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Enbridge's business case target for opponents

Economic issues were on the table when the final hearings into the Northern Gateway pipeline project began last month in Edmonton.

Economic issues were on the table when the final hearings into the Northern Gateway pipeline project began last month in Edmonton.

Enbridge, the company behind the $6 billion plan, was asked to defend its business case against questioning from a plethora of opponents. Both sides used the process to try to sway the National Energy Board's Joint Review Panel and make their case to the general public.

Not surprisingly, the two groups rarely agreed, occasionally issuing dueling news releases. Just how convincing each side was won't be known until the panel releases its final report by the end of 2013.

The final hearings continue beginning Tuesday in Prince George and wrap up in Prince Rupert in November and December. The hearings have been broken up by topic, with engineering, the environment and the socio-economic impact on tap for Prince George.

Enbridge executive vice-president for western access Janet Holder called Canada's environmental review process one of the best in the world and said the hearings give both sides the chance to clarify and defend their evidence as well as point of differences to the panel.

Part of the business case for Northern Gateway is that it will increase the amount of money Canadian producers get per barrel of oil. During the Edmonton hearings Enbridge experts and lawyers representing intevenors sparred over whether or not that meant consumers would see a significant spike in the price they pay at the pump - Enbridge said no, pipeline opponents disagreed.

China is expected to be a major customer for the oil that would flow through the Northern Gateway network along with Japan and South Korea. Enbridge was questioned on how they believe Chinese companies will act in the future - are they free-market players or do they follow the direction of their government?

The economics of having refineries close to the location of where oil is extracted versus close to where the fuel will be used was also debated as witnesses and lawyers for groups opposed to the pipeline argued for having more value-added petroleum products produced in Canada rather than shipping diluted bitumen to Asia for refinement.

Although much of the focus is on the heavy oil which will be shipped from Alberta to Kitimat, the Northern Gateway project is actually two pipelines. In addition to the east-west oil pipeline, a parallel west-east structure will move condensate from the port to the oilsands. The condensate, which is expected to originate in the Middle East or Australia, will then be used to dilute the bitumen for transport to the coast. Pipeline opponents questioned Enbridge on whether there was a market for more condensate in Canada or if the existing supply would suffice.

Also up for discussion was the possibility that rail could be used as an alternate way to get bitumen to the coast.

The Edmonton hearings gave the B.C. government its first chance to formally take part in the environmental review process.

The Opposition New Democrats hounded the governing Liberals for not providing evidence at earlier phases of the process, but the government pledged to use the cross-examination phase to get the answers they'll need to make an informed decision on whether or not to approve the pipeline.

However, the hearings got off to a rocky start for lawyers representing the province as some of their questions were declared out of order because they wandered too far from the approved topics.

The province focussed some of its questions on how much insurance the pipeline would carry. Since Northern Gateway is a separate corporate entity from Enbridge - indeed the company intends to sell close to half of its stake in the pipeline to other investors - the province wanted to know if Enbridge itself would be a guarantor on the insurance in the event of a leak or spill.

The province will have another crack at Enbridge during the Prince George hearings.