GREAT OPPORTUNITIES DISAPPEAR IN NORTHERN GATEWAY REJECTION
Prime Minister Justin Trudeau said Tuesday that the decision to approve two pipelines and reject a third was grounded in facts and science. But there’s no denying the outcomes were the result of a well-executed, political balancing act.
When the political calculus was done, it was easier for the federal government to approve pipeline expansions — in the case of Trans Mountain and Line 3 — and reject the greenfield project, Northern Gateway.
Enbridge put on a brave face — its Line 3 project was approved — but there’s no doubt Tuesday’s news was tough to swallow. The company trusted and complied with the approval process set out by the National Energy Board — and was, in fact, lauded for its efforts by both the NEB and the Federal Court of Appeal — to no avail.
“We are disappointed, how could we not be?” Enbridge president and chief executive Al Monaco said Thursday.
The rejection of Northern Gateway can be viewed from many angles, starting with the faith Enbridge put in the review process and the tremendous amount of work that’s taken place over the past eight years. The company and its customers invested $600 million equally into a project that would facilitate access to new markets, with almost 70 per cent of the route passing through established rights of way.
Enbridge also faced a world that changed must faster than it anticipated in terms of how projects need to be done.
It also has to be said the Northern Gateway process began long before any definition was given to the Great Bear Rainforest, a region only protected by the B.C. government earlier this year. To use the Great Bear Rainforest as a reason for rejecting the project therefore remains troublesome.
Additionally, it would be naive to think the impact of the government’s decisions erase uncertainty about the process or approval for future projects, including TransCanada’s Energy East.
Despite the two pipeline approvals, the rejection of Northern Gateway will ultimately be viewed by the international investment community as having been made for reasons that were more political than economic. That’s less than desirable given Canada has long relied on foreign capital to develop natural resources.
Monaco said the Gateway project was a partnership between Enbridge, the Aboriginal Equity Partners (who agreed to a 33 per cent stake) and shippers who supported the very real need to gain access to new markets.
While there is a real measure of relief that two pipeline projects were approved, rejecting Northern Gateway meant three opportunities were lost.
The first is that in fulfilling the 209 conditions put forward by the National Energy Board, the project would have set a new standard for pipeline development, construction and operation in environmentally sensitive areas.
“It would have been a worldleading example of how to do things right,” said Martha Hall Findlay, president and chief executive of the Canada West Foundation.
The second is that it presented a new model — through the Aboriginal Equity Partners (AEP) ownership group — for future resource development in Canada that included meaningful participation by indigenous peoples.
Third, it means a very real loss to the AEP, who saw the economic upside for 200,000 people in their communities evaporate.
“They missed the ball on this,” said Elmer Ghostkeeper, a member of the AEP and who played an important role in securing recognition of Metis people in the Constitution.
“This represented a new paradigm shift for any type of natural resource development and a golden opportunity for reconciliation,” he said.
Northern Gateway also presented an opportunity for youths in these communities to work at home, rather than go elsewhere for jobs, not to mention its financial capacity to build recreation centres, schools and health-care facilities.
Broadly speaking, it took away the opportunity presented to First Nations and Metis to transition to a position of having to manage prosperity, rather than poverty, said Hall Findlay.
This isn’t the outcome Enbridge, the AEP or shippers had hoped for, but the important lessons learned will inform future projects, as well as the review of the National Energy Board that’s now underway.
“From an industry and Canada’s point of view, this has been a very necessary evolution,” said Monaco. “We were part of that evolution ... that, frankly, made us better. It will make everybody better and it will be better for Canada.”
That’s the decidedly glass-halffull perspective on what transpired this week after eight hard years of work.
Being an optimist in the face of disappointment, and casting it as a lesson learned for both industry and country, are qualities not often witnessed in corporate or political circles.
From that perspective, it’s no wonder Monaco was honoured this week as Alberta Venture’s Business Person of the Year.