that Enbridge will do everything within its power to make sure we never have another incident like that again.”

You can listen to Pat Daniel's interview on the CBC website.

BC thinktank supports pipeline to west coast

Wed, 18 Jul 2012 09:16:19 -0600

“Expanding Canadian pipeline capacity to allow oil exports to Asia will pour billions of dollars into government coffers, create thousands of jobs, and bring substantial benefits to First Nations and pensioners.”

That’s the conclusion of Vancouver-based The Fraser Institute in a new report that provides a comprehensive overview of the economic feasibility and attractiveness – as well as the boost such a pipeline would bring to pension benefits of Canadians – of exporting Canadian crude oils to countries in the Asia-Pacific region.

To arrive at their conclusions, Senior Economist Gerry Angevine and former energy analyst Vanadis Oviedo examined two possible future scenarios against a status quo base case — the base case assumes no new pipelines are built to the B.C. coast and no significant amount of Canadian crude oil is exported to Asia-Pacific countries.

So what did the authors find in their examinations?

At the core of their research, the authors looked at who benefits from the construction of new oil pipeline infrastructure. Their findings might surprise you:

Looking at the construction benefits of new pipeline capacity and terminal facilities in B.C. alone, the report’s authors calculated Canada’s GDP would receive a $10.5 billion boost and gain up to 104,400 person years of employment. While these are no small sums, the authors note the benefit to the Canadian economy during a 30-year operation span for Northern Gateway is also substantial, with a nearly $9 billion annual boost to Canada’s GDP totaling $270 billion over 30 years. It’s expected 1,150 long term jobs will result from the project’s operation.

The report also notes potential returns on the substantial investments the Canada Pension Plan ($1.8 billion) and the Ontario Teachers’ Pension Plan ($1 billion) have made in the Canadian oil sands.

"Shipping Canadian oil to Asia-Pacific nations will boost the returns for the Canada Pension Plan and could improve investment income for virtually every Canadian collecting a pension," Angevine said.

The authors also discuss the economic consequences resulting from Canadian producers’ inability to access the global price for oil because of the lack of infrastructure. Canadian crude trades at a considerable discount to the global crude price, primarily because almost all exported oil from Canada goes into one market in the U.S. mid-west.

This blog post from Enbridge executive Janet Holder provides additional background to Canada’s oil price squeeze

In February 2012, the discount was over $15 per barrel to the Brent (European) price and over $25 per barrel when compared to the Malaysian market price. Angevine and Oviedo’s calculations suggest that capturing an additional $2.50 per barrel of Canadian oil will lead to a $14.25 billion net gain over 30 years—that’s a lot of wealth to help create Canadian jobs, fund Canadians’ retirements and to be taxed by Canadian governments to pay for the services Canadians hold dear.

Al Monaco speaks to TD Economics 2012 Energy Conference

Thu, 12 Jul 2012 10:06:18 -0600

The following speach was delivered by Enbridge President Al Monaco to the Luncheon Keynote address at the TD Economics 2012 Energy Conference July 11, 2012, in Calgary. A PDF copy of the presentation slides is available here.

Good afternoon.

There’s a common thread that runs through this audience . . . between the people that find and produce oil and gas, the companies that process and move it, and those that provide the capital to make it happen. That thread is that we’ve been part of an industry that has changed so much over the years.

While you’re in the midst of these changes, it’s difficult to pick out the truly defining moments. But, I believe we’re at one of those defining moments right now; in fact my view is that we’re at a crossroad today in the Canadian energy industry.

That cross road is defined by 3 challenges:

The significant price discounting of Canadian production and lost revenue due to insufficient access to key markets; escalating and unrelenting opposition to energy projects; and….. the concerns being raised about the safety and reliability of energy infrastructure.

I’ll focus my remarks today on those 3 challenges; the opportunities spawned by these challenges and how we at Enbridge are approaching them.

One thing to reflect on as we’re discussing these challenges is the complexity and interrelationships between them. And the fact that we need to think about energy not just from a Canadian context, but also from a North American and global perspective.

2. Background

This map captures why we have a view on these issues.

Enbridge is one of the largest infrastructure players in North America. We move 2.3 million bpd of crude to eastern Canada, the U.S. Midwest, Midcontinent and Gulf Coast markets. That represents 60% of U.S.‐bound oil exports from Canada. And Canada is the largest supplier of oil to the U.S., accounting for 21% of their imports.

We own a host of natural gas pipelines and gas processing facilities. We’re the largest natural gas distributor in Canada with 2 million customers. And we own a growing portfolio of renewable power generation facilities.

So on to the first challenge we face as an industry, and as Canadians, which is the massive loss of revenue from the price dislocation we’re experiencing for crude oil, natural gas and NGL.

Let me outline the root causes that are driving that reality.

3. Global Crude Oil Demand and Growth

Over the foreseeable future, global oil consumption will not be driven by North America and not by Europe, as has been the case for decades. Even with the recent economic slowdown, demand growth will be driven by emerging markets, namely Asia, India and the Middle East. By the way, some slowdown; China’s GDP growth is forecast at 7‐8% compared with modest growth of 2% in North America and Europe; and that might be a stretch.

4. North American Crude Oil Demand

On the other hand, oil consumption in the United States is likely to be declining, or flat at best, due to: fuel efficiency, an increase in biofuels, and changing demographics, which is leading to fewer vehicles and miles driven.

In light of the profile you see here, emerging market growth is critical for a resource‐based economy like Canada’s.

5. Natural Gas Demand

Despite the dim view towards natural gas these days, I’m a big believer in its significant long‐term potential.

Natural gas is not simply a medium term transition fuel to hold us over until renewables kick in…it’s critical to meeting global energy demand growth.

It’s abundant and competitive to other fuels, highly responsive to demand (by turning on the drilling tap), relatively low in emissions, and it’s cost effective to site for power generation in that it can be located close to load centers.

Global gas demand is expected to increase by 130 to 460 Bcf/d over the next two decades.

Once again, this is driven primarily by emerging markets, loosely represented by the green non‐OECD bars you see here.

The main source of growth will be, you guessed it, Asia; where there’s a growing gap between demand and contracted LNG supply.

Japan is clamoring for gas today, particularly since their nuclear fleet is currently shut down for assessment.

6. North American Natural Gas Production Growth

On the supply side, the shale gas revolution is well understood – there’s no news there. Shale growth more than offsets conventional declines and outpaces demand growth. That will keep gas prices in check for some time, which will solidify gas as a fuel for the future.

With shale gas comes significant NGL production, which is forecast to grow from 3 to 4.3 million bpd by the end of the decade.

The robust NGL outlook is less driven by North American demand than it is by growth in exports.

This is particularly true for ethane, which we don’t generally think of as an export fuel, but it’s a key element used in many producer goods that will grow in emerging markets.

As you can see ethane is competitively priced and well positioned against its oil based competitor – Naphtha.

Canadian and U.S. feed‐stocks now rank 2nd and 3rd lowest worldwide.

7. North American Crude Oil Production Growth

But the real game changer is growing North American oil production. Just a couple of years ago North America was facing declining production, a fear of peak oil and the need for ever‐growing imports – imports that come with significant geo‐political risks.

There are many contributing factors to this sea change, but it really boils down to one thing: the application of new technology.

This technology has unlocked massive unconventional reserves across North America. We’ve always known that these large unconventional reserves existed.

But the key to unlocking that potential is the combination of horizontal drilling, reservoir stimulation methods and economies of scale.

The result, today’s energy business is more akin to a manufacturing process than it is about wildcat drilling.

8. Oil Production Forecast

Industry’s recent forecast indicates that Canadian oil production will double to about 6 million bpd by 2030, so another 3 million bpd of growth. This would put Canada in the top four world oil producing nations.

This outlook, and the oil sands reserves that support it, represent a huge strategic advantage for Canada.

Why, because almost 80% of the world’s oil reserves are controlled by national oil companies. In fact, Canada holds over half of the remaining “free‐market” oil reserves.

9. Tight Oil Growth

Tight oil production is expected to grow by roughly the same amount ‐ another 3 million+ bpd; and the vast majority of that is high quality light crude oil.

That’s important in that some upper mid‐west U.S. refineries recently reconfigured themselves, at great capital investment, to take heavy oil feedstock.

Those decisions were taken before the tight oil phenomenon was understood.

That presents a bit of a conundrum in that these new high quality light barrels need to find a new home. I will get to that picture in a minute.

10. North American Supply Balance

So where does that put North America in terms of the crude oil supply picture?

Based on the forecast pace of growth for both Canadian and U.S. crude oil that I just talked about, North America will be able to substantially reduce, or possibly even eliminate, dependence on overseas oil imports.

Now, I’m not convinced we’d ever actually see 100% backing out of foreign imports.

But this picture drives home the truly game changing events we’ve seen in North America crude supply over the last 2‐3 years.

11. The Challenge

So, to recap so far…. the lion’s share of crude oil, NGL, and natural gas demand growth will be driven by emerging markets, while U.S. consumption grows slowly at best.

On the supply side, the industry has unleashed massive North American supply growth potential for all of these commodities.

At the same time, the industry is facing transportation bottlenecks between growing supply and both continental and global consuming markets.

Don’t misunderstand, we have well developed infrastructure, there’s just not enough to meet growing supply and it’s not in the right places.

And most important, because Canada’s resources are landlocked with access to only one market, our oil and gas exports are being heavily discounted relative to world prices.

We’re isolated from the world market, and that makes us a captive supplier. Effectively, Canada is a price taker, and that should concern all Canadians.

Exacerbating that, our single market – the United States – has access to multiple sources of oil supply from around the world. It’s these fundamentals that are driving the price dislocations illustrated buy this next chart.

12. Price Dislocation Charts

This is a snap‐shot of current prices for various crude grades at different pricing points.

If you focus on the green circles, you can see that Canadian light oil is selling for $14 off of WTI and $27 off Brent, so you’ve got a double whammy effect from the Cushing bottleneck and lack of access to global markets for Canadian crude.

Similarly, WCS (our heavy marker) is trading $33 under Maya.

If you do the math on these discounts, it translates to lost value of roughly $20 billion a year23 ‐ a huge loss for Canadian producers and our economy.

These discounts move around, but the basis between these markets is well in excess of physical transportation costs of about $7/bbl to the U.S. Gulf Coast…. as an example.

We all know that supply, demand and pipeline capacity seldom line up perfectly, but we’d all agree that what you see here is not a tenable situation.

This is not just a Canadian issue. You can see that Bakken light barrels also trade well off WTI and Brent.

To provide some relief for Bakken light barrels, we’ve seen the emergence of rail, where some 300 kbpd of rail capacity is being utilized.

Although rail is higher cost than pipe, it can be timely and effective in accessing markets.

We ourselves are building a rail loading terminal to support pipeline gathering and long‐haul projects.

12b. Natural Gas Prices

It’s the same story for Canadian natural gas where there’s currently no export capability to world markets.

That’s more concerning when you think about the locational disadvantage that NEBC production faces relative to U.S. shale gas located relatively close to market.

On the other hand, NEBC reserves are world‐class, producers have reduced drilling costs through economies of scale, and they have as supportive BC fiscal environment.

12c. Ethane Prices

The disconnect also holds for NGL prices. As you can see there’s a $0.23/gallon differential between Conway and MB, whereas the cost of transportation is about $0.06. That’s simply because there’s weak connectivity to Mont Belvieu, which houses 80% of North America’s petchem capability.

If this sounds familiar it should since it’s the same dynamic as the Cushing‐Gulf Coast disconnect for oil.

13a. Enbridge Market Access Initiatives

You don’t have to be an economist to know that transportation constraints or dependence on one market is bad for producers, and our economy, whether we’re exporting commodities or widgets.

So the question is how does industry resolve this issue. Since that’s a day‐long discussion, I’ll focus on the North American oil market.

In a nutshell, we need to first connect growing supply to existing Canadian and U.S. demand centers; and then ultimately establish a path to the global economic engine – Asia.

I’ll illustrate this by highlighting the market access initiatives we have underway.

13b. Gulf Coast Access

Firstly, our Gulf Coast access program connects Canadian oil supply to the mammoth U.S. Gulf Coast refining center, which has some 8 million bpd of processing capacity . . . . and roughly ½ of that is configured to run Canadian heavy.

Because of that, and declines in Venezuelan and Mexican crude, PADD III refiners have been anxious to source Canadian supply for some time.

Importantly, our Gulf Coast Access strategy utilizes existing energy corridors and pipelines so we will minimize disruption to the environment and lessen the industry’s footprint.

This $5 billion project creates thousands of jobs and millions in tax revenue.

13c. Eastern Access

Secondly, we’ve established a route for Canadian and U.S. crude to access eastern Canada and better penetrate PADD II.

In expanding Line 6B and reversing Line 9, Ontario and Quebec refineries will have access to Canadian and U.S. based light barrels I touched on earlier.

These refiners are currently fed by higher cost foreign light imports, . . . . so access to North American barrels will support their longevity.

Reversal of Line 9 requires no new pipeline construction, so it’s a benign and economical way to address the changing needs of the market.

We haven’t yet solved the challenge of getting supply to the PADD I refiners, but we’re working on that.

13d. Mainline and regional expansions

To support those initiatives, we’re undertaking; a major regional expansion program in the Alberta oil sands corridor to move volumes to our mainline, totaling some $4 Billion; increasing regional capacity in the Bakken; and expanding mainline access to feed the heavy oil refinery conversions in upper PADD II.

13e. Western Extension

While these projects are essential to expand access to the U.S. and Eastern Canadian demand centers, it’s clear that Canada needs to diversify its energy markets.

We’re about mid‐way through regulatory process to build Northern Gateway.

If you think about Gateway at 50,000’, it capitalizes on several of Canada’s inherent advantages.

We have huge energy resources; we have the technology and skills to develop those resources; and we have the Pacific coast advantage that provides access to ½ of the World’s population.

Just a couple of years ago, the producing community thought Gateway was a good option to hold.

Over the last two years though, I’ve seen a marked change – producers are pushing hard to move forward to realize the benefits of accessing a large and growing market.

Let me emphasize that although Gateway is an important project, you can see we have a lot going on. In fact, we have $17 Billion of secured projects in design or construction with more to come.

As a result we feel very confident in generating 10+% EPS growth over the next five years. With that comes significant potential dividend growth as well.

One last item before I leave this map:

It used to be that producers and pipeline companies wanted to see a very close match between throughput and pipe capacity.

But, with the explosive growth in volumes, it’s clear that market access is now the main priority.

The fact is that the cost of pipeline capacity is small relative to discounted production; witness the current price dislocations we discussed.

That brings me to the second challenge.

14. Challenge 2 ‐ Opposition to Energy Projects

The deep discounting of Canadian resources can be solved by expediting new infrastructure – pretty straight forward right?

But the challenge is that this need for infrastructure comes at a time of never‐ending opposition to energy development.

It seems this is the case with every type of energy project; nuclear, coal, oil, natural gas or even wind and solar attract well‐funded opposition.

We all recognize the world runs on energy so it’s not helpful when environmental groups promote the notion that we can get off of traditional forms of energy tomorrow.

In fact, we’ll need to grow traditional forms of energy to meet global demand. That’s the reality!

Not to mention the fact that energy investment drives economic growth and supports our social structure – whether it’s hospitals, schools or roads. I think most people get that.

But, I think as an industry we need to recognize that there’s another reality…. and that is we all want resource develop to happen in a sustainable way.

As we’re increasingly engaged in large scale linear projects, it’s important that we listen to concerns, be flexible with design, and explain the benefits that flow to communities.

Canadian resource developers are making progress. Oil sands emissions have been reduced; water and energy use is declining, and good progress is being made on reclamation.

What I find most encouraging though is how producers are approaching this issue today.

For example, the largest oil sands players recently agreed to share research in areas of water use, land, greenhouse gases and tailings.

It’s a big and progressive step for an industry that is highly competitive, to say the least, and not used to sharing information, much less research into new technology.

Another example is how producers are minimizing their energy footprint. Our Cabin gas plant is a case in point.

In that case, Producers agreed that one central facility would minimize the environmental footprint and new producers have rights to access that facility.

Producers are also more transparent about chemicals and processes used in fracturing technology.

My point is that these developments show us that the industry understands that the economic benefits of energy projects alone are not enough to make the case for development.

As an industry, we need to engage communities early and often.

And we need to do a better job of discussing our projects in community halls, college classrooms, coffee shops and farmers’ fields.

15. Sustainable Development

One issue being raised is whether the pace of development is too fast and whether our regulatory process can keep up.

From my experience, we have a robust and thorough regulatory process at both the Federal and Provincial levels. Even so, both the regulators and industry are focusing more effort on sustainable development.

I’m going to illustrate that by using Gateway as an example again and address some myths about this project.

Gateway will be a world class project in every respect; from community and First Nations consultation, to environmental protection, to safety.

Through our outreach we’ve met with 17,000 people. Just three weeks ago I attended a meeting of 5 regional community advisory boards.

The objective of these boards is to hear community concerns and capitalize on local knowledge.

The project brings significant benefits to British Columbians and Aboriginal groups; in fact, we’ll be co‐owners of the project with First Nations and Metis.

On the regulatory side, Gateway is undergoing the most rigorous regulatory assessment of any we’ve encountered.

And finally, we’re making this a world class project from an environmental and safety perspective.

From routing, to water crossing methods, to marine safety enhancements, pipeline monitoring and emergency response.

The industry is elevating it’s game even further in recognition of the need for social license for resource development.

What does “Social License” mean?

It means we need public trust and confidence that we can operate safely and bring benefits to communities that we operate in.

And this fits well with our desire to make projects better and safer through more input.

In fact, I would encourage environmental groups to engage with us to make our projects better.

16. Renewables

One last point on this challenge; while fossil fuels will be with us for a long time, we need to look to the future and develop all sources of energy to meet demand.

We don’t have the luxury—not yet, at least—of picking and choosing.

Yes, renewables are partially subsidized but we don’t expect to need subsidies forever.

In fact, the cost of renewables has declined considerably, given improvements in technology and I think project development costs can come down.

We’ve invested $2.5 billion primarily in wind and solar projects, which generate nearly 1,000 megawatts of emissions‐free energy.

I want to emphasize, and especially with this audience, our renewables projects meet the same stringent investment criteria as the liquids and gas parts of our business.

Yes there are environmental benefits in investing in renewable projects but they also need to generate stable and reliable cash flows for us to invest.

17. Challenge 3 – Operational Reliability

The third challenge facing our industry is ensuring the operational reliability of our pipelines and facilities.

Over the last two years, our industry has experienced operational upsets with some having significant impacts to the public, customers and the environment.

Suffice to say that as an industry we’re not happy about it. For our part, we have been focusing hard on enhancements for two years.

Even though we think of ourselves as pipeline experts, you simply can’t go through these events and not be focused on improvements, regardless of the circumstances of how they came about.

This is not only critical to minimizing service disruptions to customers, but also to enhance public confidence in energy infrastructure.

Operational safety and reliability are our highest priorities; and it’s an issue that keeps us up at night.

18. Integrity and Operational Reliability

Our own objective is to be the industry leader in key operational areas including integrity management, leak detection and public safety. Over the last two years alone:

We’ve conducted over 200 in‐line inspections of our pipeline systems;

We’ve investigated over 2,500 sites along our pipeline as part of our maintenance program;

And, we’ve installed a new crossing at the St. Clair River at the border near Sarnia; and

We replaced 75 miles of pipe this year; and we’ve recently completed a new control center.

19. Other Observations

Before I conclude, let me touch on two additional observations:

On the topic of LNG, I believe West Coast exports will happen; the price signal is too large to ignore.

But, it will be a greater challenge than many think.

I say that because the demand‐supply gap for Asian LNG is there now, but will eventually close; so we need to seize the opportunity before the gap gets filled by others.

LNG buyers are also positioning for NA index‐based pricing, which will weigh on west coast LNG export economics.

Another issue I didn’t get to, but is related to LNG, is industry cost escalation.

There are experts here from the producing community that will have views on the upstream side of things.

From the pipeline perspective, we’re in good shape in that there’s excess capacity at the moment for both steel and construction, which account for about 2/3 of our cost structure.

The other third includes labor, which is tight and needs careful planning.

As far as our $17 B of secured projects currently in design and execution, we’re right on track at this point with respect to cost and schedule.

I do have a longer term concern regarding the confluence of oil sands, pipeline and LNG megaprojects.

There could be a looming crunch in the 2015 ‐ 2020 timeframe.

On the oil side of things you’ve got oil sands projects, Gateway and TMX.

And then add on possibly 1 – 3 large scale LNG developments, which will require upstream, midstream and liquefaction infrastructure.

20. Conclusion

Let me wrap up by circling back to the three key challenges.

In terms of the discounting of Canadian resources, particularly crude oil, Enbridge is delivering on new market access initiatives.

We’ve seen a clear change in how industry participants are approaching pipeline capacity.

Producers want us to accelerate infrastructure. They want access to new markets and so do Canadians.

Our job as “pipeliners” is to address the industry imperative by delivering cost effective solutions.

At the same time, it’s clear that we need develop energy resources and projects in a sustainable way.

We need to ensure the safety, reliability and environmental protection through good infrastructure.

Let me close by restating that we are at a critical time in our industry, but one that should be viewed as a time of opportunity.

One thing about our industry, we always seem to navigate these challenges and I’m confident we can do it again this time.

Remembering the Past, Celebrating the Present, Building a Strong Future

Fri, 22 Jun 2012 12:08:55 -0600

Representatives from the Mohawk Council of Akwesasne (MCA) and Niagara Gas Transmission Limited (NGTL), an Enbridge company, gathered on June 22, 2012, to plant three sugar maple trees at the A'nowarako:wa Arena in Kawehno:ke (Cornwall Island, Akwesasne).

The trees, which symbolize “remembering the past,” “celebrating the present,” and “building a strong future,” were a gift from NGTL representatives, who presented them to MCA officials in January 2012 at a ceremony at which members of both parties were celebrating the cooperation and land use agreement they had jointly signed in 2009. The June 22 gathering marks the return of NGTL representatives to the Akwesasne community to actually plant the trees.

The growing positive relationship that the two groups have nurtured made the cooperation and land use agreement that they jointly signed possible. Under the agreement, NGTL paid a one-time infrastructure-related fee of $1 million to the MCA, and will pay annual payments of about $100,000 for the next 20 years for the use of Akwesasne land through which a NGTL pipeline travels.

The agreement represents a commitment by both parties to work together and build a stronger relationship based on cooperation and mutual respect. “Akwesasne has been engaged in a process to define and re-define its relationship with external agencies and governments that recognizes our jurisdiction and decision-making authority to determine how our lands will be utilized for the benefit of the Mohawks of Akwesasne,” said MCA Grand Chief Mike Kanentakeron Mitchell.

“I’m extremely proud of the relationship between the MCA and NGTL,” said NGTL President Lisa Lawler. “Through this agreement, we’re building a relationship that we can use as a model to demonstrate how working together in an open, transparent and respectful manner can achieve outcomes with mutual benefit.”

Both Mitchell and Lawler said the agreement between MCA and NGTL is the result of a decade of work. For nearly five decades, NGTL operated a pipeline that traversed through Cornwall and across Cornwall Island to New York State. Previously, a pipeline had crossed the north channel of the St. Lawrence River via a bridge owned by Federal Bridge Corporation Ltd. (FBCL), a government agency. When FBCL announced plans nearly a decade ago to replace the bridge, NGTL began exploring alternative crossing options. NGTL’s exploration led to negotiations with the MCA, starting in 2007.

“This relationship has become as strong as it has because people took the time to get to know one another. We demonstrated respect for each other and, at the end of the day, have built a true friendship,” said Peter Valiquet, Enbridge’s Manager, Work Management Centre Operations, who participated in the negotiations. “At Enbridge, we learned a lot about Mohawk culture. And the MCA and the community learned a lot about Enbridge and the pipeline.”

According to MCA Kanatakon District Chief Larry King added, “The Mohawk Council of Akwesasne hopes to build on the strong relationship that is beginning to take shape with NGTL—one based on a foundation of cooperation, mutual trust and respect and the agreement reflects that new relationship.”

In 2009, on the strength of this effort, the two groups signed the agreement. Two years later, the agreement paved the way for the installation of a new underground pipeline under the North Channel, using horizontal drilling technology.

To build the crossing, Enbridge and NGTL worked closely with the MCA’s Department of the Environment on a harmonized environmental assessment report, which incorporated traditional knowledge into project plans. Action items required by the report included removal of the abandoned pipe and the protection of culturally important trees during construction.

“We chose to give the MCA a gift of sugar maple trees because of the significance that they have amongst all trees, which represents the high value we place on our continuing relationship with the Akwesasne community,” said Lawler.

In the future, the agreement provides for an ongoing relationship between with the MCA and NGTL/ Enbridge that will contribute to long-term economic opportunities. As part of the agreement, NGTL has agreed to work with the MCA to conduct an economic development study on the merits of the MCA commissioning and operating a natural gas distribution enterprise in its community.

Kawehnoke District Chief Abram Benedict added, “We are pleased that the agreement contains provisions that will provide additional benefits and services to Akwesasne, such as exploring the distribution of natural gas to the community in the near future."

NGTL also plans to continue to invest in local initiatives, provide bursaries to local students and sponsor the community’s annual powwow.

“Our agreement is just one step in a long-term relationship,” said Lawler. “Today’s tree planting signifies that we are committed to the Akwesasne community and that we have strong roots here.”

Today we celebrate National Aboriginal Day

Thu, 21 Jun 2012 11:07:55 -0600

Please take this opportunity to celebrate the rich history and culture of Canada’s First Nations, Métis and Inuit people — and to reflect on how, together, we strengthen our country through our diversity.

Making a difference with our Enbridge School Plus programs

Several years ago, a team at Enbridge led by Teresa Homik, Manager of Aboriginal Affairs, National Policies and Programs, began looking for a way to develop an education program that would provide strong value to our Aboriginal neighbours. In working with education experts at the Assembly of First Nations (AFN), they determined that we at Enbridge could help stem the high dropout rate in Aboriginal schools by enriching local education programs with extra activities or resources.

And so began the Enbridge School Plus program in partnership with the AFN.

Helping more than 8,900 Aboriginal students. Investing $2.2 million in grants

Here are some examples of how School Plus is working to encourage kids from K to 12 to stay in school:

The Enbridge Eco-Kids on Campus program is an innovative partnership with the University of Winnipeg, in which children in Grades 5 and 6 from several inner city schools with high Aboriginal populations receive enriched science programming at the university once a week for 10 weeks.
The MacKenzie Art Gallery School Plus program is supporting an urban outreach program that provides quality arts education to on-reserve and inner city students in Regina.
Teachers at the Ermineskin Ehpewapahk Community School in Hobbema, Alberta, are providing the personal wellness and skill development programs that their students need for future success.
Under School Plus, teachers received financial support for programs such as cultural camps, sports programs, the arts, traditional and outdoor activities, and Aboriginal language studies.
School Plus has also funded the purchase of valuable instructional technology such as computers and SMART Boards.

These investments are helping to generate a new spirit in Aboriginal communities by building skills and confidence, involving young people in health, fitness and cultural activities, and encouraging them to think about university and college as real possibilities for their own future. This year marks the conclusion of a very successful three-year pilot for School Plus.

School Plus expanded to Ontario and Quebec

And, today, National Aboriginal Day 2012, I’m pleased to announce that Enbridge will continue to invest in School Plus – and that we’ll be expanding it to include First Nation schools near our operations in Ontario and Quebec. With this expansion, nearly 90 schools will be eligible to participate across Canada.

That’s something to be proud of!

Labour shortage is manufacturers’ real problem

Wed, 20 Jun 2012 14:01:31 -0600

Canadian manufacturers face a critical economic issue according to their industry association: a shortage of skilled labour.

Recent pronouncements by federal NDP leader Thomas Mulcair that a high-valued Canadian dollar is hurting Canadian manufacturers is inaccurate say Canadian Manufacturers and Exporters.

In a recent article available online at the Financial Post, Jay Myers, president of Ottawa-based Canadian Manufacturers and Exporters said claims that Canada suffers from Dutch Disease “are a misdiagnosis.”

“If anything, the first thing I hear talking to those companies that supply [the natural resources] sector is [the challenge in] finding people and I think what we’ll see over the next couple of years is that those labour shortages will spread across the country and companies will have to be more innovative in the way they supply these projects.”

In his article, author Dan Ovsey notes that Canadian manufacturers are experiencing a relative boom in growth as they’ve added over 115,000 jobs in the past 6 months alone. To sustain growth and to deal with the shortage of skilled labour, Canadian companies will have to tackle productivity issues Mr. Myers says:

“Productivity isn’t just about removing costs. It’s about increasing the value around your existing product or increasing the value of the product itself, and you do that by new product development through innovation and improving technology and the functional capabilities of the product; or, customizing through design or through the service you’re providing for the product — the support services, the logistics, the customer service, the financing, which is really important.”

These kinds of innovations—especially when they serve Canada’s oil and gas industry—happen all across Canada, in the manufacturing, financial, logistics and support services sectors. As we’ve noted before, it is Canada’s oil boom.

Enbridge reports spill from Elk Point pump station

Wed, 20 Jun 2012 10:46:30 -0600

UPDATE: June 28, 2012 - After receiving approval from the ERCB, Enbridge operators safely restarted the Elk Point pumping station at approximately 1 p.m. MST, Sunday, June 24, and normal operations have resumed. The ERCB and Enbridge are continuing their investigations as to the cause of the incident which appears to be the failure of a flange gasket. The flange gasket has been replaced, all other gaskets were tested and station piping was fully inspected. Contaminated soil and free product is being removed from the site for processing and disposal. Further environmental testing and monitoring of the site is being conducted as required.

UPDATE: June 22, 2012 - Enbridge crews and equipment are in place and work continues at the spill site. Collection of the contaminated soil adjacent to the station is 100% complete and is approved for removal from the site. Contaminated soil within the station is stored in containers for removal.

On June 18, 2012, Enbridge experienced a flange failure at its Elk Point pumping station. An estimated 1,400 barrels of crude oil were released in the immediate area. The area was secured and clean-up operations began immediately. There is no risk to public health or safety.

Immediately upon Enbridge’s detection of the pumping station leak, the pipeline was shut down. Enbridge contacted local emergency response organizations and notified authorities and regulatory agencies.

The following Q&A further explains the incident:

What happened?
At approximately 5:41 a.m. MST on June 18, 2012 Enbridge’s monitoring system detected a drop in pressure indicating a possible oil release on Line 19 (Athabasca Pipeline). The Enbridge pipeline control centre shut down the line at 5:51 a.m. MST. Shortly after, at 6:00 a.m. MST, a third party called to notify Enbridge of a possible oil release within the Elk Point Station, located approximately 70 kms south of Bonnyville, Alberta.

How did this happen?
The cause of the release appears to be a failure of a flange gasket in the pumping station. Flange gaskets are a necessary and common component in all pipeline systems, as they provide a seal when two pipe components are joined together. An investigation of the incident will be conducted in conjunction with all regulators and stakeholders.

How much oil was released?
Preliminary volume estimates of the release are approximately 230 m³ (approximately 1,400 barrels); approximately 200 m³ on Enbridge site and approximately 30 m³ on a landowner’s field.

What land is impacted by this release?
The impacted area is contained within our right-of-way with most of the product on our site and some in a landowner’s field.

Was water or wildlife impacted by this incident?
No water or wildlife was impacted. There is no water in the vicinity of the site. Fencing was placed around the site immediately to protect wildlife in the area. Deterrents have been set up to prevent birds from accessing the site.

How is Enbridge responding?
Enbridge is treating this situation as a top priority. Cleanup is underway as per the Enbridge Environmental policies and regulations.

First responders from Lac La Biche and Hardisty were immediately contacted and assisted with the response. The landowner, local First Nations, ERCB and Alberta Environment were also notified of the incident.

The release was immediately stopped. No one was injured and no wildlife was impacted.

We’re committed to thoroughly cleaning up the site as quickly as possible and ensuring the safety of the residents, environment, wildlife, contractors, and employees.

Work will continue until the impacted area is returned to a condition that meets the expectations of landowners and the community, regulators and our own stringent guidelines.

The cleanup is being conducted in compliance with all government regulations and Enbridge’s own stringent standards for safety and the environment.

Is the line operating?
Update June 20: With the approval of the ERCB, Line 19 was safely restarted at approximately 23:30 MST June 19th. The Elk Point oil pumping station remains isolated and shut down pending investigation and completion of clean up and repairs.

Al Monaco speaks to Toronto Board of Trade

Mon, 18 Jun 2012 14:44:16 -0600

The following speech was delivered to the Toronto Board of Trade by Enbridge President, Al Monaco, June 18, 2012.

Thanks Tony…and thank you everyone for attending this afternoon.

When the opportunity arose to speak today, I jumped at the chance for a couple of reasons….one was that I have a lot of time for Accenture and the Board of Trade.

Also as I’m normally speaking at this venue to investors and analysts, it gives me an opportunity to talk about another topic – a topic of national importance.

My remarks will focus on a critical energy issue facing Canada. Now, there is a bunch of energy issues being discussed by industry, policy makers, pundits, and so on.

They’re talking about gasoline prices; oil sands development; fracking and even pipelines seem to garner daily headlines. It used to be that nobody cared too much about pipelines.

Another important topic being discussed is the environmental consequences of energy.

And more recently, the impact of resource development on the Canadian economy – which is being framed as “Dutch Disease”.

These are important issues; however the one subject that is the most consequential of all is the rapid and dramatic shift taking place right now in world energy markets.

Despite a recent slow-down, global energy demand and economic growth will be driven by emerging markets like Asia, not North America and not Europe…. as has been the case for decades.

In terms of the supply side of the energy equation, North America will become the fastest growing oil and gas supply region in the world. This is 180 degrees from where we were a short time ago.

The wide swings in consumption and supply represent the most significant development in the global energy picture in recent times.

These new realities drive what I believe is a strategic imperative for Canada – which is the need to diversify its energy markets.

Diversifying our markets will require new energy infrastructure - at a time when there seems to be opposition to any and all energy projects.

Oil and natural gas are our largest single export and yet we’re selling those resources at a deep discount because we don’t yet have the infrastructure to reach new markets.

That discount equates to billions in lost revenues. As Canadians we should be concerned about that because energy is a critical component of growth and stability in Canada.

At the personal level it hits all of us through jobs, our standard of living and building on the social safety net we want in this country.

If we don’t move quickly to access new markets, Canada risks missing a golden opportunity to forge greater economic development. If we don’t move quickly, others will fill the gap!

Although I’m a westerner, I’m speaking today as a Canadian...
…to discuss the dramatic change in the world energy picture, what it means for Canada and how best to capitalize on the opportunity we have in front of us.

And what better place to be discussing the key issue of maximizing the value of Canadian exports than the Toronto Board of Trade?

Let me first briefly outline why our Company has a view on energy issues.

Enbridge is a large energy infrastructure player in North America.

Our job is to connect oil and gas supply with demand …we do that through a network of pipelines and facilities to eastern Canada, and to the U.S. Midwest, Midcontinent and Gulf Coast.

We deliver over 2 million barrels of oil every day to these markets, which represents 60% of U.S.-bound oil from Canada.

And Canada is the largest supplier of oil to the U.S. accounting for 13% of oil imports.

By now, you’ve probably guessed that oil represents Canada’s number one export and is a key contributor to our GDP.

We also operate a host of natural gas pipelines and processing facilities throughout North America. We’re the largest natural gas distributor in Canada with 2 million customers in Toronto and Ottawa.

And we own a growing portfolio of renewable electricity generation facilities.

These positions give us a unique outlook on the North American energy picture.

Here’s how energy fundamentals have changed.

The key driver of global energy and economic growth in the future is China and Southeast Asia, with GDP growth rates 2-4 times that of North America and Europe.

At the same time, U.S. oil consumption will likely be flat at best; due to slower growth, fuel efficiency, and demographic changes that are leading to fewer vehicles and miles driven.

On energy supply, the global shale gas revolution is now well understood.

Natural gas is no longer viewed as simply a medium term transition fuel to hold us over until renewables kick in… it’s now critical to meeting long term global energy demand.

Gas will be a key fuel source for the future: it’s abundant, responsive to demand, relatively low in emissions and it’s cost effective to site in that it can be positioned near load centres.

But the real game changer is growing North American oil production. In fact, at the forecast pace of growth, NA will be able to substantially reduce overseas oil imports.

This is quite a sea change in that just a couple of years ago North America was facing reduced supply, a fear of peak oil and the need for ever-growing imports…imports that come with significant geo-political risks.

There are many contributing factors to the sea change, but it really boils down to one thing: the application of new technology to energy development.

It may seem odd to be talking about new technology for an industry better known for the brute force of extracting hydrocarbons from thousands of feet below the surface.

But the fact is that technology has unlocked massive unconventional oil and gas reserves across North America.

We’ve always known that these large unconventional reserves existed.

But the key to unlocking that potential is the combination of horizontal drilling, reservoir stimulation methods and economies of scale.

The result: today’s energy business is more akin to a manufacturing process than it is about wildcat drilling.

We’re seeing explosive growth in energy production across the continent, in Alberta’s oil sands; in the Bakken region of Saskatchewan and North Dakota; in Texas and in large unconventional natural gas resource plays.

Canada has massive energy resources. We have the world’s third-largest oil reserves at 175 billion barrels with ultimate potential of some 300 billion barrels.

A recent forecast shows that Canadian oil production will double to about 6 million bpd by 2030. This would put Canada in the top three or four world oil producing nations.

This is a strategic advantage in that almost 80% of the world’s oil reserves are controlled by national oil companies. So Canada holds about half of the remaining “free-market” oil reserves.

Canada is also the world’s third largest producer of natural gas and it’s estimated we have anywhere from 700 to 1,300 TCF of reserves.

Energy accounts for about one quarter of Canada’s exports with oil leading the way at about $70 billion in 2011…with natural gas at $14 billion and other energy products at $30 billion.

Which brings me to the Canada-U.S. dynamic….

Virtually 100 % of our crude oil exports are sold to the United States, and therein lies the problem.

Because Canada’s resources are landlocked with access to only one market, our oil and gas exports are being heavily discounted relative to world prices.

We’re isolated from the world market, and that makes us a captive supplier. Effectively, Canada is a price taker.

And the double whammy is that our single market – the United States - has access to multiple sources of oil supply from around the world.

To drive this issue home, have a look at this slide, which illustrates the price dislocation for Canadian natural resources.

Canadian light oil is selling for $20 to $30 off world prices. If you do the math, that translates to lost value of some $60 million a day. A massive loss of value for Canadians.

You don’t have to be an economist to know that dependence on a single market is bad for our economy, whether we’re exporting commodities (like wheat, coal, natural gas, forestry product), technology, services or widgets.

It’s the same story for Canadian natural gas; once again, you see the price dislocation that results from a lack of connectivity for our gas supply to world markets.

Asian markets are clamoring for natural gas, including Japan, whose nuclear power plants are currently shut down for assessment.

While the United States will continue to be the primary market for Canadian oil and gas, it’s clear that Canada needs to diversify its energy markets.

Every day that goes by without access to tidewater and world markets for our oil and natural gas is another day of lost opportunity for Canada.

In response to this imperative, I believe we need to focus on three things:

First, we need to build infrastructure so we can connect growing supply to existing and new markets.

Second, and clearly linked to that, we need to ensure we develop our resources in a sustainable way.

And third, looking to the future, we need to invest in all forms of energy to meet future energy demand growth.

Looking at each of these in turn…

On building new infrastructure, we need to first connect growing supply to existing Canadian and U.S. demand centres.

And then, we need to establish a gateway to that global economic engine for the future - Asia.

I’ll illustrate this by highlighting 3 key market access initiatives under way at Enbridge, which together total some $14 billion of investment.

First, we are establishing a path for Canadian crude to access eastern Canada.

In reversing the flow of one of our existing lines—Line 9 – Ontario and Quebec refineries will have access to lower-cost Canadian feedstock. These refiners are now fed by foreign imports.

We’re proud of this project as it delivers Canadian oil to Canadian refineries. And that means Canadian oil security.

That’s significant in that Ontario and Quebec currently derive 18% and 90% of their crude from offshore sources, respectively.

It’s a solution that protects Canadian jobs and increases tax revenue in the range of some $90 million/year for Quebec – that can go to education, healthcare and other programs.

Importantly, this project requires no new pipeline construction, so it’s a benign and economical way to address the changing needs of the market—a solution that makes sense for producers and eastern Canadian refineries.

Even so, it’s important that we talk to communities about their concerns…so far, we’ve reached out to nearly 4,000 stakeholders along the right-of-way.

Our Gulf Coast access program connects Canadian oil supply to the mammoth U.S. refining centre, which has some 8 million bpd of processing capacity and is already configured to run Canadian oil.

A couple of things to note:

Reliable Canadian supply reduces U.S. dependence on foreign oil.

And this new market access strategy utilizes existing energy corridors so we will minimize disruption to the environment and the industry’s energy footprint, and…

This multi-billion-dollar project creates thousands of jobs and generates millions in new tax revenue.

To make the connection between growing Canadian supply with robust Asian demand, we’re proposing to build Northern Gateway.

The Gateway project achieves the goal of diversifying our energy markets, thereby maximizing the value of our resources.

Economically, Gateway will contribute some $270 billion to Canada’s GDP over 30 years, 63,000 person-years of employment during construction and some 1,200 long-term jobs.

$270 billion translates into jobs and economic opportunity for Canada. Clearly Gateway is not only important in terms of our country’s economic future—it is critical to helping Canadians protect our national interests at a time when a number of G8 countries and world markets are threatened by the European financial crisis.

Gateway and the benefits it will generate is, in effect, an insurance policy on Canada’s economic wellbeing.

Gateway will be a world-class project in every respect—from environmental protection…to safety…to community consultation.

That includes consultation with local communities including First Nations and Metis.

To date we’ve held 2,500 public meetings, 120 open houses, 150 presentations, and 65 economic development workshops.

Through that outreach, we’ve met directly with more than 17,000 people.

In fact on Friday I participated in a meeting of five regional Community Advisory Boards in Vancouver. Each of these boards brings together a diverse range of community stakeholders to share their views about the project. It is a unique and effective way to gather valuable input from all the communities along the right-of-way.

The advice and input obtained through this process has resulted in many enhancements to the Northern Gateway project, from environmental improvements to route changes.

And on the regulatory side, Gateway is undergoing the most rigorous assessment that any energy project has ever had.

The project will bring significant benefits to Aboriginal groups. In fact, we’ll be co-owners of the project with First Nations and Metis.

And aboriginals will also benefit from procurement opportunities and skills training that will be transferrable to other industries.

Let me summarize the importance and significance of Gateway this way.

Gateway capitalizes on several of Canada’s inherent strategic advantages. We have massive energy resources; We have the technology and skills to develop those resources effectively; And we have the Pacific coast advantage that gives Canada access to ½ of the World’s population; In my view, Gateway is a project that is clearly in Canada’s national interest. If Gateway isn’t good for Canada, then I don’t know what is.

Having said that, we have a regulatory process that will make the assessment in an independent and thorough manner.

The second leg supporting Canada’s strategic imperative is sustainable resource development.

Canadian resource developers are making progress on this front.

Oil sands emissions declined 26% per barrel from 1990 to 2010; water and energy use is declining and good progress is being made on reclamation.

Earlier this year, in a landmark collaborative effort, oil sands producers agreed to share their research and development in the areas of water use, land, greenhouse gases and tailings.

This is a big and progressive step forward for an industry that is highly competitive and not used to sharing information, much less research into new technology.

This progress is being driven in part as a response to public concerns.

But, it demonstrates that industry understands that the economic benefits argument alone is not enough to make the case for oil sands development.

For our part, Enbridge is fully committed to conducting our business in an environmentally sustainable way.

Even though we are not a major CO2 emitter, we set targets to lower our greenhouse gas emissions.

In 2010, we had reduced our Canadian direct GHG emissions by more than 20% below 1990 levels, through upgrading facilities and equipment.

We achieved these reductions at the same time as increasing pipeline throughput by nearly 50%.

We’ve also committed to stabilizing our environmental footprint through our Neutral Footprint initiative.

As of 2009, we’re counteracting our environmental impacts by planting a tree for every tree we remove; conserving an acre of natural habitat for every acre we permanently impact and generating a kilowatt of renewable energy for every kilowatt of power our operations consume.

This is a groundbreaking initiative that we think differentiates Enbridge as a company to invest in, partner with, work for, and welcome as a neighbor in communities.

The 3rd element supporting Canada’s strategic imperative is to develop all forms of energy, including renewables.

While fossil fuels will be with us for a long time, we need to look to the future and develop all sources of energy to meet demand.

We don’t have the luxury—not yet, at least—of picking and choosing.

Yes, renewables are partially subsidized but we don’t expect to need subsidies forever; in fact, the cost of renewables has declined considerably, given improvements in technology.

We ourselves have invested $2.5 billion primarily in wind and solar projects, which generate nearly 1,000 megawatts of emissions-free energy.

These are solid projects that will position us for the future.

Before concluding, let me touch on two subjects regarding opposition to energy development.

First, let me emphasize that there is agreement from all corners that we need to be responsive to concerns about the environment ….and we need to continue to improve our track record….there’s no doubt about that.

But, as I alluded to at the outset, various groups are opposing any and every kind of energy project, whether it’s nuclear, oil, natural gas and even renewable projects.

If we simply say “no” to every project, then we need to ask those who oppose those projects what their solution is.

Let’s think about what our life would be like if we eliminated traditional sources of energy right now.

We’d all agree that’s not practical…. so we need to develop all our energy resources to meet energy demand in a sustainable way.

We need to focus more effort on figuring out how to make energy projects better rather than on polarized positions.

In short, we need a more of a balanced dialogue about our energy future.

Second, there’s been discussion lately about “Dutch Disease” and the impact of oil sands development on the rest of Canada.

Yes, energy exports are one thing that can contribute to a strong currency…. and in countries with less diversified economies, that could make manufacturing less competitive.

A number of studies have concluded that this is not a significant issue in Canada.

For one thing, there are many factors that drive our dollar, including the fact that we attract investment to Canada because of our economic outlook and strong financial system.

Energy is also exported from regions across Canada, including Quebec, and other sectors like mining and electricity; and yes, our manufacturing sector also generates exports.

And relative productivity can also affect manufacturing competitiveness.

On the other side of the Loonie, there are significant benefits generated by a strong Canadian resource sector.

These include tax revenues, long-term jobs across Canada, broad economic growth, and technology development, all of which support our way of life and in particular our social safety net.

In fact, cash generated in the oil and gas industry is reinvested into Canada’s economy at a rate of $1 billion a week.

My point is that whether it's the strength of western Canada's resource sector, Ontario's manufacturing sector, Quebec's wealth of hydro power, or oil and gas resources in Atlantic Canada…we should think about regional success as Canada's success! Those regional successes generate a strong and stable Canada.

To sum up… global energy fundamentals have changed dramatically.

North American oil production is growing rapidly and Canada is poised to become an even bigger player in the global energy picture.

Today, as Canadians, we are leaving billions of dollars on the table because we’re not realizing full value for our resources.

That’s driving an imperative for Canada to diversify our energy exports to new markets.

We need to focus on building new infrastructure to connect supply to new markets; developing our resources sustainably….and working to develop all forms of energy.

I may be somewhat biased, but I think we can look at Enbridge as a good example of where our energy economy needs to head.

We’re responding to changes in the North American and global energy market by investing in the infrastructure necessary to meet demand.

We’re listening to stakeholder concerns about the environment and doing something about it.

And we’re investing in new forms of energy for the future.

Energy and resource development play a critical role in our economy. So, let’s have an open dialogue about how energy generates wealth for all Canadians.

We also need to listen to all perspectives so that we can improve these projects.

Canada has successfully addressed significant energy challenges in the past, and I’m confident we can respond to the ones we’re facing today.

As a country, we know from experience the tremendous benefits that infrastructure can bring to our economy and our nation.

We’ve proven it time and time again - building transcontinental railways, nation-building pipelines and the St. Lawrence Seaway.

And we can do it again with new energy infrastructure to reach growing markets.

If we achieve this, Canada will become a global energy leader to the benefit of all Canadians.

Let me close by re-iterating a point I made a few moments ago.

Whether it’s oil sands development in Alberta; the forestry or natural gas industries in B.C.; Saskatchewan’s potash; manufacturing and mining in Ontario or resource development in Atlantic Canada—collectively it’s all about a stronger nation as a whole…where the sum is greater than its parts.

I encourage everyone to think of regional success as a win for all of Canada.

Thank you.

Equity agreements and Northern Gateway

Wed, 06 Jun 2012 16:11:53 -0600

Yesterday Enbridge Northern Gateway announced a significant milestone in our efforts to achieve broad public support for our pipeline project. I’m extremely pleased to tell you that a clear majority of the Aboriginal groups eligible to participate in our equity plan have signed agreements to do so.

Almost 60 percent of eligible Aboriginal communities along the proposed right of way, representing 60 percent of the First Nations’ population (and 80 percent of the combined First Nations’ and Metis’ population) have agreed to be part owners of the proposed Northern Gateway pipelines. Half of the equity units taken up went to groups in British Columbia, and the other half to groups in Alberta.

Naturally, some very vocal opponents of the project are questioning our agreements. That’s what they do—opponents oppose. We understand some people have concerns and have already made up their minds about the project rather than wait to see the regulatory review process proceed and wait for all of the facts to be fairly and carefully reviewed by the Joint Review Panel. That is their right.

Some opponents are asking which First Nations have signed agreements. We have been clear from the beginning: equity partnership agreements are a matter for individual First Nations to disclose. In fact, at the current juncture, it is a contractual obligation that we allow our partners to self-disclose, or remain confidential, as they choose, as is their right. It’s clear from some commentary we’ve seen that some opponents don’t respect these First Nations' right to keep their business matters private. We ask that respect be shown to all First Nations and Aboriginal groups on this matter.

We’ve also seen claims made by some opponents that signing an equity agreement means a First Nation or other aboriginal group is no longer able to participate in the JRP process or other opportunities to have their concerns heard and addressed. Nothing could be further from the truth.

This is quoted straight from the agreement:

Participating First Nation’s obligations are without prejudice to the Participating First Nation’s right to participate in the applicable regulatory hearing process at which Transporter Approvals will be considered, in order to provide input or express concerns regarding the manner in which the Northern Gateway Project is designed and will be constructed and operated with respect to (i) the use of land for traditional purposes, (ii) the socio-economic circumstances of members of Participating First Nation (iii) the environment and (iv) Participating First Nation’s aboriginal and treaty rights and/or title, including Participating First Nation’s right to suggest measures to be taken to mitigate the potential effects of the Northern Gateway Project.

Despite the rhetoric suggesting otherwise from organized opponents, Enbridge is firmly committed to engagement with all First Nations groups along the right of way and near the planned coastal shipping routes. We actively encourage their participation in the regulatory process. There are First Nations who have signed equity agreements who have also participated in the JRP hearings, bringing forth concerns via oral and/or written submissions.

We have been consulting in relation to the Gateway project for the past decade. Over this 10-year period, the Project concept has evolved and the proposed route has been modified and refined based on input from those consultations. The multi-year process of consultation and engagement has helped us to understand the interests and concerns of dozens of Aboriginal groups with nearby communities and with traditional uses in the proposed Project corridor.

The signed equity partnership agreements are a direct result of our consultation efforts. We believe these commitments break new ground by providing an unprecedented level of long-term economic, environmental and social benefits to the communities located within the Project consultation corridor.

Please note, the original title of this blog post was Aboriginal support and Northern Gateway. We have changed it to avoid confusion.

Report: Oil and gas wealth benefits all provinces

Thu, 31 May 2012 12:42:02 -0600

A report released yesterday by an independent, non-partisan, Ontario-based think tank, The MacDonald-Laurier Institute confirms that Canada’s energy resource wealth contributes to the economic well-being of all provinces.

In a news release, report author Brian lee Crowley said: “All the evidence reviewed shows that the surprisingly diverse benefits generated by energy development, particularly in the West, redound to the benefit of Canadians everywhere. Fears that oil and gas development creates winners in a few provinces at the expense of numerous losers in other regions is not borne out in the evidence. On the contrary, that evidence suggests that benefits are both substantial and surprisingly broadly distributed nationally.”

With the federal NDP leader suggesting Canada has a case of “Dutch Disease”—an economic theory applied to the Netherlands’ manufacturing experience in the 1960s and 1970s—many Canadians are wondering whether Canada’s resource boom in the early 2000s is causing similar strain on manufacturing here. Many independent economists say Dutch Disease is not a concern for Canada’s economy right now.

In an op-ed published today, Preston Manning summarizes the core findings from another recent report by the Institute for Research on Public Policy:

Exchange-rate movements are being driven by high demand for all commodities, not just oil, including strong demand for the output of the mining sectors of Ontario and Quebec.
Fifty-five out of 80 factory sectors in Canada are either unaffected by or even benefit from the high dollar, with no appreciable damage being done by a strong dollar to the food, auto, aerospace or heavy-industry sectors.
The decline in manufacturing jobs in Canada is primarily a result of low multi-factor productivity and intense international competition, particularly from Asia.

This last point is also held up as evidence to suggest that changes to the Canadian economy are closely mirroring other countries experiences, including those without substantial resource industries. In another recent story in the Financial Post, Livio De Matteo, professor of economics at Lakehead University in Ontario, says:

The decline of Canada’s manufacturing sector parallels Australia, which can be viewed as a resource-exporting country, but it also parallels France, Great Britain and Italy, which are not viewed as natural resource-driven economies. Generally speaking, all developed economies have seen declines in their manufacturing sector’s share of GDP over time. A high manufacturing-to-GDP ratio is often more representative of an earlier stage of economic development — the transition from agricultural to industrial development. These changes are really better viewed as an economic evolution.

De Matteo isn’t the only university economics professor who has weighed in on this issue. Andrew Leach from the University of Alberta and Stephen Gordon at l'Université Laval in Quebec City have both written extensively on the Dutch Disease claims.

Stephen Gordon points out that:

What matters for Canadian economic welfare is consumption by Canadians, not manufacturing exports
The resource boom of 2002-2008 led to the lowest unemployment levels since 1976
Real median wages grew significantly between 2002-2008
Increases in labour demand in one sector increases wages for all

While Andrew Leach reminds us that:

“Before arguing for a devaluation of the Canadian dollar to make producers more competitive, Canadians should remember that any push to do so is a push to reduce Canadians’ real wages and to decrease our purchasing power. You might be happier paying more for gas and most everything else we buy, but I can’t imagine why you would be.”

Riding the Green Energy Wave

Thu, 24 May 2012 15:19:18 -0600

Enbridge Vice President of Alternative and Emerging Technology Chuck Szmurlo likens the company’s growing investments in clean, green energy technology to hopping on a surfboard and riding a wave.

While energy liquids pipelines like the Northern Gateway project are an integral part of our business, Enbridge is also a North American alternative energy leader. Riding the wave means that, for more than a decade, Enbridge has steadily increased its investment stakes in cleaner energy sources such as wind and solar. Over the past 12 years, we’ve invested $3 billion in renewable energy projects.

Today Enbridge has wind projects in Alberta, Saskatchewan, Ontario, Quebec and Colorado, as well as solar and geothermal projects in Ontario, Nevada and Oregon. In addition, there are investments in waste heat recovery stations in Saskatchewan, and the company operates a hybrid fuel cell power plant in Toronto.

We also invest in other technologies, projects and companies that will contribute to a cleaner energy future. Our clean, green energy projects now include:

Solar
Wind
Run of river hydro
Carbon capture and storage
Geothermal
Hybrid fuel cell
Coselle technology
Hydrogenics
Waste heat recovery
CO2 slurry pipeline research initiative

On May 14 and 15, 2012, Enbridge showcased our numerous innovative investments in Toronto at “Discovery,” Canada’s leading innovation-to-commercialization conference.

“We see these emerging green technologies not as a threat but as an opportunity,” says Szmurlo. “You can either stand by and watch the wave crash over you, or you can get yourself a surfboard and ride that wave. We prefer to ride that wave and create shareholder value while we’re doing it.”

Click here to read an expanded article about Enbridge’s green energy initiatives.

What is energy4everyone (e4e)?

Thu, 24 May 2012 14:41:51 -0600

The energy4everyone Foundation was conceived by Enbridge CEO Pat Daniel in 2008, as an opportunity for Enbridge to expand on its Corporate Social Responsibility of delivering energy to people.

In the developed world, energy enables nearly everything we do and there is immediate and easy access to the plentiful supply of it. In the developing world, access is far from easy, sometimes impossible to obtain, and even when it’s found, the financial cost of consumption comprises a far greater percentage of family income.

For example, in rural communities in Costa Rica, families spend up to one third of their incomes on candles, the primary source of lighting for most households. e4e is a unique community investment program in that it seeks to relieve poverty in a way that is strategically aligned with what Enbridge does every day—by focusing on the provision of energy equipment, technology, and services to communities.

e4e’s key objective is to improve the access and ability to consume modern energy and by doing so, improve the length and quality of lives while creating prosperous futures for those living in developing countries.

How is Enbridge making a difference?

The United Nations Development Programme has said that “Energy is central to the sustainable development and poverty reduction effort. It affects all aspects of development – social, economic, and environmental…” and e4e agrees.

In fact, e4e designs each of our projects for triple bottom line results—achieving Economic (savings from a more efficient technology, improvement of income level and productive time savings), Environmental (reduction of greenhouse gases, savings of wood fuel and reduced deforestation) and Social (improved access to health, education and means of communication) impacts in the delivery of e4e’s program activities.

Enbridge employees lead the charge

The e4e structure and operating model were specifically designed to maximize employee engagement and employee development with on the ground experiences which allow for the sharing of knowledge and best practices. The structure offers greater insight and understanding of local cultures, and increases awareness of energy4everyone.

Enbridge established an Employee Volunteer Assignment (EVA) to give employees the opportunity to not only implement an e4e project, but also to promote a better understanding of e4e, the energy challenges faced by communities in need and how e4e sponsored projects are designed to offer sustainable long term solutions to communities in need.

EVA engages Enbridge employees beyond just learning about energy technologies and their impact on communities, but also encourages employees to think about concepts such as poverty vs. well-being, social and economic development and how energy is a driver of economic growth.

“e4e takes our corporate CSR values and extends them to the global community,” said one Enbridge employee recently after returning from an e4e volunteer assignment in Peru. “This falls in line with providing energy as an essential, not only for our own society, but for those areas of society that wouldn’t have access to power otherwise. At Enbridge we invest in our communities, and this includes the global community. These sorts of programs are an investment in people and humanity, enabling a better life for the recipients. The e4e initiatives look to provide sustainable energy solutions for all recipients of the programs. e4e efforts help to build relationships with those beyond our day to day lives, and the employee involvement programs encourage sharing of not only resources, but of ourselves, building relationships across time, space, and cultural barriers.”

“I think that everyone participating in this e4e assignment would agree that it was a life-changing and perspective-altering experience. I know I have gained an appreciation for many of the luxuries we have here in North America, such as easy, affordable access to energy. It’s also garnered awareness into how I live my life, and has redefined necessity. I also have a great measure of respect for those who give their lives to help increase the quality of life for others, like the partner organizations we worked with. The experiences we had and the relationships we built have more value than any material good.”

While community investment is one pillar of the broader CSR perspective Enbridge takes, being socially responsible is about living Enbridge’s core values. Each Enbridge employee who has participated as a volunteer is committed to CSR beyond just providing their time and money (volunteers were responsible for their own transportation to and from Peru, as well as using a week of their personal vacation time) and clearly demonstrates their daily commitment to living our shared values. That is the heart of Corporate Social Responsibility at Enbridge.

The United Nations declares the year 2012 as the International Year of Sustainable Energy for All. It is e4e’s mission to highlight and tackle energy poverty by seeking to improve access to energy for targeted communities in Africa and Latin America; and to demonstrate to people in developed nations the significant positive impact and value of energy in addressing poverty.

Northern Gateway and energy infrastructure in the 21st Century

Mon, 14 May 2012 07:56:24 -0600

Janet Holder, Enbridge Executive Vice President, Western Access, recently gave a speech at the Canadian Club in Toronto, Ontario, Canada. Outlined below are Janet's speaking notes from this event.

Thank you Jaime and good afternoon everyone. I'm happy to be back in Toronto, particularly at this beautiful time of year. I lived here during my tenure as President of Enbridge Gas Distribution. I recognize more than a few faces in the audience and I'm grateful for the opportunity to address the Canadian Club today. Of course now I'm back in my hometown of Prince George, BC, where I'm heading up Enbridge's Western Access program.

It is my pleasure to talk with you about what I believe is the most important energy infrastructure project for our nation in the 21st Century: Northern Gateway Pipelines.

In fact, let me remove a qualifier. Forget energy. I think Northern Gateway is Canada's most important infrastructure project today, period.

120 years ago, when the Canadian Club was founded, Canada had just completed another project vital to the well-being of our country, the Canadian Pacific Railway.

Like Northern Gateway, the CPR looked west and created an important transportation corridor to connect markets and resources. In doing so it helped to build and strengthen a fledgling nation.

Had the Canadian Club had been founded just a few years earlier, I am confident that the leaders of the day would have stood at this podium and talked about the importance of that thin band of steel extending to the West Coast and helping to bind and protect confederation.

Likewise, I'm sure the creation of the St. Lawrence Seaway, a little more than 50 years ago, attracted the attention of the Canadian Club. The Seaway proved to be an economic engine for Canada in the mid-20th century. Since 1959 it has seen the transit of nearly $400 billion worth of cargo, connecting the interior of North America to the markets of the world. ⁱ

Northern Gateway is as important to Canada as the CPR and the St. Lawrence Seaway. Its impact on our economy will be of similar magnitude and its benefits will reach down through several generations.

Today I'll discuss why we need to move forward with this project as a nation. I'll talk about why Torontonians should care about a pipeline whose closest point would lie nearly 3,000 km west of here. And I'll talk about how we can build it safely, respectfully and sustainably.

Northern Gateway will fundamentally change the energy industry in Canada. It will catapult our world-class energy resources onto the global energy market and will immediately diversify our customer base, a critical step towards a stronger economy in uncertain times.

But this will only happen if, as a nation, we have the courage and conviction to step out on the world energy stage.

Canada has a choice to make. We can wistfully gaze across the Pacific at the growing Asian economies and wish there was some way for us to fuel their growth with our abundant energy resources.

Or we can act. We can create a Northern Gateway.

Background

Let me provide a little background on Enbridge and on the project itself. Then I will give you the rationale for this ambitious undertaking.

First of all, Enbridge is a Canadian company. For example, we've been here in Toronto for more than 160 years and we employ about 2,100 people in the GTA region alone.

We operate the longest and most complex crude oil pipeline system in the world, safely and reliably delivering nearly 2.2 million barrels of oil every day to markets in Canada and the US. In fact, when you fill up your car here in Toronto, you are likely pumping fuel refined from crude oil Enbridge transported.

We are also the largest natural gas distributor in Canada, heating over 2 million homes. Our natural gas gathering, processing and transmission systems extend from Northern BC to the Gulf of Mexico and transport energy to consumers in nearly forty states and two provinces.

We own and operate a growing portfolio of renewable energy projects with a combined generating capacity of nearly 1,000 MW.

Every action we take adheres to our core values of Safety, Integrity and Respect and all of our relationships are based on that. Across North America, we deliver the energy people count on to live, work and prosper.

Northern Gateway is an extension of that commitment, built on the same core values that have made Enbridge a trusted company for decades.

It's a dual pipeline extending about 1,200 km from northeast of Edmonton, AB to the established deep-water port at Kitimat, BC. The westbound pipeline will carry 525,000 bbl/day of petroleum from the Alberta oil sands to Canada's west coast and the eastbound pipeline will carry 193,000 bbl/day of condensate back to Alberta where it will be used to dilute bitumen so that it can flow through the pipeline.

At Kitimat we will build a world-class marine terminal with two mooring berths for tankers and a total of 14 storage tanks.

I cannot overstate the importance of this maritime access. Today, Canada's proven oil reserves – the third largest in the world – are landlocked. With Northern Gateway and the port of Kitimat, this resource can be sold virtually anywhere in the world.

The Case for Gateway

Canada is a trading nation. In fact, of all the G8 nations, Canada is the one whose economy is most dependent on trade.

And our energy trade is the cornerstone of Canada's economy. In 2011 Canada's single largest export was crude oil; we exported $67 billion worth of it.

However, nearly all of Canada's crude oil exports, about 99 per cent, go to only one customer: the United States. US demand is dropping, in fact according to a TD Economics special report released earlier this month there has been a 30% net drop in their imports of oil and petroleum products since 2005 ⁱⁱ . Their domestic supply is growing and they do have a desire to be self-sufficient. Us finding another customer won't hurt their feelings.

Our most valuable export commodity, and only one market. Does anyone want to defend that business model?

At the same time, the US has a wide range of oil suppliers to choose from – 65 countries in fact ⁱⁱⁱ . The list includes such major petroleum exporters as Saudi Arabia, Venezuela, Mexico, Nigeria and Russia.

That's a dangerous imbalance for Canada.

And we're feeling the impact of our landlocked crude oil every day.

Every day that we're not able to access tidewater is a day of lost opportunity on the world energy market.

When you hear that world oil is trading at a little over $100 per barrel, I want you to remember that's not the price that Canada gets for its oil. Canada's oil, because it is stuck in North America with no outlet to other markets, sells at a discount, up to $36 (as recently as March ^iv ). This discount is not only due to lack of market diversification but also as well as the bottlenecks in Oklahoma.

That's tens of millions of dollars a day and billions of dollars a year in foregone revenue for all of Canada.

What Gateway Delivers.

Northern Gateway will change that. At a single stroke, it will diversify Canada's energy markets and significantly boost the power of our nation's most important economic engine.

Here's what Northern Gateway will deliver:

Very conservatively, an immediate $2 to $3 uptick in the value of every barrel coming out of Western Canada. Some are suggesting now that number could be more like $8 to $10 for every barrel.
A diversified market for our most valuable export, with access to the energy-hungry economies of the Pacific Rim.
A $270 billion contribution to Canada's GDP over 30 years. If we just do the straight arithmetic, this will be a $9 billion contribution per year for three decades. Just to give you a sense of scale, based on 2011 GDP numbers this is slightly more than the entire contribution of the Canada's mining sector to our GDP ($8.6 billion in 2011) and nearly double what forestry and logging contribute. ($5.2 billion) ^v
Close to $1 billion in contracts, training, employment and equity for Aboriginal communities and businesses. (Including a 10 % equity stake in the project)
$2.6 billion in local, provincial and federal government tax revenues.
$4.3 billion in labour-related income.
Approximately 1,150 long-term jobs throughout the Canadian economy and thousands of jobs during construction.

That's a look at the impact across Canada. Now let's look at the potential impact here in Ontario.

We'll be buying our pipe in Canada, so there will be a tremendous impact on Ontario's steel mills and manufacturing centres.

It's a $5.5 billion project, so the Toronto–based financial and banking sector will be involved.

Northern Gateway, as I will mention later, has opposition due to its relationship with the oil sands. Here's what the oil sands deliver to Ontario:

Over the next 25 years, the oil sands industry is expected to purchase $63 billion worth of goods and services from companies in Ontario.^vi

Thousands of jobs. More than half of the employment related to the oil sands outside of Alberta is in Ontario and by 2035 seven per cent of all oil sands related jobs will be in this province. ^vii

According to the Canadian Energy Research Institute, Ontario has the most to gain of any province other than Alberta.^viii In fact, CERI paints a remarkable picture of the impact Northern Gateway will have on the economy of Ontario:

It will create more than 16,000 person years of employment in the province. ^ix
It will generate more than $390 million in provincial tax receipts. ^x
It will generate $686 million in pay for Ontario workers ^xi
And it will boost Ontario's GDP by $1.2 billion. ^xii

And where are those jobs? From services to manufacturing, the oil sands bring benefits and jobs to Ontario. Northern Gateway is good for Canada and it's good for Ontario.

The controversy

Despite all these local, provincial and national benefits, the Northern Gateway project is subject to considerable controversy. I know you have seen the headlines and concerns in print. (Protests just last week)

Much of the controversy arises from that fact that this energy megaproject will occur in a region where oil pipelines have not existed for decades, which naturally gives rise to concerns among local residents about local environment. We welcome the opportunity to engage in the community.

We also know that the project is a lightning rod for opposition because of its connection to Canada's oil sands. Opponents in Canada and primarily abroad see stopping the pipeline as a way to stop oil sands development. The majority of opponents to the oil sands are not Canadian. And we have seen different types of opposition including, as media reports have suggested, millions and millions of dollars crossing the border to stop major Canadian development. As a country, we need to give serious thought to what is an appropriate balance – how do we increase transparency and fairness around processes that impact our country's future?

But in all of this, we are eager to listen and engage on those with a direct interest in the Project. There are concerns from First Nations and Métis communities – some near the proposed right-of-way and others from different regions in Canada.

For Enbridge, the controversy may be a challenge, but it is certainly no surprise. As one of the world's leading energy delivery companies, we know from long experience that it is not easy to build consensus around energy projects. When I was here in Toronto I experienced firsthand the controversial power generation project in Oakville. And, of course, Gateway has attracted its fair share of celebrity opposition. We've got everyone from Robert Redford to Kevin Bacon. It's amazing that people seem to believe that celebrities have more knowledge about the issue than the general public.

It is not easy whether we're talking about a new gas-fired electricity generating station, a 2 km upgrade to an existing natural gas pipeline in a populated area, or a new 1,200 km oil pipeline that will stretch across provinces. That is simply the reality of today's world and the reality of our operating environment.

Given the importance of energy infrastructure to Canada's current and future prosperity, we believe that citizens across the country should get involved in the discussion on Northern Gateway. They need to weigh the pros and cons, and assess Enbridge's approach to doing business, creating shared value in the community and being a good neighbour. The key, of course, is that the discussion needs to be based in fact.

And the facts about the project appear to be capturing the public's attention. Support is growing. But those in favour of the project need to speak up. An Ipsos poll of 1000 BC residents released earlier this year shows that nearly 50 per cent of British Columbians are in favour of the project, about 32 per cent are opposed and about 20 per cent are still undecided.

The percentage of those in favour jumps to 55 per cent in Northern BC, where pipeline is proposed to run.

This is a far cry from the majority opposition that activists claim in BC. It shows that most British Columbians are open-minded and willing to listen.

Most importantly, the poll demonstrates the validity of a time-honoured rule known as the "ABC" of communications: awareness leads to buy-in, and buy-in leads to commitment. The poll shows that the more people know the facts around Northern Gateway, the more likely they are to support it.

We're also seeing that the public's understanding of the importance of energy infrastructure development in Canada is growing. Earlier this month the Canadian Chamber of Commerce released the results of a poll conducted by Ipsos.

The results showed that, contrary to how the issue may be represented by opponents of energy projects, the Canadian public has a high level of support for energy infrastructure development.

For example, two-thirds of Canadians think it's possible to protect the environment while increasing oil and gas production.

Nearly twice as many Canadians (57 % agree to 29 % disagree) that the benefits of oil sands developments outweigh the negatives.

And most importantly for Northern Gateway, 75 per cent of Canadians think it's important that Canada does what is required to diversify our oil and gas markets away from our reliance on the United States.

Clearly, support for the project and for diversifying our oil markets is gaining traction across Canada.

Our approach

There are two reasons why support is growing. One is that the business case for the project is compelling. As the global economy continues to struggle, diversifying our crude oil market with Northern Gateway helps Canada insulate itself from the worst of the economic headwinds.

The second reason behind growing support is Enbridge's approach to the project and to its stakeholders, whether they are in favour or opposed. I am convinced this will be a decisive factor in the ultimate success of the initiative.

We work hard to be a good neighbour and to prove the quality of our character as a company each and every day.

We have been consulting with stakeholders, communities and First Nations along the proposed right of way for the past 10 years. We've held 2,500 public meetings, 123 open houses, 150 presentation and we've met with more than 17,000 people over that time frame. We have taken consultation to a whole new level.

Our approach is transparent and inclusive. We will talk to any stakeholder and respond to every concern. It's not enough for us to answer the regulator's questions. We must work to gain support in the community halls and schools, meeting rooms and kitchen tables all along the proposed route.

And we're working to do just that. We know we need to earn the trust and confidence of our stakeholders and we will do that the same way we have for more than 60 years, by being approachable, open and responsive, the way a good neighbour should be.

We're also going to great lengths to keep the pipeline and marine operations safe.

Here are a few examples among many:

Only pre-screened, double-hulled tankers will be allowed in the Douglas Channel, and they will be tethered to custom super-tugboats and navigated by certified, experienced BC pilots.
We will be adding navigational aids, radar and first response capacity to enhance the safety of the entire northwest coast.
We continue to review and test new technology as it relates to pipeline integrity, earlier detection of pipeline faults, and for emergency response.
We have also adjusted the proposed routing and waterway crossings along the pipeline right-of-way in response to community and stakeholder input.

The more people learn about Gateway and Enbridge, the more trust they will have in our commitment and ability to build and operate this vital link in Canada's energy supply chain in a safe, reliable and sustainable way.

And don't forget that pipelines have been shown to be the safest, most efficient way to transport oil, and oil tankers currently safely travel the Great Lakes and Canada's east and west coasts.

The regulatory process

Currently we are in the midst of a regulatory review by the Joint Review Panel, which operates under the auspices of the National Energy Board and the Canadian Environmental Assessment Agency.

We submitted our regulatory application two years ago.

We're now into our fifth month of community hearings, which are expected to continue until the end of the summer.

Formal hearings should begin in September and be completed by year-end. We hope to have a decision on Northern Gateway by the end of 2013. As you can tell, this is a long process.

The federal government has recently announced that it is working to streamline the regulatory process. We welcome all initiatives that provide certainty to the review process of projects like Northern Gateway.

But the bottom line for us is our commitment for consultation for those with an interest in the Project.

Aboriginal consultation

First Nations along the proposed right-of-way have a profound interest in the project and are a key focus of the consultation process.

Just as I am proud of the technological and engineering expertise that we bring to the project I am also proud of the innovative and collaborative approach that we are bringing to our interactions with these First Nations.

Working closely with Aboriginal communities along the right-of-way, sharing the benefits of pipeline construction and finding opportunities for them to participate in the project over the long term is not only responsible and respectful, it just makes sense.

The relationships that we are forging with these communities are critical to our success. We know that First Nations are more than stakeholders. We work hard to engage with them, understand their interests and concerns and find out where we can work together for mutual benefit.

Our 10 per cent equity offering in the project to Aboriginal communities along the proposed route is just one example of this approach. We are also assisting with the financing of these equity stakes so that these communities can reap the long-term benefits from Northern Gateway.

That's over and above the training and labour opportunities and the sourcing of goods and services before, during and after construction.

Wrapping up

Before I wrap up today, let me leave you with a few thoughts.

First, the case for Northern Gateway is very strong. It's hard to argue against the logic – the necessity – of diversifying the market for Canada's most important export. Gateway is the link between the world's third-largest petroleum reserves and the world's fastest-growing markets for energy. It will have a transformative impact on Canada's economy. Northern Gateway will bring thousands of jobs to Alberta, BC and the rest of Canada and help secure our future as an energy superpower.

Second, Enbridge is uniquely positioned to deliver on the promise of Northern Gateway. Our long-term success is based not only on our ability to safely build and operate energy infrastructure, but also on our ability to build respectful, stable and strong relationships with landowners, stakeholders and First Nations.

Third, the project faces significant opposition, but frankly the level of that opposition is often overstated by activists who use old public opinion data that is not even about the project. The number of people who support Northern Gateway is growing. The voices arguing against it will get louder over the next several months, but we will stay the course and invite Canadians to join in a civil and fact-based discussion of the pros and cons of the project.

Finally, Canada is well-equipped to make a prudent, thoughtful and balanced decision about Northern Gateway and about all our energy infrastructure development. Gateway is just one example of the smart, sustainable and strategic projects Canada can and should undertake to ensure that we get the best value for our natural resources in a competitive world market.

I hope my comments here today have helped build support for this game-changing project. At the very least, I hope I've encouraged you to join the conversation. And you'll find a lively discussion on our website at www.northerngateway.ca

Canada is ready to enter the global energy market, and Northern Gateway is the key that unlocks the door. But it is all Canadians – and that includes everyone in this room today – who hold the key in their hands.

Thank you very much for your time today.

ⁱ http://www.greatlakes-seaway.com/en/seaway/facts/index.html
ⁱⁱ TD Economics; http://www.td.com/document/PDF/economics/special/lp0512_energy_independence.pdf
ⁱⁱⁱ EIA. http://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_epc0_im0_mbblpd_a.htm
^iv Bloomberg, http://www.bloomberg.com/quote/USCSWCAS:IND
^v Statistics Canada; http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/prim03-eng.htm
^vi CAPP, The Oil Sands: Growing Ontario’s Economy, http://www.capp.ca/getdoc.aspx?DocId=176826&DT=NTV
^vii CAPP, The Oil Sands: Growing Ontario’s Economy, http://www.capp.ca/getdoc.aspx?DocId=176826&DT=NTV
^viii CERI, A Decade of Staged Oil Sands Growth (2010 – 2020) page xiii
^ix CERI, A Decade of Staged Oil Sands Growth (2010 – 2020) Table 1.13 – 1.8
^x CERI, A Decade of Staged Oil Sands Growth (2010 – 2020) Table 1.14 – 1.9
^xi CERI, A Decade of Staged Oil Sands Growth (2010 – 2020) Table 1.12-1.7
^xii CERI, A Decade of Staged Oil Sands Growth (2010 – 2020) Table 1.12-1.7

New poll confirms support for Gateway goals

Thu, 03 May 2012 13:52:18 -0600

Leading public opinion research firm Ipsos Reid, on behalf of the Canadian Chamber of Commerce, has released a poll about Canadians' views on the oil and gas industry and the environment.

Among the highlights, the poll confirms the results that another polling firm, Nanos, found back in early February 2012: 75 per cent of Canadians believe we need to open new markets for our oil and gas products--a goal Northern Gateway will meet, should we win approval to operate.

In 2010, Canada exported $50 billion worth of oil, with almost all of that going to the mid-west market of the USA. Currently this market has a large volume of supply, and a lack of infrastructure to move oil to other places. This situation has resulted in a deeply discounted price for Canadian oil compared to the global market price--a problem that the Bank of Canada has suggested could weigh on the entire Canadian economy.

The poll results demonstrate Canadians are aware of this problem and want it solved.

Amongst the findings of the Ipsos Reid poll released today:

Two-thirds (65%) of Canadians agree that “it is possible to increase oil and gas production while protecting the environment at the same time,” including one-quarter (26%) who ‘agree strongly’. One-quarter (25%) of Canadians disagree with this idea (9% ‘disagree strongly’)
Canadians say development of the oil sands is more positive than negative. Nearly twice as many Canadians agree (57%, including 21% who ‘agree strongly’) as disagree (29%, including 12% who ‘disagree strongly’) with the statement that "I think that overall the benefits of development of the oil sands in Canada outweigh the negatives.”
Three-quarters (75%, including 35% who ‘agree strongly’) of residents agree with the statement that "it is important that Canada does what it takes to access new markets for oil and gas exports in order to reduce the reliance on exports to the United States” (15% disagree, including 4% who ‘disagree strongly’)

Energy exports: who decides the national interest?

Mon, 30 Apr 2012 14:47:12 -0600

In a recent editorial article published in the Vancouver Sun on April 28, 2012, Paul Stanway, a veteran journalist and Enbridge communications consultant, asks: “who decides the national interest when it comes to our energy exports?”

There’s a robust debate occurring in Canada right now about energy exports. We at Enbridge believe this is a good thing. It’s the Canadian way: we achieve consensus through open discussion and conversation—a free-wheeling debate. It’s how we decide on major projects in Canada.

Northern Gateway expects to ship upgraded oil

Some Canadians don’t like the idea of shipping bitumen from the oil sands without upgrading it first. Others note that Alberta upgraders and refineries are currently operating at peak capacity and it could be some time before new upgrading capacity is built. Still others note there is a shortage of skilled workers already in the oil and gas industry, and while creating new jobs is certainly important, there are plenty of opportunities for qualified job seekers at this time.

Regardless of your position on the upgrading issue, that debate is peripheral to Northern Gateway—we expect to ship upgraded oil. Like most of Canada’s economic resources, from natural resources to human services, market demands play a large role in determining what is sold, where and when.

Crude oil was Canada’s most valuable export in 2010, amounting to $50 billion in exports. If we include all of Canada’s energy exports—a market worth $94 billion in 2010—nearly 25 per cent of all exports from Canada were energy products.

Canada isn’t getting full market value for its oil exports

Canadian producers currently sell almost all exported oil into the American mid-west market, an area experiencing an oil production boom of its own with supply outmatching demand. Our oil is priced at a discount to an already discounted US Mid-West price compared to the global market price for oil. This situation means Canadians aren’t capturing millions of dollars a day, adding up to billions of dollars per year, in royalties and taxes. That’s a lot of money that could be put towards the things all Canadians value, like education, healthcare and other universal services.

Demand for oil in the United States is also declining while demand is rising in the emerging economies of the Asia Pacific region. The International Energy Agency, a Paris-based independent think-tank says that by 2035, non-OECD economies will lead demand for energy and expects oil to be 29 per cent of the global energy mix.

As Stanway’s op-ed notes: “You don’t have to be an economist to understand that dependence on a single customer for our most valuable export cannot be in the national interest.”

Northern Gateway will contribute to the Canadian effort to fix the single-market situation—an economic problem that is of national concern as recently noted by the Bank of Canada.

It’s estimated that Northern Gateway will add $270 billion to the Canadian GDP over the first 30 years of its operation. Direct benefits include $2.6 billion in local, provincial and federal tax revenues, $4.3 billion in job-related income with $400 million worth of contracts and employment opportunities for First Nations people.

Is blocking pipeline construction in the national interest?

There’s been lots of talk in the media lately about a coordinated strategy to block Canadian oil sands exports. Some groups see the oil sands as an environmental issue that can only be solved by ending development altogether. Renowned climate science academics have noted the apocalyptic climate claims of those environmental activists aren’t supported by the science. Unfortunately the facts haven’t prevented a coordinated campaign to obstruct pipeline construction as a way to stop further oil sands development.

Canadians are faced with a choice: we can risk having our resource revenues choked off and continue to lose opportunities to capture billions in additional benefits from our single biggest export or we can ensure that new markets are opened safely while keeping environmental and human safety our top priority.

A February 2012 poll found that 75 per cent of Canadians believe Canada should diversify its energy export markets beyond the USA. We strongly urge you to stand up for your national interest, please join the conversation and make your views known.

It’s a path to…

Fri, 27 Apr 2012 10:48:52 -0600

The Northern Gateway pipeline is more than an energy infrastructure project. It’s also a path to…

Thousands of jobs nationwide…
Over 3,000 direct construction jobs will be created at the peak of construction. As well, 1,150 new long-term jobs will be generated across Canada—with 560 of those in BC.

Billions of dollars to help Canadian communities…
Over 30 years, more than $2.6 billion in local, provincial and federal tax revenue can be used to strengthen public services. Enbridge will also provide $100 million to support communities near the pipeline.

World-class safety standards…
Carefully planned and built to respect the terrain and wildlife, the pipeline will be monitored 24/7. To protect our waters and coastline, marine facilities will adopt additional navigation aids, increase emergency response capabilities, and implement new land-based radar so that Canada’s Northwest Coast is safer for all marine traffic.

A strong economy with new trade partners…
There will be more opportunities and towns will prosper. It will open up global markets for Canada’s energy exports and increase our nation’s Gross Domestic Product by $270 billion.

Northern Gateway is more than a pipeline. It’s an important national project. It’s a path to our future. 75 per cent of Canadians believe now is the time to diversify our energy export markets. Now is the time for you to have your voice heard. Online or in-person, please Join the Conversation. There are many ways to have your voice heard: leave a comment on our blogs, join the conversation on Facebook, tweet with us on Twitter, you can also comment on online newspaper articles or write a good old fashioned letter to the editor!

Lions spotted in Northern B.C.

Tue, 17 Apr 2012 14:57:24 -0600

Football stars Geroy Simon and Shawn Gore from the B.C. Lions doffed the pads to travel to Vanderhoof, Fort St. James and Prince George, handing off a valuable message to youths in those communities.

In 2010, the B.C. Lions in partnership with the B.C. government launched the Lions Pride program that inspires youth to be active, make positive choices in their lives and excel at whatever they do. Now in its third year, Enbridge has joined the Lions Pride team in a supportive role.

The program runs each spring with star Lions players like Slotback Geroy Simon visiting Grade 8 to 12 students in the B.C. Lower Mainland, as well as participating in an interior tour to the Prince George and Kamloops areas.

Simon and Gore spoke to youths at a Vanderhoof high school and engaged them in a 45-minute activity session stressing teamwork and the importance of having a positive attitude.

The Lions Pride program aims to help at-risk youth make positive choices in their lives and keep them from falling into gang activity.

“In the first year of the program I realized how important it is for the kids to connect with the players directly,” explained Geroy Simon. “We visited an alternative school in Prince George where we were able to connect with the kids in a much smaller group than the normal 600 or so we get in the gyms of the big high schools.”

In many communities in B.C., youth who find themselves in trouble at school or within their communities can be placed in an alternative learning program that provides opportunities for more specialized education and interaction in an effort to help guide them towards future opportunities.

“In talking with these teens directly, I realized that many of them, despite the challenges they’re dealing with in life today, have big goals and dreams for the future,” said Simon. “Sharing my personal journey of focusing on having a positive attitude, being a better teammate and changing some of the choices I was making in life in order to be successful at football will hopefully help them to recognize they can do the same things to achieve their goals and dreams.”

These youth couldn’t ask for a better role model. Simon’s coach recently said: “He is the kind of player every team wants to have and build around. Geroy will never be outworked or stop challenging himself or his teammates and that’s vital to our success.”

“It wasn’t always like this for me,” Simon said. “Success doesn’t come without hard work and a positive attitude. To get to where we are today, I had to learn how to be a better teammate, how to always bring a positive attitude to the football field and to learn how to make better choices away from the field so I could achieve my goals on it.”

Simon led all Lions receivers in 2011 and was second in the Canadian Football League with 1,350 yards, with 8 touchdowns on 84 catches. He was a league All Star for the sixth time in his 13-year career. Simon is just 66 yards shy of being the all-time receptions leader in the CFL.

“Enbridge is proud to partner with the B.C. Lions and the B.C. Ministry of Public Safety and Solicitor General on this important initiative,” said Janet Holder, Enbridge Executive Vice President Western Access. “The work that the B.C. Lions and Geroy Simon are doing away from the field will help create positive spirit in communities across B.C.

“We share the same positive vision for the communities we do business in and with.”

Alberta construction group urges support for Gateway

Wed, 11 Apr 2012 15:53:20 -0600

A workers association says Alberta NDP policy of opposing Northern Gateway because it will transport bitumen is a recipe to kill jobs and prosperity.

The Alberta Merit Contractors Association calls on the NDP to support both Gateway and Keystone XL, which proposes to transport Alberta oil to the U.S. Gulf Coast, as a way to boost viability of the oil sands – a big contributor to the provincial economy.

“Thousands of construction and energy industry jobs are currently tied to recovering bitumen. The NDP plan could result in these valuable resources being shut-in and would result in lost opportunities and jobs for Albertans," says Stephen Kushner, president of the Association that represents over 1,300 contractor firms employing over 40,000 workers in commercial, institutional and industrial construction sectors.

The NDP has said it is in favour of the pipelines, but only if they are exporting upgraded bitumen. What’s lost on the NDP is that Northern Gateway will be constructed so that it can carry both diluted bitumen and upgraded product.

The Association says it is a supporter of the “Refine it Where We Mine it” coalition dedicated to adding value to Alberta's energy resource chain by boosting oil sands crude oil refining capacity in the province.

The NDP’s policy of exporting only refined product is not achievable, says Kushner. And if Gateway and Keystone aren’t built, Albertans would be forced to “give up” tremendous benefits.

"Prevailing markets and economics are saying that fully realizing the goal of refining all of our resource products must be phased in over time.” Kushner stated in a recent news release. “The NDP's stand against moving forward on the pipeline projects, as soon as possible, means they want Albertans to give up tremendous opportunities that exist today. Their plan is merely a wishful hope that uncertain global conditions in the distant future will provide suitable economic conditions to attract the multi-billions of dollars of private investment needed to build each upgrader or refinery."

If you’ve been following the oil refining debate, as we have, you’d know that upgraders and refineries are running at, or near, peak capacity in Alberta.

Currently, oil exported from Canada is sold at a significant discount to the global price. Analysis by Scotiabank released March 28, 2012, as reported here, found that discount to be over $30 per barrel. That’s a lot of money left on the table for Canadian producers, their employees and investors, as well as for government programs funded in part by revenue generated through royalties and corporate taxes.

“Canada needs to increase export capability by building more pipeline capacity,” said Patricia Mohr, a Scotiabank analyst, in her monthly commodities index report. “Secondly, we need to diversify away from just the U.S. Midwest market [and] the third thing, which I'm beginning to be a little concerned about, is that the growth of U.S. petroleum demand is extremely slow. Last year it actually declined.”

It’s clear that Canada needs to open new markets for its oil exports in order to achieve maximum value. It’s also clear that Northern Gateway is an important step towards this goal.

One thing to remember that an argument in favour of boosting refining capacity in Alberta is NOT an argument against Northern Gateway, despite the proclamations by the NDP.

Northern Gateway will be able to ship both.

Greenpeace co-founder Dr. Patrick Moore talks Gateway

Wed, 04 Apr 2012 14:21:09 -0600

“Oil is nearly one-third of energy and all transportation – you can’t just cut that off and expect (society) to continue.”

***

“I know we need oil now and into the future … we need to develop that oil in the most sustainable way.”

***

“We don’t want to suggest cures that are far worse than the disease and that’s where the environmental movement has lost credibility in my eyes.”

***

The source of the above quotes might surprise you.

Dr. Patrick Moore is a co-founder of Greenpeace and a veteran of the environmental movement. For four decades he’s travelled the world righting environmental wrongs.

But as a scientist, Dr. Moore says he became disillusioned with the activist organization when it began to take stands that weren’t rooted in sound science.

“To this day, I believe that all of the positions I’m taking on environmental issues are based on ecology and science and logic,” says Dr. Moore.

Dr. Moore has become an unapologetic critic of “mainstream environmental organizations” that espouse the unrealistic notion that the world can be run on alternative energy in relatively short order.

Dr. Moore isn’t alone in his belief that, for all of our efforts toward green energy and increased efficiency, oil will continue to represent a significant share of world energy demand for many years to come.

In a report released in September 2011, the International Energy Agency finds that demand for oil will continue to grow and remain an indispensable part of the mix for decades. The Paris-based energy think tank says oil will comprise 29% of world energy demand by 2035, driven by demand growth in non-OECD countries.

That rising demand, particularly in transportation sectors of developing countries, will boost unconventional oil production (i.e. oil sands) to form a very important part of the global energy portfolio by 2035, according to the IEA.

Dr. Moore says doomsday predictions by environmental organizations that oil sands development must inevitably lead to climate change Armageddon spurred him to travel to Fort McMurray to survey the industry for himself.

What he found was far different than the usual images portrayed by media and opponents of oil sands development.

“From my point of view, from an environmental point of view, we should develop that oil in the most sustainable way. That means not adopting a position of shutting it down or blocking it or banning it,” he says, pointing to Northern Gateway as a responsible, efficient and sustainable means of transporting the oil from where it is developed, to where it’s needed.

“There is no escaping the fact that seven billion people wake up every morning with real needs for food, energy and materials. Sustainability is partly about how to continue providing for those needs - maybe getting a little bit more food and energy for people in the developing countries - while at the same time, through changes in our behavior and our technologies, reducing our negative impact on the environment.”

Review matters

Mon, 02 Apr 2012 08:32:57 -0600

The Canadian federal government released their budget last week. Included in the budget are provisions to create defined timelines for federal environmental assessment processes and dollars to assist the impacted departments to balance stringent environmental review over an established period of time.

This announcement has been described by some pundits in the media as a significant change. Accordingly, there are organizations and individuals who have expressed concern and outright opposition to proposed changes. In many cases, opposition to establishing deadlines in environmental assessments is borne of the belief that “longer” somehow equals “better.”

Online channels have been, pardon the expression, all “a Twitter” about these plans since the budget was announced, with a wide variety of opinions expressed. One particular discussion stood out for us:

Andrew Leach, a professor based at the University of Alberta who is an expert economist with a focus on energy and the environment, very quickly after the budget was released, asked his Twitter followers:

“Can anyone provide a single piece of evidence that longer environmental processes, beyond a certain point, yield higher quality evaluation?”

As part of his summary of the responses he received, Leach sent several tweets including:

“Many people expressing concerns that reviews won’t be adequate, but connection between that and time limit is tenuous at best.”

“Remainder seem to be people who see the value of a longer process as a longer delay in projects they don't think should be built.”

“…Time limit is/should be a red herring. Argue for better, not longer, process.”

It’s a sentiment echoed by columnist Don Cayo in the Vancouver Sun:

“…it’s a spurious argument to try to link the efficiency of the regulatory process and the fairness of it. “Slow” is not a synonym for “good” nor is “faster” another word for “worse.” It does immense harm to the economy and no good to anyone at all, as history proves, to have a Byzantine process that is obscenely expensive for both the public and private sectors.”

Enbridge Northern Gateway supports the notion of having a thorough but efficient regulatory regime assess all large industrial projects—this is in the best interests of all Canadians. We believe the public interest is also best served by a timely process that provides predictability for companies proposing substantial investments in the Canadian economy, often in the billions of dollars.

At this time, there are only a few details known about the environmental assessment changes announced in the budget. Further legislation providing the working details of the announced changes will likely be presented soon.

Enbridge is supportive of measures in the federal budget that advocate the concept of “one project, one review” completed in a clearly defined time period. It makes great sense and would support developments that bring jobs and prosperity to Canadians. We will look with interest at forthcoming legislation stemming from the federal budget around streamlining the regulatory application process for major energy projects.

Gateway community hearings shift back to Alberta

Fri, 30 Mar 2012 15:56:21 -0600

Community hearings into the Northern Gateway project moved back into Alberta last week for the first time in nearly two months, with a noticeable change in atmosphere.

While B.C.’s coastal communities such as Kitkatla, Skidegate, Hartley Bay, and Prince Rupert are less familiar with pipelines, oil derricks, and refineries, the energy industry is more familiar to centres such as Grande Prairie, where the three-person Joint Review Panel (JRP) continued the public consultation process into Enbridge Inc.’s regulatory application for three days from March 26 to 28.

Northern Gateway, a $5.5-billion project, would include a twin pipeline of nearly 1,200 kilometres from the Edmonton area to Kitimat, B.C., with a new marine terminal at Kitimat servicing oil tankers using the Douglas Channel, one of the widest and deepest inland waterways on North America’s West Coast. The ultimate goal is to connect Canada’s oil sands with emerging energy markets in the Pacific Rim.

Enbridge’s calculations suggest Northern Gateway would mean $270 billion to Canada’s gross domestic product totals over a 30-year span. Enbridge is offering 10 per cent equity ownership in the project to eligible Aboriginal groups living near the project, a windfall of nearly $280 million over those same 30 years.

First Nations such as the Kelly Lake Cree Nation and Horse Lake First Nation, along with various Métis groups, took the mic in at Grande Prairie front of the JRP, whose representatives are appointed by the National Energy Board (NEB) and the federal Ministry of the Environment.

Some First Nations expressed concerns regarding the potential for pipeline spills, pipeline location, and sustainability issues with respect to its construction, while other Aboriginal groups expressed interest in employment opportunities and economic spinoffs.

Members of the Saulteau First Nation, just across the provincial border near Chetwynd, B.C., expressed a wish to have land near the proposed pipeline restored with natural grasses and berry bushes.

“We’re connected to the land in all ways — from the grass, plants and medicine, the herbs that heal our ailments,” said Saulteau Chief Harley Davis.

Grande Prairie also marked a shift in the lengthy Northern Gateway public consultation process — with the first registered speakers in the oral statements phase of the JRP community hearings.

While their names are similar, oral evidence and oral statements are different.

Up until now in the hearings, the focus for registered intervenors has been solely on oral evidence — provided largely by Aboriginal groups who have an oral history and tradition — based on personal experience, and the impact Northern Gateway may have on them and their community.

The oral statements stage imposes a 10-minute time limit for each speaker and allows registered participants to offer opinion and argument.

Delwin Slemp, a councillor with the nearby town of Valleyview, Alta., gave an oral statement in support of Northern Gateway, noting he’s worked in the oil and gas sector for years and understands the relative safety of transportation infrastructure — as well as Northern Gateway’s numerous provisions to heighten safety standards.

“I value the land out there, the Crown land,” said the avid outdoorsman. “If I didn’t believe that this was safe, if I thought there was undue risk, I would not be here endorsing it.”

Both oral evidence and oral statements will be heard over the next three weeks — including simultaneous sessions at Comox, B.C., and Klemtu, B.C. — until the oral evidence hearing schedule wraps up April 17 at Prince Rupert, B.C.

Enbridge generates more solar power

Thu, 22 Mar 2012 14:32:57 -0600

While you may know Enbridge as an oil and gas transportation company — two core areas of our business — you may not be aware that Enbridge is recognized as a leader in North America for generating renewable energy.

The world will need oil and gas for decades to come — they are key ingredients in many of the products we rely on every day as well as providing much of the fuel we use for transportation. Despite this, Enbridge recognizes the importance of boosting capacity of renewable and alternative energy sources.

On March 22, 2012, Enbridge announced a 100 per cent stake in First Solar’s Nevada Solar Project. This project has the capacity to generate 50 megawatts (MW) of solar electricity — enough electricity to power 9,000 homes.

It’s an important step towards reducing carbon emissions. Fifty MW of ‘green’ power will displace about 42,000 tonnes of carbon dioxide (CO2) emissions annually, or about the same as taking 8,000 cars off the road.

The First Solar project is one of many included in Enbridge’s renewable energy generating portfolio, which includes eight wind farms, four solar projects, a hybrid fuel cell and four waste heat recovery facilities, which together generate almost 1,000 MW of renewable energy.

Enbridge has spent some $2 billion in the last 10 years on green power — but we aren’t resting on our laurels.

Enbridge’s Neutral Footprint program has provided us with a mandate to generate a kilowatt of renewable energy for each kilowatt of power we consume in our operations. In our most recent update, we announced that we’re well on our way to reaching this goal with over 2,166 gigawatt hours of renewable electricity generated thus far.

And Enbridge’s green thumb isn’t going unnoticed.

In an annual ranking of major companies around the world, Enbridge was deemed one of the Global 100 Most Sustainable Corporations.

The group Corporate Knights looked at hundreds of corporations around the world and analyzed a variety of measures such as energy efficiency, CO2 emissions, and waste levels.

Enbridge joined just five other Canadian companies in the prestigious so-called “green capitalism” designation.

CBC Cross Country Check Up in Fort McMurray

Mon, 19 Mar 2012 14:54:26 -0600

You’ve likely heard a lot about Canada’s oil sands. But unless you live in Northern Alberta you probably haven’t heard from the people living and working in the region.

There’s no doubt that the oil sands are a hot button of debate in Canada. As Canadians, we need to find a balance in responsible development of one of our country’s greatest natural resources—from environmental and socio-economic perspectives.

There’s a staggering amount of global attention focused on the oil sands. Unfortunately, often lost in the stories are the perspectives of some of the most important people involved—those who live next to the development and those who work to responsibly develop this vital energy resource.

Rex Murphy is a well-known journalist in Canada. Hailing from Newfoundland, ‘The Rock’ as he likes to call it, Rex opines on all sorts of issues, political and otherwise, in a weekly column published in the National Post, on a weekly segment on CBC TV news show The National and he also runs a two-hour radio talk show on Sunday afternoons called Cross Country Check Up.

On Sunday, March 18, 2012, Rex took his radio show on the road to tell the story of the people and community of Fort McMurray, Alberta.

The city is as close to ‘ground zero’ as it gets in the oil sands debate, but the people who make up its vibrant and diverse community are rarely heard from. Rex is helping to change that.

In this two hour Cross Country Check Up show, Rex speaks to the Mayor of the Municipality of Wood Buffalo, local citizens, representatives from industry and aboriginal groups, a few callers from across Canada and an environmentalist whose views are likely very different than what you’d expect. Here are some notable quotes:

“The kind of people that are out here are some of the smartest people in the world. We’re one of the highest educated, we come from not only Alberta but Canada and the world… we’re not all men, we’re not all blue collar and we are all here to improve our life.” Mayor Melissa Blake

“There are a thousand researchers at the University of Alberta and throughout the educational networks in Alberta that are working on environmental issues and activities for the benefit of developing this oil sands play as well as other oil industry elements throughout the province.” Bill Ramsey, oil sands construction expert

“Are there issues? Absolutely, there are always issues with industrial projects of any sort. I also know there are people here working hard to address those issues… we are not ignorant of the issues we face in the industry or our community, we are working on them…” Theresa Wells, Fort McMurray lifestyle blogger

“Last year we celebrated planting our five millionth tree in our operation as part of our reclamation efforts… five or six years ago, environmentalists said that was impossible.” Mark Little, Executive Vice President, Suncor

“Aboriginal businesses have the opportunity to kind of evolve with the actual evolution of the oil sands industry…” Tyrone Brass, President of Northeastern Alberta Aboriginal Business Association

“The human ecology, the human community that is Fort McMurray is fantastic… there are 200 non-profit community associations operating in this town… The oil companies are doing everything they can, they’re pouring billions of dollars into research and development into how we can do this better…“ Howard Rensler, Master’s Degree in environmental studies, founder of Pollution Probe

These are just a few of a great many excellent comments from participants in Rex’s show. The perspectives are unique and provide insight into the local human ‘environment’ often overlooked in critiques of oil sands development.

Leading up to the show, Rex Murphy wrote an opinion column in the National Post, and ended it poignantly:

The environment is not just what you see on green posters. It is not just sunsets and tall trees. It is also the people living in it. And people need energy, and people need jobs. Projects such as the oilsands, which supplies both in abundance, should be celebrated for its cutting-edge technological and scientific prowess. It is Canada’s great national project for the 21st century.

Tanker traffic in Kitimat today

Fri, 16 Mar 2012 11:17:19 -0600

You’ve heard them…the myths stridently stated by environmental activists:

Northern Gateway’s plan, including 220 crude tankers annually into a marine terminal in Kitimat, would be introducing tankers to the Douglas and Principe Channels.
Northern Gateway would represent an end to a tanker moratorium along B.C.’s north coast.
It’s not ‘if’ a spill happens, but ‘when’ a spill happens.

What these activists will not tell you is that there has been plenty of ship traffic in and out of Kitimat already—without a catastrophe they claim is inevitable.

According to numbers from the Port of Kitimat, not only have vessels carrying industrial products been travelling the channels safely for some 35 years, but so too have ships carrying petroleum products—like the one featured arriving in the Port of Kitimat through the Douglas Channel in the picture above.

In fact, some 1,560 vessels carrying methanol and condensate called on Kitimat port from 1982 to 2009 – that’s over 3,100 transits of vessels dedicated to the transport of petroleum products.

When you add vessel traffic of all industrial activity into Kitimat port, the number jumps to 6,112.

To be clear…the number of ships servicing industry arriving at Kitimat port between 1978 and 2009 is 6,112. That’s 12,224 transits!

When you add traffic related to proposed liquified natural gas projects out of the Kitimat region that number is certain to rise even higher.

Suddenly, Northern Gateway’s plan to introduce 220 ships into Kitimat annually is put into proper perspective.

With the kind of traffic already occurring, wouldn’t it make sense to introduce measures that would heighten safety for everyone?

Northern Gateway’s marine plans include navigational aids such as beacons, buoys and lights throughout the channel. There would also be an advanced radar system with Automatic Identification System. The plan includes tethered tugboat escorts that have emergency response capabilities.

Northern Gateway would add additional emergency response equipment that will exceed regulation and will be available to all marine traffic in the event of an incident.

If a spill were to take place, emergency response personnel and equipment will be located at the Kitimat marine terminal and along the vessel routes to ensure the fastest response time possible.

Northern Gateway’s claim that our plan would enhance safety for all vessel traffic was recently independently verified. The TERMPOL report, led by Transport Canada and including input from Environment Canada, the Department of Fisheries and Oceans, the Canadian Coast Guard and the Pacific Pilotage Authority Canada was filed with the National Energy Board regulators as part of the Joint Review Panel process.

Check out the video below to see our safety measures in action, and as always, give us your thoughts in the comments section:

Birdtail Sioux: Sustaining our People

Thu, 15 Mar 2012 16:33:05 -0600

Birdtail Sioux First Nation was once one of too many First Nations communities in Canada suffering the heartbreaking combination of alcoholism, school dropouts, hopelessness and suicide. But a transformation has taken root. Here is the story of Birdtail, the last in a four-part series of how a small First Nation found a path to a brighter future through partnership and collaboration.

Birdtail elder Hilliard Benn says he didn’t know Enbridge or whether the company should be trusted.

When Enbridge approached Birdtail Sioux First Nation prior to a pipeline expansion through territory they view as their traditional lands, Benn was skeptical. So was the community.

“I wasn’t quite sure really what Enbridge is or how they worked,” says Benn, remembering the early days when the community located in southwest Manitoba was getting acquainted with Enbridge.

At the time, Birdtail was battling some very difficult social issues of alcoholism, unemployment and a workforce that was largely uneducated. Birdtail had only graduated 4 people in 40 years.

Birdtail Chief Ken Chalmers saw a path to a brighter future, one that favoured partnership and collaboration over obstruction and confrontation. But it wasn’t just he who saw this path. It was a community decision to build partnerships with Corporate Canada.

“They were very apprehensive, our people,” says Chief Chalmers. “And my people decided, not chief and council.”

That early engagement built a relationship that has since set in motion a series of events involving other corporations, other businesses and various levels of government. The results are striking.

A school, a health clinic, a general store, renovated homes, a water treatment plant and a host of economic development initiatives both on and off the reservation are all either already achieved or what Chief Chalmers still has in store for Birdtail.

Engagement with industry and government has not always been popular with some of his First Nations neighbours but he’s convinced it’s the right direction.

Chief Chalmers is adamant, these initiatives have not resulted in a relinquishment of rights, and he’s resolute in his belief that his traditional territory and his culture have not been compromised.

“We’ve just finished our annual hunt for the reserve and now our fridges in just about every household are full of those meats,” says Chalmers.

He points to the picturesque Assiniboine River valley he says is in the direction of the rights of way of two pipelines, one of them Enbridge’s.

“We’re still doing the stuff we did a thousand years ago in our traditional territory.”

Banning oil tankers in B.C. coastal waters “All pain, little gain”: report

Wed, 14 Mar 2012 16:19:27 -0600

A new report by non-partisan think tank, Macdonald-Laurier Institute, shines a light on activists’ claims that oil tanker traffic will inevitably lead to environmental catastrophe.

The report, written by three experts in the areas of marine traffic, energy economics and international law, concludes that banning oil tankers from B.C.’s north coast are actually likely to have negative results.

The three experts took a look at the repercussions of a ban on oil tanker traffic in B.C. coastal waters, as recently proposed by a cluster of NDP MPs.

The report, Making oil and water mix: Oil tanker traffic on Canada’s West Coast, comprises three essays by leading experts who examined the environmental, economic and legal arguments in favour of an oil tanker ban.

In the end, they concluded: “These opposition bills would add little to the goal of environmental safety, directly damage the legitimate and profitable use of Canada’s petroleum resources, and open a Pandora’s Box of legal problems.”

In his analysis of the environmental effects of an oil tanker ban, Dr. Philip John sheds light on Canada’s enviable record in tanker transport. In Canada, oil spills have been driven downward from 18 in the 1980s to zero in the 2000s.

“The downward trend in oil spills demonstrates superior construction and regulatory standards and a keen sense of awareness, safety, and environmental consciousness,” writes John, Marine Fleet Manager of the Woodward Group of Companies of Newfoundland and Labrador.

John finds that banning oil tanker traffic in coastal waters (which would inevitably result in the end of the Northern Gateway project) will only force its delivery by other modes of transportation such as rail and truck resulting in an increase in its price and exacerbating environmental risk.

“Canada’s major oil-handling ports and the ecologically sensitive waterways leading to them are highly efficient, with extremely low-risk cargo movement procedures. All these ports and waterways have areas of environmental and ecological sensitivity within their boundaries as well as in their vicinity, which have remained pristine and unspoiled despite decades of oil-handling activity,” he writes.

Indeed, the Kitimat port – where Enbridge Northern Gateway proposes to construct a marine terminal – has been welcoming large vessel traffic for decades.

According to statistics from the Port of Kitimat, there have been over 1,500 vessels carrying petroleum products into port from 1982 to 2009 – that’s some 3,100 transits. What’s more, when you add all vessel traffic servicing industry into Kitimat, the number of vessel transits jumps to over 11,700!

Enbridge Northern Gateway would be adding approximately 220 vessels into Kitimat annually. Northern Gateway would also implement a marine plan that would enhance marine safety not just for oil tankers but for all vessels.

These measures include navigational aids such as beacons, buoys and lights throughout the channel. There would also be an advanced radar system with Automatic Identification System, and tethered tugboat escorts that have emergency response capabilities. Northern Gateway would add additional emergency response equipment that will exceed regulation.

The Macdonald-Laurier Institute report follows an extensive independent review by a host of agencies of Northern Gateway’s marine plan. This review – called TERMPOL and prepared as part of Northern Gateway’s regulatory review – found that Northern Gateway’s marine plan is not only sound and comprehensive, but enhances safety for all marine traffic.

Please give us your thoughts on this and other issues related to Northern Gateway in the comments below.

UPDATE (March 15, 2012) - Several media outlets covered the MacDonald-Laurier Institute report today. Business News Network hasa video interview with Brian Lee Crowley from MLI and The Rutherford Show on Alberta radio did an extensive interview with report author Phillip John. That interview is available in the QR77 audio vault—it's in the 11AM to noon segment on March 15, 2012 and begins at the 8:00 minute mark on the player.

David Akin spoke to Phillip John on his news show: Daily Brief

Canadian oil and the Practical Man

Wed, 14 Mar 2012 09:02:54 -0600

In a column published March 13, 2012, Andrew Coyne at the National Post presents a new take on one point of view on the complex matters of refining oil and value-added economic concepts—one he calls the Practical Man.

Coyne’s definition of “Practical Man” is an ironic one. It includes those who “are quite convinced that, rather than pipe crude oil south or west for refining in foreign lands, we should be refining it here at home.”

But Coyne argues that it is more “practical” to pursue economic goals that are rooted in economics rather than to manufacture our raw materials merely for the sake of manufacturing our raw materials.

In other words, if producing raw bitumen for export provides a greater return to Canada than refining it here, why would we put all the money and effort into refining it here?

Coyne suggests Practical Man should pursue higher wages and living standards, and the way to get there is through greater productivity (higher efficiency of production), not necessarily refining the resource.

Despite Coyne’s economics-based critique, this debate is likely to carry on, and is equally likely to continue to influence public policy around energy and trade in Canada as it already has.

In 2008, the Government of Alberta established a goal of having one third of oil sands bitumen upgraded to synthetic crude oil and one third processed to oil-based products and petrochemicals in Alberta. That’s more than 60 per cent of oil sands products entering the so-called value added chain in Alberta.

Both government and oil sands producers are working to meet this goal.

In a recent blog post, Northern Gateway pointed out that an argument in favour of refining bitumen in Canada doesn’t mean you must also oppose the project, which will pipe diluted bitumen to the West Coast where it can then be shipped to Asian markets.

That’s because Northern Gateway will also have the capability of shipping upgraded crude as well, and the expectation is we will ship a large volume of upgraded product. Business is a key player on what gets shipped, when it gets shipped and where it gets shipped— it’s our shippers’ role to understand markets and meet their demands.

Coyne states in his column: “Refining bitumen is an expensive, capital-intensive business. If it were really wiser to refine it here than sell it to refiners elsewhere, investors are at least as capable of realizing it as anyone else.”

One of the great things about Canadian society is our ability to agree to disagree. No matter which position you find yourself agreeing to in the value-added debate, please remember that Northern Gateway will be able to ship Alberta’s oil products—upgraded or not.

As always, share your thoughts in the comments below.

Education wise use of oil revenue

Tue, 13 Mar 2012 15:10:22 -0600

One thing is for sure: there is no lack of debate about what Canadians should be doing with our oil resources. Some suggest all of it should be kept for Canadians to use exclusively. Others suggest only refined products should be sold outside of Canada. Others say let the markets decide where and what should be sold outside of the country.

Whichever side of the debate you might find yourself, many Canadians will agree that the revenues we generate now should be used, at least in part, to prepare for the future.

So how do we translate our strong natural resource economy into long term success? As Jeremy Torobin, a writer on the Globe and Mail’s Economy Lab blog, notes, we must create “an adaptable, highly educated and highly skilled work force that can adapt quickly to fill a variety of needs.”

Some business leaders have called for a renewed focus on technical trade skills training and professional services education. An emphasis on developing the skills necessary for innovation, and to take advantage of opportunities presented by emerging markets, should lead to economic stability as our economy changes over time.

A new study by the Organization for Economic Co-operation and Development (OECD), examined by Torobin on the Economy Lab blog, stands tall in its praise for Canadians’ ability to use our oil resource gains to educate ourselves for the future.

The study looked at the results from the Program for International Student Assessment (PISA) and found that Canada, along with Australia and Norway, outperforms almost all of the other oil producing nations.

“Canada is among a select group of countries positioned to prosper even some time way down the road, when finite resources like oil start to become less important to the economy,” wrote Torobin.

It’s good that Canadians are focused on education for the future. As the study’s author originally noted: “Without sufficient investment in skills, people languish on the margins of society, technological progress does not translate into productivity growth, and countries can no longer compete in an increasingly knowledge-based global economy.”

Birdtail Sioux: A healthy community

Tue, 13 Mar 2012 08:48:39 -0600

Birdtail Sioux First Nation was once one of too many First Nations communities in Canada suffering the heartbreaking combination of alcoholism, school dropouts, hopelessness and suicide. But a transformation has taken root. Here is the story of Birdtail, the third of a four-part series of how a small First Nation found a path to a brighter future through partnership and collaboration.

There were 116 First Nations communities across Canada living under a drinking water advisory as of January of 2012. Birdtail was not one of them.

When Birdtail Sioux First Nation Chief Ken Chalmers was first elected to the community’s top office, he made it a priority to ensure the children in his community were educated, properly housed, and healthy.

For Chief Chalmers, a healthy community meant clean drinking water.

So while so many of his neighbours and First Nations across Canada grapple with “disease and flu epidemics,” Chief Chalmers says his does not.

“The water supply here I worried about so we built our water treatment plant,” says Chief Chalmers of the facility with enough excess capacity to handle population growth decades into the future.

Health is a major issue on many First Nations communities. The Aboriginal population has higher rates of chronic and contagious diseases as well as shorter life expectancy than the general population in Canada.

First Nations people also have a 1.5 times higher rate of heart disease and three to five times higher rate of Type 2 diabetes. Tuberculosis is also eight to 10 times higher.

Chief Chalmers, whose first job at Birdtail before his political career was as health centre administrator, has seen firsthand the inextricable link between a healthy population and a healthy community.

“I’m proud to say we are one of the First Nations that can show its accountability through transparency and we can show the success we’re having,” he says.

The water treatment plant on Birdtail, a maze of pipes, gauges and pumps, is clearly a facility requiring a staff with much training and expertise.

“It’s all totally First Nation run and owned. We have the qualified people to do it,” says the Chief.

This is Part Three of a Four Part blog series on the inspirational transformation of a First Nations community. Click to read Part One: Bringing back our Children and Part Two: Building for the Future.

Alberta mayors throw support behind Northern Gateway

Thu, 08 Mar 2012 17:05:31 -0700

Calling it a “regional action for a global opportunity”, mayors along the proposed Alberta corridor of Northern Gateway officially threw their support behind the project that promises to bring benefits not just to their region but to B.C. and the entire country.

Representing a million people, mayors of the greater Edmonton area – the Capital Region Board – virtually unanimously decided to pen a letter to the Joint Review Panel now assessing the regulatory application by Northern Gateway.

“The (Capital Region Board) is supportive of the proposed Enbridge Northern Gateway project, and we urge you to approve the project,” reads the letter to be sent to the JRP.

“I’m going to call it a regional action for a global opportunity,” the Calgary Herald quoted Spruce Grove Mayor Stuart Houston, who spearheaded the Capital Region Board effort.

“We want to let our voice be heard in the region for a global opportunity. And that global opportunity is the ability to increase and improve Canada’s export of our national oil and national gas resources.”

The $5.5 billion Northern Gateway promises to bring substantial benefits to Alberta and B.C., where the pipeline crosses, as well as drive gross domestic product growth across Canada by $270 billion during the first 30 years of operation.

Northern Gateway will bring significant, lasting benefits to the economy including:

$400 million in employment and contracts for Aboriginal communities and businesses;
$4.3 billion of labour-related income across Canada during construction;
$2.6 billion in local, provincial and federal government tax revenues; and
1,150 long-term jobs throughout the Canadian economy.

And that’s just economic boost related to the project.

According to thinktank Canadian Energy Research Institute, jobs as a result of oil sands investments are expected to grow from 75,000 in 2010 to 905,000 in 2035. The oil sands are also expected to purchase some $117 billion in supplies and services from Canadian provinces outside Alberta over the next 25 years.

Currently, nearly all Canadian export crude goes to just one market – the U.S – where oil demand is flat or falling, where pipeline bottlenecks constrict transport, and where domestic supply is rising sharply.

This has brought into focus the need for Northern Gateway, which would give Canadian producers access to markets in Asia, where rapid economic expansion is fuelling demand.

Northern Gateway expects to ship upgraded oil

Wed, 07 Mar 2012 16:27:14 -0700

One of ongoing themes in the conversation around the Northern Gateway surrounds the issue of natural resource exports and usually leads to this question: why don’t we upgrade and refine all of our energy resources in Canada before we sell them to other nations?

It’s a question that can be viewed through both economic and political lenses. And it’s a question that is centred on the economic concept of “value added.” In the case of the oil business value added processes are typically upgrading and refining. However, the question is peripheral to the Northern Gateway pipeline.

First of all, some have argued against Northern Gateway because they’d like to see all of Canada’s crude upgraded here before it is exported. What those same folks either don’t know or won’t say is that Northern Gateway, as it’s proposed, would be able to ship BOTH diluted bitumen and upgraded crude. The pipeline is designed to handle a variety of crude products in batches. Individual shippers are expected to determine the product type for each batch request.

It’s important to note there are upgraders and refineries in Canada that process Canadian oil sands crude. While not all of Canada’s crude oil is upgraded and refined in Canada, a lot of it is. Crude oil imported from other nations is also refined in Canada—Natural Resources Canada has a list of Canadian refineries on their website if you want to know where the refineries are.

The Government of Alberta, on their Alberta Energy webpages, has a section on Value Added Development. There’s a great graphic outlining the hydrocarbon processes, you should definitely check it out to see some of the value added to Canada’s oil, in Canada.

The value added debate is part of a larger discussion that crosses all resource sectors and isn’t just limited to oil sands development. This is an important distinction. At its core, the question of value added applies to everything Canadians produce from our land. If you want to mandate that Canadian oil be refined in Canada, your argument could also easily be applied to Canadian wheat—should Canadian wheat only be made into bread and pasta in Canada and nowhere else?

Economics explains why this argument doesn’t always make sense.

Andrew Leach, an environmental economist at the University of Alberta, wrote a blog post recently: The ‘economics’ of upgrading. In that post, Leach takes a look at “value” in the oil sands crude conversation and writes: “The real question people should be asking is, ‘should we be willing to subsidize, either directly or through trade barriers, merchant upgraders and refineries in this country in order to export a higher value end-product?’”

His analysis of that question throughout the post leads him to conclude: “I simply don’t see why the value from our natural resource should go to subsidizing the processing of our natural resources. In my view, there are far better uses for that value.”

Granted, his is just one expert opinion on the subject, and if you disagree with his conclusion you will likely be able to source a different expert to support your own opinions on the subject.

If you want to read more on this issue, Suncor’s Oil Sands Questions and Answers blog (OSQAR) has a great post explaining the various actors and ‘camps’ in this ongoing discussion.

Oil sands companies launch environmental performance alliance

Wed, 07 Mar 2012 16:14:07 -0700

Canada’s oil sands producers have formed a new alliance, Canada’s Oil Sands Innovation Alliance (COSIA), focused on accelerating the pace of improving environmental performance in Canada’s oil sands.

CEOs of 12 companies have signed the alliance’s founding charter, committing to COSIA’s vision to “enable responsible and sustainable growth of Canada’s oil sands while delivering accelerated improvement in environmental performance through collaborative action and innovation.”

This is a positive step forward for the environment by oil sands producers—as COSIA says on their website:

Through COSIA, participating companies will capture, develop and share the most innovative approaches and best thinking to improve environmental performance in the oil sands, initially focusing on four Environmental Priority Areas (EPAs) – tailings, water, land and greenhouse gases.

COSIA will take innovation and environmental performance in the oil sands to the next level through a continued focus on collaboration and transparent exchange.

The participating companies are: BP Canada Energy, Canadian Natural Resources, Cenovus Energy, ConocoPhillips Canada Resources, Devon Canada Corporation, Imperial Oil, Nexen, Shell Canada, Suncor Energy, Teck Resources and Total E&P Canada.

There is no doubt COSIA’s goals are both commendable and lofty. At the announcement of its launch, environment advocates Pembina Institute and Nature Conservancy of Canada, according to news reports, “applauded the goals of the initiative.” The Government of Alberta is also supportive.

COSIA will be led by CEO Dr. Dan Wicklum, who holds a PHD in Aquatic Ecology from the University of Montana.

Birdtail Sioux: building for the future

Wed, 07 Mar 2012 10:43:42 -0700

Birdtail Sioux First Nation was once one of too many First Nations communities in Canada suffering the heartbreaking combination of alcoholism, school dropouts, hopelessness and suicide. But a transformation has taken root. Here is the story of Birdtail, the second in a four-part series of how a small First Nation found a path to a brighter future through partnership and collaboration.

Marcel Benn returned home to Birdtail Sioux First Nation after 23 years of city life.

Life in this picturesque prairie community in southwest Manitoba offers an opportunity to reconnect with the land.

Deer, elk and moose are plentiful in the treed edges of the Assiniboine River valley, as are fish in its winding waters.

But at least as important to Benn is the other big reason he came back to Birdtail after so long a hiatus.

“I found work here, labour work and a lot of carpentry work,” says Benn, who proudly proclaims his family has recently grown by one to include his first granddaughter.

“I’m happy to have this job to support my daughter and my granddaughter.”

Benn is part of a construction troupe of about a dozen hired to construct a $1.3 million 4,000 sq.ft. general store and renovate over 100 homes in the community.

All of this construction work is part of Chief Ken Chalmers’ larger plan to take care of the foundation of his community – housing.

The ambitious project he started over a year ago is to renovate all the homes in the community – both inside and out.

The Chief points as he drives throughout his community to each home with a green roof, signifying that it has been outfitted with new windows, doors, insulation and roofs.

Now, his task is to refurbish interiors of all 115 homes to clean out mould and other remnants of the formerly leaky, drafty structures.

This mission is daunting enough. But there is another monumental challenge on the horizon for Chief Chalmers.

Birdtail School has 150 students from Kindergarten and Grade 5. This mini-population boom will require nearly that many new homes in about 10 years just to keep up.

“Good chiefs think seven generations ahead…seven generations from now,” he says. “For me to think about it, just a couple of generations ahead is huge.”

Building for the future, for Chief Chalmers, means ensuring the children of his community have the necessities of life now.

“What I worry about is our children having safe homes to live in while they go to school so they can concentrate on school without worrying about freezing,” says the Chief.

“If you don’t get these kids now, the ones that are in school, we’re going to have the same cycle repeating itself – alcoholism, no future, quitting school. There’s no future when you go to a home with no windows and doors.”

This is Part Two of a Four Part blog series on the inspirational transformation of a First Nations community. Click to read Part One: Bringing back our Children. Part Three is here: A healthy Community

Birdtail Sioux: bringing back our children

Tue, 06 Mar 2012 15:21:04 -0700

Birdtail Sioux First Nation was once one of too many First Nations communities in Canada suffering the heartbreaking combination of alcoholism, school dropouts, hopelessness and suicide. But a transformation has taken root. Here is the story of Birdtail, the first of a four-part series of how a small First Nation found a path to a brighter future through partnership and collaboration.

Chief Ken Chalmers of Birdtail Sioux First Nation stands before the new school he championed, holds his hand up to his ear and asks, “You hear that? That’s a sound we hadn’t heard for over a hundred years in our community.”

It is the sound of children’s laughter as they scamper around a playground at Birdtail School, a Kindergarten to Grade 12 facility the Chief lobbied hard to build a few years ago.

Bringing back the children is also something Chief Chalmers astutely viewed as critical to break the cycle of hardship and pain on the small reservation of about 300 near the Saskatchewan border in southern Manitoba.

Prior to Birdtail School, the children were bussed to the schools of neighbouring towns.

That wasn’t a strategy for success. Birdtail high school graduates numbered just four in the last 40 years.

And for decades prior to that, the children of his people were educated in residential schools.

“This is my most (crowning) achievement,” says the Chief, pointing to the grand structure replete with architectural symbolism that harken back to Birdtail’s Dakota roots.

“Every kid that should be in school is in school,” says Chief Chalmers. Birdtail will graduate 14 this year and 21 the next. Dakota language and culture is alive in the classrooms.

Children’s laughter feeds the soul for Chief Chalmers. The school filled with laughing children is also the most striking illustration of the transformation of Birdtail, from a community plagued by alcoholism, hopelessness and suicide to one that now boasts a health clinic, a general store, an adult education centre, over 100 freshly renovated homes and a host of economic development prospects on the horizon.

If you ask the Chief where the metamorphisis began, his one-word answer is “industry.”

He may point to his engagement with Enbridge and other corporations as the catalyst. But really, it would be more accurately attributed to the Chief himself. He made a decision a number of years ago that he was going to “do something different” for his community. He’d adopt a different strategy as he sought a better life for his people by foregoing obstruction and confrontation in favour of partnership and collaboration.

When Enbridge approached the Chief to discuss the expansion of its mainline pipeline system through Dakota traditional territory, the Chief was cautious but receptive. Those early discussions eventually paved a path of mutual respect, benefit and partnership. It has become a template, for Chief Chalmers, in his dealings with other corporations, businesses and the various levels of government.

“We’ll partner with everybody we can to make a better life for our people,” he says.

The Chief’s work is far from done. He’d say it has only just begun. Birdtail may have turned a corner but the Chief is still pursuing his vision for the community.

“I see business opportunities wherever I look and it’s my job to bring those children up so they have that chance. It is just great to have these young people that are excited about these opportunities.”

This is Part One of a Four Part blog series on the inspirational transformation of a First Nations community. Click to read Part Two: Building for the future and Part Three: A healthy Community.

The so-called ‘Dutch Disease’

Mon, 05 Mar 2012 10:25:50 -0700

The economic case for Northern Gateway is very strong. Canadians understand the need to diversify markets for our energy products—without this diversification, we don’t get full value for our exports.

Opponents of the oil sands and the Northern Gateway project are challenging the economic case with a claim that oil sands exports have led to an increase in the value of the Canadian currency. For many Canadians, an increased dollar value is typically viewed as a good thing; after all, our dollar trading higher on the currency market means the things we buy outside of Canada like vacations and cross border shopping trips cost less.

But there are a few Canadians, like some politicians and advocacy groups, who claim that the increased dollar value hurts our economy because it means our manufacturing exports are more expensive for non-Canadians. These folks point to the oil sands and say they’ve led Canada down the path towards Dutch Disease. Few economic experts agree with these claims, however.

Stephen Gordon, who is a professor of economics at l'Université Laval in Quebec City, is a regular writer on the Economy Lab blog at the Globe and Mail. Today he takes the Dutch Disease claims head on. In a nutshell, Gordon sums up the logic of those making the claims with a great quote from Yogi Berra: “’Nobody goes there anymore,’ he once said of a St. Louis restaurant, ‘it’s too crowded.’”

Gordon’s lessons for us non-economists are these:

What matters for Canadian economic welfare is consumption by Canadians, not manufacturing exports
The resource boom of 2002-2008 led to the lowest unemployment levels since 1976
Real median wages grew significantly between 2002-2008
Increases in labour demand in one sector increases wages for all

The next time you hear someone suggest that Canada has a case of Dutch Disease, ask them why they think lower unemployment, higher wages and more purchasing power is a disease?

Canada's oil boom

Tue, 28 Feb 2012 12:17:18 -0700

Both the federal government and the Alberta government have been staunch defenders of the oil sands – a resource that brings tremendous value to Canadians across the country.

Both have traveled in the U.S. and to Europe trying to correct myths about the carbon footprint related to crude derived from the oil sands.

And they’ve reaped some success on that front.

Now, Alberta Premier Allison Redford is enlisting the help of Canadians by issuing a call to action for them to become vocal advocates of a resource that brings tremendous benefits to all regions of this country.

“We in Alberta have a resource that matters to the rest of the country,” Ms. Redford was quoted in a Globe and Mail article.

Redford pointed to a study done by the Canadian Energy Research Institute that found that, as expected, Alberta draws the biggest benefits from the oil sands resource. But the think tank finds some pretty lofty sums of resource revenue going to the provinces of Ontario and British Columbia and Quebec as well.

“It’s not enough for Alberta to be talking about the importance of Keystone in the United States. We need the Premier of Ontario talking about that. We need the Premier of Quebec talking about that, and of course, we have the Prime Minister of Canada talking about that,” Redford was quoted in the Globe.

The oil sands isn’t Alberta’s oil boom, it is Canada’s oil boom.

You can help refute the myth that the oil sands is only about Alberta by sharing this infographic the Globe and Mail created from the data CERI made available.

2011 Business Summit attracted overflow crowd

Mon, 27 Feb 2012 16:51:53 -0700

A late boost in interest in the Summit held Nov. 1-3 had organizers quickly adjusting to accommodate an additional 150 to 200 delegates – including from some 30 First Nations communities from Alberta and B.C. The additional crowd was over the 200 scheduled to attend the event at the River Cree Resort on the Enoch First Nation near Edmonton.

“From the get-go at this event, it’s just been tremendous momentum and positive buzz.”

Building on the success of Enbridge’s first Northern Gateway Business Summit in 2010, the 2011 edition aimed to connect Aboriginal and non-Aboriginal community members, leaders and businesses with industry.

The Northern Gateway Project, if approved, promises to generate 62,000-person years of employment during construction across both provinces and beyond. The 1,177-km pipeline and marine project connecting northern Alberta’s prolific oil sands region to a marine port at Kitimat, B.C. aims to have 15% of the construction workforce comprise of Aboriginal people.

The promise of parlaying well-paying construction jobs in the $5.5 billion Northern Gateway Project into long term careers is one of the things that attracted Elmer Derrick, Chief Negotiator for Gitxsan First Nation in B.C., to the event. Derrick, who is also the hereditary Chief of Gitsegukla First Nation, says it is incumbent upon First Nation leaders to seek out opportunities with industry.

“What I’m reminded of every day by young people is that we have to strive for more economic activities that they can become engaged in,” said Derrick.

Alfred Goodswimmer, Director of Operations for Sturgeon Lake First Nation, made the trip to learn opportunities in industrial support jobs such as trucking and construction but also in energy industry operations.

“As community leaders, we don’t go out and make demands on industry. We establish relationships, have dialogue, and come to agreement on how we are going to work together because it’s the people we want to make sure benefit from these projects,” said Goodswimmer.

Kelly Lendsay, President and CEO of the Aboriginal Human Resource Council, stressed the importance of inclusion of Aboriginals in the new economy – not just for the sake of good jobs today but for vibrant communities into the future.

Described as a resounding success, organizers hailed the delegate list that included members of some 30 First Nation and Metis communities from Alberta, B.C. and a number of signed agreements.

More and more Aboriginal groups are seeking information from industry to better their communities and offer opportunities for their people. Northern Gateway has held two Business Summits and both have been successful in bringing together people intent upon connecting Aboriginal people and the energy sector. The latest Business Summit, held in Edmonton in November of 2011, attracted an overflow crowd as representatives of some 35 Aboriginal communities across B.C. and Alberta came together to see how business connections could be made.

“People are seeing opportunity. We can no longer live in a world of shame and blame. It’s about how we collaborate, set targets for our communities and then achieve those targets together ,” said Kelly Lendsay, President and CEO of the Aboriginal Human Resource Council, who also stressed the importance of inclusion of Aboriginal people in the new economy – not just for the sake of good jobs today but for vibrant communities into the future.

“Success for me is measured in two ways. Success is measured by attendance and it’s measured by buzz,” said Morgan Yates, Enbridge Northern Gateway Vice President of Aboriginal and Stakeholder Relations.

“From the get-go at this event, it’s just been tremendous momentum and positive buzz.”

Transport Canada gives positive review of NGP

Thu, 23 Feb 2012 12:54:08 -0700

On February 23, 2012, Transport Canada filed a TERMPOL Review Process Report of Northern Gateway’s proposed marine operations. The study reviewed the marine operations associated with the Northern Gateway terminal and associated tanker traffic in Canadian waters. Based on the information supplied by Northern Gateway, the review finds “no regulatory concerns and no serious safety issues.” The review also makes a number of recommendations and findings regarding the operation of the Kitimat terminal and the safe passage of vessels in and out of the terminal.

Janet Holder, Enbridge’s Executive Vice-President of Western Access and the senior executive with responsibility for Northern Gateway, said “It is important for the public, particularly BC residents, to know that we’ve done our homework and that our marine plan has been thoroughly reviewed. I think the TERMPOL review underlines that what we are proposing is well planned and safe – and indeed would enhance safety for all shipping on BC’s north coast.”

Northern Gateway is encouraged by the positive conclusions of this technical review of the marine components of the project – including the safe operation of the Kitimat terminal and safe passage of tankers to and from the facility through Canadian waters.

Oil tanker traffic on the BC coast is not new. Over the past 25 years, more than 1,500 ships have safely travelled in and out of Kitimat, including oil tankers. In 2010, more than 70 oil tankers called at Port Metro Vancouver, and in 2011 Port Metro Vancouver shipped 6.6 million tonnes of petroleum products, of which 2.4 million tonnes were crude oil.

Here are some highlights of the findings contained in Transport Canada’s TERMPOL review:

The proponent’s commitment to fully implement its proposed Northern Gateway Project risk reduction strategy will help enhance the safety of the project’s marine transportation components.
The proponent’s commitment to vet oil tankers through its Tanker Acceptance Program will help ensure vessels exceed national legislation and international regulatory frameworks and meet high industry standards as promoted by Oil Companies International Marine Forum.
The proponent’s commitment to include environmental limits (weather and sea conditions) on oil tanker navigation in the Terminal Operations Manual and Port Information Book will enhance safety. It will help ensure the oil tankers remain within safe operating parameters while navigating to and from Kitimat.
The proponent’s commitment to implement a tug escort system for oil tankers that provides immediate and effective action will help mitigate risk if a tanker’s steering or propulsion system fails. The tug escort system will enhance tanker safety.

Transport Canada’s TERMPOL submission is available on the National Energy Board website.

You can learn more about Northern Gateway’s comprehensive marine safety planning by watching this video.

State-owned companies behave like other companies: study

Wed, 22 Feb 2012 14:45:06 -0700

The Prime Minister’s trade mission to China was criticized by some who see this pursuit as a compromise of Canadian economic sovereignty.

Other critics have asserted that investments by foreign state-owned firms into resource development in Canada will somehow weaken Canadian control and oversight over these resources.

The author of a recent study commissioned by the Canadian Council of Chief Executives attempts to calm fears Chinese state-owned firms are mere puppets of their central government.

Margaret Cornish, a Beijing-based ex-Canadian diplomat, argues that state-owned Chinese enterprises behave in a manner that isn’t all that different from that of corporations in free-market economies around the world.

Cornish’s observations of firms such as Sinopec and PetroChina, that have invested heavily into Canada’s energy sector in recent years, is that they are far more intent on the pursuit of their corporate goals and performance measures than on the political whims of their government.

Behaving in a manner that runs counter to a state-owned company’s financial goals and performance measures would be “putting at risk its corporate and financial integrity by undermining the good name and relationships that take decades to establish,” says Cornish’s paper quoted by Postmedia.

In her paper, Cornish calls on Canadian government “ to avoid politicization of the (foreign investment approval) process to the extent possible."

Coal far worse on climate than oil sands: report

Wed, 22 Feb 2012 11:02:19 -0700

The graphic above was created by the report authors, Swart and Weaver, and is made available on this webpage.

The oil sands shouldn’t be the energy pariah they’ve been made out to be – at least that’s the conclusion of a couple of B.C. climatologists in a recent study.

Andrew Weaver, a professor at the University of Victoria, took a look at carbon dioxide emissions from the burning of Canada’s oil sands reserves and those of coal.

Weaver, and colleague Neil Swart, essentially asked the question of how much global warming would occur by burning a variety of fossil fuel resources. Here are their calculations.

Oil sands under active development: would add 0.01°C to world temperatures.
Economically-viable oil sands reserve: would add 0.03°C to world temperatures.
Total unconventional natural gas resource base: would add 2.86°C to world temperatures
Total coal resource base: would add 14.8°C to world temperatures

In other words: Coal presents a climate challenge 1,500 times greater than that presented by the oil sands.

Weaver and Swart certainly gained some attention in the media and in social media circles as more experts are beginning to take issue with environmentalists’ doomsday dogma that the pursuit of the oil sands resource is akin to charting a course to global climate change Armageddon.

Weaver and Swart do issue warnings that unmeasured pursuit of fossil fuels as our primary source of energy isn’t a competent response to climate change.

But certainly their study does bring a measure of context to the debate that shouldn’t be restricted to in-situ drilling, upgraders and pipelines.

Opposition to NGP ‘premature’: Terrace Chamber

Fri, 17 Feb 2012 11:17:35 -0700

The Terrace and District Chamber of Commerce calls for patience during the regulatory review of the Northern Gateway Pipelines project.

In a letter addressed to Northern Gateway and sent to the Terrace Standard newspaper, the Terrace Chamber expressed “concern” with Terrace city council’s official opposition to Northern Gateway.

“It is our position that this decision was premature and as a Chamber, we support economic development as it underpins all of our social programs be it education, health or infrastructure,” stated the Chamber in the letter.

The business group reacted to Terrace council’s recent vote to officially oppose Northern Gateway. The Chamber says it has taken a position of neutrality until the regulatory review completes its work.

“We want the objective panel of experts to assess the concerns of affected parties and contrast them with procedures and equipment being positioned to mitigate any and all perceived risks. It is important that all voices are heard and all questions are asked and answered,” says the letter.

The Chamber adds: “Terrace has been without major development for many years now and the Terrace business community has struggled. We are encouraged by the recent investments that have been approved and look forward to many more projects coming to our area that will continue to build our economic landscape.”

Despite Terrace’s stance, a number of city and town councils have pledged their support in letters to the Joint Review Panel now assessing the project application.

Support for Northern Gateway is solid in B.C. According to a recent Ipsos Reid poll, support for the project stood at 48% while those opposed lagged at 32%. In northern B.C., where familiarity in the project is strongest, support jumps to 55%.

Enbridge detects small oil release during maintenance work

Thu, 16 Feb 2012 15:53:26 -0700

On Wednesday, February 15, during a planned maintenance inspection and repair on Enbridge’s Line 5 in Arenac County, Michigan, near the village of Sterling some soil contamination was detected. Upon further investigation, a small release was identified.

The estimated volume of the release is less than 3 barrels.

The pipeline repair and clean up began immediately. We expect the repairs to be completed and the line to be restarted later today. We will work with our Shippers to assess the impact of the outage.
As a precaution, Enbridge is imposing a temporary incremental pressure restriction until a review of similar features from inspection tool runs has been conducted.
Line 1 has been shut down due to high inventories at Superior and will restart after Line 5 has started.
Line 5 carries light crude oil and natural gas liquids. It does not transport heavy oil.
Any release in our liquids pipeline network is of great concern to Enbridge. This incident can be viewed as an example of Enbridge’s pipeline integrity systems and clean-up procedures at work.
Enbridge invests heavily in safety through its pipeline and system integrity programs, which encompass the tools, technologies and strategies needed to ensure that pipelines and facilities are checked and inspected for safety and reliability. Since 2002, we have spent approximately $1 billion on our safety and maintenance programs for our Liquids Pipelines systems across North America.

Chief Vern Janvier of the Chipewyan Prairie Dene First Nation talks Northern Gateway

Wed, 15 Feb 2012 12:01:32 -0700

Chief Vern Janvier, of Chipewyan Prairie Dene First Nation in northern Alberta, says his people have not only learned to get along with the energy industry, but they've thrived.

In his interview with Sun TV, Chief Janvier says much of the band's income comes from oil and gas activities. And this symbiotic relationship has not hindered the ability of his people from practicing their traditions.

Watch the interview and tell us your thoughts about what Chief Janvier has to say in the comments.

Oil squeeze a big concern

Thu, 09 Feb 2012 17:23:56 -0700

I’ve said it before and I’ll say it again … I think Northern Gateway is one of, if not THE most important proposed infrastructure projects in Canada today.

That belief was bolstered again when I read in the Globe and Mail about something that serves to underscore what I’ve been saying for some time – Canadian oil producers need another outlet for their oil.

Oil prices for Canadian producers are getting “squeezed” and that’s not a good thing.

It’s not good for energy producers, for the thousands who work in the industry, for communities, for provinces and for the federal government. All of us rely to varying degrees on the viability of our energy sector.

Whether or not the current squeeze is temporary is a matter of debate, but it does underline something very worrisome.

What’s happening? Canada produces a lot of oil. We are also a net-exporter of oil valued at about $50 billion a year.

It has become our most valuable resource and a pillar of our national economy – but there is one catch, virtually all of the oil we export goes to just one market, the U.S.

America is a mature market and demand there isn’t what it once was. Combine that with soaring U.S. oil production, and you get the picture. It’s a potentially dangerous imbalance for Canada.

“On a logistical basis, it points to the vulnerability of having all our eggs in one basket as a nation. It makes more sense to diversify your customer base for crude oil,” Frank King, an analyst with First Energy Capital, says in the Globe.

This imbalance could also see us leave a lot of money on the table. By one estimate, it will cost the energy industry $8 billion a year if Northern Gateway isn’t built. It is already depriving governments of millions in lost royalties and tax revenues every single day.

Northern Gateway would give our energy industry other crucial trade outlets. Booming economies in Asia promise to give Canadians more competitive returns for our resource and shelter us from the vagaries of having a single oil export market.

An Enbridge-commissioned report (which was required of us as part of our regulatory application for Northern Gateway) estimates that this one project would boost Canadian GDP by $270 billion in the first 30 years of operation.

That’s tremendous wealth that would flow through our economy, create jobs and result in higher tax revenues that pay for hospitals, roads, schools – all the things that help make Canada the country it is.

I’m a proud British Columbian and a patriotic Canadian.

And the situation described in the Globe concerns me greatly.

"Is this really a good idea?"

Thu, 09 Feb 2012 14:34:35 -0700

Hi Alyssa, for the benefit of other readers, I'm quoting your comment you left on a different post so they'll better understand my response to you:

So, I'm a sixteen year old girl doing a project on the Enbridge Pipeline for my Socials Class. I live in Terrace.

I'm basing this project mainly on the people's opinions of Enbridge, but I want to know what you have to say. I don't actually know what I think on this Pipeline. I don't want an oil spill -- I've worked on my father's charter boat since I was ten. My father, during the winter, works for Northwest Fuels. I know the damage a gas spill can cause. And I know how much worse crude oil is. My father described it as 'thick, black tar that you have to scrape off the ground.'

What would you do if there was an oil spill? Will it harm the environment? How many animal habitats are going to be destroyed by this? How many trees torn down, forest floors ruined, animals disturbed? Even if there is no spill, just building this thing will cause terrible damage, am I right?

And if a tanker crashed... We've seen how many captains tend to get drunk and crash their ships -- it happened in Alaska, it happened with the Cruise ship two weeks ago. You could do everything right, and one person can still screw it up. What then?

You see alot of articles on the internet about this project, and they're all biased strongly one way another. Is this really a good idea? ~Alyssa

My name is Janet Holder. Like you, I live in BC's north. I've worked with Enbridge for a number of years and last June I asked to return to my hometown of Prince George to lead the Northern Gateway project. I strongly believe that the project is in the best interest of Canadians no matter where they live. Equally, I believe that British Columbians, once they learn more about the project and its benefits, will come to understand that there are significant benefits they will receive as well.

Thank you for taking the time to come to the Northern Gateway blogs to ask questions and provide your thoughts about the project. You're right, there's a lot of information out there about Northern Gateway, much of it strongly biased, and it can be quite a challenge to sort out the facts.

I'm glad that you feel motivated to do a school project on Northern Gateway. You'll find a lot of information about our proposed pipeline on this website. Please explore the website to find the information you need, and if you can't find what you're looking for, just leave a comment on this post and we'll point you in the right direction.

Like you, no one, and let me stress this emphatically, no one at Enbridge wants an oil spill to occur. When an oil spill happens, there are adverse effects to our environment. That's why safety is our number one priority at Enbridge. Preventing a spill from happening is the best way we can safeguard the environment. There are two aspects to our comprehensive pipeline integrity program at Enbridge: prevention and response.

Let's look at the way we've acted to prevent a spill from occurring first. Did you know that we've spent the past decade studying the proposed route? We've done this to satisfy our own safety concerns, to listen to and attempt to address the concerns of the people who live along the proposed pipeline route and to provide the National Energy Board with a comprehensive safety plan so they can best judge our application to build the pipeline.

During the route study, we looked at potential geotechnical concerns—we were looking for the most stable ground to build on. We want to leave as little to chance as practicable. I invite you to watch this video with Drum Cavers, an expert in the field, who discusses how we conducted our route study and planning.

You asked what we would do if there is a spill. I want to stress to you that the likelihood of a spill occurring is low. The proposed Northern Gateway pipelines will be designed according to exacting Canadian Standards guidelines. No pipeline ruptures have been reported on pipeline systems built in the last 25 years to these standards. But despite our best efforts to prevent spills, there is a chance of a spill, and you're right to be concerned with our emergency response planning.

This page outlines our emergency response planning. Forgive me for cutting and pasting here, but this best describes our response planning: If an incident should occur, Northern Gateway will be there quickly to control, contain and clean up. Here's another video we created to help you understand the way we prepare to respond to emergencies.

When we were preparing our application, we conducted a comprehensive study on the kind of wildlife and land that can be found along the proposed route. The findings of those studies can be found here in our technical data review. Some people might find reading those studies a bit overwhelming; they're detailed and very technical. We've written some fact sheets about environmental assessment and wildlife, you can find them here (they're under the heading Environmental Protection and Socio-Economic Assessment), but this blog post might also provide you with the answers you're looking for.

Let's address your next concern: adverse effects caused by constructing the pipeline. When people think about us building this pipeline, they might have visions of bulldozers ploughing through a thousand kilometres of pristine forest. That's certainly the painted picture opponents of the project try to create. Fortunately for the environment, it's simply not true.

Living in Terrace, you're likely familiar with other resource industries like forestry and mining. You may even be familiar with the Northwest Transmission Line that will bring much needed power to BC's northwest. These kinds of projects leave a footprint on our land. When we began planning our proposed route, we looked at existing development created by other industries—forest service roads, rights-of-way, forestry cut blocks, etc—and planned the route to follow alongside those areas and avoid, wherever practicable, impacting land that hadn't already been impacted.

As our manager of engineering stated recently "There are actually very few segments where we need to create right-of-way through ‘undisturbed’ forest. Minimizing impact to the environment is one of the first considerations Enbridge takes into account when planning pipeline routes."

We have a program at Enbridge we call Neutral Footprint. It outlines some of our environmental commitments to the land impacted by our operations. Whenever we disturb an acre of land, we make sure an acre is conserved somewhere else. We also make sure we replant a tree for every tree we cut down.

We've discussed our route safety, emergency response and route construction planning for the pipeline itself. You also have questions about the marine shipping. I invite you to watch this video describing our comprehensive marine safety program. It's almost 10 minutes long, and I know that might be longer than you'd like to watch, but please understand that our safety planning is comprehensive. So much so that compressing all of the marine route study, safety and emergency response planning into a short video is impossible.

I want to address your comments about the potential for human error directly. You correctly note that human error was at the root of the Exxon Valdez accident twenty years ago. Human error may have been involved in the cruise ship accident in the Mediterranean several weeks ago. These are extremely unfortunate, but also very isolated, examples of human error on the ocean.

If you watch the marine safety video linked above, you'll note that the ships involved with transporting oil and condensate into and out of Kitimat, will be tethered to tug boats. Neither the cruise ship nor the Exxon Valdez were tethered to tug boats when they struck ground. Did you know that since the Exxon Valdez ran aground 20 years ago, more than 11,000 oil tankers have safely transited the same channels into and out of Alaska, aided by tug boats?

There have been significant improvements in tanker design and operational safety since the Exxon Valdez accident. We've studied those improvements, and other port operations, and we are committed to ensuring that our proposed Kitimat terminal and marine operations are a global leader for safe operations. You can read more about our plans here.

You finished your comment by asking, is this really a good idea? I believe it is. A $5.5 billion dollar project creates a lot of economic benefits during construction for the towns along the right of way. There are other benefits for BC too. Northern Gateway will create lasting benefits for Canadians by opening new markets for Canadian energy products. Northern Gateway will allow Canadians to get more value than they currently do in return for their important energy resources. That value helps people fund their retirements, creates jobs, provides revenue for education and healthcare, and it also allows us to make investments in renewable energy and environmental protection.

Thanks Alyssa for joining the conversation and good luck with your school project.

Northern Gateway bad for economy? Not so say Economists

Tue, 07 Feb 2012 11:15:50 -0700

In a recent report, Robyn Allan argues against Enbridge’s assertions that Northern Gateway would be net-positive for the Canadian economy.

Allan, who was appointed CEO of ICBC in the early 1990s by the then BC NDP government, took a look at Enbridge’s regulatory filing from an economic perspective.

The filing includes commissioned economic studies demonstrating the economic effects of export market diversification—studies that must stand up to the scrutiny of the quasi-judicial Joint Review Panel (Appendixes A & B here).

Allan’s report, submitted to the JRP by the Alberta Federation of Labour, claims higher oil prices would fuel higher gasoline prices across Canada, causing a dampening effect to the entire economy.

University of Alberta economist Andrew Leach, an oft-quoted media source on energy and environmental economics, decided to test some of Allan’s claims against the realities of gas market economics.

On his blog, Leach debunks Allan’s claims that a $2-$3 per barrel increase for our resource will cause gasoline prices to jump across Canada. He points out that Canadian retail gas prices are already reflective of world oil prices, not the deflated WTI benchmark prices that most of Alberta’s oil sands production is sold at.

As Leach says “Think about this before you decide that blocking export pipelines and stranding crude in Canada, which will lead to a discounted Canadian crude oil price, will translate to savings at the pump in Canada.”

Leach also reminds us of some of the benefits of higher oil export prices in the form of higher royalties and government tax revenues to pay for universal programs like health care and education.

Other recently published independent studies also support the obvious need for diversifying markets for Canadian energy.

This University of Calgary study says “With better access and new pipeline capacity, oil producers will see more efficient access to international markets which can add up to $131 billion to Canada's GDP between 2016 and 2030.”

Another independent study suggests the cost to the Canadian economy would reach into the billions if Northern Gateway is not built.

Economists debate on CBC radio

Fri, 03 Feb 2012 18:53:23 -0700

Comments in the media that Northern Gateway would be bad for the Canadian economy were recently challenged by a University of Alberta economics professor.

In this CBC interview, Andrew Leach goes head to head with Robyn Allan, former head of the Insurance Corporation of British Columbia on the issue of how higher returns for the energy industry affects the wider Canadian economy.

Leach presents a different take on the report by Allan, who was appointed to the ICBC post by the NDP government.

Allan argues in a recent report highlighted in this Vancouver Sun article that should Northern Gateway be built, and should it provide Canadian energy producers with a $2-3-a barrel boost in returns, gasoline prices would also rise.

The price of oil is constantly fluctuating. The price of West Texas Intermediate—the benchmark of Canadian crude—rose almost $1.50 on February 3, 2012. It can rise or fall $2 to $3 per barrel in a single trading session.

In its application to the regulators, Enbridge states that Northern Gateway would enable Canadian oil producers to tap lucrative offshore markets, causing higher returns to the energy sector and increased royalty and tax revenues for federal and provincial governments.

Those higher returns would boost investment and spinoff economic benefits.

Neutral Footprint creates lasting impact

Fri, 03 Feb 2012 11:22:32 -0700

In May 2009, at Enbridge's Annual General Meeting in Toronto, President & Chief Executive Officer Patrick D. Daniel announced an ambitious plan to stabilize Enbridge’s environmental footprint at January 2009 levels. Enbridge’s Neutral Footprint commitments are the result of that vision. They are designed to reduce the company’s environmental impact where it is felt most: on the trees we remove, the natural habitat we permanently impact, and the energy we consume to power our operations, within five years of the impacts occurring.

To conserve land, Enbridge has partnered with Nature Conservancy Canada to protect environmentally sensitive areas. One such partnership resulted in the purchase of 544 acres (220 hectares) of wetland, forest and shoreline habitat along Gauley Bay to conserve habitat for the globally rare wildflower Hill's Thistle.

"The Gauley Bay property is an important conservation project," said Paul Hunt, Director, Sustainability & Corporate Social Responsibility, for Enbridge. "In 2009, as part of our Neutral Footprint program, we committed to conserving an acre of natural habitat for every acre that our company impacts. Since then, we've been working with the Nature Conservancy of Canada to make that commitment a reality."

Enbridge’s commitment to the environment through Neutral Footprint doesn’t stop at land conservation efforts. We’re a recognized leader in renewable energy projects as well. This helps us achieve our Kilowatt for a Kilowatt commitment—for every kilowatt we use in our operations, we generate a kilowatt through renewable means.

By October 2011, Enbridge was generating almost 1,907 gigawatt hours of electricity through our renewable energy investments, including wind, solar and geothermal operations. Our generating capacity is continuously growing and is on target to meet our commitment.

School Plus helps First Nation students

Fri, 03 Feb 2012 10:10:43 -0700

The Enbridge School Plus Program was established in 2009 in partnership with the Assembly of First Nations to support enrichment programming and extracurricular activities in First Nations schools near major Enbridge pipeline routes and our wind farm in Ontario. About 50 First Nations schools are currently eligible for the program.

The overall goal of School Plus is to encourage First Nations youth to stay in school by funding enjoyable extra curricular programs to which students would not otherwise have access.

The School Plus Program provides substantial financial support each year to teachers who wish to undertake programs and activities that are not fully funded as part of each school's standard curriculum. Projects from all grade levels, from kindergarten through high school, are eligible for support. Teachers in eligible schools may apply for financial support, up to a maximum grant of $20,000 per project.

Over the last two years, the program has awarded over 1.3 million in School Plus funding and benefitted more than 6,500 First Nation students in Western Canada and Ontario.

The program expanded in 2010 to include initiatives that build strength and sustainability in Métis and urban Aboriginal communities. Enbridge is proud to partner with the following organizations:

Métis Child and Family Services in Edmonton to provide the Enbridge Hot Lunch program at Highlands School in inner city Edmonton.
The Gabriel Dumont Institute in Saskatchewan to support a teaching resource on the history of the Métis people for public and Catholic schools near our right-of-way.
The University of Winnipeg to fund the Enbridge Eco-Kids on Campus program to enable youth from two inner city schools in Winnipeg to receive enriched science programming at the University of Winnipeg once a week for 10 weeks.
Stardale Women’s Group to support the Honouring the Girls’ Stories program that builds mentoring relationships and nurtures artistic expression among Aboriginal girls in Calgary.

MacKenzie Art Gallery to support an urban outreach program that provides quality arts education to on-reserve and inner city students in Regina.

In addition to the current partnerships above, Enbridge also sponsored in 2010 the Gabriel Dumont Institute in support of a teaching resource on the history of the Métis people for public and Catholic schools near our right-of-way.

Poll: Canadians see need for energy market diversification

Thu, 02 Feb 2012 12:14:59 -0700

$50 billion.

That’s a big number… a lot of money.

That’s the value of Canada’s oil exports every single year.

In recent years, oil has become Canada’s most lucrative trade product.

But are Canadians aware that virtually all oil we export flows to just one market ?

Do Canadians know that our country—one of the most trade-dependent on the planet—is beholden to a single customer for this resource?

Some 99% of our export oil flows to the U.S. and only the U.S.

A new poll out shows Canadians are aware of this trade dependency... and the numbers suggest they don’t like it.

In a national random survey, Nanos Research concludes 75% of Canadians favour developing a diversified energy strategy to include more than just the U.S. market for our oil exports.

“In other words, three Canadians in four agree that Canada needs to develop the emerging markets of the Asia Pacific and other regions of the world,” writes Nanos in the latest issue of Policy Options.

“What Canadians are saying here is that while our relationship with the U.S. is very important, they see a diversified energy strategy as key to the long-term future prosperity of the country,” adds Nanos.

Is it smart, or logical, to put all of our eggs in a single basket when it comes to oil trade?

Judging from the results of this poll, it would appear Canadians are saying ‘no.’

Pipelines are safe and efficient

Fri, 27 Jan 2012 15:50:14 -0700

We continue to receive thoughtful questions and commentary on the Northern Gateway blogs. Thank you to readers and commentators alike. The following questions came to us recently by e-mail.

Will the proposed pipelines be insulated?

The buried sections of pipelines will not cool to the ambient air temperature during a line shutdown for normal operations or in emergency situations; as a result, the buried pipeline does not need to be insulated.

The pipe and equipment found above ground will be of a minimum design temperature of minus 45ºC and will be insulated and heat traced as required. Above ground piping will also be designed to be drained, if necessary, in the event of an extended shutdown.

Pipe used in the construction of Northern Gateway will be externally coated to protect against corrosion. During construction, rock shield, sand padding, wooden lagging or concrete coating will also be used, where needed, to provide additional mechanical protection for the pipe.

How much energy will be used to pump the oil in the two pipes and does that oil have to be heated?

The commodities we have proposed to transport do not require heat to be added to the system.

It’s expected that each pump will be 5,750 horse power (4,290 Kilowatts) and we anticipate 45 pumps will be used for the pipelines.

The pump horse power ratings and locations are described in Volume 3, Section 8.3 of our application which you can find here.

The number and horsepower of the pumps at each station to achieve the average annual capacity in the oil and condensate pipelines was determined during the hydraulic analyses (see Section 4 in the document linked above).

How many pumping stations are planned and what energy source will they use?

There are a total of 10 pump station sites planned. Each pump station will have numerous safety standard measures incorporated into its design to eliminate accidents and malfunctions or reduce their severity. This will be supported by:

remote monitoring
well trained personnel who will visit each site on a regular basis
appropriate maintenance and operational procedures for the safety and integrity of the facility

Power lines will be constructed to supply electrical power for the pump stations. These power lines will connect to existing transmission systems operated by various utility companies such as ATCO Power, AltaLink and BC Hydro. In British Columbia, Northern Gateway will be responsible for supplying connection facilities to BC Hydro, and in Alberta, the utility providers will supply the connection facilities. Provision for substations is included for each pump station.

Why do you assume different oil commodities for transport?

The Northern Gateway pipeline is designed to transport different types of oil commodities in batches. Based on discussions with shippers, Northern Gateway has assumed a variety of standard crude oil commodities for transport in the pipeline:

synbit, which are blends of refined synthetic oil and bitumen
dilbit, which are mixtures of condensate and bitumen
synthetic crude oils

Strong support for Northern Gateway: poll

Wed, 25 Jan 2012 16:44:03 -0700

In an Abacus Data poll released January 24, 2012, 38 per cent of respondents say they support the Northern Gateway pipeline project while 29 per cent say they don’t.

The Abacus poll, conducted exclusively for QMI Agency, shows results similar to an earlier Ipsos Reid poll conducted on behalf of Enbridge and released early in January 2012. That poll showed British Columbian respondents were more likely to support the project than oppose it, with nearly 50 per cent of respondents saying they support the project.

“This is a far cry from the majority opposition that activists claim in BC,” Janet Holder, Executive Vice President, Western Access, said in a speech to the Edmonton Chamber of Commerce. “It shows that most British Columbians are open minded and willing to listen—and most importantly that the more people know about what we’re proposing, and the decade of engineering and environmental study we’ve put into Northern Gateway, the more likely they are to support it.”

Media coverage on Enbridge's record doesn't tell full story

Thu, 19 Jan 2012 11:46:27 -0700

There have been a few stories in the media lately related to Enbridge’s incident history on its pipeline systems. Unfortunately, the stories don’t provide readers with many of the details they’d need to understand the complete story.

As Enbridge discloses annually in its Corporate Social Responsibility Report, the vast majority of the spills that Enbridge experiences are small, they occur within Enbridge facilities (and never leave the site), and are discovered very soon after they occur - allowing for rapid response and clean-up and resulting in low, or no environmental impact.

In three of the past 10 years, Enbridge had no significant off-property releases on our liquids pipeline system in Canada and the United States. In the other seven years, we experienced one significant release each in 2003, 2009 and 2011, two each in 2002 and 2004, three in 2010, and four in 2007.

Contrary to the impression left by some media stories, spills are rare relative to the volume of liquids products that Enbridge transports. As the stories correctly point out, Enbridge safely delivered over 99.99% of the volume we transported in 2010, when we shipped almost a billion barrels of petroleum products through our system.

Having said that, no spill is acceptable to Enbridge because our goal is zero incidents. Our number one priority is the safety and integrity of our operations and to prevent all spills, leaks and releases. Since 2002, we have spent approximately $1 billion on our safety and maintenance programs for our Liquids Pipelines systems across North America.

The proposed Northern Gateway pipelines will be designed according to exacting Canadian Standards guidelines. No pipeline ruptures have been reported on pipeline systems built to these standards in the last 25 years.

Just as Enbridge does for all its pipelines, Northern Gateway will implement mitigation measures during design, construction and operation of the pipelines to prevent releases and to quickly respond should the need arise. These measures include, among others, avoidance of environmentally sensitive areas and special design requirements for areas such as road, river and creek crossings.

Although pipelines have long been proven to be the safest way of transporting oil and gas, Enbridge is working constantly to ensure safety by increasing the reliability of our pipelines and facilities.

Our number one social responsibility is to deliver energy reliably and safely and we will always live up to that standard.

Answers to questions about benefits and the environment

Tue, 17 Jan 2012 15:40:19 -0700

We received a few questions and comments on our Facebook page the other day, thanks for these Dylan.

Dylan stated: “Very little revenue will actually go towards the First Nations who's lands you are apparently stealing and that most of the jobs are only temporary construction jobs lasting one or two years.”

Dylan, respectfully we disagree with the assertions in this comment. Northern Gateway is offering Aboriginal people a 10% share in a $5.5 billion project. The long-term financial benefits for participating Aboriginal shareholders will be significant. Aggregate equity ownership is expected to generate approximately $280 million in net income to neighbouring Aboriginal communities, over the first 30 years.

Becoming an owner in this project means Aboriginal groups are going to see cash flow within the first year of operations. Through equity ownership, Aboriginal people will be able to generate a significant new revenue stream that could help achieve the priorities of their people – such as improved health care, education and housing.

Dylan also showed his concern for the environment when he said: “the presence of tankers and heavy marine traffic will highly disturb wildlife in the area, including a humpback whale population which has only recently recovered from two digit populations and the spirit bear, which has been reported in the video by opponents of this plan to be almost if not equally as rare as the panda.”

Dylan, we agree protecting the environment and the animals is very important. The Northern Gateway Project understands the long-term success of the project depends on our ability to construct the project in an environmentally responsible way. A team of over 200 environmental experts and scientists have conducted a comprehensive analysis throughout the project area in aspects such as marine biology, wildlife, water resources, fish and others. The findings of this analysis have been incorporated into our planning to ensure that construction proceeds safely and responsibly and that our environmental impact is minimized throughout the operational life of the project.

To best address the wildlife issues Dylan raised, we’ve organized them in two parts: marine mammals and land animals.

Here are some of the specific measures we propose to reduce potential effects for marine mammals:

Using specified vessel transit approaches, taking into account navigational safety, so that acoustical disturbances are constrained to similar and predictable areas during marine transportation
Reducing vessel speed to 10 to 12 knots throughout the channels to the terminal
Reducing vessel speed to 8 to 10 knots, unless otherwise required for safe navigation, in the core humpback whale area during May to November.
In the initial years of operation, introducing a whale-monitoring vessel during months of peak humpback whale abundance in the core humpback whale area.
Investigating the use of remote detection techniques. This would be used to support the visual observation program from the whale-monitoring vessel.
Using the best commercially available technology at the time of design/construction of the tugs (primarily in engine vibration reduction and propeller design) so that escort and harbor tugs produce the least underwater noise possible.
Develop and implement a marine mammal protection plan specific to the Project that would outline measures to limit the effects of underwater noise on humpback whales and other large marine mammals in the shipping channels.
Operators of project-related vessels will report all sightings of whales in the shipping channels via a ship communication system, so other marine traffic is made aware of whale locations.
Implementing cooperative planning and research to address important data gaps.

With regards to the Spirit Bear, it’s important to note that the proposed pipeline route does not go through the area environmental groups call the Great Bear Rainforest. That said, there are some potential effects on wildlife wherever the right-of-way (ROW) is built. To reduce the risk of these effects occurring, Enbridge Northern Gateway will implement the following mitigation measures:

Reduce disturbance by routing the ROW along areas where other infrastructure development already exists (e.g., roads, seismic lines and pipelines)
Use existing access roads wherever possible
Limit the area cleared for temporary workspace and then re-vegetate these areas using native species
Protect wetlands using a variety of measures:
- using existing water course crossings where possible
- minimizing disturbance of soil and sedimentation
- reclaiming areas to the pre-construction profile
- allowing wetlands to regenerate naturally
- monitoring effectiveness of wetland reclamation, making adjustments as necessary
Survey important wildlife habitat features (grizzly bear dens, nests of sensitive bird species, dens of other animals, mineral licks [i.e. salt licks], and elk migratory paths) and implement measures such as construction setbacks to avoid them
Maintain habitat connections between key forested areas, where possible, by placing coarse woody debris on the ROW after construction or facilitating the re-growth of vegetation along the ROW
Track and report all wildlife incidents (wildlife vehicle collisions, bear encounters or problems) and engage the appropriate wildlife authority as required

Kitimat resident speaks in support of Gateway

Thu, 12 Jan 2012 17:40:37 -0700

According to a Canadian Press report, longtime Kitimat resident Peter King called on the regulatory body assessing the Northern Gateway project to consider benefits connected to the proposal.

Peter King addressed the Joint Review Panel on the second day of hearings in the Haisla Nation community of Kitamaat Village, near Kitimat, B.C.

"For us to sit back in Canada where we're blessed and say that other people in India and so on like that can't enjoy the benefits of what we have, I have a problem with that," he was quoted in the Canadian Press.

Columnist calls for pragmatism

Wed, 11 Jan 2012 12:10:30 -0700

Michael Den Tandt, a columnist with Post Media, took exception to some politicking recently by Skeena – Bulkley Valley MP, and NDP leadership hopeful, Nathan Cullen, in a recent column—it’s well worth a read.

Den Tandt highlights some important facts about Canada’s oil and gas industry and points out just how valuable it is to all Canadians, coast to coast to coast:

“Tax revenue from oilsands development [is] projected to be $307 billion across Canada over the next 25 years, with $187 billion accruing to the federal government”

That’s an important part of the Northern Gateway conversation. As Canadians, we all receive benefits as a result of our tax system—things we value, like subsidized education and health care, along with other important social programs.

When our elected representatives stand up in opposition of an industry that employs hundreds of thousands of Canadians, and provides billions of dollars in tax revenue to all levels of government, without explaining to Canadians how they plan to replace those jobs and revenue, as Den Tandt suggests, we can:

“…call it ‘symbolism,’ because that's precisely what it is. Neither Cullen, nor the Sierra Club, nor actor Robert Redford, nor any of their political fellow travellers, appear concerned with finding pragmatic solutions that address environmental concerns, while still allowing Alberta oil to flow to market.”

There is no question that Canada’s oil and gas industry has a responsibility to Canadians and our environment. It’s a responsibility that industry has said they accept, acknowledge and act upon. If you haven’t read the Canadian Association of Petroleum Producers’ most recent Responsible Canadian Energy report, please do.

You should also check out Enbridge’s Corporate Social Responsibility actions. We’re proud of our commitment to the people, communities and environment wherever our operations exist.

Let’s have a fact-based conversation about Northern Gateway, and dismiss the political rhetoric for the empty symbolism Den Tandt exposes it to be.

Oral hearings begin in Kitimaat Village

Tue, 10 Jan 2012 18:22:38 -0700

The Joint Review Panel oral hearings began today in Kitimaat Village, part of the Haisla First Nation community. Enbridge Northern Gateway’s role in the hearings is observational. We’re committed to the National Energy Board’s process, and we’re keenly interested in hearing what all stakeholders have to say about the proposed project to build twin pipelines between Bruderheim, A.B. and Kitimat, B.C.

The oral hearings are one step in an extremely comprehensive public regulatory process. The current hearings, scheduled to wrap-up in early April 2012, are to allow registered interveners an opportunity to present oral evidence to the three-member JRP. These oral hearing sessions will hear evidence from First Nation communities located close to the proposed right-of-way, and other registered interveners.

Out of respect for the process, Enbridge Northern Gateway will not comment on any evidence presented at the hearings. We support the JRP decision to ensure a comprehensive public input component into the regulatory process.

How many visits to the marine terminal?

Fri, 06 Jan 2012 10:14:35 -0700

There’s been some great discussion in these blogs since we launched them just a few short weeks ago. Thanks for joining the conversation!

A Twitter user asked us a marine related question recently, so we turned to our marine expert, Chris Anderson, to provide us with the answer. The following is a summary of the question and Chris’ response:

Q: Will the tankers used to import condensate be used to export bitumen?

In Enbridge Northern Gateway’s submission to the Joint Review Panel that is reviewing the project proposal and conducting the environmental assessment, we estimate the tanker traffic volume to be 225 “calls” to the Kitimat terminal each year. To arrive at this conservative estimate, Enbridge Northern Gateway has assumed that tankers bringing condensate for Canadian import will not be used to transport diluted bitumen and other oil products away from Kitimat.

Tankers are generally capable of transporting any class of hydrocarbon, but like many industries, the transportation of energy is highly specialized.

New poll shows strong B.C. support for Gateway

Thu, 05 Jan 2012 17:26:43 -0700

A new poll out suggests solid support among B.C. residents for Northern Gateway and opposition far lower than often suggested by environmental activists.

A survey by leading polling firm Ipsos Reid done on behalf of Enbridge found support for the Enbridge Northern Gateway project at 48% while those opposed at 32%.

“Clearly such statements by environmental activists that there is overwhelming opposition in B.C. to Northern Gateway are inaccurate,” said Paul Stanway, Manager of Communications for Northern Gateway.

“Judging by this poll, the people of B.C. are far more open-minded on Northern Gateway than the activists would give them credit for.”

Of the 48% in support, 14% indicated they “strongly” support Northern Gateway.

Of the 32% who oppose, 13% said they are “strongly” opposed. Two-in-10 are undecided about the project.

“Project support leads opposition in all regions, among both genders and among all age groups,” Ipsos Reid stated in a news release.

Ipsos Reid also measured B.C. residents’ familiarity with Northern Gateway.

Respondents who are either “not at all familiar” (25%) or “not very familiar” (30%) stood at 55%, according to the poll.

Those who said they are either “very familiar” (5%) or “somewhat familiar” (37%) stood at 42%.

“It will be incumbent upon us to continue to work hard at getting the facts out to British Columbians so that they can come to an informed opinion on the project,” added Stanway.

The poll of 1,000 adult British Columbians was conducted Dec. 12 - 15, 2011. Ipsos Reid estimates a margin of error of ±3.1 percentage points, 19 times out of 20. These data were statistically weighted to ensure the sample’s regional and age/sex composition reflects that of the actual B.C. population according to 2006 Census data.

The poll can be found here.

A news article on the poll can be found on the Vancouver Sun website.

Pipeline emergency response

Thu, 05 Jan 2012 12:17:06 -0700

Since we launched these blogs just a few short weeks ago, we’ve had some great commentary and questions asked by people who decided to join the Northern Gateway conversation. Thank you!

Brad from Victoria recently asked some pipeline safety related questions:

Will you install cameras like web cams at environmentally sensitive areas like rivers and stream crossings and monitor them 24-7-365?
Will there be containers at these sensitive locations loaded with oil containment booms, pumps, absorbent oil pads and emergency phones?

These are great questions. Enbridge Northern Gateway is committed to ensuring our pipeline integrity is monitored around the clock, every day of the year. We have a state of the art computerized monitoring system, headquartered in Edmonton, monitoring all of our existing pipelines—should Northern gateway be built, this same system will be employed to ensure it is maintained and operated safely. In addition to round-the-clock monitoring, a system of regular pipeline inspection is put in place to ensure pipeline integrity: we’ve developed internal inspection technology (called PIGs) that travel down the pipeline on scheduled maintenance cycles to look for any potential pipeline integrity issues.

At environmentally sensitive areas, like stream and river crossings, safety shut-off valves will be installed to ensure fast response to any leaks and prevent large-volume discharges. A series of fast acting, emergency response stations will be located at strategic points along the entire route of the pipeline, located near access points and areas where spill response can be initiated quickly. Each of these stations will be equipped with containment booms, absorbent pads and other safety related gear. Crews that operate these stations undergo rigorous training; you can see one of these crews in action in our Emergency Response Exercise video below.

Answers to your questions

Wed, 04 Jan 2012 17:59:27 -0700

We’ve been receiving lots of great questions from a wide variety of people since we launched these blogs just a few short weeks ago. It’s great to see this level of interest and we thank you all for joining the conversation.

Stu D asked a few oil and gas related questions:

What is the difference between bitumen and crude delivery?
Which has more environmental impact and can your pipeline deliver both?
What is the annual mix of these products?
Which is easier to recover from a spill?
What about the condensate?

We also were asked a similar set of questions about the proposed pipeline and the products we intend to deliver through it by someone on Twitter:

What percentage of the dilbit (diluted bitumen) will be bitumen and what percentage will be condensate?
Where will the condensate be sourced from?

Oil extracted from Canada’s oilsands is known as bitumen. Bitumen is a form of heavy crude oil that resembles molasses when it’s first separated from the sand and clay it’s found in. In order for bitumen to flow through a pipeline, it needs to be mixed with diluents, called condensate. The condensate Enbridge will use in the Northern Gateway pipeline is expected to be liquids extracted from the natural gas liquefaction process. These liquids will be sourced from the global market, most often from Asia and other Pacific Rim producers.

Condensate will be delivered to Kitimat by tanker where it will be shipped via pipeline to Bruderheim. The condensate will then be mixed with the bitumen to create a product commonly called dilbit (diluted bitumen) for transport by a separate, larger pipeline, back to Kitimat. Typically the ratio of condensate to bitumen for pipeline transportation is in the range of 25-30% condensate to 70-75% bitumen.

Northern Gateway has assumed four standard crude oil commodities for transport in the pipeline: synbit, which is a blend of refined synthetic oil and bitumen; two types of dilbit (mixtures of condensate and bitumen); and synthetic oil. The storage tanks planned for Kitimat will be able to accommodate these products.

It’s important to note that transporting dilbit in pipelines is not a new activity—dilbit has been shipped safely in pipelines across North America for almost 30 years. Enbridge has a 99.99% pipeline safety record. And while we’re an industry leader when it comes to safe and reliable pipeline infrastructure, we’re not satisfied with 99.99% safety and we’ve invested billions of dollars to make our pipeline system the safest in the world, with a goal of 100% safety. Please check out our Pipeline Integrity Program for more information. If a dilbit spill were to occur, the environmental restoration process is very similar to other crude oil clean-up procedures.

Community hearings to open in Haisla First Nation

Tue, 03 Jan 2012 12:05:06 -0700

You may have heard a lot about Enbridge Northern Gateway in recent weeks.

In the coming weeks, you’re likely to hear a lot more about our project, a $5.5 billion 1,177-km dual pipeline and marine terminal connecting Canada’s oil sands to lucrative markets in the Pacific Rim.

That’s because a very important phase in the regulatory process is about to begin. The oral community hearings kick off Jan. 10 in Kitamaat Village, a Haisla First Nation community on the West Coast adjacent to the town of Kitimat.

Let’s be frank. There are some strong feelings on either side of the debate on whether Enbridge and its partners should build Northern Gateway, the largest private-sector infrastructure project British Columbia has ever seen.

Some of those strong feelings will likely get expressed during these hearings. But this is an important part of the regulatory process to scrutinize and test our assurances that Northern Gateway can be built safely and in an environmentally sustainable way, and that it is in the public interest.

These hearings give those who have signed up to speak an opportunity to participate in a very real and tangible way. They also give the public the opportunity to view the proceedings and the media the freedom to observe and report on this very transparent process.

It’s important to note that these hearings are not being organized by Enbridge. They are being held as part of Canada’s stringent public regulatory regime.

It is the Joint Review Panel – a three-member body struck under the auspices of the Canadian Environmental Assessment Agency and the National Energy Board – that is in charge of this process.

It is a process dedicated to fulsome but factual dialogue related to this proposed project.

We encourage all those interested in Enbridge Northern Gateway to become engaged, but do so armed with the facts, with an open mind and in keeping with Canada’s long tradition of compromise, openness and dialogue.

Here is a recent announcement on the schedule for community oral hearings.

Please note that the JRP has shifted the Jan. 10-11 hearings in Kitimat, B.C. to Kitamaat Village.

You can read the JRP announcement here.

Billions at stake if Northern Gateway not built: new report

Tue, 03 Jan 2012 12:00:00 -0700

There are billions at stake for Canadian oil producers should Northern Gateway not get built, says new economic analysis.

A report filed just before Christmas to the Joint Review Panel – the regulatory body assessing the application of Enbridge Northern Gateway – details some eye-popping numbers that support the notion that there is a compelling business case for the project.

Currently, Canada’s only oil export market is the U.S. But if Northern Gateway were to be built, giving producers more oil export market options such as China, producers would see some striking financial benefits.

“Canadian producers not having sufficient access to premium heavy crude refining markets could lose about $8/bbl (per barrel) for every Canadian heavy crude barrel, with a revenue impact averaging C$8 billion per year for 2017 to 2025,” writes Harold York, Ph.D. of Economics and vice president of Houston consulting firm, Wood Mackenzie.

The full report, commissioned by the Alberta provincial government and filed for consideration as part of the regulatory review of Enbridge Northern Gateway, can be found here.

Revenues that flow to oil producers also translate into some big benefits for Canadians.

According to estimates by the Oil Sands Developers Group, development of the oil sands has the potential to generate more than $483 billion in royalty and tax revenues for Canada’s federal and provincial governments over the next 25 years.

Oil sands investment will generate $1.7 trillion in economic activity and 456,000 jobs will be directly and indirectly linked to construction and operation of oil sands facilities over that same time frame, says the group.

For another take on this important issue, you can also read an Edmonton Journal article on the Wood Mackenzie report.

Northern Gateway a ‘nation building’ project

Wed, 28 Dec 2011 17:04:49 -0700

In her year-end media interviews, Alberta Premier Allison Redford described Northern Gateway as a “nation building” project.

Others have likened Northern Gateway to the St. Lawrence Seaway.

The parallels of the two projects are obvious. Canada corrected a transportation bottleneck to burgeoning post-war Europe by conceiving and constructing the seaway in the 1950s.

Since then, 260,000 vessels have travelled up and down the channel, moving 2.3 billion tonnes of goods totaling $350 billion, according to reports. The seaway supports 75,000 jobs in Canada and another 150,000 in the U.S.

Commerce on the system generates $4.3 billion in personal income per year.

Fast forward to the present…

Canada’s most lucrative export is now oil and it is sold at a deep discount from crudes traded elsewhere merely because there isn’t the infrastructure to get it to high-demand markets such as Asia. Canada’s economy may, in effect, be constrained unless a solution is found.

But if Northern Gateway and other proposed pipelines were built to relieve pipeline bottlenecks, Canada and Canadians would be huge beneficiaries, according to a group of deep thinkers at the University of Calgary.

In a research paper released in December for the university’s School of Public Policy, it is estimated that if pipeline capacity is built connecting to high-demand markets, federal, provincial and municipal governments would reap extra tax receipts of a whopping $26 billion from 2016 to 2030.

That’s a lot of money that can be spent on all those things Canadians hold dear – hospitals, schools, roads, public transit etc.

This heightened energy trade would also spur a boon in jobs as well. The learned group says the new pipeline infrastructure would create 649,000 person-years of employment.

“Most every single province and territory will realize fiscal and economic gains from the distribution and sale of products reflecting reduced cost and increased access to refineries for heavy oil,” says the 71-page report you can find here.

As the paper concludes, these facts and figures show the “rewards are too great to ignore.”

Northern Gateway: who decides?

Fri, 23 Dec 2011 18:27:58 -0700

How is it decided whether Northern Gateway is in the public interest? Who makes the call?

An independent Joint Review Panel, with representatives appointed by the National Energy Board (NEB) and the federal Ministry of the Environment, will hold a transparent and thorough review of the Northern Gateway project as part of the public regulatory process.

The mandate of the JRP, which operates under the auspices of the NEB and the Canadian Environment Assessment Agency, is to assess the potential environmental impact of the Northern Gateway project, and determine whether it’s in the public interest.

The JRP process, held in public, will test all of Enbridge’s assurances about Northern Gateway, as well as our planning, project design, and safety procedures, in careful detail.

This public process will begin in January 2012 and last for more than a year, and involve a series of community hearings and oral statements from registered participants. The process allows everyone with a stake in Northern Gateway to have their questions answered and their concerns addressed. And we at Enbridge believe people’s concerns over the project will abate once they learn the facts about what we’re proposing—and our commitment to safeguard the environment and the interests of all stakeholders.

Energy responsibility

Fri, 23 Dec 2011 18:21:44 -0700

Even though Enbridge ships the oil, doesn’t it care about its part of the oil sands negative effect on the global environment?

Energy literacy is the most important part of a constructive public discussion, and that’s certainly applicable in the case of Alberta’s oil sands.

Let’s not lose sight of the big picture. Final combustion—specifically, from the exhaust pipe of your vehicle—is responsible for 70 to 80 per cent of the lifecycle emissions of oil (this is also called the well-to-wheels model, which includes production, refining, transport, and end-use combustion). And those numbers are consistent, regardless of the source of crude oil that produced your vehicle’s gasoline.

We can all make an effort in our own way—by using our cars less, or driving vehicles that are more fuel-efficient. At Enbridge, we’ve got a substantial and growing investment in green and renewable energy, but it will likely take many years to develop enough renewable energy to satisfy the growing global demand.

Now, we don’t believe for a minute that an emotionally charged argument passes for constructive discourse. Nor do we believe that two polarized groups entrenching themselves and slinging rhetoric constitutes a debate. In a perfect world, the oil sands would not exist because of our endless supply of free and clean energy.

But it’s not a perfect world. Our world needs energy. It powers our homes and our lives, and provides the foundation of our modern economy. And we need to work together to maximize the benefits and reduce the negative impacts.

Aboriginal partnership is key

Fri, 23 Dec 2011 18:10:42 -0700

How can we justify this pipeline’s approval when so many First Nations are opposing it crossing their traditional territory?

There’s no other way to say it—partnership with the Aboriginal community is key to the success of Northern Gateway. At the end of the day, we want Aboriginal groups to benefit from this project. We are working hard to understand and appreciate the potential concerns of all Aboriginal groups with a vested interest in Northern Gateway — and these communications represent one of Enbridge’s most important ongoing discussions regarding the project.

We’ve spent 60-plus years successfully operating pipelines, and we also have a long history of working harmoniously with Aboriginal communities. In other words, we’re committed to Aboriginal consultation. We’re familiar with Aboriginal rights, as set out in Canada’s Constitution, and Treaty rights, where applicable — and we already have in place a detailed, inclusive Aboriginal Peoples policy that identifies paths to mutual success.

We want to accommodate the interests and objectives of all Aboriginal groups all the way along the pipeline corridor, including those in coastal communities.

Some First Nations have expressed opposition to the Northern Gateway project. We respect those positions, but we want to continue the dialogue. We began reaching out to all Aboriginal groups along the pipeline route back in 2002, and we intend to continue the consultation throughout the entire life of the Northern Gateway project.

Through our Aboriginal engagement program, we’re committed to providing project information, answering project-related questions, identifying and addressing issues and concerns, and gathering community input into our project plans. To date, we’re encouraged by the response we’ve received from First Nations — and we look forward to a fruitful partnership in the long term.

Pipeline spill risks are low

Fri, 23 Dec 2011 17:56:51 -0700

It is not possible to guarantee that a spill won’t occur, but with modern pipeline design and mitigation measures, the risks are very low.

Does Line 6B ring a bell? Everyone knows what happened in Michigan. How do you know it won’t happen with Northern Gateway?

What we can say is that at Enbridge, we take our responsibility very seriously. An ounce of prevention may be worth a pound of cure, but we certainly don’t stop at an ounce. We adhere to the best safety practices available, and we pay close attention to pipeline integrity.

And just so we’re clear, no spill is acceptable at Enbridge. When things go wrong, as they did in Michigan in July 2010, we act immediately and decisively, we don’t stop until we make things right, and we learn from our mistakes.

First, the prevention. Enbridge is an industry leader in internal pipeline inspection. We invest heavily in innovative leak detection technology. We’ve spent about $2.3 billion on pipeline system integrity since 2002. Typically, Enbridge safely delivers over 99.99 per cent of the volume it ships in any given year, including in 2010. Most of our spills have been small, and contained within our facilities — so we’ve been able to clean them up quickly, with no environmental impact.

By no means, however, are we patting ourselves on the back. We were, frankly, humbled by the events in Michigan. Enbridge has always assumed full responsibility for the leak in Line 6B, which saw oil enter Talmadge Creek and the Kalamazoo River.

There is simply no way of guaranteeing that an accident won’t happen. However, our goal is always zero spills. And every aspect of project design and planning for Northern Gateway has been driven by measures for minimizing risks and mitigating any potential effects.

What are the benefits to Canada?

Thu, 22 Dec 2011 12:55:51 -0700

While it's true the pipeline route is between Alberta and British Columbia, many Canadians from coast to coast can expect to see economic benefits.

Why should the rest of Canada care about this Western Canadian issue?

We’re talking about a transformational injection of new economic opportunity for Canada, from coast to coast, for an entire generation. Northern Gateway’s impact, for Canadians, is an estimated $270 billion boost to Canada’s gross domestic product over a 30-year period.

Here are the results of more Northern Gateway number crunching from a national perspective—62,000 person-years of employment and $4.3 billion in labour income during the construction phase, 1,150 long-term jobs totaling $68 million a year in income, and $2.6 billion in total tax revenue for the three levels of government.

These are significant, lasting benefits to the Canadian economy.

Here’s a news report about a recent University of Calgary study on the subject you might find interesting.

Port safety is paramount

Thu, 22 Dec 2011 12:38:30 -0700

From our frequently asked question files:

Q: What marine safety precautions are you employing? Won’t the traffic congestion caused by so many oil tankers almost certainly cause a collision at the Kitimat Marine Terminal?

The majority of the world’s petroleum products are transported by sea every year, and Canada itself sees about 20,000 oil tanker movements annually. The Northern Gateway Project plans for about 220 tankers to call at the Port of Kitimat each year—less than one per day. Even when all current and future projects in Douglas Channel involving commercial shipping (some of which also incorporate tanker traffic) are taken into account; ship traffic volumes would still be at modest levels in comparison to other ports.

While traffic volumes may be lower than many other Ports in the world, marine and terminal operations will be managed to some of the highest industry standards. We are committed to reducing the chances of an oil spill to as close to zero as practicable.

Check out this video which explains some of our planning process to ensure safe travel of tankers into and out of the Port of Kitimat.

Marine safety expert answers your questions

Wed, 21 Dec 2011 12:23:56 -0700

In yesterday's Marine Safety blog post, Are BC's waters too dangerous?, there were some thoughtful comments that touched on really important issues and asked really good questions. To best answer them, we've engaged the help of Chris Anderson. Chris is a Master Mariner and the lead Marine Advisor for the Northern Gateway project.

Richmond and Harold both asked simliar questions about weather, night travel on the waterways and additional safety measures. Here are Chris' responses, in italics:

Hi Richmond and Harold. My name is Chris Anderson a Master Mariner and the lead Marine Advisor for the Northern Gateway Project. Thanks for adding your comments and questions. Because both of your comments are very similar, I’ve decided to answer them together.

Richmond, regarding your inquiry about the safety measures other than double hull tankers and pilots that the project will have in place, I invite you to watch our video, if you haven't already, that provides an extensive overview of the proposed marine safety initiatives, by clicking here. While some items such as double hulls and the use of pilots are required under Canadian statutes, Northern Gateway has also voluntarily committed to

using escort tugs,
upgrading navigation infrastructure, and
to providing spill response resources outside Kitimat Terminal.

Admittedly, our video is long, but there are a lot of safety measures in place that are worth learning about.

Harold and Richmond, you are quite right in your comments on daylight hours. Northern Gateway clarified its position on this matter in recent communications with the Joint Review Panel. Comments in our Application to the effect that “Transits of the CCAA will usually occur during daylight hours” were made in error. That said, with the navigation technology onboard modern tankers, assisted by planned upgrades to navigation aids and the addition of land based radar, the marine channels can be safely transited during both daylight and at night. Marine terminals in northern latitudes such as Kitimat, Scotland, Sweden, Norway and Alaska have operated for decades under similar conditions.

There are some differences between Port Metro Vancouver and Douglas Channel; however, we do not believe weather is one. Weather conditions in the open waters of Hecate Strait and Dixon Entrance, as is the case with waters off the West Coast of Vancouver Island leading to Port Metro Vancouver, can be severe and need to be taken into consideration for marine operations.

Conditions along the BC Coast are definitely no worse than other parts of the world with a long history of tanker transits, such as the North Sea or the waters off Japan. Similarly conditions in the marine channels leading to and from Kitimat are not that different from that of the Straits of Juan de Fuca and the Strait of Georgia. Tanker transits to and from Kitimat, like Port Metro Vancouver, include passage through marine channels and a risk of grounding, which is why both Port Metro Vancouver and Northern Gateway support the use of tug escorts.

The tug escorts proposed by Northern Gateway will be much more powerful than any tug currently available on the BC Coast and will be able to assist tankers in the open waters if required. One key difference between the Port of Kitimat and Port Metro Vancouver and Puget Sound area is that the risk of collision is much lower in the Kitimat area due to the much lower traffic density.

Another commentator, Ron, asked a question about our spill response plans should a tanker incident occur. Here's Chris' answer for Ron:

Ron, we do not disagree that while mitigation measures, such as tug escorts, may lower the risk so far as is reasonably practicable, a spill could still occur. That is why Northern Gateway has committed to implementing a response capability that would exceed Canadian requirements and increase the response capability for the entire Canadian west coast.

Despite the significant investment that this response preparedness would require, we would hope never to see it used for an actual spill. Historic marine spill incidents have resulted in extraordinary improvements to tanker design, construction and operation, and in oil spill response requirements and capability.

Northern Gateway believes learning from other incidents from around the globe is critical to the safety and success of the Northern Gateway Project. In the years following the Exxon Valdez incident, over 11,000 tankers have been safely escorted by tugs through Prince William Sound.

Norway, one of the world’s leading seafood producers, is also one of the largest oil producers (some terminals see more than 2000 visits per year). Norway’s marine terminals, like those of Scotland and Sweden, have operated safely for decades without a major tanker incident, in part, because these countries employ many of the same strict safety protocols and risk mitigation measures being proposed by Northern Gateway.

Why open new markets?

Mon, 19 Dec 2011 23:23:54 -0700

Q: Why is this project so critical to the Canadian economy?

Think of it this way. The energy needs of the United States of America with a population of over 300 million people have flatlined. The energy needs of the Pacific Rim, population three billion, are growing dramatically.

Without putting too fine a point on it, Northern Gateway is the key that could unlock a new economic reality—and help transform Canada into a global energy superpower. Northern Gateway represents Canada’s energy crossroads. One path would see us remain landlocked in North America, selling our energy resources at a significant discount. The other path would see us responsibly and safely create the infrastructure to tap into the world’s fastest-growing and most important new energy markets.

Northern Gateway is Canada’s 21^st-century equivalent of the St. Lawrence Seaway. It’s a nation-building opportunity, a chance to build for the future, a pathway to connect our most valuable export to the developing markets that need it, an opportunity to provide jobs and prosperity for future generations of Canadians.

Other countries can always provide energy for the burgeoning Pacific Rim economies. Northern Gateway can take Canada from the sidelines to the playing field.

What about carbon emissions?

Mon, 19 Dec 2011 22:59:07 -0700

Q: If Enbridge is increasing the flow of (dirty) oil from the oil sands, how do you justify our role in increasing carbon emissions?

Alberta’s oil sands have become an emotionally charged topic in recent years. But let’s take a moment to focus on the facts.

Alberta’s oil sands account for one-tenth of one per cent (0.1%) of the world’s global greenhouse gas emissions, and produce one per cent of the GHGs emitted by coal-fired power generation in the United States.

And it’s also important to note that oil sands companies have curtailed per-barrel GHG emissions by more than 30 per cent since 1990, thanks to increasingly efficient technologies. Some facilities have reached reductions of as much as 45 per cent.

There’s a bigger story about the oil sands that doesn’t make it into your local newspaper. Investigate the oil sands further and you’ll soon understand that environmental responsibility is a top priority. But don’t just take our word for it. Here’s some links where you will find useful information about the oil sands.

Are there reasons for First Nations to support Gateway?

Mon, 19 Dec 2011 22:45:53 -0700

Q: Would Northern Gateway really make a meaningful difference to Aboriginal groups given their opposition based on environmental concerns?

The economic opportunities are plentiful. One of our most fervent wishes at Enbridge is for Aboriginal communities to reap some meaningful benefit from Northern Gateway—not just in the short term, but through the entire life of the project.

Put simply, we want Aboriginal economic participation in this project. We’ve used the input we received from Aboriginal communities to develop a package of economic and social commitments—creating local and regional opportunities, and enabling long-term sustainability.

Enbridge is offering 10 per cent equity ownership in the $5.5-billion Northern Gateway project to eligible Aboriginal groups. And for those groups who don’t have the wherewithal to finance an equity partnership, Enbridge is finding their financing for them—allowing them to share in the net income. That equity ownership is expected to generate about $280 million, in total, to Aboriginal communities through the first 30 years of the pipeline’s operation, and Aboriginal shareholders will see cash flow within the first year of operation.

Enbridge is also committed to hiring local residents to build the Northern Gateway project, and Aboriginal workers, we anticipate, will make up about 15 per cent of the construction labour force. We’ll be identifying direct and indirect employment opportunities for residents of neighbouring Aboriginal communities, and we’ll be helping to provide access to education and training for all Aboriginal communities in the project area.

We’ll also be depositing one per cent of annual pre-tax earnings into the Northern Gateway Community Trust—which will generate more than $100 million through the pipeline’s 30-year economic lifetime, and fund community initiatives in Aboriginal and non-Aboriginal communities alike.

Are there any benefits for British Columbians?

Mon, 19 Dec 2011 22:34:26 -0700

Q: The Gateway pipeline represents so much environmental risk to so many British Columbians, with benefits to so few. Why are you so convinced that the people of B.C. will support it?

The people of British Columbia are proud of their province, and rightly so. The Northern Gateway has the potential to make B.C. an even better place to live, thanks to a sizable impact on the provincial economy.

With an estimated cost of $5.5 billion, Northern Gateway represents the largest private investment of capital in British Columbia history. And we’ve also taken the philosophical stance that the people of B.C. should benefit from such an ambitious undertaking.

While the twin pipeline system and the Kitimat Marine Terminal are being built, Northern Gateway is expected to generate 4,100 person-years of employment on-site, and 31,300 more off-site. That includes more than 400 workers to build the marine terminal, and its related infrastructure, during the peak construction period. In total, Northern Gateway’s three-year construction phase will result in an estimated $2.5 billion in total labour income, including $165 million in tax revenue to the provincial government.

As for the long term? About 560 permanent jobs in B.C., creating $32 million a year in labour-related income. That includes 165 permanent jobs at Kitimat, taking into account the terminal, marine services, tug fleet, and environmental monitors, for a total of about $17 million a year in wages. The provincial government will also collect $1.2 billion in tax revenue for 30 years after construction.

Should this project receive regulatory approval, we want to make sure that Northern Gateway creates a lasting legacy of local investment, jobs, and tax revenue for British Columbians. More than half a century ago, Quebec and Ontario benefited from the opening of the St. Lawrence Seaway, and this is B.C.’s chance to grasp the same sort of opportunity.

Is the Pipeline route too remote to safely monitor?

Mon, 19 Dec 2011 22:21:32 -0700

Q: It seems virtually impossible to be able to oversee safety on a pipeline that runs for hundreds of miles, much of it through remote wilderness regions?

A dedicated computer system will enable 24/7 monitoring of the Northern Gateway pipeline, and allow for immediate response to abnormal conditions. Our plans also call for the installation of isolation valves on either side of major water crossings, ensuring a quick shutdown if necessary. Those crossings have all been individually engineered to provide enhanced pipe protection (such as concrete coatings, etc) and buried with increased depth of cover.

Emergency response personnel and equipment will also be stationed at several locations along the pipeline system. We’ll be training local emergency responders to help with any potential spill scenario, and we’ll be holding full-scale response exercises every year.

We’re also enlisting the most modern technologies to make sure the Northern Gateway pipeline is protected from natural disasters, such as avalanches. Where the pipeline crosses terrain that is exposed to slope hazards, we’re looking at special measures such as tunnels, special pipe design, and a particularly deep burial of the pipe to prevent a spill.

For more information about pipeline route safety, watch this interview with Drum Cavers. Drum is a Principal Engineer with AMEC Environmental & Infrastructure and has been consulting for the project since the beginning.

Are BC's waters too dangerous?

Mon, 19 Dec 2011 22:01:41 -0700

Q: I've heard B.C.’s North Coast has some of the most treacherous coastal waters in the world. Isn’t it simply too dangerous to allow oil tankers in and out of the port of Kitimat?

The short answer is no. Similar environmental conditions are experienced in other parts of the world, and it’s not too dangerous. Here’s why.

The Port of Kitimat lies at the head of the Douglas Channel. We proposed this location because the Douglas Channel is, simply put, one of the widest and deepest inland waterways on the West Coast of North America.

It’s important to also understand that over the past 25 years, more than 6,000 ships including 1,500 tankers have travelled in and out of the Port of Kitimat.

The transportation and movement of hydrocarbons is not new to Canada’s west coast. About 250 tankers—50 to 60 of them carrying crude oil—dock annually at the Port Metro Vancouver. In 2009, for example, approximately 55 million barrels of petroleum products (25 million of those crude oil) moved through the Port Metro Vancouver to various destinations, via tanker vessels.

As with all shipping activities weather concerns are legitimate. As is standard practice at ports and marine terminals worldwide, oil tankers would only transit coastal waters when conditions are safe and within operational limits.

We recently produced a video that outlines the marine operations and safety measures proposed for the Northern Gateway Project. The information and animations in the video represent an accurate description of the proposed marine operations.

Join the conversation

Mon, 19 Dec 2011 16:56:12 -0700

We recently launched this blog to provide a place to engage in a fact-based conversation about the Northern Gateway Project. We have kicked off the conversation by responding to a few frequently asked questions we receive from the media and from our direct engagement with the people who live along the proposed route—you'll see this in the next blog post, so check back soon.

We will respond to your questions or point you directly to the places and people who have answers for you.

We look forward to the conversation.

The Gateway Team

Join the conversation

Mon, 19 Dec 2011 16:55:15 -0700

We will respond to your questions or point you directly to the places and people who have answers for you.

We look forward to the conversation.

The Gateway Team

Join the conversation

Mon, 19 Dec 2011 16:54:02 -0700

We will respond to your questions or point you directly to the places and people who have answers for you.

We look forward to the conversation.

The Gateway Team

Join the conversation

Mon, 19 Dec 2011 16:51:18 -0700

We will respond to your questions or point you directly to the places and people who have answers for you.

We look forward to the conversation.

The Gateway Team

Join the conversation

Mon, 19 Dec 2011 16:49:45 -0700

We will respond to your questions or point you directly to the places and people who have answers for you.

We look forward to the conversation.

The Gateway Team

Join the conversation

Mon, 19 Dec 2011 16:47:41 -0700

We will respond to your questions or point you directly to the places and people who have answers for you.

We look forward to the conversation.

The Gateway Team

Investing in Aboriginal education right thing to do: Enbridge comentary in Globe and Mail

Tue, 21 Jun 2011 16:28:39 -0600

Some aboriginal Canadians face an alarming reality. They make up the youngest and fastest growing segment of our population, and yet many still have significantly less education than the general population.

Recent studies, including a report from the Ottawa-based Centre for the Study of Living Standards, suggest that, if current lower educational trends continue for aboriginal people, Canada could lose billions of dollars in productivity. The centre estimates that more than $170-billion could be added to Canada’s economy by 2026 if natives achieved the same education levels as other Canadians.

The statistics speak for themselves. The latest census data show that, in 2006, more than 40 per cent of aboriginal Canadians 15 and older did not earn a high-school diploma. This was almost double the percentage for non-aboriginal young people. And while 33 per cent of the non-aboriginal population had a university degree, the number for aboriginal Canadians was 12 per cent.

This education gap is something that should concern all Canadians.

Education is critical to aboriginal citizens for the same reasons it’s essential for other Canadians: It inspires young people. It opens doors. It provides hope for a better future. And yet, without higher education attainment, many aboriginal Canadians will continue to face the prospect of lower incomes and higher unemployment.

That’s the personal dimension to the education gap. But there are also broader implications to the country as a whole.

Statistics Canada has predicted that Canada will face a labour shortage over the next two decades as baby boomers retire and there are fewer workers to replace them. With almost half of aboriginal people under 25, native youth can help to fill this gap, but only if they’re empowered with the skills and education to meet the need.

Certainly, the barriers are complex. Aboriginal youth face many challenges, including lower standards of living, social pressures, risk of exposure to addiction issues and the past legacy of residential schools. Solving these will require diverse approaches and the contributions of different groups in our society. And education must be part of the overall answer. Because as prominent aboriginal leaders such as Shawn Atleo, national chief of the Assembly of First Nations, have pointed out, education is key to aboriginal and Canadian potential.

So what should be done?

As a society, we all share responsibility for helping aboriginal youth to bridge the education gap. The federal government has a leading role as the primary funder of schools in first nations communities. But corporations can also play a supporting role.

One example is investing in extracurricular activities that engage youth and help to foster their success. At Enbridge, we’ve made support for aboriginal education initiatives a priority. Enbridge’s School Plus Program, established in partnership with the AFN, funds extracurricular and culturally enriched programs at first nations schools, as well as partnerships that benefit urban aboriginal children.

Our funding has been used to support numerous initiatives, including a Cree-language program at the Heart Lake First Nation in central Alberta, a photography project for children at the Montana First Nation in Hobbema, Alta., and a partnership with the University of Winnipeg that engages children from Winnipeg’s inner city in hands-on science activities in a campus environment.

There are many ways that businesses can support the educational aspirations of aboriginal young people: through postsecondary scholarships, the purchase of school equipment and training and skill development programs; and by encouraging aboriginal students to find value in education and stay in school.

It’s this kind of life-changing support we need to extend to all aboriginal students. And business is starting to take action. We need to partner with native leaders and others to provide more of the education resources aboriginals urgently require. We need to do our part to inspire a new generation of aboriginal Canadians.

This is not only the right thing to do – it’s in our own best interest. Our future depends on investing in them – and in their education. Ultimately, supporting aboriginal education is an investment that will benefit all Canadians.

Today, our country celebrates National Aboriginal Day. This event is an opportunity for Canadians to celebrate the rich history and culture of first nations, Métis and Inuit people. It’s also an important moment to reflect on what needs to be done to invest in their future.

D’Arcy Levesque is vice-president of public and government affairs at Enbridge Inc.

Enbridge Northern Gateway Pipelines Files Updated Information Including Aboriginal Consultation With NEB

Wed, 08 Jun 2011 16:34:36 -0600

Northern Gateway Pipelines Limited Partnership has filed additional materials with the National Energy Board (NEB), including details of its extensive program of consultation with Aboriginal communities in British Columbia and Alberta between December 2009 and the end of March 2011. The update to the Joint Review Panel details consultation with over 40 Aboriginal groups in each of B.C. and Alberta.

Aboriginal groups have continued to provide important feedback, which has informed and tailored Northern Gateway’s response to interests and concerns raised during consultation.
Many meetings during the update period were the result of requests by Aboriginal groups for a better understanding of pipeline routing and construction, watercourse crossing strategies, spill response logistics, environmental impacts and economic development opportunities.
The update summarizes the information provided to Aboriginal groups, the engagement activities that have occurred, the interests and concerns that have been expressed to Northern Gateway, commitments and mitigation measures in response to those concerns, and an update on the status of Aboriginal Traditional Knowledge study programs.
Enbridge is committed to working with Aboriginal groups along the pipeline to create economic opportunities and to incorporate traditional knowledge into the planning and operations of the project.
This update supplements the information previously provided by Northern Gateway in Volume 5 of its Application for Certificates of Public Convenience and Necessity in respect of the Project, which was filed with the NEB on May 27, 2010.

In addition Northern Gateway Pipelines has also filed a number of other documents, including:

TERMPOL Surveys and Studies: 3.1 to 3.15, Section 3.18 and Section 3.19, dated January 20, 2010, and supporting Technical Data Reports in respect of marine transportation matters; a Technical Data Report entitled “Hydrocarbon Mass Balance Estimates: Inputs for Spill Response Planning”, 2011 by Hay and Company Consultants; and a pro forma Precedent Agreement and Transportation Service Agreement, as referenced in Application Volume 2.

These documents are provided to assist the Joint Review Panel in its review of the Northern Gateway Project, and will inform future measures to ensure that the pipeline is designed, constructed and operated in a safe and responsible manner.

Copies of these filings can be retrieved from the NEB’s repository by accessing the following links:

http://www.neb-one.gc.ca/fetch.asp?language=E&ID=A29571

http://www.neb-one.gc.ca/fetch.asp?language=E&ID=A29573

http://www.neb-one.gc.ca/fetch.asp?language=E&ID=A29574

The need for diversifying markets has never been clearer

Fri, 27 May 2011 16:33:20 -0600

Some reports today call into question the “need” for the Northern Gateway Project. What these reports fail to address is that any additional pipeline capacity recently brought onto the marketplace transports Canadian crude only to the U.S. The necessity to diversify markets and respond to growing Pacific Rim demand for Canadian oil has never been clearer.

Currently, Canada relies on one market for the export of Canadian crude oil (over 99% of Canadian crude oil exports go to the U.S.). Market diversification will mitigate the risks associated with having a single customer and it will ensure competitive pricing for Canadian oil.

Access to Asian markets will boost oil prices for all Canadian producers, a total of $28 billion in the first 10 years alone. Enbridge has a number of partners who are helping to fund the regulatory process for the Northern Gateway project. These are companies that recognize and support the need for pipeline infrastructure to access new markets along the Pacific Rim where demand for oil is undeniable.

While the U.S. will remain Canada’s most important oil trading partner, demand is declining in the United States and trade related actions are occurring at the federal and state levels that may limit Canada’s access to that market.

In addition to the clear need for the project and for diversified markets for Canada’s most important export, the Northern Gateway Project represents tremendous benefits not just to industry, but to communities in which it would operate, the provinces and to Canada as a whole.

At Enbridge we’ve worked hard to ensure that, should the project receive regulatory approval, it will create a lasting legacy of local investment, tax revenue, and jobs.

62,700 person-years during construction, and 1,150 long-term jobs created
$270 billion increase in Canadian Gross Domestic Product over 30 years
$4.3 billion of total labour-related income during construction
$68 million/year in labour-related income during operations
$2.6 billion in total tax revenue for local, provincial and federal governments

Northern Gateway will help Canada take its rightful place on the stage as a reliable, ethical energy superpower opening new markets, creating new jobs, and prosperity for generations of Canadians. Our energy reserves are potentially a tremendous strategic advantage for Canada, but only if we choose to develop and make them available to the rest of the world.

Enbridge Northern Gateway Welcomes NEB Hearing Order

Fri, 06 May 2011 16:36:29 -0600

On May 27, 2010, Northern Gateway Pipelines submitted its application to the National Energy Board in respect of the Enbridge Northern Gateway Project. A Joint Review Panel (JRP) was established by the Minister of the Environment and the NEB to consider the environmental impact of the Project and decide if it is in the public interest. In the Panel Session Results and Decision document of January 19, 2011, the Panel indicated it would issue a Hearing Order once Northern Gateway had submitted additional required information. The Panel has now issued that Hearing Order (OH-4-2011) outlining the procedures to be followed, and has decided that it will hold hearings starting on January 10, 2012.

Enbridge Northern Gateway Pipelines welcomes the announcement and the scope of the public hearings, which clearly meets the widely expressed desire for a full and open review of the Project. This process was triggered by Northern Gateway’s application and the company remains fully supportive of, and committed to, a thorough public review.

“This is good news as the next step in a lengthy public process,” said Northern Gateway Pipelines President John Carruthers. “The JRP process is specifically designed to thoroughly test all our assurances, our safety procedures and our planning – in detail and in public. It enables everyone to have their questions answered and concerns addressed. An impartial, public regulatory process is the way Canada decides about projects like Northern Gateway, and it’s our belief that the more people know about what we’re proposing, our commitment to safeguard the environment, and the tremendous economic benefits for our entire country, the more supportive they will be.”

Participation details and associated deadlines can be found on the JRP’s website at www.gatewaypanel.review.gc.ca.