UPDATE 2-Canada approves Enbridge pipeline to West Coast

Tue Jun 17, 2014 8:11pm EDT

(Adds company CEO comment, background)

By Julie Gordon and Randall Palmer

VANCOUVER/OTTAWA, June 17 (Reuters) - The Canadian government approved the construction of Enbridge Inc's Northern Gateway pipeline on Tuesday, setting the stage for a barrage of lawsuits and demonstrations by environmental and aboriginal groups opposed to the project.

Natural Resources Minister Greg Rickford announced the decision in a statement that was widely expected. He said approval of the proposed pipeline, which would link Alberta's oil sands with a Pacific port, was contingent on Enbridge meeting more than 200 conditions set out by a regulatory panel.

"We're pleased with the decision and we think it's an important milestone for Gateway and Canada, but we still have some work to do," Enbridge Chief Executive Officer Al Monaco told reporters.

Leaders of the two main opposition parties in the House of Commons condemned the decision and vowed to stop the project if victorious in next year's federal elections.

Monaco said it would "take about a year, maybe a bit longer" to meet the conditions required before construction could begin.

Much of that work is around gaining support from aboriginals living along the 1,177-km (731-mile) route, which will cross hundreds of kilometers of wilderness and mountain ranges, mostly in the Pacific province of British Columbia. Some are fiercely opposed to the line crossing their territories.

The company says it has the support of 26 aboriginal communities. Of those, the majority are in Alberta. Just 11 of 27 eligible communities in British Columbia have signed on.

Enbridge "clearly has more work to do in order to fulfill the public commitment it has made to engage with aboriginal groups and local communities along the route," Rickford said in a statement.

Native leaders expressed disappointment over the decision, pledging to fight to stop the project, while environmental groups prepared to file lawsuits and promised to stage protests and blockades if needed.

"This pipeline will never be built," Nikki Skuce, senior energy campaigner for environmental group ForestEthics, said in a statement. "Instead of seeing shovels in the ground, we'll be seeing action in the courts, at the B.C. legislature, on the land and at the ballot box in 2015."

Indeed, the leaders of Canada's two main opposition parties, the New Democratic Party and Liberal Party, both pledged to block the project if either takes power after the October 2015 election, potentially through the use of legislation.

"If I win the honor of serving as prime minister, Northern Gateway will not happen," said Liberal leader Justin Trudeau. NDP leader Thomas Mulcair talked about making it illegal to use supertankers in the channel used to reach the Kitimat terminal.

On the provincial level, Alberta's government heralded the decision, which would open new markets for Canadian oil, while British Columbia reaffirmed its opposition to the project.

"Our position remains unchanged. It is 'no,'" B.C. Environment Minister Mary Polak said. "We understand the economic benefits that the Northern Gateway project may bring, but it will not be at the cost of our environment."

British Columbia has said it will not support any oil pipeline within its borders unless five conditions pertaining to environmental safeguards, consultation and fiscal benefits are met. The company has so far met just one of those five conditions, Polak said.

Northern Gateway would carry diluted bitumen extracted from Alberta's oil sands to a deepwater port in Kitimat in northwest British Columbia, where it would be loaded on supertankers and shipped to Asia.

Like the proposed Keystone XL pipeline to the United States, Northern Gateway is loathed by environmentalists who fear it will hasten the development of Canada's oil sands and exacerbate climate change. They also worry about the risk of a spill along the pipeline route or near the coastline.

Canada's ruling Conservatives strongly support Keystone and Northern Gateway as crucial for the development of the oil sands and in turn Canada's economic future. The line to the Pacific would allow Canadian oil producers, now dependant on U.S. markets, to tap energy-hungry Asian markets.

In December, Canadian regulators recommended the government to approve the 525,000 barrel-per-day project after concluding that it would pose little risk to the environment if the company complied with the conditions it spelled out. ($1 = 1.0946 Canadian Dollars) (Additional reporting by Nicole Mordant in Vancouver and Scott Haggett in Calgary; Editing by Frank McGurty, Grant McCool and Ken Wills)

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