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The Canadian government announced on Thursday that it will hold itself to a two-month deadline for a yay or nay on the controversial Northern Gateway and Line 3 oil pipelines—two projects that would alleviate pipeline capacity issues currently choking Canadian oil companies.
Another pipeline project that requires Canadian Prime Minister Justin Trudeau’s approval is Kinder Morgan’s Trans Mountain pipeline extension, for which a decision is due mid-December. Unfortunately for Enbridge, news broke earlier this month that it would likely be one project or another to get approved—not both, as people familiar with Trudeau’s plans said that it was his goal to approve at least one new oil pipeline project during his first term, and that the Kinder Morgan project was favored. The idea was that Trudeau wanted to reject some and approve some in order to restore confidence in newer regulatory rules and prop up Canada’s troubled economy.
“Given the complexity of the proposed Northern Gateway Pipelines project, this extension provides the Government with additional time to consider next steps in response to the Federal Court of Appeal decision,” Alexandre Deslongchamps, a spokesman for Carr, said on Thursday.
The Northern Gateway project is estimated at US$6 billion, and had already been approved by the previous government, only to have its permits invalidated earlier this year after a court found that the government failed to consult the country’s indigenous people—a scenario that is all too familiar in the U.S. with the Dakota Access Pipeline project that has stalled after relentless indigenous protests.
Seeing the writing on the wall, Enbridge has already made plans to pick up its marbles and go home, and has a plan to spend $28 billion to take over Spectra Energy. By design, the purchase would help Enbridge wean itself away from Canada and toward a more accommodating market in the U.S.—but given the DAPL controversy, we’re not sure they’ll find it there either.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for US-based Divergente LLC consulting firm, and a member of the Creative Professionals Networking Group.