Canadian Government Approves Northern Gateway Pipeline

The federal government issues its approval for Enbridge’s controversial pipeline project

Canada’s federal government has issued its approval for Enbridge Inc.’s hotly contested $7.9 billion Northern Gateway bitumen pipeline project from Alberta to the B.C. coast.

Prime Minister Stephen Harper’s federal cabinet announced Tuesday its acceptance of a report released in December by the National Energy Board’s joint review panel recommending the project’s go-ahead. “After carefully reviewing the report, the government accepts the independent panel’s recommendation to impose 209 conditions on Northern Gateway Pipelines’ proposal,” Natural Resources Minister Greg Rickford said in a statement.

“Today constitutes another step in the process. Moving forward, the proponent must demonstrate to the independent regulator, the NEB, how it will meet the 209 conditions,” he added. “In addition, consultations with Aboriginal communities are required under many of the 209 conditions that have been established and as part of the process for regulatory authorizations and permits. The proponent clearly has more work to do in order to fulfill the public commitment it has made to engage with Aboriginal groups and local communities along the route.”

The twin pipeline project will transport an average of 525,000 barrels of diluted bitumen crude per day from Alberta’s oil sands to the port in Kitimat, for shipment to refineries and markets in Asia. A secondary pipeline will flow in the opposite direction, transporting a condensate that helps thin petroleum products from Kitimat to Alberta.

The pipeline had faced staunch opposition from First Nations and environmental groups concerned about damage to sensitive land and marine habitats along the pipeline route and on shipping routes near the coast. Those groups were joined by federal and B.C. opposition parties. Opponents also argued that that British Columbians would bear the brunt of any environmental damage, while most of the economic benefits would be flowing to Alberta. First Nations groups anticipated the government’s approval of the project, and vowed to continue to battle against it.

“We fully expected the Harper government to make every effort to ram this project through,” said Grand Chief Stewart Phillip, president of the Union of B.C. Chiefs, in a CTV News interview broadcast on Sunday. “But… there’s enormous solidarity here in British Columbia between First Nations people, British Columbians, Canadians, and we’ll do what’s necessary and whatever it takes to stop this project.”

There are five applications in Federal Court seeking judicial review of the panel’s report, and further legal challenges are likely.

Proponents argued Northern Gateway would bring significant economic benefits, and that the environmental impacts could be mitigated. Enbridge estimated the pipelines would add $300 billion to the economy over 30 years, and contribute $80 billion in tax and royalty revenues over that time frame. Thirty-six billion dollars would go to Ottawa, $32 billion to Alberta, $6.7 billion to B.C. and $4 billion to Saskatchewan.

The federal government’s approval is a significant step forward for the project but numerous hurdles, in addition to legal challenges, remain before construction can begin.

When the joint review panel recommended the government approve the project, it was contingent on Enbridge meeting 209 conditions intended to prevent and mitigate environmental damage from spills and other mishaps. Some 113 of those conditions need to be met before the first shovels hit the ground.

Northern Gateway Pipelines is a limited partnership. Calgary-based Enbridge owns 50 per cent of the project, with the remainder of the equity split among 10 investors. National Energy Board documents named six: French oil company Total, Suncor Energy, MEG Energy, Cenovus Energy Inc., Nexen—owned by Chinese state-owned China National Offshore Oil Co.—and Sinopec, China’s largest oil company. The remaining four investors have not been named publicly.