Enbridge and corporate pinata syndrome
It may be fun to whack the pipeline company, but its problems are ours.
When it comes to the business of righteous indignation, it's always a bonus when a corporate piñata appears on the scene. Who doesn't love to get a big stick and start whacking away at something with impunity? It's almost as much fun as popping bubble wrap.
Without question, Enbridge is the piñata of choice these days. The Calgary-based pipeline company has been publicly shamed by its appalling record of oil spills - including three recent ones in the space of a single month. And now an inquiry in Michigan into a nasty pipe rupture and oil spill there, has allowed U.S. officials to heap cross-border scorn on it.
With the media, environmentalists, regulators and First Nations already on its back, Enbridge now has a new challenge to consider: the politicians that have started to pile on as well. And that just may be the final straw for Enbridge's aggressive ambitions to expand its pipelines south into the U.S. and west through British Columbia.
It's one thing for NDP leader Thomas Mulcair to predict the demise of the Northern Gateway pipeline from northern Alberta's oil sands to the west coast. As the Official Leader of the Opposition, he's really just doing his job as a professional opponent.
But when B.C. Premier Christy Clark declared that Enbridge "should be deeply embarrassed" about the report into its 2010 oil spill in Michigan and added they could "forget about it" if they planned to conduct their business like that in her province, things took another sharp turn for the worse.
If that's even possible for Enbridge at this point.
Politicians tend to be the canaries in the coal mine: if they sense that public sentiment has swung in a certain direction, they're usually the first to sound the alarm. It's their job to anticipate how issues will play with voters and then position themselves ahead of the curve proclaiming themselves savior of whatever situation is looming.
As it is with everything, once the momentum has shifted from neutral to negative, it's extremely hard to claw back to neutral ground - let alone achieve the leap to a positive space.
That's what's happened in B.C. where Ms. Clark was initially prepared to sit on the sidelines and wait for the National Energy Board to rule on the Enbridge proposal for the Northern Gateway pipeline, which would cut through her province. (The $7-billion Northern Gateway Pipeline would run nearly 1,200 km from Edmonton to the west coast of British Columbia.)
"I think the company should be deeply embarrassed about what unfolded, we saw that in the report. If they think they're going to operate like that in British Columbia - forget it," she told reporters.
Based on those legitimate concerns about the basic competence of Enbridge, she's now said the province will participate in the hearing as an intervenor. Although the province can't outright block the federally-regulated Northern Gateway, it can withhold the permits required to cross bridges and highways..
The problem is that a significant piece of Canada's economic future hinges on Enbridge - and other pipeline companies - getting their act together in a big hurry.
There's not much secret that however ambivalent Canadians may be about developing the oil sands in northern
Alberta, those projects represent the engine for future economic prosperity and job creation. It's certainly no secret with the federal government which is in a tough spot here.
As the regulator, Ottawa has responsibility for ensuring that Enbridge conforms to standards that protect communities, the environment and a wide array of stakeholders. As a tax-dependent government with voters who need jobs, it is responsible for ensuring economic growth ticks over - especially at a time of extreme and prolonged global uncertainty.
The problem is that as the oil produced in those remote spots comes on stream, it's got an awfully long way to travel to market. It needs pipeline access to make all the billions of dollars spent on development pay off - especially now that crude prices have slumped.
Then there's the issue of which market all that oil is destined for.
Although the U.S. is the traditional go-to destination a number of factors have prompted a shift. Specifically, they are the economic recession, the discovery of new reserves in North Dakota and, of course, the President's unwillingness to approve the required pipeline.
That coincides with Ottawa's decision to aggressively diversify trade away from the north/south axis toward the east and the Asia Pacific region. It's the same focus that prompted Canada's involvement with the Trans-Pacific Partnership, a new trade agreement.
With apologies to Jay-z, Enbridge may have 99 problems. But they are our problems too.
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