Kinder Morgan Trans Mountain pipeline | BCBusiness

Kinder Morgan Trans Mountain pipeline | BCBusiness

Lessons from Kinder Morgan’s pursuit of social licence

Ian Anderson had a friendly crowd on November 5, 2013, at the Fairmont Hotel Vancouver. The Kinder Morgan Canada president was addressing a sold-out Vancouver Board of Trade energy forum, where his message of economic opportunity flowing from pipelines was falling on sympathetic ears. The oil and gas executives among the assembled business leaders were particularly enthused by the part where he estimated that his company’s Trans Mountain pipeline, if its expansion goes ahead as planned, would contribute an additional $40 billion to Canadian producers’ coffers over 20 years. But as he was wrapping the 20-minute speech, Anderson started to lose the crowd. Eyes in the room shifted from the stage to smartphone screens as Twitter feeds filled with the news that Premiers Clark and Redford had reached a tentative agreement on B.C.’s five conditions for new pipeline projects.

The timing was no accident. Redford was in Vancouver to headline the VBOT event—she was scheduled to speak later the same day. But close observers of the pipeline negotiations between the two premiers had whiplash at news of the deal. A meeting that had been scheduled for the morning of the 5th was abruptly cancelled late on the 4th amid reports that talks had broken down over Clark’s fifth condition: that B.C. receive a “fair share” of the economic benefits of new oil projects. The scuttled meeting was taken as evidence that the relationship had turned “frosty” again. The mood in the networking session that followed Anderson’s speech, however, was anything but, as the prospect of renewed progress on pipelines was giddily discussed.

The People's Pipeline 

Anderson, for his part, probably didn’t mind being upstaged by the news. Not only did it mean a significant hurdle removed from his pipe’s path to the Pacific, it was also consistent with his message. Vancouver was his first stop on a 20-city tour of communities along the Trans Mountain pipeline route seeking social licence (or as he calls it, “public permission”) for the proposed expansion of Kinder Morgan’s 60-year-old pipeline, a plan that would nearly triple capacity to 890,000 barrels per day. A tenet of contemporary corporate social responsibility thinking, social licence is the notion that, while governments can grant regulatory approval, the people impacted by a project have to be convinced as well. It’s particularly tough to achieve for pipelines because that’s a very long list of people. Clark’s five criteria concern the same things Anderson will be talking about on his road trip: marine and land oil spill response, completion of environmental review processes, First Nations engagement and, the big one, economic benefit.

Getting Grass Roots 

“The environment has to be prepared to give you a ‘yes,’” Anderson told the energy forum attendees. “And that environment doesn’t get you to ‘yes’ unless you’ve addressed the local concerns, the local issues and derived the local benefits.” He spoke about conducting “chief-to-chief” meetings with aboriginal leaders from the 15 reserves and 24 traditional territories the route crosses. He said he intends to engage with everyone from equipment suppliers to motel operators and coffee-shop owners about how they can maximize their profit from the $423 million Kinder Morgan plans to spend during the construction period in communities along the route. He’s on a mission to make sure everyone who stands to benefit from the project knows how and by how much.

Advocacy Over Ads

The November Premiers’ agreement covers government permission for both proposed pipeline projects to deliver Alberta’s oil to B.C.’s coast, Enbridge’s Northern Gateway and Trans Mountain. But the two companies face different challenges and have employed different strategies in their pursuit of public permission. Both companies, for instance, talk about how many jobs they expect to create (Kinder Morgan says about 4,500; Enbridge says about 3,500), but Anderson gets much more granular. He not only promises Burnaby, where the terminal is located, increased tax revenue ($125 million over 20 years), but he boasts about working with the mayor of Valemount to help the town improve its motel capacity during the construction years. Both companies also emphasize their efforts to mitigate environmental risks, but Enbridge has a credibility problem on the subject. In 2010, its Line 6B burst open causing up to 3,800 cubic metres of diluted bitumen to flow into Michigan’s Kalamazoo River. Two years later, the company released an animated video of the pipeline’s path intended to calm fears about another spill in which approximately 1,000 square kilometres of landmass clustered in the perilous Douglas Channel (arguably the likeliest place for a tanker accident if Northern Gateway were to be completed) were conspicuously missing.

Talking Trust

Anderson told the VBOT audience that his tour is all about building trust. “We need dialogue and we need trust... in order to move these projects and provincial and federal pathways forward.” Jim Hoggan, president of Vancouver PR firm Hoggan & Associates, agrees that trust is an important part of achieving social licence, and points out that Enbridge has a long way to go to earn it. In a 2012 blog post, he wrote about an Angus Reid poll in which 77 per cent of British Columbians surveyed said they partially or completely distrust Enbridge when it comes to the project. “They have fumbled this file over and over again,” he says, reiterating Anderson that, “social licence is built on trust—it’s built on respecting people’s views who disagree with you. You don’t see any of that from the industry people and the government people who have been fighting either on the Northern Gateway or on the Keystone [XL] pipeline.”

But public opinion has started to favour Enbridge’s Northern Gateway. According to a poll conducted by Insights West in November 2013, less than half (47 per cent) of British Columbians are opposed to the pipeline project—a drop of 14 points from a 67 per cent opposition last February. In fact, the study found that 42 per cent supported the project, up from 35 per cent in a similar February 2013 poll.

Still, Kinder Morgan, Hoggan believes, is doing a somewhat better job on social licence. He describes Anderson’s shoe-leather strategy as “much wiser” than Enbridge’s ads and videos. “Social licence emanates from the people who are most impacted,” he says, and there’s no better way to convince them than face-to-face. The strategy is especially effective when you can tell the good people of Valemount exactly how many motel room-nights could be filled.