Review panel supports Northern Gateway pipeline, opponents vow to fight on

CALGARY – A review panel has given its blessing to the proposed Northern Gateway pipeline that would carry bitumen from Alberta’s oilsands to tankers on the West Coast, but opponents warn their battle against the multibillion-dollar project is far from over.

The panel, which released its long-awaited report on Thursday, has attached 209 conditions, which cover everything from protecting caribou habitat to research into how the oil would behave in a marine environment to the company’s spill response plans.

“After weighing the evidence, we concluded that Canada and Canadians would be better off with the Enbridge Northern Gateway project than without it,” the three-member panel said in its report.

The controversial proposal has pitted Calgary-based Enbridge (TSX:ENB) against environmental groups and several First Nations, who have raised concerns about potential oil spills on land or in the water off the B.C. coast.

Supporters say the pipeline is critical if Alberta is to get its oil to emerging markets in Asia. The panel agreed.

“We have taken the view that opening Pacific Basin markets is important to the Canadian economy and society.”

While there are bound to be some environmental impacts, the panel said those can be effectively mitigated and the project’s economic benefits outweigh the risks and burdens.

“We found that a large spill is unlikely,” the panel said.

“We further found that a large spill would initially have significant adverse environmental effects on ecosystems and we accepted the scientific evidence that indicates that the environment would ultimately recover and return to a functioning ecosystem similar to that existing prior to the spill.”

The panel did suggest Enbridge must be able to prove it would have the financial resources immediately available to respond to any cleanup of a spill or other damage.

One condition requires Enbridge to have $950 million in liability coverage and “unfettered access” to $100 million within 10 business days of a large spill from any component of the project.

Many opponents of the pipeline have zeroed in on what would flow inside of it — oilsands crude. The review did not address the upstream impacts of the oilsands or how development of that resource may contribute to climate change.

The panel did recommend that Enbridge be required to research the behaviour and cleanup of heavy oil, like that from the oilsands, in freshwater and marine aquatic environments.

However, the panel was not persuaded by arguments of some opponents that oilsands crude is more corrosive and abrasive than conventional crude.

The final decision rests with the federal government, which has roughly six months to respond.

Enbridge CEO Al Monaco said he’s pleased the panel found the project is in the public interest but there is much work left to be done.

“The decision today comes down to confirming that we have a sound project from a commercial, technical and safety and environmental point of view. That’s all good, and it’s all subject to the conditions and we are proud of that… but we are not celebrating.”

The regulatory approval is just one step, he said.

“We know more work needs to be done with some aboriginal communities. Over the last year, I can assure you we’ve been listening very carefully to both British Columbians and aboriginal groups to address concerns.”

At first glance, the conditions set out Thursday are very similar to 199 potential conditions released by the panel earlier this year.

“They’re tough,” Monaco said, but not unexpected.

The company has said its most recent cost estimate for Northern Gateway of $6.5 billion is out of date and likely to rise. National Energy Board documents accompanying the report Thursday used a $7.9 billion figure, but Monaco said the company is in the process of updating the project’s price tag.

Reaction from opponents was swift.

ForestEthics Advocacy’s Ben West likened the recommendation to “throwing fuel on a fire.”

Greenpeace campaigner Mike Hudema said opponents will do “what it takes” to ensure Northern Gateway is never built — from court cases to civil disobedience.

And Arnold Clifton of the Gitga’at First Nation said the panel’s recommendation is “by no means the final say.”

“All options are on the table,” said Clifton, chief councillor and hereditary chief of the community located along the proposed tanker route.

The Raincoast Conservation Foundation said political and corporate agendas won out over the interests of the public. David Miller of the World Wildlife Fund questioned how the panel could acknowledge the environmental risks, but still support the pipeline.

“I think the case is very clear that there is a real risk to the environment, the local economy and the social well-being of people who live in this region,” Miller said. “The (joint review panel) agrees with that yet it’s full steam ahead.

Federal Natural Resources Minister Oliver said the government will thoroughly review the report and consult with aboriginal groups before making its decision.

B.C. Environment Minister Mary Polak said the province wants to assess whether the panel’s report addresses five conditions B.C. has set out before it will support the pipeline.

“We are not yet in a position to consider support for any heavy oil pipeline in B.C.”

The pipeline faced an uphill battle in B.C. where the environmental movement was bolstered by a decades-old “War in the Woods” against old-growth logging.

Enbridge and the oilpatch drastically underestimated the power of Green Corp., the older, wiser and better-funded modern version of the tie-dyed denizens who were arrested trying to save trees in the 1990s. Flush with cash from green philanthropists largely from south of the border, groups such as Forest Ethics Advocacy, the Dogwood Initiative and Rising Tides mounted a relentless campaign in Canada and abroad.

But perhaps the toughest hurdle for the project has been the simmering tension between B.C. First Nations and the federal government.

Unlike the rest of Canada, most First Nations in the western-most province never signed treaties with the Crown. Decades of treaty negotiations have largely gone nowhere and aboriginal rights have been left to the courts.

“We’re treated as a stakeholder in this process,” Carrie Henchitt, a lawyer for the Heiltsuk Nation, said as the panel hearings became increasingly adversarial earlier this year. “We are not just stakeholders. We have specific rights very different from other interest groups.”

Amid rising opposition to the project in early 2012, the federal Conservative government became defensive over oilpatch expansion and Oliver branded opponents as “foreign special interests groups” that threatened to “hijack our regulatory system to achieve their radical ideological agenda.”

The government changed the rules to give cabinet the final say on approval and rewrote rules around waterways and environmental protections.

It wasn’t until after the project was mired in controversy that Oliver announced rules that began to address some of the concerns around tanker and pipeline safety, and over liability in the event of a spill.

— With files from Dene Moore in Vancouver.