July 20, 2012 / 5:00 PM / in 5 years

Enbridge pledges new Northern Gateway safety measures

CALGARY, Alberta (Reuters) - Enbridge Inc (ENB.TO) moved to assuage critics of its controversial C$5.5 billion ($5.4 billion) Northern Gateway pipeline plan on Friday by adding safety measures that will increase the project’s cost by as much as C$500 million.

The measures include: increasing the thickness of the pipeline’s walls; adding thicker pipe at water crossings; increasing the number of shut-off valves; and installing leak detection systems, the company said.

The Northern Gateway pipeline would ship 525,000 barrels of oil a day derived from the Alberta tar sands to Kitimat, British Columbia on Canada’s Pacific Coast, where it would be loaded onto tankers and taken to markets in Asia and California. A second line would take 193,000 bpd ultra-light crude and natural-gas liquids into Alberta.

The new steps are meant to placate environmental groups and aboriginal communities along the line’s route who are concerned that an oil spill would threaten fish and wildlife in northern British Columbia and on the Pacific Coast.

“It has become clear - we have to do everything we can to ensure confidence in the project,” Janet Holder, Enbridge’s executive vice-president, western access, said in a statement. “We have often been asked if we could guarantee that we would never have a significant pipeline failure over the years on Northern Gateway. These initiatives will put the project closer than any pipeline system in the world to providing that guarantee.”

Along with thicker walls, Enbridge promises to increase the frequency of in-line inspections by 50 percent above current standards and to have full-time staff at remote pumping stations.

The company said the measures will cost between C$400 million and C$500 million to implement.

The announcement comes a week after the U.S. National Transportation Safety Board denounced the company’s handling of a 2010 pipeline rupture in Michigan, with the board’s chairman characterizing the company’s employees as “Keystone Kops” as they failed to stop the flow of oil on the line for 17 hours following the initial spill.

Pat Daniel, Enbridge’s chief executive, has acknowledged that the NTSB comments will make it more difficult to convince the project’s opponents that the Northern Gateway will be safe though the company has implemented new procedures following the disaster.

Indeed, the additional measures for the pipeline may do little to mollify its opponents, who look to the NTSB’s comments as an indication that the line will not be operate safely.

“Adding a few extra inches to their pipeline thickness is going to do little to ease the concerns here,” Nikki Skuce, a senior energy campaigner with ForestEthicsAdvocacy, said in an email. “... As the NTSB report shows, Enbridge’s culture of ineptitude and dysfunction is hardly any comfort and hasn’t appeared to have changed.”

Enbridge shares were down 7 Canadian cents at C$41.18 at midafternoon on Friday on the Toronto Stock Exchange.

($1=$1.01 Canadian)

Reporting by Scott Haggett; Editing by Peter Galloway and Leslie Gevirtz

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