Gateway to nowhere

Following the frustrated pullout of one of its biggest customers, Enbridge Inc.’s Gateway project is facing it’s 7th major delay since the twin pipelines, slated to open up the Asia-Pacific market to Alberta’s tar sands crude, were proposed.

Indications were that PetroChina, a subsidiary of China National Petroleum Corp., was to have bought up to 50% of the Gateway’s crude oil capacity. A vice-president for the parent company cited a lack of commitment and willingness on the part of Canadian oil producers and the federal government to ‘do business with China’ as part of the reason for their abandonment of the project.

Yet it was not some discriminatory aversion to China that has scared producers and investors away from the Gateway – the money for the project has dried up largely because of legal and regulatory risk associated with First Nations opposition to the pipelines that would pass through their territories.

Let’s review:

The 1100 km pipes, one carrying crude oil West, the other carrying condensate East, would place the burden of safety and environmental risk on 42 affected First Nations with little in the way of benefit to those communities. Most of the First Nations that would be impacted have asserted jurisdiction over the project, either in the form of self-government rights or Aboriginal rights and title, which include rights to make land use decisions in areas subject to said title.

The majority of the pipeline footprint would be in the territory of seven First Nations represented by the Carrier Sekani Tribal Council, who in 2006 filed a lawsuit against the federal environment minister, claiming that her and her ministry failed to consult with aboriginals regarding a three-person joint review panel commissioned to evaluate the project.

Before the regulatory process can be reactivated by Enbridge, the federal government will have to deal with this lawsuit.

And what about the tankers?

The Gateway project calls for supertankers to fill up with crude oil in Kitimat before going on their merry way to the markets of the world. In addition to the opposition generated by the pipelines themselves, Enbridge must find a way to finesse its way around the 75% of British Columbians who are opposed to oil tanker traffic through the inside waters of BC’s north coast. Oil tankers have been passively kept out of these waters since 1972, as a result of a policy moratorium first accredited to Pierre Trudeau.

The federal Conservatives are attempting to invalidate this policy ban, but are having a difficult time convincing British Columbians that this is OK.

So, what stands in the way of Enbridge’s Asia-Pacific dreams?

  • Staunch First Nations opposition based upon a failure to respect aboriginal title and rights, and self-governing authority; this includes a lawsuit that will block reactivation of the regulatory process until settled.
  • Broad opposition, spurred by memories of the Exxon Valdez, to oil tanker traffic out of Kitimat.
  • The continued aversion of investors and producers to the financial risk associated with manifestations of the above opposition.
  • The recent abandonment of its largest potential customer.

Even so, Enbridge is putting on a brave face to the world, claiming that they still expect to be in operation between 2012 and 2014 (the date set after their 6th official delay).

If nothing else, the folks at Enbridge must be given credit for their persistence. Time after time, spadefuls of earth have resoundingly landed on the casket of their proposed Gateway to the Asia-Pacific, and time after time Enbridge has jumped into the hole in desperate attempts to brush away the dirt.

This project, thankfully, is looking more and more like a Gateway to nowhere.

~ Eric Swanson

Comments are closed.

Send this to a friend