Today’s Lead Story

Canadians need to be made more aware of the importance of the energy industry and the need for market access for its products, industry executives said Thursday.

"It's not just an issue for the energy industry and it's not just an issue for pipelines; this is an issue for all Canadians," Vern Yu, senior vice-president of business and market development for Enbridge Inc., told a panel discussion on barriers facing pipelines. "I would love if the silent majority, many of the people in this room, could help us and advocate for our business," he said.

"Somehow we have to change the tone of the message that it's not just Albertans and the energy industry that benefit from what we are trying to do with pipelines but it's everyone in Canada," Yu told the luncheon panel discussion on barriers to pipelines sponsored by the Calgary Chamber of Commerce and the Canadian Association of Petroleum Producers.

"The energy industry is important not to just the producing community, it's not just important to the Alberta government for tax and royalty payments, it's not just important for the federal government in income taxes but it's also important for creating jobs in Alberta, in Atlantic Canada and indirectly for jobs in Central Canada."

But the industry is not the only voice in the conversation, said Ian Anderson, president of Kinder Morgan Canada Inc., operator of the Trans Mountain pipeline. "This is about a national interest dilemma that we face," he said. "It's about a national benefit that does translate down into local benefits but the players in that conversation are well beyond the pipeline and energy sectors themselves. And that's not just governments talking."

In talking to Canadians about the energy industry, CAPP has found that they want to know what it means for them -- for their education, their job opportunities, for their children, said Greg Stringham, the association's vice-president of markets and fiscal policy.

For example, CAPP advertisements that showed a Quebec bus company that manufactured buses used to transport oilsands workers had a great impact in the province because they never realized those buses were manufactured in Quebec, he said. "All of a sudden, for that community in particular, it meant something."

Anderson, who frequently flies between Vancouver and Calgary, offered another example. "More often than not that plane is filled with oilsands workers going from Vancouver Island to Calgary and then up to Fort McMurray and then going back, taking home their paycheques and investing them in British Columbia on Vancouver Island," he said. "And those stories have to be part of the fabric and part of the message."

Industry, along with government, also needs to promote purely Canadian pipeline options, in light of the political issues presented by permitting for cross-border pipelines, suggested Alex Pourbaix, president of pipelines for TransCanada Corporation, which has been seeking a presidential permit for its Keystone XL pipeline to the U.S. Gulf Coast. Canadian alternatives would include moving crude oil both east and west to access new markets such as Eastern Canada, the Pacific Rim, China and India, he said.

"In order to do that, we are going to have to continue to educate Canadians across the country on the benefits of these projects and a healthy upstream industry."

A challenge, said Stringham, will be finding a way to deal with moving the additional crude oil production that is expected to come onstream in the next 20 years. In its annual supply/demand forecast to be released in early June, CAPP sees two million bbls of growth -- much of it in situ oilsands production that also will require diluent, further increasing pipeline capacity requirements.

In order to obtain the pipeline development the industry knows it needs, "it will have to have the environmental performance to demonstrate not only to the public, but to also to the regulators, that it can be done in an environmentally responsible manner," he said.

"When it comes to safety and reliability (integrity), there has never been a debate; we know it [a pipeline system] has to be safe," said Stringham. "Moving it up a level is what we really need to focus on because the scrutiny is on it."

While many systems are operating safely today, the question is "how do we move to that final incremental piece in a way that can actually be understood by the whole industry before enabling that market access that we all so desperately want."

Yu acknowledged that historically the pipeline industry operated as an industry where operators were allowed to make mistakes. "You were allowed to spill a little bit of oil and it wasn't a significant issue for the people immediately on the right-of-way or the public at large," he said. "What changed dramatically is that people don't want to accept that anymore."

The Enbridge Energy Partners oil spill in Michigan and the BP Macondo blowout in the Gulf of Mexico obviously had a significant impact on perceptions, he said.

"I think the most important thing we need to do internally is to focus our culture to change from being able to accept a small degree of failure to a culture which is similar to an airline industry or the chemical industry where you have a highly reliable industry," said Yu. "If we could change that mindset at Enbridge and then invest the dollars properly we are highly confident we can become a highly reliable industry."

And while Enbridge over the past 10 years has moved 99.999 per cent of the crude on its system to the final destination without incident, it now believes that isn't good enough and it has to strive to get that last .001. "We need to be perfect. We have raised the bar internally so that no pipeline spill is acceptable," he said.

Companies can't talk about accessing new markets unless the safety issue has been dealt with before the conversation occurs, said Anderson. "We are trying to high-grade our performance ultimately to something that is transparent and available to the public."

In addition to the issue of pipeline safety and integrity, both Anderson and Pourbaix emphasized the importance of early consultation on a proposed pipeline, well before a regulatory application is filed.

Kinder Morgan Canada this fall plans to file an application for a 680,000 bbl-per-day expansion of its Trans Mountain crude pipeline and has been exploring the issues for some time.

"What we found is that the breadth of the issues is much wider than we had ever anticipated; the sophistication around the knowledge on the issues is inadequate," said Anderson. To fill that void the company has a focused grassroots effort, "talking about what the impact can be and should be," and starting to talk about "how over whether."

He also noted that his company is trying to get a deeper understanding of public opinion than perhaps it has before and to differentiate between public opinion and public beliefs and values -- and those aren't always the same. "There are many public opinions that are based on fundamental values," Anderson suggested.

"To me one of the greatest barriers to getting pipeline projects approved is understanding local interests, local concerns, local points of view that shape that value base."

For his part, Pourbaix said that while pipeline companies might sometimes like to say they are only the transporters of the product, "that doesn't work for us," he said. "The fight that is going on right now in the U.S. is all about the product in the pipe and I think we all need to band together -- the upstream, the midstream, downstream -- because that's the only way we are actually going to get the decision [on Keystone XL]."