Northern Gateway pipeline approved by National Energy Board – with more than 200 conditions

An independent panel appointed by Canada's National Energy Board (NEB) has approved Enbridge's proposed Northern Gateway pipeline, with more than 200 conditions.

The three-member NEB panel will hand over its report and recommendation to the Federal government and Ottawa will issue its decision next year.

"Based on a scientific and precautionary approach to this complex review, the Panel found that the project, if built and operated in compliance with the conditions set out in its report, would be in the public interest," the NEB wrote in a news release.

Enbridge (NYSE:ENB), Canada's biggest energy transport company, first proposed the $6.5 billion project in 2004. The company's plan is to build twin lines across 1,177km from northern Alberta to Kitimat, BC, providing a steady stream of oil to tankers and opening Alberta's petroleum industry to Asia's oil-hungry markets.

The westbound portion of the line would carry up to half a million barrels per day, and the eastbound nearly 200,000 barrels of condensate – a product used to thin oil for pipeline transport.

The report

In addition to recommending that the Federal government approved the project – subject to 209 conditions – the NEB has cautioned the government to ensure that the construction and routine operation of the line would "cause no significant adverse environmental effects, with the exception of cumulative effects for certain populations of woodland caribou and grizzly bear."

The panel concluded that the "environmental burdens" of the pipeline could be "effectively mitigated."

Meanwhile, the effects of a large oil spill would be "significant," but "unlikely and not permanent."

The NEB also praised Enbridge for taking steps to minimize the likelihood of a large spill through its "precautionary design approach."

As for economic considerations, the panel found that "opening Pacific Basin markets is important to the Canadian economy and society" and that the project would bring significant benefits.

"After weighing all of the oral and written evidence, the Panel found that Canada and Canadians would be better off with the Enbridge Northern Gateway project than without it," the NEB wrote.

Conditions

The NEB's blessing has strings attached. In its news release, the panel identified some key conditions which include several requirements related to animal habitats – such as a Caribou habitat restoration plan – and measures to mitigate the risks of a potential oil spill – including a research program on the behaviour and clean-up of heavy oils.

Opponents and proponents 

Environmental opposition has been fierce with groups citing concerns over potential oil spills and the difficulty tankers would have navigating the islands of the Douglas Channel.

Enbridge came under fire last year after releasing  a video of the tankers' passage while photo-shopping out about 1,000 square kilometers of islands.

Opponents were quick to respond to Thursday's news. The Sierra Club issued a statement claiming that the Panel's decision "flies in the face of overwhelming evidence" and is a "message of disrespect to British Columbians on the eve of the holiday season."

“The panel’s recommendation is a disappointment, but unsurprising given such a flawed process,” said Sierra Club BC campaigns director Caitlyn Vernon.

Enbridge argues that the project would provide thousands of jobs and boost the revenues of Alberta, BC and Canada. The company also claims that over 200 experts and scientists have conducted a comprehensive environmental assessment and determined that the project is safe.

BC businesses applauded the NEB's decision through the BC Chamber of Commerce.

“This is great news for B.C.: It means that this pivotal, job-creating project has been examined from every angle and found sound,” CEO of the BC Chamber of Commerce John Winter said in a statement. “With this decision, British Columbians can confidently back this project, knowing that it meets our top-tier environmental and community standards.”

Political support

Canada's Minister of Natural Resources Joe Oliver was quick to respond to the NEB announcement.

"The Panel's report represents a rigorous, open and comprehensive science-based assessment," Oliver said. "Now that we have received the report, we will thoroughly review it, consult with affected Aboriginal groups and then make our decision. We also encourage everyone with an interest to take the time and review the report."

Meanwhile, Prime Minister Stephen Harper has already declared his support for the project, saying the government is committed to helping Canada's energy resources access new markets.

In November the premiers of BC and Alberta surprised the public after reaching a framework agreement on an energy partnership – though BC Premier Christy Clark has identified five conditions relating to environmental, aboriginal and economic issues.

In anticipation of Thursday's announcement, opponents have argued that even with Federal approval, the pipeline won't be built.

Speaking with The Province last month, Keith Stewart, campaign co-ordinator for Greenpeace, said that although he "fully expect[s]" Ottawa to give its approval but that he thinks the line will "never be built."

Jessica Clogg, senior counsel at West Coast Environmental Law, told The Province that a number of First Nations groups would likely take the project to court.

“The courts have ability to quash or set aside any unconstitutional decisions of government,” she said.

Enbridge's share price was up just over 1% minutes ahead of the news, trading at $45.33 per share.

See also: BC and Alberta one step closer to moving Alberta's oil sands to Asian markets