Big Loser: Enbridge

Enbridge bled credibility this year.


Martin Louie, a First Nations leader from Nadieh, B.C., speaks to first nation protesters and their supporters as they gather outside the Enbridge AGM during their continuing protest against proposed oil pipelines in Canada’s west coast, on Wednesday May 9, 2012. (Photo: Chris Young/CP)

For decades, Enbridge built the world’s largest network of oil and liquids pipelines without the public even noticing. In 2012, they finally paid attention—and it was bad news for the company. Controversy over the Northern Gateway project, the fallout from a massive oil spill in Michigan, and a poorly considered public relations campaign combined to drag the company’s reputation into the muck. Like crude oil gushing from a ruptured pipe, Enbridge bled credibility.

Even as the company’s stock price held steady, its reputation fell apart. As pipeline politics came to dominate the North American energy debate, uncertainty over TransCanada’s Keystone XL project gave new urgency to other efforts to expand Canada’s oil market, including Enbridge’s Northern Gateway project. Prime Minister Stephen Harper lent support to the 1,200-kilometre, $6-billion pipeline that would carry more than 500,000 barrels a day of crude oil from Edmonton through the Rockies to Kitimat, B.C., where it could be transported by tanker to markets in the U.S. and Asia, including China.

But as the project’s profile increased, Northern Gateway itself became a target for the same sort of hostility that befell Keystone. British Columbians rallied against a company increasingly viewed as an irresponsible intruder into the province’s fragile wilderness. Enbridge’s then-CEO, Patrick Daniel, lamented the company’s sudden disrepute. “We don’t like being in the public eye the way we are,” he told CBC News in August. Harper dismissed the noise as the work of American environmentalists. But he clearly underestimated the apprehension to Northern Gateway in British Columbia itself. So did Enbridge.

In the public arena, the company did little right. It ran the project out of Alberta and failed to properly engage those who would be affected by the development, including aboriginal communities, says Tex Enemark, a Vancouver public-policy consultant and former president of the Mining Association of British Columbia.

The company’s long history might have given it some goodwill among the public to help it push forward with Northern Gateway. But that disappeared in July when the U.S. National Transportation Safety Board admonished the company for its handling of a Michigan oil spill in 2010. The board called the incident a “complete breakdown of safety,” and likened Enbridge employees to “Keystone Kops.”

That judgment renewed conviction in British Columbia that Northern Gateway posed a threat to the province’s environment. The provincial NDP, which has a commanding lead in the polls in the run-up to a spring election campaign, has taken a hard line against Northern Gateway. Yet even if Northern Gateway is doomed, Enbridge stock has held up fairly well through 2012. “It’s actually been a very good business development year for the company,” says Paul Lechem, an analyst at CIBC World Markets. “The reality is that they have billions, if not tens of billions, in other projects under development that are equally or more important than Northern Gateway.” Still, solid finances won’t repair the company’s scarred reputation, nor can they restore Enbridge’s invaluable low profile.

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10 comments on “Big Loser: Enbridge

  1. This company has such a bad reputation and it only gets worse, try and find a British Columbian who is not connected with the oil and gas industry or is just uninformed and you will see that Northern Gateway is dead in the water. The airwaves are constantly barraging us with cute ads how this poorly placed idea will be good for all of us….The more the ads run the more British Columbians want nothing to do with this. Unless harper sends in the army it will not happen

    • Well, *I* am not connected with the oil and gas industry but still FULLY support this pipeline. Enbridge employs thousands of people and contributes greatly to the Canadian economy. It’s essential, though, that any new pipeline development include some kind of contingency arrangement that would NOT involve any public cost in the event of leakage. Admittedly, eventually, leaks DO occur. Similarly, airplanes crash but that doesn’t stop 99% of people from flying, does it? Attempting to stop pipeline building is equivalent to the Luddites, back in the 19trh century, trashing factories.

      • Pipelines are the safest way to deliver oil and natural gas, the reason most don’t support the Northern Gateway is WHERE it’s located. There are already pipelines traversing BC to Vancouver in places without the environmental threats…Two more earthquakes this week in the region. Why export crude anyway….Build refineries in Alberta and ship the finished product, keep the profit, supply jobs and if a spill was to occur they are much easier to clean up than crude. As ridiculous as shipping raw logs to Asia, quick profit and no jobs in Canada.

      • China is going to be the major factor regarding the pipeline..I am sorry, but to date they still don’t have a great track record in either human rights or environment concerns…Do you honestly believe that when we lose our fishing, hunting, tourism, and for the people to lose their food sources, that China is going to compensate.? Do you truly believe in your heart that when all the wildlife starves to death because the eco system is destroyed that anyone is going to replace it? Do you really believe an oil tanker will never have an accident amongst all those narrow channels?…Is the legacy you are leaving for your children and grandchildren going to be in picture books and stories only of how “this is how it used to be”…Is it worth the 500 hundreds jobs that this will create… Oh and by the way…to build the pipeline… China will be bringing in their own people for those few years….it’s already legislated…:)….I understand the reference to the industrial revolution. and we do need a major change…How about putting on our thinking caps and coming up with more lucrative, sustainable resources….That would be an awesome revolution, one to be proud of….And it has to happen at some point anyway…The reason we are even processing the bottom sludge of the oil industry… we are going to run out of oil…It is not an endless resource…Why run the risk of destroying what could be our only life supporting resources, just to make someone else even richer for a few more years….Okay…I am done now…

      • Not having a real argument you resort to calling names? Or worse yet calling name that don’t really fit? Pipelines are old technology that seem to have an on-going record of failure. Using your argument, pipelines burst and tankers crash but that doesn’t stop the flow of oil. A 99% success rate would be catastrophic for rural communities and wilderness environments.

      • This statement resonates: “some kind of contingency that would NOT involve any public cost”. History shows that this is not the case. Enbridge has NO financial responsibility for anything occurs on the coast . If an accident happens, we will be left with an environmental catastrophe and an effort to sue an overseas shipping company. The risk is too great in this place.

        When an airplane crashes, the only people who die are on board.. Weak example. If a single tanker breaks apart on the rocks, BC loses everything- a coastal economy, coastal communities, and a globally-recognized environmental treasure. All we have to do is look at the places where other tankers had accidents, and see that all the oil doesn’t get cleaned up. THe whales don’t come back and the salmon streams fail. All we need to do is put this pipeline somewhere else.

        I too support pipelines and mitigation of risk, but the North Coast is a stupid place to do this, and Canada needs to recognize Northern Gateway is the WORST choice of all the options available to us.

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