Enbridge Inc. is seeking a three-year extension to allow the company to resolve the challenges facing the Northern Gateway pipeline, rekindling hopes that the project that has been stalled due to fierce opposition and regulatory roadblocks may be built.
The project connecting the oilsands to global markets via a marine terminal in Kitimat on the British Columbia coast, was approved by the previous federal government in June 2014 but with 209 conditions, including a sunset clause that stipulated the permit will expire if construction did not begin by the end of 2016.
On Friday, the company and its partners applied to National Energy Board to extend the deadline to the end of 2019, as the 1,177-kilometre project faces opposition from aboriginal groups and local communities, apart from judicial challenges.
Enbridge’s Northern Gateway may be resuscitated as Trudeau wavers on tanker moratoriumNorthern Gateway pipeline gets handed another setback from B.C. Supreme Court
The company filed the extension together with Aboriginal Equity Partners, comprising 31 First Nations and Metis communities in Alberta and B.C., to underscore its improving relationship with indigenous groups.
“Northern Gateway has changed,” John Carruthers, president of Northern Gateway, said in a statement. “We are making progress and remain open to further changes. We believe this is the right course of action for Northern Gateway and the right thing to do as Canadians. We know this process requires time and we are committed to getting it right.”
The company said the extension will allow for “legal and regulatory certainty and to continue the development of a new and unprecedented level of aboriginal participation in the project.”
Acknowledging they should “have done a better job” of building relationships with communities, especially on the West Coast, Enbridge and its project proponents said they will reduce their ownership and raise First Nation and Métis ownership up to 33 per cent from 10 per cent.
“While we had the right intentions, we should have done a better job of listening and fostering these critical relationships and developing our plans together as true partners,” Carruthers said.
The project’s approval is being challenged before the Federal Court of Appeals, while the B.C. Supreme Court has ruled that the province’s environmental agency must issue its own environmental certificate and can impose more environmental conditions on the project.
Adding to the headwinds, the federal Liberal government opposed the pipeline during its election campaign last year and is proposing a moratorium on crude tanker traffic off the north coast, a move that could severely impact the viability of the 525,000 barrels-per-day project.
Natural Resources Minister Jim Carr’s office did not respond to a request for comment.
Enbridge’s filing to the NEB cites the federal moratorium proposal as one of the key reasons that has led to “market uncertainty” among its shippers and potential loss of economic benefits for Aboriginal Equity Partners.
“Their communities stand to lose up to $2 billion in economic development if such a ban were to be put in place,” Ivan Giesbrecht, the project’s communications manager, said in an email.
The company also cited the rejection of TransCanada Corp.’s Keystone XL pipeline and the lifting by the United States of its oil export ban as key reasons for need to access new markets.
“Following, the rejection of Keystone XL project by the United States, it is uncertain how much additional capacity to the United States will be afforded to Canadian oil producers,” the company said in its application.
The project was originally estimated to cost $6.5 billion, but the final cost will be higher, Giesbrecht said.
While we had the right intentions, we should have done a better job of listening and fostering these critical relationships
The NEB said it will ensure it has all the information before it will determine an appropriate process for reviewing it. “At this point, we do not have a timeframe for any next steps,” NEB communications officer Sarah Killey said.
Kelly Russ, chairman of The Coastal First Nations, an alliance of First Nations on British Columbia’s North and Central Coast and Haida Gwaii, said his group remained opposed to the project.
“Whether it’s extended out three years, our position is not going to change,” Vancouver-based Russ said. “We oppose any pipeline that comes through Kitimat, Prince Rupert or any other mythical place on the West Coast.”