For Northern Gateway, the easy part is over

Now Enbridge needs to build the social license to proceed

VANCOUVER, BC, Jun 24, 2014/ Troy Media/ – The saga of Northern Gateway is far from over, but it has already taught us an important lesson. It makes far more economic sense to acquire the social license first than to solely focus on regulatory permissions. Without real legitimacy, development projects are at risk.

Enbridge spent over 10 years and millions of dollars developing the plan and application to build the Northern Gateway Pipeline. After a long wait, it has its answer and it’s “yes” with 209 “buts”.

Last week, the federal Cabinet accepted the National Energy Board’s approval of the Northern Gateway with those 209 conditions. The $7.9 billion project would transport up to 500 barrels of bitumen a day, through a 1,200 km pipeline from Alberta to a new ocean terminal in Kitimat. From there, tankers would take the crude to markets in Asia.

The easy part is done. Enbridge will now spend the next year or two meeting those 209 “buts”. But let me add one more.

The project may have attained conditional permission, but it has not yet been granted the social license to proceed. To build Northern Gateway, Enbridge needs to build broad-based support, or at least significant targeted support and a reduced opposition.

Enbridge executives spent too much in a group hug at Calgary’s Ranchmen’s Club, while dismissing the concerns of citizens, First Nations, and the environment industry. Now, the opponents have launched at least five legal actions.

The company’s inability to develop support from impacted First Nations, and its seemingly effortless ability to develop strong opponents, puts the project in very deep legal jeopardy. Courts across Canada are recognizing Aboriginal rights and articulating conditions to accommodate that Enbridge has not come close to meeting.

Instead, Enbridge has built strong and fierce opponents among Aboriginals and the environmentalists who have entrenched themselves in the “not-ever” rather than in the “only if you meet these conditions” camp.

The Kitimat referendum was a harbinger of the political scene. Kitimat rejected Northern Gateway even though it is the B.C. town with the most to gain economically. The voters did not care for the headaches the project will bring, and they are relying on similar benefits from the proposed LNG terminals.

The same goes for the B.C. government: its support for pipelines is far better placed in LNG which includes B.C. royalties. Premier Christy Clark and her team do not need to waste their political capital shipping Alberta oil.

Even the federal government is taking a hands-off approach to the pipeline.

So it’s now up to Enbridge to make things right.

Enbridge has to declare a truce while works to meet those 2009 conditions. It needs to listen to communities, First Nations and environmentalists, as well as ordinary citizens.

Will Northern Gateway be another McKenzie Valley Pipeline (not built), or a Maritimes & Northeast Pipeline (built but delayed until legal challenges were rectified)? Or will Enbridge develop a new model – one that is approved then built only after the social license is acquired?

As noted lawyer and author Bill Gallagher said last week at the Vancouver Board of Trade’s Aboriginal Opportunities Forum, “It’s too late to make nice afterwards.”

Columnist Michael Izen is an economic and labour market analyst. He joins Dr. Roslyn Kunin to keep an eye on BC’s Business.

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