Enbridge Inc. (ENB), Canada’s largest oil pipeline operator, is spending more time seeking public support for new conduits than regulatory approval as opponents of fossil fuel development try to block new routes to market, Chief Executive Officer Al Monaco said.
“It’s not so much about getting the regulatory authority, it’s all about ensuring that the public is comfortable,” Monaco said at the Bloomberg Canada Economic Summit in Toronto today. “That’s the price of entry and that’s where we have to focus our energy more.”
Enbridge has proposed the C$6 billion ($5.82 billion) Northern Gateway pipeline to carry oil-sands crude from Alberta to Canada’s Pacific Coast. Environmental and some aboriginal groups oppose the 1,177-kilometer (731 mile) project because of the risk of spills.
New conduits are needed from Canada to correct a “huge disconnect” in North American oil prices as supply exceeds pipeline capacity, Monaco said. Constraints on existing lines have caused Canadian heavy oil prices to trade at a discount to West Texas Intermediate, the U.S benchmark.
Western Canada Select oil was $21 a barrel less than WTI today, according to data compiled by Bloomberg.
The price gap amounts to “C$25 billion a year of value destruction” for the Canadian economy, Frank McKenna, deputy chairman of Toronto-Dominion Bank, said during the panel discussion with Monaco.
Enbridge has about C$30 billion of projects in design and construction to carry crude to new markets, Monaco said. The company owns and operates Canada’s largest oil pipeline network, spanning 24,738 kilometers, according to its website.
Canada’s National Energy Board regulator has until the end of the year to make a recommendation on Gateway. Monaco said he’s “heartened” a decision will come this year.