Enbridge lowballing pipeline cost: leaked "shadow CIA" emails - APTN NewsAPTN News

Enbridge lowballing pipeline cost: leaked "shadow CIA" emails

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By Jorge Barrera
APTN National News

Enbridge is likely lowballing the Northern Gateway pipeline’s projected $5.5 billion price tag which could triple in cost by the time it’s completed and see the Chinese end up financing most of it, according to internal emails written by senior analysts with a private international intelligence firm known as the “shadow CIA.”

The internal emails, from Texas-based intelligence firm Stratfor, were obtained by whistle-blowing website WikiLeaks. APTN National News gained access to the emails through an investigative partnership organized by WikiLeaks.

WikiLeaks began publishing the first of the nearly 5 million emails on Feb. 27. The emails range from 2004 to December 2011.

Stratfor has a global client list that includes major corporations and U.S. agencies, along with the RCMP and Canadian government departments like Foreign Affairs and Natural Resources Canada.

The emails show Stratfor officials have been monitoring the opposition to the tar sands and the proposed Enbridge pipeline to ship Alberta bitumen to the British Columbia coast. Stratfor analysts, however, questioned Enbridge’s stated price-tag for its controversial Northern Gateway Pipeline which seemed low for a project that would cross the Canadian Rockies.

Peter Zeihan, Stratfor’s vice-president of analysis, said he expected the price tag triple and that Chinese state-owned Sinopec, which is part of the project, would likely pick up most of the bill.

“While technically possible, going over the Canadian Rockies would be a technical challenge to say the least. I’m guess that the price tag on this would easily go above $15b (sic),” writes Zeihan, in the Jan. 21, 2011 email. “There’s a very good reason why all the crude goes south on flat land to the Midwest. So not impossible, but China would have to pony up for all of that itself.”

The comments emerged during a discussion on a news story on China’s decision to help finance the pipeline project, which is heavily opposed by many First Nations communities and environmental groups.

An Enbridge spokesman, however, said the company stands by its projected cost for the project.

“It is a figure we use that we expect is going to be the cost to construct the pipeline,” said Todd Nogier, spokesperson for Enbridge. “Our funding partners, participants and Enbridge have financial arrangements. Whatever cost escalations that might occur, that is not something we are dealing with at the moment.”

The Stratfor emails also reveal that one of the intelligence firm’s analysts used his younger brother, a Canadian trade official currently in Japan, as a source on the Enbridge pipeline.

Mark Schroeder, Stratfor’s Africa analyst, contacted his brother, Alan Schroeder, who, according to his LinkedIn account, is a trade official with the Canadian embassy in Tokyo, to get information.

Mark Schroeder asked Alan Schroeder what he knew about the Enbridge pipeline and the port in Prince Rupert, B.C., which Stratfor analysts speculated could be the end point for the Enbridge pipeline.

“We had a little talk this morning at work about the infrastructure plans for Prince Rupert,” wrote Schroeder, on Jan. 21, 2011. “Have you heard any more talk on plans for expanding infrastructure there? Some folks are real interested (stuff like what port changes they have in mind in addition to new pipelines that are possible).”

Alan Schroeder, using a Gmail account, responded by saying he didn’t know too much about the Enbridge pipeline because it was a new project, but speculated it could be ready by 2016.

“Enbridge is the entity that is working on it. There is quite a bit of interest and Sinopec has committed $100 million to the project. There is still a lot of preparatory work that needs to get done, and perhaps that’s why I’m not very familiar with the project…If everything runs smoothly it could be operational by the end of 2016,” he wrote.

Mark Schroeder then copied and pasted his brother’s answer into an email to Strafor’s analysts and identified him as a “Stratfor Canadian source,” code number CA012, with a reliability rate of “four.”

Nogier said Enbridge has looked at Prince Rupert as potential end point for the project, but the company concluded that Kitimat, B.C., was the safest option for the pipeline’s end point.

jbarrera@aptn.ca

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