Enbridge Inc. is spending a lot of money advertising in the newspapers and on TV in an attempt to persuade people that its planned Northern Gateway pipeline will really be safe. Enbridge knows that this is the number one concern of the majority of people in B.C. around the project, and their political pals in Victoria and Ottawa will not be able to push it through unless the safety issue disappears.
It is significant that Enbridge Inc. has set up a special company for the project (Northern Gateway Pipelines, Inc or NGPI). This sounds reasonable, until it is realized that setting up NGPI breaks the liability ties to the principal multi-billion company ($10 billion Cdn in equity). If there were a major disaster, at sea or on land, that looked as though it was going to cost billions to fix and clean up, then Enbridge Inc.s management could just walk away, scot-free after declaring NGPI bankrupt. Commercial law limits the liability of the owners of any company (like NGPI) to its issued capital, which by design is a small fraction of Enbridges capitalization.
Four years ago, a group of Enbridge shareholders demanded that their board show how the shareholders could be protected from such possibilities. Well, now we can see how the clever lawyers in Calgary came up with a foolproof protection scheme: it certainly protects Enbridge shareholders!
If Enbridge Inc. is convinced that its project is safe, let it buy a commercial indemnity policy, say for $1 billion (the Exxon Valdez spill cost half that), from the free-enterprise insurance industry (not the B.C. government, which is drooling over the expected $2 billion in royalties).
If the NGPI plans really are safe, then Enbridge should be able to buy a 30-year policy to pay for any cleanups at a reasonable price. If they cannot do so, then the independent risk-assessment market will have voted with its wallet that this is not a safe project.
Let Enbridge Inc. really put its money into safety, and not just into smooth-talking advertisements, and prove to the people of B.C., in advance, that this project is truly low-risk.
It is significant that the BC Liberals have not yet insisted on this independent proof of safety.
Herb Spencer, Surrey
@ Copyright 2013