by Peter Ewart l Opinion 250

The BC government has just put forward five requirements for it to agree to Enbridge’s Northern Gateway pipeline proposal. These include commitments from Enbridge itself, as well as the Harper federal government and the Alberta provincial government. But in any such arrangement, everything depends upon how serious and responsible the parties are to meeting those commitments, otherwise the arrangement is not worth the paper it is printed on. 

 

For its part, the Harper government has been backing away fast from stronger regulation and oversight at the federal level, which, as the U.S. National Transportation Safety Board has noted, is necessary to ensure companies like Enbridge keep their commitments and avoid oil spill disasters like the one on the Kalamazoo River (1). 

 

And then there is the Christy Clark Liberal government. Despite its newly released “five requirements,” the Clark government appears to be all over the map in regards to where it stands, and does not inspire confidence that it could, even if it wanted to, keep Enbridge in line or resist pressure from the Harper government to further erode standards. 

 

In regards to Enbridge, it has a long history of making commitments in words, but violating them in deeds.  “Say one thing and do another” appears to be its unofficial motto. This has resulted in hundreds of citations being levelled against it by government regulators over the years for environmental and safety violations and a huge loss of public trust. 

 

The U.S. National Transportation Safety Board characterized the company as having “an operating culture in which not adhering to approved procedures and protocols was normalized.” In other words, Enbridge not only fails to meet commitments it makes to external regulators, but also those that it makes internally. As the NTSB noted in regards to the Kalamazoo River spill, “if Enbridge’s own procedures had been followed during the initial phases of the accident, the magnitude of the spill would have been significantly reduced” (1). 

 

Enbridge’s CEO at the time of the spill, Patrick Daniel, was himself known for making solemn commitments to safety on a regular basis, but not meeting these year after year. For example, from 2006 onwards, Enbridge’s professed goal was to have zero spills and leaks (as opposed to 70 the previous year). However, in the following years, it got nowhere near reaching that goal. In 2007, the corporation had 65 reported spills and leaks. In 2008, 80 reported spills and leaks. And in 2009, a whopping 103 reported spills and leaks. This was followed by another 80 in 2010 (2).  

 

Adding it all up, the total volume of crude oil leaked from Enbridge pipelines between 1999 to 2010 alone came to approximately 5 million gallons which “amounts to approximately half of the oil that spilled from the oil tanker the Exxon Valdez after it struck a rock in Prince William Sound, Alaska in 1988” (3).  

 

Despite this record, CEO Daniel was still singing the same safety song several years later in 2011 when, once again in a letter to Enbridge stakeholders, he claimed that the corporation was “more committed than ever to meet [its] goal of zero incidents” (4). Such a statement, of course, has become part of the company’s “boilerplate” responses to oil spills, a set of responses which are repeated almost verbatim every time a major spill takes place. 

 

2010 was a particularly bad year for the company. In July, the Kalamazoo oil spill happened, triggering what has been described as “the costliest onshore pipeline spill in U.S. history” (5). In addition, in August 2010, the company was fined $2.4 million for a pipeline explosion in which two Enbridge employees were killed in Minnesota three years prior (6). The company had been warned beforehand, and a federal investigation found that Enbridge committed eight probable violations leading up to the accident. 

 

If a corporation was serious about safety, it would make sure some heads would roll – especially at the top of the organization - for allowing such terrible incidents to happen. This is especially the case since Enbridge Inc. has been singled out as a whole for “organizational failure” and a “culture of deviance” from protocol and procedure. Such systemic problems are first and foremost a problem of leadership.

 

But heads did not roll in 2010. Far from it. The leadership of the company rewarded itself, with all executives receiving bonuses, as well as compensation for CEO Patrick Daniel being increased “from $6 million to $8.1 million” (5). A year after the disaster the bonuses were upped even further for five senior executives who had their pay increased by over $4.5 million.

 

The Enbridge leadership appears to be afflicted with what might be called the Wall Street banker syndrome, i.e. the greater the disaster, the greater the bonus.

 

And there is a reason for this. Although 2010 was a disastrous year for safety, it was a banner year for Enbridge in another way, with the company amassing $970 million in profit (7). As one analyst noted, while Enbridge does not have a reputation for being “a star player” in regards to safety, it certainly does have “a good reputation of delivering for their shareholders” (8).

 

It is this contradiction between Enbridge’s narrow private interests and the interests of the public at large that seem to be at the core of its “say one thing, do another” problem. This is a serious issue given that both the federal and provincial governments have a track record of handing over even more power and responsibility to private corporate interests like Enbridge. In this situation, who will stand for the public interest?

 

(1)    “Pipeline rupture and oil spill accident caused by organizational failures and weak regulations.”  National Transportation Safety Board. United States. July 10, 2012. http://www.ntsb.gov/news/2012/120710.html

(2)    Nelson, Joyce. “Enbridge spills.” Watershed Sentinel. June 27, 2012. http://www.watershedsentinel.ca/content/enbridge-spills

(3)    Girard, Richard. “Out on the tar sands mainline: a corporate profile of pipeline company Enbridge.” Polaris Institute. http://www.tarsandswatch.org/files/Updated%20Enbridge%20Profile.pdf

(4)    Daniel, Patrick. “Delivering the energy North Americans need: a letter from Patrick D. Daniel.” http://ebridge.enbridge.com/eBridge/volume74/article5.php

(5)    Nikiforuk, Andrew. “Enbridge Execs got big pay raises after continent’s costliest pipeline spill.” The Tyee. July 12, 2012. http://thetyee.ca/News/2012/07/12/Enbridge-Executives-Pay-Raise/

(6)    “DOT fines Enbridge $2.4 million for safety violations.” Pipeline and Hazardous Materials Safety Administration. United States. August 17, 2010. http://www.phmsa.dot.gov/portal/site/PHMSA/menuitem.ebdc7a8a7e39f2e55cf2031050248a0c/?vgnextoid=1a0387e16584a210VgnVCM1000001ecb7898RCRD&vgnextchannel=d248724dd7d6c010VgnVCM10000080e8a8c0RCRD&vgnextfmt=print

(7)    Cattaneo, Claudia. “The oil patch crusader.” Financial Post Magazine. Nov. 1, 2011. http://business.financialpost.com/2011/11/01/the-oil-patch-crusader/

(8)    “Company at center of huge oil leak into Mich. River has history of pipeline problems.” Fox News. July 29, 2010. http://business.financialpost.com/2011/11/01/the-oil-patch-crusader/