VANCOUVER - While the British Columbia government remains locked in a dispute with neighbouring Alberta over revenues from the proposed Northern Gateway pipeline, the province has declined offers from Enbridge (TSX:ENB) to discuss benefits.
Al Monaco, chief executive officer of the Calgary-based company, said Wednesday that the $6-billion pipeline is a strategic development for all of Canada.
B.C. is "quite legitimately" insisting on criteria such as First Nations involvement and environment safety before it will approve the project, he said, but so far has not requested a meeting with Enbridge about concerns over the revenues and potential benefits of the pipeline.
In fact, Monaco said the province has turned down the company's offers for discussions.
"My understanding it that it's not their desire to meet with us at this point in time, but we remain open to sitting down with the premier, as we would other members of the government or, frankly, whomever we need to," Monaco told reporters in a conference call following an investor conference.
There are many benefits to B.C. from the project, Monaco said: it would be the largest energy project in B.C. history and would generate hundreds of millions of dollars in spinoffs, taxes and jobs.
"As to whether or not there are any additional benefits beyond that, that's something that the governments I know are, hopefully, discussing now or in the future. We would certainly be glad to be sitting at the table in that discussion but at this point we haven't seen that opportunity," Monaco said.
Premier Christy Clark has outlined five criteria that must be met before B.C. will allow construction of the pipeline to deliver diluted bitumen from the Alberta oil sands to a tanker port proposed for Kitimat, B.C., to transport crude to Asian markets.
The project faces opposition due mostly to the risk of a spill on land or from the tankers off the B.C. coast, and Clark has said the project must include world-leading response plans for a marine or land oil spill. It must also address aboriginal and treaty rights and include First Nations participation.
Monaco said he believes Enbridge can deliver on those demands.
But Clark said B.C. also must get a greater share of the fiscal and economic benefits from the pipeline than is currently on the table, to reflect the greater risk to the environment for the westernmost province.
Alberta says sharing royalties from the project is a non-starter, and Clark has responded by suggesting B.C. could withhold hydro and regulatory approvals to press the issue.
Clark was not immediately available to comment, but her spokesman, Mike Morton, said it would be inappropriate for the premier to meet with Enbridge officials until the review on the proposed pipeline is complete.
Morton said this discussion has to take place between B.C., Alberta and the federal government.
Clark reiterated in a speech to the University of Calgary's School of Public Policy on Tuesday that B.C. could make things difficult for the project.
"British Columbia has the power to grant or withhold 60 permits," she said.
"British Columbia's power would be required to power up the pipeline from B.C. Hydro, a Crown corporation. There's a whole number of things the British Columbia government could do and certainly if this project was forced through without meeting the five conditions, it wouldn't be just the British Columbia government that would be in court. It would be every First Nation across the line."
The project is currently undergoing a joint environment assessment review. That panel has until the end of 2013 to complete its report and recommendations.
Monaco told an investor conference earlier that the controversial project benefits the entire country.
"The bottom line on Gateway I think is this: It is a highly strategic project to Canada and there is general agreement that accessing the Asian market is in our interest," he said.
"As a resource driven economy, there's no question that Canada needs access to tidewater and the project is going to generate billions in terms of spinoffs, thousands of jobs and benefits to communities."
It could help boost the price Canadian oil producers see because without access to Asian markets, Canadian producers will face a further discounting in oil prices compared with international benchmarks caused by a supply glut at a key storage hub in Cushing, Okla.
The glut has caused oil priced at Cushing — the WTI benchmark — to trade at a discount to other international benchmarks.
"I don't think that is a tenable situation in the longer term," he said.
In addition to the Enbridge project, Kinder Morgan has proposed its own $4.1-billion Trans Mountain project that would expand an existing pipeline from Alberta to the Vancouver area.
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Northern Gateway President John Carruthers
(Sept. 4) - Northern Gateway president John Carruthers argues the pipeline is just as important to Canada as the St. Lawrence Seaway and the Canadian Pacific Railway..."when constructed, [they] laid the foundation for significant benefits for generations of Canadians. Our project is no different."
Robert Mansell, U of C School of Public Policy
(Sept. 4) - Robert Mansell, academic director of the University of Calgary School of Public Policy, argued the benefits the pipeline could have for Canada. "Just imagine a situation where, if not for Northern Gateway, you had shut in 525,000 barrels per day for one year. That loss works out to $40-million a day, or $14.4-billion per year," he said.
Leanne Chahley, lawyer for the Alta. Federation of Labour
(Sept. 4) - Leanne Chahley, a lawyer for the Alberta Federation of Labour, questioned the estimated economic gains. "It's still a social science that you're involved in, economics. How much degree of certainty should we give it?"
Gil McGowan, Alta. Federation of Labour President
(Sept. 4 ) - Albert a Federation of Labour argues the $6-billion line would mean 5% less refinery in Alberta and the loss of 8,000 jobs. "China is in the midst of a building boom in terms of refineries and refining capacity, so our fear is that if our policymakers allow this pipeline to be built we'll end up in a situation where our own homegrown refineries are no longer economic and they'll close down," federation president Gil McGowan said. "We'll end up in a situation where we're sending our raw bitumen oil to China and then buying back the refined product."
John Carruthers, Northern Gateway President
(Sept. 4) - Northern Gateway president John Carruthers on the Enbridge's committment to environmental responsibility: "It involves assessing, in the same objective fashion, and according to the same standards, the information or evidence that has been presented by those who are opposed to the development of our project. And it culminates in approving the project under a framework of conditions that will promote reconciliation over division, and fact over rhetoric."
John Risdale, B.C. First Nations Chief
(May 2012) - B.C. First Nations leaders travel to the step of the Alberta Legislature to voice their concerns on the environmental damage. "The pipeline route that they have proposed is following the most major river system that we have and when the river is ruined, the people are ruined, the land is ruined," said Hereditary Chief John Ridsdale of the Wet'suwet'en First Nation.
Terry Lake, B.C. Environment Minister
(Sept. 4) - B.C. Environment Minister Terry Lake on how Enbridge plans to exceed world standards in spill prevention. "We certainly want to clarify with Enbridge some of the comments made over $500-million more of safety improvements and what exactly will that mean," Lake says. "In terms of monitoring, in terms of response capability, how can we ensure that any proponent would have to live up to what we consider world class response and mitigation measures."
Economist Robert Mansell, U Of C School Of Public Policy
(Sept. 5) - <strong>On the chance that the proposed Nothern Gateway pipeline would have a negative effect on central Canada's manufacturing sector</strong>: "It is not credible that one could argue this would cause Dutch disease." "Would it do, as has been alleged -- cause the rate of inflation to go up and then force the monetary authorities to tighten the money supply and thereby shrink the economy? The answer is no. "Monetary policy is based on what's called the Core Inflation Rate, which excludes the price of food and energy."
Texas-Based Energy Consultant Muse Stancil
(Sept. 5) - <strong>In a report submitted to the hearing, Texas-based energy consultant Muse Stancil said the Northern Gateway will have an effect on oil pricing in North America:</strong> "It can be expected to have a material effect on the distribution patterns and pricing dynamics for Western Canadian crude, as crude producers for the first time will have a high-volume alternative to their historical markets within North America," said the Muse Stancil report. "Northern Gateway allows the Canadian crude producers to both stop selling to their least attractive refiner clients (from a pricing prospective) and reduces their need to ship heavy crude via comparatively expensive rail transport."
Richard Johnston, UBC Political Scientist
Sept. 5 - <strong>On the chance the federtal Tories could lose ground in B.C. due to unfriendly policies such as support of pipelines to the west coast:</strong> "Among the risks to their base, I would put Northern Gateway highest," Johnston said. "The risk/benefit ratio (for B.C.) is massively unfavourable in itself and if the government were to force the issue pre-emptively, they would add an additional dimension to the debate, singling out one province for ill-treatment, rather like the NEP and Alberta. I expect Conservative MPs are worrying about this aloud."
Elisabeth Graff, B.C. government lawyer
(Sept. 7) - "Are you willing to acknowledge this is a complex organizational structure that limits the liability of a corporate giant that definitely would have sufficient funds?" she asked. "What we're left with is an entity which you tell us has the financial resources necessary to cover any type of spill, but we're still doubting whether that is possible." "No, I just fundamentally can't accept that," replied Mr. Carruthers. "Because of the investment, everyone would want to make sure there's proper funding available in case of a spill," he said.
Janet Holder, Enbridge senior executive
(Sept. 7) - "We're doing everything in our power to mitigate against a spill." "Believe me, Enbridge doesn't want a spill. It's not what we're in the business for. We're in the business of moving very safely, environmentally sound and in a sustainable way, product from one spot to another."
Geoff Plant, B.C.'s head lawyer for the hearings
(Sept. 7) - "The question [is] whether Enbridge is actually capable of getting the kind of insurance to ensure against the risk of liability," on whether the insurance is there should an oil spill happen.
Barry Robinson, lawyer for three environmental organizations
(Sept. 8) - "If free market economies aren't at play, where's the economic benefit?" asked Robinson about the economic effects of the hypothetical possibility of Chinese interests buying control of the Northern Gateway pipeline.
Kelowna resident James MacGregor
(Spet. 6) - The Avaaz petition <a href="http://www.avaaz.org/en/petition/Stop_Enbridges_Northern_Gateway_pipeline/?whtizcb" target="_hplink">"No Enbridge Tankers/Pipeline in BC Great Bear Rainforest"</a> was started by James MacGregor and has since passed 10,000 signatures. "BC's entire Great Bear Rainforest, its wildlife and the livelihoods of coastal First Nations are all at great risk if Enbridge's Northern Gateway pipeline is approved," he said. "I know I'm not the only one out there speaking up about the pipeline, but I felt like I couldn't sit back and do nothing." (Source: <a href="http://www.vancouverobserver.com/blogs/earthmatters/petition-opposing-northern-gateway-pipeline-clears-10000-signatures" target="_hplink">Vancouver Observer</a>)
Hana Boye, lawyer for Haisla First Nation
(Sept. 17) - On who could end up with ownership stakes: "If we don't know who these investors are, we're not able to determine if they're financially viable, if they're market-force driven or if it's in the interest of Canadians," she said.
Crystal Lake pipeline
Chris Peters, Engineer
(Sept. 17)- Peters argues that an approval of the pipeline might mean a setback to Canada's national climate change policy aims to reduce such emissions to by 2020. That cost "should be recorded as a negative and a cost to the planet," said Peters.
Crystal Lake pipeline
Crystal Lake pipeline
trenton falls pipeline
Terry Lake, B.C. Environment Minister
(Sept. 17) - In the worry that in the event of a spill, Enbridge won't have tge insurance to cover the clean-up costs: "Enbridge and Northern Gateway are very aware of that concern now, so we'll look to their response. But we've made it clear that taxpayers will not be left on the hook," Lake said. "I think that the company would argue they have the resources necessary. What British Columbians want to see is an ironclad guarantee that they do have the resources necessary, that the structure and the insurance in place will protect British Columbians from the cost of any adverse event," he added.