Linking Canada’s World Class Resource To New, Large and Growing Markets

June 2012

Getting to know Enbridge – Socially

Neutral Footprint• A tree planted for every tree removed• An acre conserved for every acre disturbed• Generate a kilowatt of renewable energy for

every kilowatt used in operations

Renewable Energy Assets grown to $3 billion

GHG emissions reduced 21% from 1990 to 2010

Ride to Conquer Cancer

New Market Access Required to Earn Full Value

Energy Landscape

•Global Demand Growth Up

•US Consumption Down

•NA Supply Up

•Canada captive to US Market

•Transportation Bottlenecks

Northern Gateway – The Opportunity

Demand: *Through 2030 Asia Pacific region will experience compound annual growth of nearly 2%, contrasted with the declining demand for oil in North America

*2012 BP Energy Outlook

North America

Asia Pacific

23 26

*2010 Crude Oil Consumption [million bpd]

Asia

$89

$102

$113

AlbertaLight

WCS

Bakken Light Brent

Maya

Note: Pricing reflects 2012 year to date averages

Price Signals For Infrastructure Development

$88$10

9 $75

$13

Natural Gas

Light Crude

Heavy Crude

$113

LLS

$2

$3

$96

WTI

6

6

MERCATOR MAP FROM KARO

Canada’s west coast is a competitive advantage

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Major Scope Items:

• 1,177 km crude oil and condensate pipelines

• Marine terminal

• $6.4 billion project

• Targeting 2018 in-service

Pipe Design:

• 525,000 bpd crude oil

• 193,000 bpd condensate

Kitimat Terminal:

• 5 million barrels of storage

• 2 berths

• VLCC ready

The Project

Canadian National Benefits are Extensive

Direct, Indirect & Induced

• $312 billion in GDP uplift over 34 years

• $98 billion in tax revenues

• 26,700 average annual person years of employment

• $70 billion in labour income

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Benefiting British Columbia

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Construction Phase

– 35,000 person-years employment / $2.5B in labour income

– $165 million tax revenue to Government of BC

– $800 million in goods & services sourced in northern BC

Ongoing Operations

– 560 long-term jobs with $32M/year of labour-related income

– 165 long-term jobs and $17M/year in wages in Kitimat

– $1.2B in tax revenue for Government of BC over 30 years

Direct, Indirect plus Induced Benefits

‒140,000 person years employment (almost 7,700 jobs)

‒$55B increase in GDP

‒$9B Government Revenue for BC, +$5B in transfers = $14B* Wright Mansell Report

Why Is It Controversial?

• Opposition to oil sands

• First oil pipeline to the northern BC coast

• Unsettled BC Aboriginal land claims and concerns regarding impact on rights and traditional way of life

• BC risk / reward

–Crossing world class rivers

–Previous tanker/offshore spills = public concerns

• Detailed Design Approvals

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Enbridge – Safety & Integrity

Objective is to be top quartile or best• Integrity management• Leak detection• Incident response• Worker occupational safety• Public safety / environmental protection

Pipeline integrity

• 2,500 integrity digs

• 138 inline inspection tool runs

$2.9B integrity investment - since 2002

Priority One: Focus on Operations

* Based on mandatory reports to PHMSA of accidents and infrastructure, 2002-2011.

• 12 billion barrels delivered since 2002 - 99.9996% successful delivery rate

• 2011 spill volume frequency was lowest on record

• Still not good enough – target is zero incidents

Enbridge Pipeline Safety Track Record

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Improvements in Pipeline Safety

• Route and watercourse crossing selection

• Stringent steel chemistry & strength testing

• Fusion bond epoxy coated pipe used & inspected

• Every weld will be inspected during construction

• Cathodic protection prevents corrosion during operation

• Enhanced protection: thicker steel, shut-off valves

• Pipe hydrostatically tested

• 24/7 monitoring from control center

• Routine aerial reconnaissance of pipeline ROW

• Increased monitoring with in-line inspection tools

• Strategic emergency storage minimizes response time

Control center

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Existing Tanker Routes & Tanker Exclusion Zone

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9

Measures exceed regulation & current practice

Regulatory Requirements: • Double hulled ships / multi

compartment

• BC pilots (plus redundant nav-aid systems)

• Emergency preparedness and response planning

Enhancements to Safety:• Tanker route simulation

• Improved navigational aids, new radar

• Vetting of ships and crew

• Weather monitoring criteria for ship transit

• Reduced vessel speeds in marine channels

• Tug escort operations (tethered towing)

• Closed loading and containment booms

• TERMPOL review completed

• Whale monitoring vessel

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Broad Aboriginal & Community Consultation

Aboriginal benefits are unprecedented

• Environmental safeguards paramount

• Consultation Capacity Funded

• Equity ownership– 10%– Structured to access credit

• Procurement– $300 Million targeted– Based on Enbridge experience– Depends on First Nation capacity

• Employment & Training– 15% construction target– Work with prime contractors

• Tax on reserve land

• Environmental stewardship & monitoringAboriginal Business Summit

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Contribution to Stable Economies & Communities

• Petroleum transportation infrastructure can co-exist with and make positive contribution to:

coastal region & community economies

economies based on fishing, aquaculture, tourism

• Evidence provided by Bay of Fundy, Newfoundland, Scotland, Norway, etc.

• Success results from Triple Bottom Line approach i.e. viewing project risks and benefits through three “lenses”:

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Economic Environmental Social

Public joint regulatory review (JRP)* led by:• Canada’s National Energy Board (NEB)

– Economic & technical feasibility, socio-economic & environmental protection

• Canadian Environmental Assessment Agency (CEAA)– high-quality environmental assessments in support of sustainable development

Additional agencies, including:• Transport Canada• Department of Fisheries and Oceans• Indian and Northern Affairs • Natural Resources

Termpol report on marine safety and accident prevention • The proponent is proposing to implement safety measures that

exceed national and international regulatory frameworks for vessel safety and operations.

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Rigorous, fair and open public review process

Efficient Regulatory Timeline Required

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Regulatory Application

Filed(May 2010)

NGP In-Service

Date2018+

gatewaypanel.review-examen.gc.cagatewaypanel.review-examen.gc.ca

Community Hearings

cont. 2013

The above timeline is illustrative and subject to change

Construction

JRP community review of Issues

and required additional

information

Community Hearings

(started Jan 10, 2012)

Final Hearings (started

Sept 2012)

Information Requests (Aug 25 to Nov, 2011)

Regulatory Decision / Detailed

Engineering

Deadline to Register for Oral Stmts Oct 6, 2011

Deadline for Letters of Comment

Aug 31, 2012

JRP is a quasi-judicial, independent tribunal

Path Forward

• Examination of facts & science

objectively 

• World class spill prevention &

response

• Decision of project determined by

an independent, public review

• Approval of project with conditions

promoting reconciliation

• Role for environmental

organizations in research &

monitoring

• NEB & Transport Canada detailed

design approvals21

* Energy supports our quality of life, and can improve the quality of life for others

Questions