Alberta Moves Closer to Pipeline With B.C. on Agreement

Alberta and British Columbia moved closer to an agreement allowing Enbridge Inc. (ENB) to build a pipeline that would bring bitumen to Canada’s Pacific coast from the oil sands.

The two signed a framework deal that sets the ground rules for development of pipeline projects in the nation’s westernmost province. Oil royalties are “not on the table,” according to British Columbia Premier Christy Clark.

Alberta and British Columbia are discussing ways to share the financial benefits from Enbridge’s Northern Gateway oil-sands pipeline project. The Calgary-based company, Canada’s largest oil-pipeline operator, is proposing to build a 1,177-kilometer (732-mile) conduit through British Columbia from Alberta to transport bitumen to Asian customers.

“We don’t know what form the economic benefits will take,” Clark said.

Officials from both provinces continue to work on the issue, she said. British Columbia wants to protect royalties, which might be worth as much as C$1 trillion ($957 billion) from liquefied natural gas projects in the coming decades, Clark said.

Alberta is seeking to diversify the market for its bitumen, which requires about C$20 billion in annual investment and risks remaining land-locked amid rising production.

‘Social License’

Alberta agreed today to five conditions set out by British Columbia to protect the province’s environment and economy. Winning the “social license” to operate new oil pipelines in the province includes spill response on the Pacific coast and sharing benefits with local communities and aboriginal groups, Clark said.

“These are five things that matter to British Columbia and to Alberta,” Alberta Premier Alison Redford said today at a conference organized by the Vancouver Board of Trade in the city. “We’re moving ahead on all five of those points.”

Enbridge’s Northern Gateway has faced opposition from aboriginal and environmental groups along its proposed route through central British Columbia.

The province said in May it can’t support Northern Gateway because the plans fail to address the risk of spills on land or sea. Canada’s National Energy Board regulator has until the end of the year to make a recommendation on the project.

To contact the reporters on this story: Jeremy van Loon in Calgary at jvanloon@bloomberg.net; Christopher Donville in Vancouver at cjdonville@bloomberg.net

To contact the editors responsible for this story: Chris Fournier at cfournier3@bloomberg.net; Simon Casey at scasey4@bloomberg.net; Chris Wellisz at cwellisz@bloomberg.net

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