Friday, August 26, 2011

Pipeline, Politcians...Hollow?

“Enbridge touts support, but others call deals “hollow.”

So read the headline published in the GLOBE AND MAIL, dated Thursday, August 25, 2011 and written by a Nathan Vanderklippe.

Seems the proposed Enbridge Northern Gateway pipeline to the BC west coast from near Edmonton is another headliner. Last blog posted was headlined, “Pipeline to west coast will be tough to stop.” There, the premise then was noted as a metaphor of a “slow train coming.” It’s just a matter of time. Seems too, the above noted article is feeding that premise. This time, it’s “let’s make a deal.”

Deal? who with?

Enbridge Inc. said it has lined up critical industry support for its proposed Northern Gateway pipeline to ship Canadian crude to Asia. Like a seasoned politician, Enbridge won’t say whom with. All the National Energy Board (NEB) has received from Enbridge are “Precedent Agreements” from major oil producers. So, what’s the deal?

“Under the agreements, would-be oil shippers are not obligated to send a drop of crude through the pipe.” Surely, based on experience with the NEB, economists there will want assurance rather the speculation before a permit is issued.

Still, Enbridge’s ploy seems to follow that old adage, “if you build it, they will come.” For some, it’s not that simply.  Those “precedent agreements” are non-binding, i.e. if you commit no money, no oil, (you will) receive no financial penalty for backing out.

“That prompted one lawyer who has analyzed the agreements to call Enbridge’s claims of commercial support “hollow.”

Don’t forget too, the proposed project lacks the support of the biggest hurdle in the way: British Columbia as a whole that includes a lot of First Nations.

Yes, there still is a slow-train coming. The NEB still has a job to do to ensure the project makes economic sense and especially make Enbridge disclose bona fide deals. After all,  “hollow” agreements or deals will not fill those pipes.