Canada minister says Northern Gateway line can still go ahead

Thu Jan 3, 2013 12:32pm EST

* Oliver says it's possible to win over critics

* Regulatory approval could help sway opponents, he says

* Commentator urges Harper to convene pipeline summit

* Controversy spurs proposal for rail line to Alaska

OTTAWA, Jan 3 (Reuters) - Proponents of the planned Northern Gateway pipeline from Alberta's oil sands to Canada's West Coast can still carry the day even though the project has generated a wave of opposition, the country's natural resources minister said.

"I am still of the belief that we can get this done, on the assumption, of course, that it passes regulatory muster," Joe Oliver told Postmedia News in an interview published on Thursday.

"If the conclusion is this project can be safe for Canadians, safe for the environment ... that, I hope, will go a long way in respect at least to people who are kind of open-minded to the facts."

Both the federal and Alberta governments, as well as the oil industry, are keen for the C$6 billion Enbridge Inc pipeline to be built to enable the increasing supply of crude from the oil sands to satisfy thirsty Asian markets.

A glut of Albertan oil relative to current pipeline capacity has forced deep discounts that are taking a toll on provincial and federal coffers as well as oil company profits.

But the Liberal government of the province of British Columbia, the main opposition New Democratic Party, aboriginal groups and environmental groups have raised strong opposition to the 550,000 barrel-per-day (bpd) line.

It is currently undergoing an environmental review, which is to conclude at the end of the year. Oliver said Ottawa had much work to do to convince British Columbians of the value of the pipeline but said that if environmental concerns were allayed, the provincial government should not be opposed.

Ian MacDonald, editor of Macdonald-Laurier Institute's Inside Policy magazine, said in an op-ed piece on Thursday that Canadian Prime Minister Stephen Harper should convene a meeting of provincial premiers and aboriginal leaders to push for pipelines as part of a Canadian Energy Strategy.

The difficulties in getting approval for pipelines from Alberta have prompted a proposal to send oil by rail to the Valdez terminal on Alaska's southern coast, though studies show rail is proportionately more likely to record spillages and accidents.

The Alaska rail project is being promoted by Generating for Seven Generations, a group that advocates extensive collaboration with native groups. It says it could transport 1.5 million to 4 million barrels per day, far more than pipelines could handle.

Mike Deising, spokesman for Alberta Energy Minister Ken Hughes, said the province advocates for market diversification without endorsing one project over another.

"We support the need to get the product to market and work with other provinces and stakeholders to help ensure Canadians understand the benefits of our oil," he said.

Canada is also awaiting a verdict from U.S. President Barack Obama on whether to allow TransCanada Corp's Keystone XL pipeline into the United States. He rejected an initial application last year.