Enbridge Inc. (ENB) Chief Executive Officer Pat Daniel is counting on Canadians’ support for ending the nation’s reliance on U.S. markets to boost the company’s chances of building its proposed Northern Gateway pipeline.
“A recent poll shows that a vast majority of Canadians believe we need to broaden out our market dependence,” Daniel said at the company’s annual shareholder meeting in Toronto today. The pipeline, which would transport crude from Alberta’s oil-sands projects to the Pacific Coast, is necessary to expand access for Canada’s most valuable exports to new markets, including Asia, he said.
A majority of Canadians believe developing Alberta’s oil sands is more positive than negative, according to a May 3 Ipsos Reid poll conducted on behalf of the Canadian Chamber of Commerce. Three-quarters of those surveyed agree it’s important for Canada to build the infrastructure needed to reduce its dependency on the U.S. for hydrocarbon exports. The poll has a margin of error of 2.2 percentage points.
Northern Gateway is opposed by some aboriginal groups and environmentalists who say the pipeline threatens salmon streams, forests and coastal waters.
NEI Investments, a Toronto-based fund which holds 148,000 Enbridge shares, proposed a motion at the shareholder meeting that the company provide details on how the board of directors assessed the risks associated with the pipeline, Jamie Bonham, a senior analyst at the fund, said today.
“It seems likely that this opposition could result in lengthy litigation,” he told shareholders today. “Ultimately the strength of this opposition risks long-term damage to the company.”
Enbridge has met with 17,000 people over the past few years in the area affected by the proposed pipeline, Daniel, who is also chairman, said today. The Calgary-based company has almost 50 percent support from the aboriginal groups living along the 1,177-kilometer (730-mile) pipeline route, Daniel said. The company plans to end its offer to share revenue and ownership of the pipeline with native groups at the end of the month.
Opponents say momentum is in their favor. The Yinka-Dene Alliance, a group of aboriginal communities in central British Columbia near the proposed pipeline, traveled to Toronto and gathered outside the meeting to chant “no means no.”
“Pat Daniel needs to be aware that we have gained support” for opposing the pipeline, said Jackie Thomas, the elected chief of the Saikuz First Nation, in an interview today. The Yinka-Dene Alliance has a petition with 15,000 signatures of people opposing the pipeline, she said.
Exxon Valdez Spill
The proposed pipeline will terminate in the town of Kitimat, on the Pacific coast of British Columbia. The area is home to killer whales, salmon streams and farms and other marine life. An oil spill on the coast would involve a complicated clean up, reminiscent of the Exxon Valdez disaster on the Alaskan coast in 1989, according to the Pembina Institute, a Canadian environmental research organization.
Enbridge reported first-quarter net income fell to C$264 million, or 35 cents a share, from C$364 million, or 49 cents a share, a year earlier, mostly from C$110 million in unrealized derivative losses. Excluding the derivative losses, per-share profit was two cents higher than the 48-cent average of 18 analysts’ estimates compiled by Bloomberg.
The shares rose 0.2 percent to C$39.77 at the close in Toronto.
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