06/18/2014 05:46 EDT | Updated 08/18/2014 05:59 EDT

Northern Gateway plans to work on 'engagement' with communities

Northern Gateway knows it has more work to do in its “engagement process” with B.C. First Nations and communities along the 1,173-kilometre pipeline route, says company president John Carruthers.

But Carruthers is confident the pipeline can be built safely and that it will ultimately return $300 billion in GDP growth to the Canadian economy over the life of the project.

The federal government agreed Tuesday to let parent company Enbridge build its Northern Gateway pipeline, subject to 209 conditions recommended by the National Energy Board and further talks with aboriginal communities.

The twin pipeline would move up to 525,000 barrels of oil a day from Bruderheim, Alta., to a new marine terminal in Kitimat, B.C. That oil, from the Alberta oilsands, could then be sold at world prices, instead of the significant discount it now trades at because of bottlenecks in getting it to market.

“The discount is costing Canada about $50 million a day in lost value — approaching $20 billion a year,” Carruthers said in an interview with CBC’s Lang & O’Leary Exchange. “Clearly that’s very important in the life of Canada.”

First Nations opposition

Before it can build, Northern Gateway must secure the agreement of the B.C. government, which has put five conditions on the project. And it will have to negotiate multiple lawsuits, including a joint lawsuit being launched by B.C. First Nations.

“We are definitely unified in our opposition to the Northern Gateway pipeline proposal in B.C. and we enjoy the support of the vast majority of British Columbians over the inherent risks attached to these heavy-oil pipeline proposals,” said Grand Chief Stewart Phillip, of the Union of B.C. Indian Chiefs.

Northern Gateway’s Carruthers said the company has engaged with communities along the pipeline group and has agreements with 60 per cent of them to cross their territory.

“We did develop plans where they [indigenous communities] could see economic benefits of $1 billion, because historically a complaint was that they didn’t participate from an economic perspective — through equity, through procurement, through employment, I think it’s unprecedented,” Carruthers said.

Those communities have made deals with Enbridge, but don't want to come forward on such a contentious issue, he said.

Phillip said he doesn’t believe that many communities have signed agreements with Enbridge.

The fight over the pipeline is just beginning, he said.

“We stand on our constitutional and legal rights. We stand on our traditional laws,” Phillip said.

“In our view this is a fundamental human rights issue for indigenous peoples and we will do what we need to do to defend the integrity of our territories and the waters contained therein.”

Pipeline can be safe, Carruthers says

Carruthers said environmental concerns have been a “core focus” of the Northern Gateway project, which was the subject of hearings beginning in 2010.

He said the pipeline can move oil safely.

“There’s hundreds of kilometres of pipeline that safely move product every day and most people don’t know those pipelines exist because they’re below ground, they don’t see them and there isn’t incidents,” he said.

“We have pipelines operating successfully for decades, and we’ve seen significant improvements in technologies, the processes we use, the testing, the steels we use, the welding that we do and even how we select the route,” Carruthers added.

Northern Gateway involved international experts in its design process to move the pipeline to what Carruthers called a “world-class” standard.

With “Northern Gateway we’re moving above that with thicker steel, more shutoff valves, increased line inspection,” he said.

“There’s a lot of things we do to help build confidence the pipeline can be built and operated safely.”

Investors were less sure that Enbridge would benefit from the long-awaited approval. Enbridge stock fell 58 cents to $51.38 in trading Wednesday.