Gateway may get lifeline from Ottawa

Enbridge Inc.'s Northern Gateway pipeline may get a new lease on life as the federal government wavers on a planned tanker moratorium that was previously thought to spell the end for the project.

Officials are weighing what types of petroleum products may be exempt from any moratorium, and whether certain tankers could be allowed, say people familiar with the matter who spoke on condition of anonymity.

Prime Minister Justin Trudeau pledged in November to “formalize a moratorium on crude oil tanker traffic” on British Columbia's northern coast.

But cabinet ministers are noncommittal on its precise implications, while federal officials have regularly declined to comment on Northern Gateway's prospects.

“It's a formalized moratorium and, when we have worked out exactly what that means, we'll let you know,” Transport Minister Marc Garneau, who is responsible for implementing the measure, said earlier this month.

Asked in a separate interview whether the moratorium pledge means Gateway is dead, he said: “It's premature to say anything.”

The 1,177-kilometre-long Northern Gateway would carry diluted bitumen from Alberta's oilsands through B.C. for shipment to Asia.

The pipeline, now expected to cost more than its initial $6.5-billion price tag, was first proposed about a decade ago.

Trudeau said in 2014 that Gateway “will not happen” if he became prime minister. His spokesman, Cameron Ahmad, acknowledged the prime minister's earlier comments against the pipeline while declining to comment on whether his position remains the same.

“We remain committed to a crude oil tanker ban on British Columbia's northwest coast,” Ahmad said. “The government is currently conducting consultations and examining science and facts to ensure we protect Canadian coastlines.”

Alberta Premier Rachel Notley changed her skeptical stand on Northern Gateway after seeing progress on some of the project's hurdles and speaking to people involved who are “optimistic” about the pipeline's chances, said her spokeswoman, Cheryl Oates.

Northern Gateway is the country's only major pipeline proposal with federal government approval. Facing opposition from communities along the route, Enbridge is still working to build support with aboriginal groups before making a final investment decision ahead of its permit expiring at the end of the year.

With Kinder Morgan's Trans Mountain expansion and TransCanada Corp.'s Energy East projects facing hurdles of their own, a shift in the government's approach to the tanker ban may give Gateway the best chance of moving forward.

Enbridge must file shipping agreements by the end of June and begin construction by Dec. 31 to avoid losing its permit.

Calgary-based Enbridge wants to “move forward” on Northern Gateway, said spokesman Ivan Giesbrecht when asked about the moratorium.

“Building support is the No. 1 priority right now,” he said.

It has proposed a “world-class” response system and tug boat escorts for tankers in the 90-kilometre-long Douglas channel to address oil-spill concerns.

The B.C. government has opposed both Northern Gateway and the Trans Mountain expansion on the grounds not enough has been done to mitigate risks.

British Columbia won't support a heavy-oil pipeline unless the project meets five conditions, including environmental approval and spill response. The province will “continue to work with industry, First Nations, communities and the federal and other provincial governments to ensure the five conditions are met,” B.C.'s Minister of Natural Gas Development Rich Coleman said in an e-mail.

The debate hinges on “what petroleum products will be captured by the moratorium,” said Kai Nagata of the Dogwood Initiative, an environmental group that opposes the pipeline. He added they were told to expect legislation on the moratorium this year.

“It would be quite a stunning reversal for people in British Columbia were the government to walk back its promises of a formal tanker ban.”