The Root Word: ForestEthics Blog

Yesterday, October 3rd, was Enbridge’s Investor Days – a time when the company management promotes all their projects and expected growth, while glossing over any risks or past errors, to analysts in Toronto. Investor Days hit New York today. Enbridge is the proponent of Northern Gateway pipelines and tanker project, a 1,170-kilometre (730 mile) tar sands pipeline to stretch from Alberta to British Columbia’s renowned coast. To counter some of the spin, we decided to update our 2010 Enbridge investor report and include the current political and reputation risks to the company.

Northern Gateway: a politically risky investment in British Columbia

A couple of years ago, we were close to achieving a federally legislated tanker ban. Today, the political risk associated with Northern Gateway lies more with British Columbia. At last year’s Enbridge Annual General Meeting, then CEO Pat Daniel admitted they foresaw risks around BC politics, given lack of support from the BC Liberals and outright opposition from the BC NDP. Elections in the province will happen in May 2013. BC has several tools at their disposal to create long-term delays and costs to Enbridge, if they decide to push forward with Northern Gateway despite opposition.

Municipalities, churches, unions, teachers, and the majority of British Columbians, now oppose Northern Gateway pipelines and tankers. From the proposed port of Kitimat, BC, over 225 oil tankers would be introduced to dangerous waters, carrying the toxic product for export to US and Asian markets. 

First Nations legal risks have only increased with federal interferences in support of the project and a greater resolve to stop it. Over 100 First Nations signed the Save the Fraser Declaration, banning tar sands from being transported over the Fraser River watershed. Coastal First Nations have declared a crude oil tanker ban on the Northwest Coast.

Enbridge tries to gloss over serious mistakes, like 2010 Kalamazoo pipeline disaster

Enbridge is now brushing off any risks to analysts and investors, even touting how great they are by posting anonymous quotes regarding their oil spill clean-up efforts in Kalamazoo, Michigan on their website (see “Focus on Operations” report). The 2010 Kalamazoo river tar sands spill was the costliest onshore pipeline disaster in US history. Ironically, this misleading information from Enbridge was presented on the same day the US Environmental Protection Agency sent out a press release demanding that Enbridge return to clean-up more oil on the river. Talk about greenwash!

At least one Enbridge investor has done the right thing - the largest financial institution based in British Columbia, VanCity Credit Union, divested its shares from the energy giant in August. They divested because Enbridge no longer meets its Corporate Social Responsibility criteria. We hope more investors will do the same.