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Enbridge plans $500-million safety upgrade for Gateway

Nathan VanderKlippe, The Globe and Mail, Jul. 20 2012

Facing widespread concern about the safety of oil pipelines, Enbridge Inc. promised to spend up to $500-million to reinforce its planned Northern Gateway pipeline to the British Columbia coast, while the Alberta government is launching a broad review of industry practices in the province.

Enbridge said Friday it plans to use thicker-walled steel for delicate sections of the planned project, including more than 100 important river crossings, and install about 50 additional remotely operable valves that it can shut in the event of an emergency. Together, those measures will add $400- to $500-million, or roughly 10 per cent, to the $5.5-billion twin-pipe project, which would haul Alberta crude for Pacific export at Kitimat, B.C.

Opposition to Northern Gateway, particularly among first nations and environmental groups, has hardened following a series of oil spills in Alberta and elsewhere in North America. Enbridge believes skeptics ‘will be swayed by these initiatives,” said Janet Holder, the company’s executive vice-president in charge of Gateway. “This should give them further comfort that we are going well beyond anything that’s ever been done in North America with regards to pipeline safety.”

On the same day, the Alberta government ordered a pipeline safety review, after the province experienced three substantial spills in a month earlier this year, a confluence of events that trained public attention on how the province’s nearly 400,000 kilometres of pipe are operated.

The measures come at a critical juncture for Canada's energy future, as companies with surging oil sands production seek new, and more lucrative, offshore markets at a time when the industry’s failings have made clear the risks of producing and transporting those barrels.

“I'm not happy with the spills we’ve seen,” said Alberta energy minister Ken Hughes, days after he convened a meeting of top pipeline CEOs – including the heads of Enbridge and TransCanada Corp. – to seek advice and express his displeasure.

“Everybody needs to step up here,” Mr. Hughes said.

“This is a moment of truth for the pipeline industry and for the oil and gas industry in general. And I have high expectations they’re going to deliver on that.”

The pipeline review will see the Energy Resources Conservation Board, Alberta’s oil and gas regulator, call in an independent third party to examine the province's management of pipeline integrity, spill response and the safety of pipeline water crossings – many of which were built decades ago using techniques no longer allowed. Mr. Hughes said that if it appears necessary, he is open to changing the rules that govern both industry and the regulator itself, although he did not commit to doing so.

But even those with lengthy industry experience say it is going to be difficult for either Alberta or the pipeline industry to sway a public that has seen a litany of spills sully rivers, muskeg, urban areas and farmer’s fields across the continent in the past two years.

“The Alberta government is five years behind announcing a big review of their pipeline safety,” said Richard Ballantyne, the former president of Trans Mountain Pipe Line and past chair of the Canadian Energy Pipeline Association. “I don't think the money is being spent on corrosion and fixing issues with coatings,” he said.

And undoing the recent record of spills will be tough, he said. “They have to stop having incidents, and that’s going to take a number of years.”

Environmental groups also criticized a review that will see the resources conservation board lead an investigation of itself. But those who work to keep pipelines safe say the provincial regulator is doing a good job – as evidenced by a spill rate that has substantially declined in past decades – and Enbridge is making the right moves.

“The thicker wall is probably one of the most effective things that you can do in terms of increasing the structural integrity of the pipe,” said Jake Abes, the Canadian president for Det Norske Veritas, which does pipeline risk-management work. More steel helps safeguard a pipe against soil movement, damage from heavy equipment and corrosion.

Many first nations groups, however, have said they won’t be satisfied until Enbridge can offer a 100-per-cent assurance that there will be no spills in waters that have important cultural and economic value – an impossible hurdle for any industrial undertaking. Besides, they say, boosting pipeline standards does little to fix the likelihood of human error, such as the control room mistakes that caused a 17-hour delay in identifying the 2010 Enbridge spill in Michigan, or the risks of oil spilling from tankers navigating West Coast waters.

“This is a desperate move by a project that’s dead,” said Art Sterritt, executive director at Coastal First Nations, an alliance of aboriginal groups deeply opposed to Gateway. “That's really what it boils down to.”


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