PREVIEW-Stakes high as small Canadian town votes on Enbridge pipeline

by Reuters
Friday, 11 April 2014 21:42 GMT

By Julie Gordon

KITIMAT, British Columbia, April 11 (Reuters) - A small Canadian town's vote on whether to back Enbridge Inc's proposed Northern Gateway oil pipeline could have a far greater impact on the country's energy industry - and future economic health - than its advisory status might suggest.

Residents of the northern British Columbia town of Kitimat head to the polls on Saturday in a nonbinding vote on the controversial project that is likely to influence the federal government's decision on whether to approve its construction.

The Pacific Coast town is sharply divided over the proposed C$7.9 billion ($7.21 billion) pipeline, which would carry crude from Alberta's oil sands to Kitimat's port, where it would be loaded onto supertankers and shipped to energy hungry Asia.

Supporters say the pipeline will bring jobs and growth to the town of about 10,000. Those opposed say the benefits are not worth the risk of an oil spill along British Columbia's pristine coast.

As with the proposed Keystone XL pipeline to the United States, environmentalists also fear that Northern Gateway will hasten the development of Canada's oil sands and exacerbate climate change.

While Saturday's vote is symbolic, both sides are well aware of the sway the decision could hold, with Enbridge's bright blue "vote yes" signs and the opposition's handmade white "vote no" signs dotting lawns and public areas throughout the town.

"People either want it or they don't want it. It's democracy, you get a vote," said Kitimat Mayor Joanne Monaghan, who has not taken a public position on the project, but says she supports any new jobs in her community.

At stake is the first major conduit for getting Alberta's landlocked oil to high-paying markets in Asia, allowing producers to sidestep the over-supplied U.S. Midwest, where Canadian crudes sell at a steep discount to benchmark prices.

Canada's Conservative government has long supported Northern Gateway, citing its potential benefits for the broad economy, though it has said it will not approve any pipeline project unless it safe for Canadians and the environment.

It is expected to rule on the project in mid-June, roughly six months after regulators recommended that it be approved, provided Enbridge can meet 209 environmental, technical and socioeconomic conditions.

Northern Gateway has met with very vocal opposition from environmental groups and from many of the aboriginal groups, known as First Nations, that live along its route. A positive vote in Kitimat, however, would show that there is support for the pipeline in the community that would be most affected by it.

"If they vote for the pipeline, that would be something," said Steven Paget, an energy analyst at FirstEnergy Capital in Calgary. "Then Enbridge has a tool to promote the pipeline."

By contrast, an overwhelming "no" vote could have a negative impact on the federal decision. Indeed, it would be politically difficult for the government to push through the project if both the First Nations and the local community reject it.

That is the outcome that grassroots activists behind the locally based Douglas Channel Watch hope for.

"If there's an overwhelming 'no' vote it will be an embarrassment to Enbridge and also a real message for Ottawa that they need to rethink their priorities," said Murray Minchin, spokesman for the Douglas Channel Watch.

Minchin said the group has knocked on more than 2,000 doors in Kitimat so far and that his sense is that most people plan to vote against the proposed pipeline.

"We don't trust Enbridge to do that great of a job considering their past history of spills," he said, referring to a 2010 incident in which an Enbridge pipeline ruptured and spilled more than 3 million liters of oil into Michigan's Kalamazoo River.

Enbridge has repeatedly said the 1,177-kilometer (731-mile) Northern Gateway pipeline, which would extend from Edmonton, Alberta, to Kitimat's deepwater port, will adhere to the highest safety standards to ensure environmental and community protection.

Minchin's group has also accused Enbridge of having an unfair advantage in the plebiscite as there were no spending limits and the company invested heavily in glossy lawn and highway signs, newspaper advertisements and radio spots.

Enbridge said its advertising spending has not been "significant" and promised to release details after the vote. The company did bring in about a dozen employees to knock on doors and answer questions at various community events.

"The plebiscite has really been an opportunity to share information with residents and answer the questions they have," said Donny van Dyk, manager of coastal aboriginal and community relations at Enbridge.

Van Dyk said response has been good in the community, with many people inquiring about job and training opportunities. He added that regardless of the outcome, the company will continue to work on meeting the conditions put forth by regulators ahead of the federal decision.

"We're committed to being in Kitimat regardless of the vote outcome and we're committed to working with the community and the residents," van Dyk said.

($1=$1.09 Canadian) (Editing by Jeffrey Hodgson; and Peter Galloway)

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