* Opponent's lawyer says Enbridge uses rosy forecast
* Study calls for C$3.36 bln in benefits by 2020
* Enbridge says production outlook difference not relevant
By Jeffrey Jones
CALGARY, Alberta, Sept 18 The financial gains
Enbridge Inc forecasts will flow from its proposed
Northern Gateway pipeline to Canada's West Coast are based on
rosier oil production predictions than the company shares with
its own investors and analysts, a lawyer for a native group
opposed to the project said on Tuesday.
Hana Boye, attorney for the Haisla First Nation, whose lands
encompass the end-point of the C$6 billion ($6.2
billion)pipeline's route, told a public hearing that Enbridge's
calculation of benefits to the oil industry are based on the
Canadian Association of Petroleum Producers' (CAPP) output
That study, prepared for Enbridge by Dallas-based Muse
Stancil, projected a C$3.36 billion benefit to the Canadian oil
sector in 2020, a year and a half after the planned startup.
However, Enbridge's in-house outlook lags that by about
500,000 barrels a day by 2020, Boye said, citing a company
executive's presentation to investors in 2011. She asked
Northern Gateway President John Carruthers to provide all of the
assumptions used in that forecast.
"That creates a material difference in terms of the benefits
affected by the supply," Boye said during a sometimes testy
exchange at the proceedings before a federal Joint Review Panel
in Edmonton, Alberta.
The current phase of the hearings into the contentious
1,177-km (731-mile) Northern Gateway pipeline across the Rockies
are delving into financial aspects and economic benefits.
The Haisla are among several British Columbia native groups
that oppose the 525,000 barrel a day project, which the industry
hopes will open up new supply lines to Asia for oil
sands-derived crude from Alberta.
A big part of the projected benefit is a higher price for
all Western Canadian crude as a result of Northern Gateway
volumes being priced against higher-value oil in Asian markets
and not just discounted to North American supply, as is the case
During Enbridge's investor day in Toronto on Oct. 4, Steve
Wuori, head of the company's liquids pipelines division, said
the CAPP forecast, a much-quoted tally calling for 4.47 barrels
of western Canadian crude a day by 2020 was more "bullish" than
the company's own.
"I think they have a 5.2 percent growth rate for the Western
Canadian basin over this period of time to 2020. Our forecast is
a little more muted, 4.4 percent is what we are forecasting,"
Wuori said, according to a transcript of his presentation.
Members of Enbridge's witness panel said the discrepancy
would not mean a relevant difference to the benefits, as
forecasts change each year with developers adding or changing
plans for projects. In addition, the "uplift" to prices would
vary by grade of crude.
Carruthers disagreed with Boye that the 500,000-barrel-a-day
discrepancy in the forecast suggested that Enbridge did not
believe Northern Gateway is needed.
"Within our application we outline the forecast that we're
using to establish what the supply would be. There will be
fluctuations that change, our predictions will change over time
and even change if the project is approved and constructed," he
"Fundamentally the project is designed to access new, larger
foreign markets. There's very significant supply in the Western
Canadian basin, but prior to going into service that will be
validated by long-term shipping commitments by credit-worthy
Neil Earnest, vice-president of Muse Stancil, said he
believed the CAPP forecast to be credible, having used it in
analysis for several years.