2014 Investor Report
Northern Gateway A pipeline that will never be built Enbridge overcame two major obstacles in the past year for their Northern Gateway pipeline proposal that hopes to bring tar sands through British Columbia to load onto tankers for Asian markets. First, the company received a positive recommendation from the National Energy Board’s Joint Review Panel (JRP). Secondly, it received approval from the federal government in June 2014. However, Enbridge’s Northern Gateway pipeline project faces substantial obstacles ahead, making it unlikely to ever be built. After approval from the JRP, five court cases were launched by First Nations and environmental groups. Following the federal government’s approval, another nine court cases were brought forward. These followed the Supreme Court of Canada’s Tsilhqot’in decision that recognized aboriginal title. This court ruling strengthens First Nations authority over land-use decisions and clearly puts Northern Gateway at risk given strength of opposition and title evidence brought forward throughout the JRP process. 1
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Enbridge also faces several political risks. The government of British Columbia has set out five conditions before approving any heavy oil pipeline through the province. None of these conditions have been met. A federal election is expected in 2015. Many analysts predict that Northern Gateway will be an election issue in British Columbia and could put some of the 21 Conservative seats there at risk. At the same time, the federal NDP, Liberal and Green parties have all committed to stopping Northern Gateway if elected. 3
Lastly, one of Enbridge’s 209 conditions set out by the National Energy Board, that the company needs to report on regularly, is that of shipping agreements. It is rare for a pipeline company not to have over fifty percent of its proposed project committed before formally applying. Enbridge had none. Perhaps due to the risks and uncertainties around the project, the company’s first report posted in July indicates that they still have no transportation service agreements (TSAs). This briefing is an update to our 2012 report ”Enbridge Northern Gateway Pipelines: A dead-end investment” and will highlight the risks outlined above. In the end, investors should be asking Enbridge how much they are willing to continue investing and putting at risk for a project that will never be built. 4
by Nikki Skuce
One expert said it's likely this [Tsilhqo’tin] decision will be used by First Nations fighting the Enbridge pipeline in court."The pipeline is going through many, many First Nations who have already declared that they do not want the Enbridge pipeline going through their territories, and this decision strengthens their rights to preserve their traditional territories," said Antonia Mills, a First Nations studies professor at the University of Northern B.C. (http://www.cbc.ca/news/politics/tsilhqot -in-first-nation-granted-b-c-title-claim-insupreme-court-ruling-1.2688332 )
A Bloomberg-Nanos survey of 500 people in the province between May 27 and 31 showed 47 per cent of all respondents polled — regardless of voting preference — said they would be less likely to support local Conservative candidates if the Harper government approved the pipeline. Only 11 per cent said they would be more likely to support local Conservatives if the project is approved."I think privately in the confines of Conservative circles they're quite worried about what's happening because those ridings could be in play," said pollster Nik Nanos in an interview with CBC. "There will be a very close election and every Conservative riding counts." (http://www.cbc.ca/m/touch/news/story/1 .2672204).
Photo: Amanda Follett