CALGARY - Enbridge Inc. chief executive Al Monaco said the company would take the next 12 to 15 months to work through the 200-plus approval conditions attached to Northern Gateway, but he said the company would not make an 'indefinite commitment' to the $7.9-billion oil pipeline.
On March 6, 2002, Calgary-based Enbridge announced preliminary plans for a pipeline linking the Alberta oil sands to the West Coast. Here's what happened next.
'We have a sanctioning decision to make,' he told reporters Tuesday. 'That sanctioning decision is not happening today, and that's because we need to undertake a few more steps here ... as we move through that we'll be continually evaluating where we are on the project. At some point, when we get satisfied one way or the other, then we'll make that call.'
Enbridge has said the project could be up and running by late 2018. Mr. Monaco said it could get pushed back depending on negotiations with aboriginal groups and the B.C. government.
The federal government on Tuesday accepted last year's recommendation from the National Energy Board to approve the project subject to 209 conditions, moving Alberta's landlocked oil producers a step closer to tapping energy demand in fast-growing Pacific markets.
Gateway would transport up to 525,000 barrels of light and heavy crude from Alberta's oil sands to a new super-tanker port at Kitimat, B.C., allowing Canada's oil industry to bypass the U.S. Midwest, which is increasingly flush with shale oil. A twinned line would import 193,000 barrels a day of oil-thinning condensate.
Since it was first proposed more than a decade ago, the $7.9-billion project has generated reams of regulatory filings, sparked protests from aboriginal and environmental groups, and driven a wedge between governments in Alberta and B.C.
But the contentious oil pipeline is just one of $36-billion in growth projects Enbridge considers commercially secure through 2017. Another $5-billion worth of projects is still in development, the company says.
Some analysts say Gateway by itself - whether it's built or delayed indefinitely - is unlikely to move the needle on Enbridge's outlook. The company is targeting earnings per share growth of 10% to 12% through 2017.
'Enbridge does have a very significant growth-capital program that has been commercially secured,' Izabel Flis, analyst at Franklin Bissett Investment Management in Calgary, said in an interview before the decision was released.
'Although Northern Gateway would be a nice addition, it doesn't necessarily put a stain on Enbridge's potential in the short- to medium-term' if the project is delayed, she said.
Natural Resources Minister Greg Rickford said Enbridge must do more to engage aboriginal groups and demonstrate it can meet the regulator's approval conditions, which include using extra-thick steel and deploying extensive leak-detections systems to guard against a spill.
'Today constitutes another step in the process,' Mr. Rickford said in a news release.
'Moving forward, the proponent must demonstrate to the independent regulator, the NEB, how it will meet the 209 conditions.
'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 Conservative government has made it clear that finding new markets for Canadian oil is an economic priority.
Within minutes of the announcement, opponents of the project vowed that the pipeline will never see the light of day despite the nod from Ottawa.
'First Nations will immediately go to court to vigorously pursue all lawful means to stop the Enbridge project,' said a statement issued by a broad coalition of B.C. aboriginal groups.
The statement was signed by 28 individual bands and the three main aboriginal organizations in the province: the B.C. Assembly of First Nations, the First Nations Summit and the Union of B.C. Indian Chiefs.
'This project, and the federal process to approve it, violated our rights and our laws. We are uniting to defend our lands and waters of our respective territories,' they said.
They said the majority of British Columbians oppose the project, which they said poses an 'unacceptable risk' to the environment and health of all people in the province.
'We will defend our territories whatever the costs may be,' the statement said.
The decision already faces legal challenge.
Several First Nations and environmental groups have filed applications with the Federal Court for judicial review of the federal panel report recommending approval.
The Gitxaala and Coastal First Nations have already said they are preparing broader lawsuits against the federal government and/or the company over aboriginal rights.
The Sierra Club B.C. called the decision a 'slap in the face' for British Columbians.
'But ultimately, it changes nothing: the Enbridge pipeline will not get built,' said spokeswoman Caitlyn Vernon.
'We are deeply disappointed, but you need to look no further than the spate of legal challenges filed against this project to know that cabinet's approval is by no means a guarantee that this project will ever be built,' said Barry Robinson, a staff lawyer for the group Ecojustice.
The project was always going to be controversial.
The proposal is for a 1,200-kilometre pipeline that would link Alberta's Athabasca oilsands to a marine terminal on the northern edge of British Columbia's Great Bear Rainforest.
To do so, it would cross the territories of more than 50 First Nations. Most of those are in B.C., where aboriginal bands never signed treaties with the Crown and where many land claims remain unresolved.
The pipeline will deliver bitumen - the heavy, molasses-like oil product from the oilsands - to oil tankers that are seven times the length of an NHL hockey rink.
Those oil tankers will then transport the heavy oil product around the small islands that dot the narrow Douglas Channel and past the Haida Gwaii archipelago and a UNESCO world heritage site.
The economics are compelling. Billions of dollars in revenues and GDP are at stake.
A joint federal review panel recommended approval in December, with the 209 conditions, and the Conservative government has made it clear for some time that finding new markets for Canadian oil is an economic priority.
But pressure will now mount on the B.C. government, which officially opposed the project at federal review hearings.
Premier Christy Clark set out five conditions for B.C.'s support, and on Tuesday she repeated her contention that those conditions have yet to be met. Provincial environment minister Mary Polak planned to speak to media Tuesday afternoon.
The project, which would move an estimated 525,000 barrels of petroleum products each day, still faces political and legal challenges from various fronts in B.C., where opposition to the project has grown as the decision drew near.
'There are going to very substantial delays on actually moving on this project,' Werner Antweiler, who teaches at the University of British Columbia's business school, said Tuesday before the announcement.
Tom Mulcair, leader of the main opposition New Democratic Party, vowed to rescind the approval if his party wins elections scheduled for next year.
'You can no longer force projects like this from the top down,' Mulcair told reporters in Ottawa. 'We are talking about a severe threat to social order, social peace.'
Liberal leader Justin Trudeau also said he'd overturn the decision if he wins the next election. 'This government has from the very beginning been a cheerleader for this pipeline when what we need is a referee.'
'The Conservatives today have rubber stamped a flawed decision that is deeply concerning,' Mr. Trudeau said in a statement.
Earlier today, Harper defended the process that led to the decision, telling lawmakers in Ottawa the government makes decisions 'based on the facts.'
'This government has approved some projects, not approved others, conditionally approved some based on the findings of panels, based on the findings of fact,' Harper said. With files from Bloomberg
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