Enbridge CEO touts benefits pipeline reversal
MONTREAL - The proposed reversal of a pipeline that would bring western crude to Eastern Canada won't cut gasoline prices but will preserve thousands of jobs in Quebec's refinery and petrochemical sectors, the head of Enbridge Inc. said Tuesday.
Suncor's refinery in east-end Montreal and Ultramar's Valero operation near Quebec City account for 20 per cent of Canada's refinery capacity.
"The immediate priority is to ensure the competitiveness of those refineries and ensure those jobs are saved," Enbridge CEO Al Monaco told reporters after speaking to the Montreal Board of Trade.
The Calgary-based energy company (TSX:ENB) plans to spend $110 million to reverse its Line 9B to carry western crude to meet Quebec's refining needs. The National Energy Board will conduct hearings on the proposal in October, with a decision expected in 2014.
"I am not here today to tell you we're going to create thousands and thousands of new jobs. I think the issue is the competitiveness of those refineries that's at stake," he said.
Monaco said there are many variables in determining gasoline prices but that consumers tend to get the best pricing when there is a strong conduit to transport energy from source to end use.
The union representing Quebec refinery workers says the investment is needed to preserve the viability of existing refineries and the polyester industry that depends on them.
Daniel Cloutier, whose union Unifor represents Suncor employees, said it would be disastrous for Montreal if another refinery closes, three years after Shell dismantled its operation.
"In the immediate (future) will it create jobs? Maybe not directly in 2014, but we know there are investment projects in the air as much at Suncor as at Ultramar," he said as part of a coalition of union and business leaders supporting the Enbridge project.
Francoise Bertrand of the Quebec Chamber of Commerce said the prospect of protecting more than 4,000, well-paid sector jobs shouldn't be minimized.
A Suncor spokesman said that besides bringing in Western Canadian crude, the line reversal will allow it to replace the 15 per cent of heavy crude it imports from Mexico with product from the United States.
Monaco said the formation of the coalition is an important lesson learned from its poorly received efforts to promote the Northern Gateway project in British Columbia.
He said pipeline projects need to include members of the "entire value chain" to ensure proposals are responsive to the needs of various members of the community and to the "public policy discourse on energy projects today."
Earlier, he pointed to polls that show Quebecers favour the line reversal but that public trust is tested by events, including the deadly rail crash involving crude oil in Lac Megantic, Que.
"It reinforces our duty â€” our responsibility to the public to ensure products are transported safely."
Monaco said the public's perceptions are shaped more by such failures than successes. He noted that a 2010 spill in Marshall, Mich., shook the company and was "very difficult and humbling" but that Enbridge responded by improving its spill response and processes.
He described the line reversal as the most "benign" thing an energy company can do since the infrastructure is already in place. While no pipeline construction will be required, Enbridge will build new stations and install detection systems to warn of underground problems.
Built in 1975 to carry western crude east, it was reversed 15 years later to facilitate imports to refineries in Ontario and Quebec. Although the pipeline is 38 years old, it still has many years of useful life if properly maintained, Monaco said.
Enbridge's project is competing for public attention with the proposed construction of a 4,500-kilometre Energy East pipeline by TransCanada (TSX:TRP) that would connect up to 1.1 million barrels per day of western crude to refineries and export terminals in Quebec and New Brunswick.
Monaco said both efforts are needed to move oil out of Western Canada.
"If you look at the supply profile out of Western Canada, we need all of the pipelines that are being proposed right now to be done," he told reporters.