Is Northern Gateway’s price-tag set to balloon by $500 million?

CALGARY: Enbridge Inc. is proposing to spend up to $500 million to change the design of its Northern Gateway pipeline in a bid to address safety concerns of aboriginal groups and others.

The project, which had a $5.5-billion pricetag before last week’s announcement, has been the focus of intense debate among local communities, environmental groups and politicians.

Enbridge made its announcement on the same day the Alberta government—a staunch supporter of Northern Gateway—announced an independent pipeline safety review following three leaks in the province this year.

Critics of Northern Gateway, a paired system of pipelines between the oilsands in northern Alberta and a terminal near Kitimat, BC, have said they’re worried about the potential environmental risks it poses within the BC Interior and in coastal waters.

The Calgary-based company said Friday it had listened to the feedback from public hearings and was prepared to address concerns with a combination of improved technology and monitoring.

“We had already planned to build a state-of-the-art project using the most advanced technology, safety measures and procedures in the industry,” said Janet Holder, executive vice-president for western access.

“These initiatives announced today make what we believe is a very safe project even safer.”

Among other things, Enbridge says its new design would increase the thickness of pipe walls at river crossings. Enbridge says it would also increase the number of inspections it does by at least 50% and staff pumping stations in remote locations around the clock.

“And after years of consultation with stakeholders and after personally attending many of the regulatory hearings for Northern Gateway, it has become clear to me that we have to do everything we can to ensure confidence in the project,” Holder told reporters on a conference call.

The executive director of BC Coastal First Nations, a group that represents aboriginals on the province’s central and northern coasts, said the announcement does nothing to alleviate its major concern—oil tankers.

“These tankers are still going to be going through the fourth most dangerous body of water in the world, and they still have the potential to wipe out everything on the cost of British Columbia with absolutely no benefits going to anybody in BC,” Art Sterritt said.

Holder indicated Enbridge’s plans for the marine terminal and tankers will remain unchanged.

“We have already raised the bar, I would say, in that our standards for the terminal site and the safety of the tankers off the West Coast of British Columbia far exceeds any standards in Canada and actually exceeds any standards within the world,” she said.

In Calgary, meanwhile, Alberta Energy Minister Ken Hughes announced the province would tap an independent third party to work with the Energy Resources Conservation Board in reviewing pipeline integrity, the safety of pipe that crosses waterways and response to spills.

“The scrutiny is at a level we have never seen before. I welcome that scrutiny and I believe our pipeline companies do so as well,” Hughes told a news conference.

Hughes held meetings with three industry groups: the Canadian Energy Pipeline Association, the Canadian Association of Petroleum Producers and the Small Explorers and Producers Association of Canada _ before announcing the review.

Environmental groups and others outside of industry did not take part.

“I specifically wanted to meet with the regulator and with the industry—the people who are closest to the file who actually understand this in most intimate detail,” said Hughes.

The scope of the review has not yet been determined. Hughes said it will likely take months, not years, to complete.