VANCOUVER/CALGARY, April 14 Opponents of Canada's Northern Gateway pipeline, bolstered by a coastal town's vote against the project, said on Monday they will now push harder for a provincial referendum they hope would kill Enbridge Inc's plan to move oil sands crude to Asian markets.
Residents of Kitimat, located in British Columbia's remote northwest, voted against the proposed project on Saturday, with 58.4 percent of residents opposed in the non-binding poll. The small town is where the terminal facilities for the C$7.9 billion ($7.21 billion) pipeline would be built.
The victory has fueled calls for a vote to determine if there is public support in the rest of the West Coast province of British Columbia, which would host more than half of the pipeline and all the marine transport facilities.
"This is a turning point in Enbridge's campaign to buy social license," said Kai Nagata, energy & democracy director at the Dogwood Initiative, an environmental group campaigning for a provincial vote on Northern Gateway.
The group hopes to use a so-called citizen's initiative, legislation last used to launch a British Columbia-wide vote that succeeded in getting rid of an unpopular sales tax.
Saturday's vote in Kitimat came after a month of divisive campaigning by both sides. Supporters pointed to the jobs and tax revenue that would be generated, while opponents cited their fears of an oil spill.
As with TransCanada Corp's proposed Keystone XL pipeline to the United States, environmentalists also fear that Northern Gateway will hasten the development of Canada's oil sands and exacerbate climate change.
The line would be Canada's first major export route to the oil-hungry economies of Asia. It's backed by Canada's energy industry, which currently sells most of its oil to U.S. buyers at a steep discount to benchmark prices.
But numerous recent polls have found that more people in British Columbia oppose the project than support it, although support is increasing.
And Enbridge has also faced strong opposition from many aboriginal communities, who are concerned about the impact the project will have on British Columbia's pristine northern realm.
Still, the company said on Monday it is unfazed by the plebiscite result and would keep trying to win public support.
"We will be continuing on our original plan, which is to continue to engage with the district of Kitimat as well as with other communities in British Columbia as well as Alberta," Janet Holder, Enbridge's executive vice-president, western access, said in an interview.
"It has always been our plan to continually ... travel around the communities, talk to the communities, provide them opportunities to ask questions, provide the opportunity to express concerns."
For now, the future of the 1,177-kilometer (731-mile)pipeline is in the hands of the Canadian government, which has jurisdiction over the project.
Regulators in December recommended it be approved, contingent on Enbridge meeting 209 technical, environmental and social conditions. The government, which has the final say, is expected to make its decision in June.
Prime Minister Stephen Harper's ruling Conservatives have been largely supportive of Northern Gateway, but reiterated on Monday they will only approve projects if they are safe for Canadians and the environment.
Despite a supportive federal government, investors are not banking on the project just yet.
BMO Capital Markets analyst Carl Kirst thinks Northern Gateway will eventually be approved, yet he does not include the project in his valuation of Enbridge.
Even if approved, he expects the proposed pipeline will face lengthy legal battles from opponents and noted the company must still address the conditions outlined by regulators.
"In a couple of years, if this project is actually moving forward, once perhaps they get to a point where ground is actually broken on it, then I think we'd start to reassess what the long-term, incremental value would be," said Kirst.
"From our standpoint ... We need a little more clarity and certainty before we move that valuation into our targets."
In Kitimat, school teacher and Douglas Channel Watch volunteer Patricia Lange was cheered by the vote, but knows first-hand that the potential of jobs and tax revenues will be a tough lure to beat.
Northern Gateway is expected to create 180 direct, permanent jobs in Kitimat, in addition to some 3,000 construction jobs along the right of way. Total municipal, provincial and federal tax revenues over 30 years are projected to be about C$2.6 billion.
"It's a lot of money and it would be hard for the government to ignore that," said Lange. "But that might not be the will of the people."
"There's no doubt to me that communities throughout British Columbia are going to stand up. I think there will be protests - that idea of a wall being formed."