Northern Gateway - What History Tells Us...

From MNP, Oilfeild Service News June 24, 2014

By: David Yager, National Leader, Oilfield Services

Northern Gateway Approval an Important Step, Outcome Remains Unknown

The federal government did the logical thing on June 18th when it ratified the National Energy Board’s (NEB) decision on the approval of the Northern Gateway pipeline, subject of course to the sponsors meeting the NEB’s short list of 209 conditions. 

The reaction from all sides was predictable. Those who support the project applauded. Those opposed threatened court challenges, obstruction and possibly civil disobedience. This odyssey is approaching ten years with more years assured. Some predict oil will flow by 2017. Others say never.

The current Canadian record for pipeline approvals is Mackenzie Valley which took over three decades from concept in 1973 to approval in 2010. A 2010 CBC News report indicated the Mackenzie Valley gas pipeline was 37 years from proposal to approval. By the time it got the green light the price of natural gas had collapsed, sinking the project’s economics. Hopefully, that record will stand for all time. 

What is not known is where the public stands. The position of proponents and opponents is clear. But both sides only represent a small fraction of the population. The outcome of public opinion polls really depends upon the question. If somebody asks “Do you support a pipeline that will spill oil on the pristine west coast?” the answer is no. If the question was, “Do you oppose Northern Gateway if not building it costs you your job?” Another matter entirely.

Politically the lines are drawn. The Conservative Party and Prime Minister Stephen Harper are clearly supportive. But the day it was announced the leaders of the federal NDP and Liberal parties declared this a terrible decision. With a federal election slated for the fall of 2015, Northern Gateway could become an election issue. This is along the lines of the 1988 election where Prime Minister Brian Mulroney’s Progressive Conservative government went to the polls over the Free Trade Agreement with the United States. This too was vocally opposed by many; the end of Canada as we know it but for different reasons. Mulroney won the election indicating that most Canadians will vote with their wallets if the question is clear. If the next federal election is in part about Northern Gateway, then we’ll know for sure which of the two polarized positions is acceptable to Canadians

Looking south of the border, there is strong evidence of the degree to which the public wants one thing while governments do another. The refusal of the White House to approve Keystone XL is frustrating for most Canadians up to and including the Prime Minister. U.S. protests against KXL – which is even in TV ads slagging TransCanada’s CEO – would lead many to believe this pipeline is not something America wants.

To read the news you’d believe there was broad opposition to Northern Gateway.

But polls conducted in the past year indicate over half to two-thirds of Americans want to see KXL approved. An even greater percentage support buying more oil from Canada compared to other non- American suppliers. In fact they are surprised when they learn Canada is now America’s largest international oil supplier. Again, it depends upon the question. Support has declined somewhat in the past year as more voters understand how much U.S. domestic production has increased. But if an election were held in the U.S. on this issue alone, President Obama would lose. 

The court challenges and posturing will continue for some time. Enbridge, the pipeline’s sponsor, will work diligently to shorten the list of conditions and build bridges with those opposed, particularly First Nations. Pipeline alternatives to Northern Gateway are emerging, ranging from projects with aboriginal sponsorship to giant upgrader/refineries that will ensure no bitumen is ever shipped by tanker, only refined products like gasoline and diesel fuel.

NEB and now federal approval are important steps. Stay tuned.