Linking Canada’s World Class Resource
To New, Large and Growing Markets
June 2012
Getting to know Enbridge – Socially
Neutral Footprint
• A tree planted for every tree removed
• An acre conserved for every acre disturbed
• Generate a kilowatt of renewable energy for
every kilowatt used in operations
Renewable Energy Assets grown to $3 billion
GHG emissions reduced 21% from 1990 to 2010
Ride to Conquer Cancer
New Market Access Required to Earn Full Value
Energy Landscape
• Global Demand
Growth Up
• US Consumption
Down
• NA Supply Up
• Canada captive to US
Market
• Transportation
Bottlenecks
Northern Gateway – The Opportunity
Demand: *Through 2030 Asia Pacific region will experience compound annual growth of
nearly 2%, contrasted with the declining demand for oil in North America
Liquids (oil) Consumption INDEX (2010
=100)*
150
140
130
120
110
100
90
80
2010
2015
2020
North America
*2010 Crude Oil Consumption [million bpd]
North
America
Asia
Pacific
23
26
2025
Asia Pacific
2030
*2012 BP Energy Outlook
Price Signals For Infrastructure Development
Asia
$10
9
$88
$2
$75
Alberta
Light
WCS
$13
$89
Bakken
Light
$11 Brent
3
WTI
Light Crude
$96
Heavy Crude
$3
$11
3
LLS
Natural Gas
$10
Maya
2
Note: Pricing reflects 2012 year to date averages
6
Canada’s west coast is a competitive advantage
MERCATOR MAP
FROM KARO
6
The Project
Major Scope Items:
• 1,177 km crude oil and
condensate pipelines
• Marine terminal
• $6.4 billion project
• Targeting 2018 in-service
Pipe Design:
• 525,000 bpd crude oil
• 193,000 bpd condensate
Kitimat Terminal:
• 5 million barrels of storage
• 2 berths
• VLCC ready
7
Canadian National Benefits are Extensive
Direct, Indirect & Induced
• $312 billion in GDP uplift
over 34 years
• $98 billion in tax revenues
• 26,700 average annual
person years of employment
• $70 billion in labour income
8
Benefiting British Columbia
Construction Phase
– 35,000 person-years employment / $2.5B in labour income
– $165 million tax revenue to Government of BC
– $800 million in goods & services sourced in northern BC
Ongoing Operations
– 560 long-term jobs with $32M/year of labour-related income
– 165 long-term jobs and $17M/year in wages in Kitimat
– $1.2B in tax revenue for Government of BC over 30 years
Direct, Indirect plus Induced Benefits
‒ 140,000 person years employment (almost 7,700 jobs)
‒ $55B increase in GDP
‒ $9B Government Revenue for BC, +$5B in transfers = $14B
* Wright Mansell Report
7
Why Is It Controversial?
• Opposition to oil sands
• First oil pipeline to the
northern BC coast
• Unsettled BC Aboriginal
land claims and concerns
regarding impact on rights
and traditional way of life
• BC risk / reward
–Crossing world class rivers
–Previous tanker/offshore
spills = public concerns
• Detailed Design Approvals
10
Enbridge – Safety & Integrity
Objective is to be top quartile or best
• Integrity management
• Leak detection
• Incident response
• Worker occupational safety
• Public safety / environmental protection
Pipeline integrity
• 2,500 integrity digs
• 138 inline inspection tool runs
$2.9B integrity investment - since 2002
Priority One: Focus on Operations
Enbridge Pipeline Safety Track Record
Volume Spilled *
Frequency of Spills *
0.021
0.005
Enbridge
Barrels spilled per billion barrel-miles
Number per billion barrel-miles
10.5
Industry Average
10.7
Including
Marshall
4.6
Excluding
Marshall
5.9
Enbridge
Enbridge
Rest of Industry
Industry
Average
* Based on mandatory reports to PHMSA of accidents and infrastructure, 2002-2011.
• 12 billion barrels delivered since 2002 - 99.9996% successful delivery rate
• 2011 spill volume frequency was lowest on record
• Still not good enough – target is zero incidents
10
Improvements in Pipeline Safety
• Route and watercourse crossing selection
• Stringent steel chemistry & strength testing
• Fusion bond epoxy coated pipe used & inspected
• Every weld will be inspected during construction
• Cathodic protection prevents corrosion during operation
• Enhanced protection: thicker steel, shut-off valves
Control center
• Pipe hydrostatically tested
• 24/7 monitoring from control center
• Routine aerial reconnaissance of pipeline ROW
• Increased monitoring with in-line inspection tools
• Strategic emergency storage minimizes response time13
Existing Tanker Routes & Tanker Exclusion Zone
14
9
Measures exceed regulation & current practice
Regulatory Requirements:
Enhancements to Safety:
• Double hulled ships / multi
compartment
• BC pilots (plus redundant nav-aid
systems)
• Emergency preparedness and
response planning
• Tanker route simulation
• Improved navigational aids,
new radar
• Vetting of ships and crew
• Weather monitoring criteria for
ship transit
• Reduced vessel speeds in
marine channels
• Tug escort operations (tethered
towing)
• Closed loading and
containment booms
• TERMPOL review completed
• Whale monitoring vessel
15
Broad Aboriginal & Community Consultation
16
Aboriginal benefits are unprecedented
• Environmental safeguards paramount
• Consultation Capacity Funded
• Equity ownership
– 10%
– Structured to access credit
• Procurement
– $300 Million targeted
– Based on Enbridge experience
– Depends on First Nation capacity
• Employment & Training
– 15% construction target
– Work with prime contractors
• Tax on reserve land
• Environmental stewardship &
monitoring
Aboriginal Business Summit
17
Contribution to Stable Economies & Communities
• Petroleum transportation infrastructure can co-exist with
and make positive contribution to:
 coastal region & community economies
 economies based on fishing, aquaculture, tourism
• Evidence provided by Bay of Fundy, Newfoundland,
Scotland, Norway, etc.
• Success results from Triple Bottom Line approach i.e.
viewing project risks and benefits through three “lenses”:
Economic
Environmental
Social
18
Rigorous, fair and open public review process
Public joint regulatory review (JRP)* led by:
• Canada’s National Energy Board (NEB)
– Economic & technical feasibility, socio-economic & environmental protection
• Canadian Environmental Assessment Agency (CEAA)
– high-quality environmental assessments in support of sustainable development
Additional agencies, including:
• Transport Canada
• Department of Fisheries and Oceans
• Indian and Northern Affairs
• Natural Resources
Termpol report on marine safety and accident prevention
• The proponent is proposing to implement safety measures that
exceed national and international regulatory frameworks for vessel
safety and operations.
19
Efficient Regulatory Timeline Required
JRP is a quasi-judicial, independent tribunal
Regulatory
Application
Filed
(May 2010)
Information
Requests
(Aug 25 to
Nov, 2011)
Community
Hearings
(started Jan
10, 2012)
Regulatory
Final
Decision /
Hearings
Detailed
(started
Sept 2012) Engineering
Construction
JRP community
review of Issues
and required
additional
information
Deadline to
Register for
Oral Stmts
Oct 6, 2011
Deadline for
Letters of
Comment
Aug 31, 2012
Community
Hearings
cont. 2013
NGP
In-Service
Date
2018+
The above timeline is illustrative and subject to change
gatewaypanel.review-examen.gc.ca
20
Path Forward
• Examination of facts & science
objectively
• World class spill prevention &
response
• Decision of project determined by
an independent, public review
• Approval of project with conditions
promoting reconciliation
• Role for environmental
organizations in research &
monitoring
• NEB & Transport Canada detailed
design approvals
* Energy supports our quality of life, and
can improve the quality of life for others
21
Questions