Enbridge is a Canadian success story
Energy company with a long history in Alberta prides itself on environmental stewardship
By Gordon Hoekstra, Vancouver Sun
January 2, 2012
Enbridge, the company that wants to open access to Asia for the Alberta oilsands with the Northern Gateway pipeline, was born during the heady days following the discovery of oil at Leduc, Alta., in 1947.
Two years after the discovery, Interprovincial Pipe Line Co. was created by Imperial Oil to get Alberta oil to markets in Eastern Canada and the U.S.
By October 1950, Interprovincial Pipe Line (its name was changed in 1998 to Enbridge) had completed an 1,850-kilo-metre pipeline, opening up access to refineries in Saskatchewan, Ontario and Wisconsin.
Peter McKenzie-Brown, author of The Great Oil Age, said the $90-million Interprovincial Pipe Line was part of the historic boom that trans-formed the province's agricultural economy, and saw billions of dollars in investments pour into Alberta.
"When it was built it was the largest pipeline in the world. It was absolutely an amazing story," said McKenzie-Brown, a supporter of Enbridge's modern-day $5.5-billion Northern Gateway project.
After more than 60 years of history in Alberta, Enbridge is a well-known brand in the province. But that is not the case in British Columbia, where the proposed 1,172-kilome-tre Northern Gateway project plans to flow oil to B.C.'s north-west coast at Kitimat for export to Asia. As a result, explaining the project has been more difficult in B.C., particularly west of Prince George, where there is little knowledge of the oil sector or Enbridge, says company spokesman Paul Stan-way, a former Edmonton Sun publisher and communications director for former premier Ed Stelmach.
"What people need to under-stand is we've been doing this for 60 years, so we've dealt with these issues for a long time. We have a lot of experience. We hire world-class talent to help deal with the issues you face when you are building a pipe-line," said Stanway.
Since 1949, the company has grown to operate the longest oil and liquids pipeline system in the world, with a 13,500-kilo-metre network in Canada and the U.S. and 6,000 employees.
Patrick Daniel, its president and CEO, has headed the company for the past decade.
Daniel, 65, was recently named Canada's 2011 chief executive of the year by Caldwell Partners executive search firm. The firm also ranks among Canada's top employers.
Under Daniel, who earned $8 million in 2010 in salary, bonuses, stock options and other compensation, the company has ramped up its commitment to the environment.
Daniel rejects the stereotype that he is a successful corporate titan from the Alberta oil-patch who is insensitive to the environmental sensitivities of B.C.'s activist-oriented political culture. An avid outdoors-man, fly-fisherman and self-proclaimed environmentalist, he proudly boasts of owning a single car - a somewhat beat-up 2006 Toyota Prius that he is considering trading in for an all-electric Chevrolet Volt. In 2009, Enbridge said it would move toward a neutral environmental footprint by 2015 for new projects. That means for every tree the company removes in a right-of-way, it will plant another.
It also has promised to put an acre in a nature conservancy for every acre used in a right-of-way. And for every kilowatt of energy it consumes in its operations, it will generate a kilowatt of renewable energy.
Its latest green project is a $330-million investment for a 50-per-cent stake in a Quebec wind farm expected to be complete in 2013.
Enbridge is already Canada's largest natural gas distributor, but the company also is investing in natural gas extraction in northern B.C.
It recently increased its stake in Encana Corp.'s Cabin plant, which is destined to process the shale gas coming from the huge Horn River basin deposits west of Fort Nelson in the province's far northeast. Enbridge has been a solid company for its shareholders, consistently paying out a dividend for the past 58 years. The dividend has increased 10 per cent a year on average. The company posted a profit of nearly $1 billion in 2010. A widely held company that went public in 1953, more than two-thirds of its shares are owned by Canadians.
First Energy analyst Steve Paget said the company's financial performance - and particularly its ability to generate consistent earnings, growth and dividends - is without peer in Canada and the U.S.
"Enbridge has a level of discipline that is, I think, unsurpassed," said Paget.
That discipline is evident in its approach to the Northern Gateway project, noted Paget. Some companies would let a project like Northern Gate-way consume its energy and resources, but Enbridge continues to generate other investment opportunities, he said. While Enbridge has touted its safety record, it had a setback in July 2010 when a pipeline in Michigan spilled an estimated three million litres of oil. Some of the oil entered the Kalamazoo River. The spill coated wildlife such as geese, ducks, muskrats and turtles, as well as killing some fish. The cost of cleaning up the spill is more than $700 million.
Daniel received kudos for staying on the ground at the spill, talking to Michigan residents face-to-face, immediately accepting responsibility for the spill and saying the company "would make it right."
The company's environmental record has other blemishes.
In 2009, the company agreed to pay $1.1 million to settle claims it broke numerous Wisconsin state environmental laws during construction of its Southern Access pipeline in 2007 and 2008. In Alberta, Sherwood Fish and Game Association environment commit-tee chair Andy Boyd is willing to work with Enbridge on the Northern Gateway project.
Although, the association's 3,000 members have concerns about the pipeline's effect on wildlife habitat, they are not interested in stopping the project. It's a different reality when some of your members work in the oil sector, noted Boyd, saying they understand the apprehension of northern British Columbians who have little experience with the oil industry.
"Everything is a balancing act. ... If we are going to have any industrial presence in the backcountry, there's going to be some impacts. You just have to manage them as best as you can," said Boyd.
A nine-part series examining Enbridge's Northern Gateway project, the regulatory pro-cess surrounding the $5.5-bil-lion dual-pipeline design and those who have the most to gain or lose.
Dec. 31: An overview of the players, the issues and the public process.
Today: About Enbridge
Jan. 3: The impact on the first nations
Jan. 4: Environmentalists weigh in
Jan. 5: The business community
Jan. 6: The risk of pipeline spills
Jan. 7: The risk of tanker spills
Jan. 9: The politics of the project
Jan. 10: The view from Kitimat
Online: Read the entire series at vancouversun.com
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