Keystone denial a threat to Gateway line: Enbridge

Thu Jan 19, 2012 3:50pm EST
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By Scott Haggett

CALGARY, Alberta (Reuters) - The head of pipeline company Enbridge Inc (ENB.TO: Quote) said on Wednesday that the Obama administration's rejection of the Keystone XL line may be a threat to other new pipeline projects, including its planned C$5.5. billion ($5.45 billion) Northern Gateway line.

Chief Executive Pat Daniel conceded that Enbridge, whose lines carry the bulk of Canada's crude exports to the United States, may see some short term benefit from the U.S. decision on Wednesday to deny TransCanada Corp's (TRP.TO: Quote) Keystone XL oil line a presidential permit allowing construction.

However he told an investment conference that Enbridge, Canada's No. 2 pipeline company, supports TransCanada's project and now worries that the coalition of environmental groups that opposed Keystone XL will now take aim at Enbridge's Northern Gateway pipeline, which would take oil sands crude from Alberta to a deepwater port in British Columbia.

"To have (Keystone XL) turned down for the reasons being indicated is horrible for our industry and it's a horrible precedent," Daniel said at an investment conference. "It's bad in terms of future approvals. It only will embolden those opposed to Gateway and other new project developments."

The Obama administration declined to authorize construction of the $7 billion Alberta-to-Texas Keystone XL line because there was not enough time to review an alternative route that would avoid a sensitive aquifer in Nebraska, within a 60-day window set by Congress.

However others said a series of widespread protests by environmental groups convinced the administration it would be politically unwise to approve the project.

The Northern Gateway project faces similar opposition from environmental and native groups concerned that the line, and the extra tanker traffic it generates, would threaten the pristine wilderness of northern British Columbia.

More than 4,000 people have registered to speak at regulatory hearings that began earlier this month. The process was extended late last year by about 12 months to the end of 2013 to accommodate everyone.   Continued...