Al Monaco

President & CEO

tel
fax

403 231 3900

403-231-3939

Enbridge Inc.
st
3000, 425 1 Street SW
Calgary, Alberta T2P 3L8
Canada

November 23, 2015

Glenn McIntyre
Saarim Asady
Julia Guenther
Masahiro Mark Fukui, and
Jackson Lund
COMM 408, Queens University
Dear Glenn, Saarim, Julia, Masahiro and Jackson:
Thank you for your letter expressing concerns about our investments in energy infrastructure
and voicing your support for renewable energy. Youve posed good questions and, as stewards
of our company, we challenge ourselves to address the same type of questions when we make
decisions to invest capital that will assure the sustainability of our business. This letter responds
to the issues youve raised and I have also posted my response to our company intranet to
share with our staff across North America.
Ill make some general comments before responding to your specific questions.
From the outset, Id like to emphasize that we at Enbridge are very proud of what we do. For
decades weve provided a critical connection between energy supply and the people who need
it to heat homes, fuel cars and airplanes and generate electricity for residential and industrial
use. This energy is also used to make medicines, synthetic fabrics, lubricants, tires, and plastics
for computers, cellphones and many other products used in our day-to-day lives. We dont
produce or refine the products we transport, but we provide a vital function to our society and
economy, which we have a responsibility for and take very seriously.
Its a fact that modern fuels have significantly enhanced the lives of billions of people across the
world. Energy is vital to essentials that we take for granted like clean water, food and health
care. For your reference, the International Energy Agency provides information that illustrates
the impact that energy makes to our quality of life and the impact on developing nations in
improving infant mortality, adult literacy and life expectancy1. I encourage you to read the report.
That said, at Enbridge weve also developed a wider perspective about energy and
sustainability. Although our purpose is to deliver the energy society needs and wants, were
investing in assets and technology that will contribute to a lower carbon future - we have been
doing that for more than a decade. In fact, its our traditional businesses, the transportation of
oil and gas, which are generating the capital that enables us to make investments in renewable
electricity generation and other technologies.
We dont disagree that climate change is a critical global issue; we do need to act and we are.
Another example of that was Albertas new Climate Leadership Plan that was announced just
yesterday. Among other things, Alberta established renewable energy targets, implemented a
broad based carbon tax and capped emissions from oil sands. Most encouraging is the
collaborative approach that saw opposing perspectives come together to form the plan.
In my view it comes down to a question of balance. Simply eliminating fossil fuels is neither
practical nor possible if we want to maintain our quality of life and our economic prosperity,
much less continue to improve the lives of hundreds of millions of people around the world.
We believe that our shared responsibility as a society is to strike the right balance to make a
transition to a lower carbon future while ensuring we meet our collective need for energy.

COMM 408, Queens University

November 23, 2015

Energy Fundamentals
To provide context for this discussion, lets first talk about the broad fundamentals of global
energy consumption and the sources of energy supply to meet energy demand.
Theres little disagreement among experts that global energy demand will grow between 30
50% by 20402. Increasing energy demand will be driven primarily by a 2 billion increase in
global population from 7 to 9 billion, the desire for improved standards of living in developing
nations, and greater urbanization that will see cities with populations in excess of 10 million
grow from 28 today to 41 by 20303. All of this will require more energy.
This consumption growth means that we will need all sources of energy supply to meet demand,
including renewables like hydro, wind and solar power. But there is a clear consensus that
fossil fuels will be required to meet the lions share of global energy needs for the foreseeable
future somewhere in the vicinity of 75%4.
Even with increasing energy supply, some 800 million people around the world will still not have
access to electricity by 2030 and 2.3 billion will lack access to clean cooking fuels, an
astonishing figure and one that we all need to reflect on5.
As part of the balance I referred to earlier, lets recognize that we have actually made good
progress in reducing our energy needs. To illustrate, the above forecasts reflect significant
gains from energy efficiency measures. Without these gains, its estimated that global energy
demand would grow not by 30 to 50%, but by 140%6.
Mandatory efficiency rules, particularly in the transportation and building sectors, in North
America, Europe and increasingly in countries like China and India, are having a dramatic
impact in reducing energy consumption. In 2014, demand growth was a third of what it would
have been without such measures (0.7% growth versus 2.1%) generating efficiency savings of
122 million tonnes of oil equivalent7.
While its clear that energy demand will continue to rise, our societal challenge is to minimize
our environmental footprint and strive to achieve a balance between economic growth and
sustainability. This is a critical issue faced by all of us and one that requires global cooperation.
We all need to take accountability for our environment for example, if you look at where
emissions come from in the transportation sector, around 20% comes from producing the fuels
while some 70 to 80% comes from consuming them it as we all drive our vehicles every day8.
The Canadian oil and gas industry has made good progress on reducing emissions and as
Canadians we should be proud of that. Emissions intensity has declined by 30% per barrel from
1990 - 2013 and industry continues to innovate to further minimize emissions9. For example,
you would have seen the recent announcement by Shell of the Quest Carbon Capture and
Storage project10. Another is the new $20 million Carbon XPRIZE, co-sponsored by Canadas
Oil Sands Industry Alliance (COSIA), that will incentivize breakthrough technologies to convert
CO2 into products from industrial to consumer goods to low-carbon transportation fuels11.
Lets also remember that Canada is an export driven economy and our infrastructure is critical
to accessing markets and therefore our balance of trade. The energy industry also accounts for
more than 500,000 direct and indirect jobs across Canada and pays $17 billion in taxes to the
various levels of government. These payments support economic growth, social programs,
education and health care. The energy industry is the largest private sector investor in Canada,
investing $81 billion last year, well in excess of the next two sectors combined12. Most
important is that the benefits of energy investment are shared through all Provinces and
amongst all Canadians.

COMM 408, Queens University

November 23, 2015

Enbridges $38 billion investment plans

You expressed concerns about our investments and suggested that Enbridge invest solely in
renewables and phase out investment of all non-renewable energy assets. Let me explain why
the sudden and complete shift you propose is not practical or desirable in our view.
First, we agree that there is a good case for investment in renewables and in fact, theyre a key
area of growth for us. Over the last few years, weve invested $5 billion in 19 wind, solar and
geothermal facilities with generating capacity of more than 2,600 megawatts enough energy to
provide power to more than 750,000 homes. Today, were Canadas third largest producer of
renewable energy.
Were also investing in research and development of energy storage technologies that will help
address the key challenge of intermittency and advance the ability to deploy wind and solar on a
larger scale. We support public policy action to encourage investment in renewables. We also
support transparent carbon pricing that is broad-based and aimed at reducing consumption, not
just aimed at those who produce the fuels we use.
Youll know from our Investor Day presentation that were actively exploring opportunities to
grow our renewable power business with the objective of doubling our generating capacity over
the next five years. We recently announced a significant investment in offshore wind in the U.K
and were laying the foundation today for even more growth in renewable power generation
beyond 201913. We should also recognize that another source of large scale carbon emissions
reductions is through natural gas. Enbridge is focused on building out that opportunity as well.
While renewables will have a role to play going forward, they simply cannot solely provide the
supply we will need to meet the worlds energy needs. There are significant limitations that we
need to recognize, most notably the inability of wind or solar to be dispatched to meet electricity
demand when needed, and the vast investment in new transmission lines to move renewable
energy from where the wind blows and the sun shines to major load centers.
But even if we could wave a magic wand and eliminate fossil fuels, lets consider the societal
impacts. Without an effective and reliable replacement fuel, we would remove approximately
80% of the primary energy supply we use every day for electricity, heating/cooling, cooking and
transportation. Today, less than 10% of current energy supply in OECD countries comes from
wind, solar and geothermal.14 Even with accelerated investment in renewable generation,
removing our primary energy supply that comes from fossil fuels would dramatically impact the
quality of life we enjoy today.
Lets get back to Enbridge and our $38 billion investment program.
The capital were investing in our pipeline systems is critical to ensuring energy supply reaches
the people who need it. Its widely accepted that pipelines are the safest and most effective
means of transportation and require significantly less energy to operate than trucks or rail and
have a much lower carbon footprint15.
Canada has 825,000-km of transmission, gathering and distribution pipelines. Without
pipelines, large volumes of crude oil (over three million barrels per day in Canada) would have
to be transported by other modes of transport, such as trucks, ships, or rail cars. Transporting
three million barrels per day by truck would mean more than 15,000 additional long distance
truck trips every day on Canadas highways, which would have massive public safety, road
maintenance, noise, and emissions implications16. By rail, it would mean another 4,200 rail cars
per day. Is that what we want?

COMM 408, Queens University

November 23, 2015

Actions we take to reduce the impacts of accidents

Im glad you asked about what we are doing to reduce the impact of an oil spill. This is a topic
we address with our communities, regulators and government. We publish an annual safety
report to share what were doing to prevent incidents, to maintain the operating fitness of our
systems and to continually enhance our emergency preparedness. Our report is one of the
ways we hold ourselves accountable to stakeholders. I encourage you to read it17.
You will know from our Investor Day presentation that the safety of our operations and
protection of the environment is our Companys number 1 priority. Since 2010, weve invested
more than $5 billion in maintenance and integrity programs and weve executed the largest,
most comprehensive integrity management program of any pipeline system in the world using
the most sophisticated inspection tools available. Were investing in new technology including
deployment of smart balls and testing new detection technologies using a state-of-the-art
pipeline research simulator the first of its kind in the world.
As youll read in our safety report, last year we safely delivered more than 2.4 billion barrels of
oil on our system 99.9999% of the oil we transported arrived without incident. Thats good,
but for us, its not good enough because our goal is 100% safe operations and zero incidents.
While we do everything we can to prevent accidents, we have emergency response plans and
equipment along our systems. We share those plans with communities and we work closely
with first responders. We invest heavily in training and we conduct about 400 drills and
exercises each year to enhance our preparedness.
Risk management
You asked about our risk management processes.
We believe the key to managing risk lies in strong governance. Our Board of Directors oversees
corporate risks, including safety and reliability. We have a dedicated Environment, Safety and
Operational Reliability team that is accountable for defining and executing enterprise-wide
integrated programs and policies and establishing the vision and safety culture that we want.
We manage risk through various means including our Corporate Risk Assessment, our
Operational Risk Management (ORM) program and comprehensive integrated management
systems. The National Energy Board conducted a comprehensive audit of our management
systems over the past year: the largest audit in its history. In announcing its findings, the Board
noted that Enbridges safety practices and procedures are well established within our
organization18. The Board noted that in its implementation of a comprehensive, integrated
management system, Enbridge is going beyond regulatory requirements: Enbridge has not
limited its management system to the technical programs required by the Board and was
implementing a corporate management system, not merely an operations management system
as many companies have done in response to the Boards regulatory requirements19.
Northern Gateway
You raised some questions and concerns with respect to the Northern Gateway pipeline project.
First, its important to recognize that opposition to projects like Gateway isnt new and we
encourage the dialogue. If you look back through Canadas history, our nation building
infrastructure projects have seen significant opposition; our national railways that connected our
regions, the original natural gas pipeline across Canada or building of the Saint Lawrence
Seaway that helped Canada access European and global markets.

COMM 408, Queens University

November 23, 2015

These projects have been critical to Canadas development, theyve advanced our economy
and way of life, and they will enable prosperity for generations.
The Northern Gateway Pipeline will provide access to new markets in the Pacific Rim, enabling
Canada to realize fair value for our energy exports, rather than selling our limited natural
resources at a discount to our only export market the United States. The project would
generate some $300 billion in GDP over 30 years, to the benefit of Canadians from every
province.
But lets put the economic benefits aside because its not just about that whats equally
important is the steps we take to protect our environment.
You refer in your letter to the number of streams and crossings the project would traverse and
you note that a failure could cause environmental damage. Despite our best efforts, we
acknowledge this is a possibility, much the same as the risks we all encounter in day-to-day life.
The challenge is finding ways to mitigate risk while still moving our society forward.
Northern Gateways top priority is to ensure a spill never occurs in the first place. We are
committed to world-class spill prevention, response and recovery. In recommending its
approval of Northern Gateway to the federal government, the Joint Review Panel charged by
the Minister of the Environment and the National Energy Board with assessing the
environmental aspects of the project, concluded that not only did we meet regulatory
requirements, we exceeded them in a host of areas and we are aligned with international best
practice.
Northern Gateway will be the most monitored and secure pipeline project in Canada. Please
have a look at the various reports on Northern Gateway to get a feel for the extra measures we
have taken on this project, including extra thick wall pipe and the most advanced technology.
You may not be aware that twenty-eight First Nations and Mtis communities will be our
partners and owners in Northern Gateway. Thats because we believe that First Nations and
Mtis communities have an important role in the environmental protection of lands and waters
along the pipeline corridor and in marine operations. The involvement of these communities will
include input into the design of land and coastal emergency response operations.
Their voice will allow us to ensure Northern Gateway is built to the highest safety and
environmental standards providing Aboriginal people with education, skills training and business
opportunities while respecting their title and rights.
For clarification, the marine terminal where the pipeline route ends near Kitimat, B.C. is actually
many kilometers east of the Great Bear Rainforest (GBR). Tankers calling at the marine
terminal will sail past the GBR on their way to open ocean.
The Douglas Channel is one of the deepest and widest waterways on Canada's North West
Coast; at its narrowest, three times wider than Transport Canadas recommended width for twoway tanker traffic. Northern Gateway will add land-based radar to the North Coast for the first
time, and install new lights, beacons and buoys throughout the Douglas Channel and approach
channels, making the Douglas Channel safer for all vessels.
What Northern Gateway is proposing is not new - thousands of tankers carry millions of tonnes
of oil products every day around the world. There have been dramatic safety improvements in
tanker construction and operating practices over the past 30 years resulting in a reduction in
tanker incidents. There were 580 in the 1970s, declining to zero in 2012, even as the total
number of tankers operating worldwide has significantly increased.20

COMM 408, Queens University

November 23, 2015

On land, we meticulously planned Northern Gateway's proposed route to minimize

environmental impacts. Over 70% of the route will use previously disturbed land like old forestry
roads and other linear corridors.
Conclusions
As you can see from the investments Enbridge has made, and how we think about the future of
our business, were very much part of the transition to a lower carbon future. Our focus on
sustainability is core to who we are and our values.
The discussion youve prompted is one that needs to happen more often; we need to engage
more Canadians, bringing all points of view, together in a conversation around energy. Thats
how well get to the right balance and finding the common ground that enables us to make
progress.
Finally, youve challenged us with some very thoughtful questions. I now put the challenge back
to you and your classmates this way: How can we best achieve our collective goal to reduce
our impact on the environment while ensuring that we continue to meet the energy needs of our
society in a sustainable manner.
Above all, what we need is greater collaboration to arrive at shared solutions, because one of
the greatest risks we face is continued divisiveness that prevents us from taking action. That, I
genuinely hope, is where you come in.
Thank you again for writing and for raising these important issues.
Yours very truly,

Al Monaco
President & CEO

COMM 408, Queens University

November 23, 2015

Notes for further reading:

We report annually on our approach and progress in our Corporate Social Responsibility report,
available on our website. To learn specifically about climate change:
csr.enbridge.com/en/report-highlights/material-topics/energy-and-climate-change/
We report publicly on our safety and operational reliability performance through both our
Corporate Social Responsibility Report as well as our Safety Report to the Community.
csr.enbridge.com/report-highlights/material-topics/system-integrity-and-leak-detection/
blog.enbridge.com/2015/October/2014-Safety-Report-to-the-Community.aspx
More information on how we manage our environmental impacts is available in our CSR report:
csr2014.enbridge.com/report-highlights/material-topics/environment-and-landmanagement/2014-performance/
Information on the Northern Gateway Pipeline project is available online:
Gatewayfacts.ca

International Energy Agency, www.worldenergyoutlook.org/resources/energydevelopment/ and World Energy

Outlook, www.iea.org/bookshop/700-World_Energy_Outlook_2015
2
IEA, World Energy Outlook; EIA Annual Energy Outlook, www.eia.gov/forecasts/aeo/, industry reports
3

United Nations, World Urbanization Prospects, www.un.org/development/desa/en/news/population/worldurbanization-prospects.html

IEA, World Energy Outlook, p. 56-7

IEA, World Energy Outlook, p. 23, 105-108
6
ExxonMobil, Outlook for Energy 2015, p. 7, cdn.exxonmobil.com/~/media/global/files/outlook-for-energy/2015outlook-for-energy_print-resolution.pdf
7
IEA, World Energy Outlook, p. 389
8
Government of Canada, Oil Sands: A strategic resource for Canada, North America and the Global Market,
http://www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/energy/pdf/eneene/pubpub/pdf/12-0614-OSGHG%20Emissions_eu-eng.pdf
9
CAPP, www.capp.ca/responsible-development/air-and-climate/climate-change/count-us-in
10
Shell, Shell launches Quest carbon capture and storage project www.shell.ca/en/aboutshell/media-centre/newsand-media-releases/2015/oil-sands/shell-launches-quest-carbon-capture-and-storage-project.html, Nov. 9, 2015
11
COSIA, www.cosia.ca/carbon-xprize
12
Canadian Association of Petroleum Producers, www.capp.ca/canadian-oil-and-natural-gas/canadian-economiccontribution
13
Enbridge, Enbridge Acquires 24.9% Interest in UK Offshore Wind Project,
www.enbridge.com/MediaCentre/News.aspx?yearTab=en2015&id=1999440, Nov. 5, 2015
14
IEA, World Energy Outlook
15
Fraser Institute, August 2015 - www.fraserinstitute.org/sites/default/files/safety-in-the-transportation-of-oiland-gas-pipelines-or-rail-rev2.pdf
16
Natural Resources Canada, http://www.nrcan.gc.ca/energy/infrastructure/5893
17
Enbridge, blog.enbridge.com/2015/October/2014-Safety-Report-to-the-Community.aspx
5

18

National Energy Board, National Energy Board releases Enbridge audit report, news.gc.ca/web/articleen.do?mthd=tp&crtr.page=1&nid=1001649&crtr.tp1D=1, July 15, 2015

COMM 408, Queens University

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20

November 23, 2015

National Energy Board, Final Audit Report OF-Surv-OpAud-E101-2014-2015 03 of the Enbridge Pipelines Inc.
Safety Management Program, www.neb-one.gc.ca/sftnvrnmnt/cmplnc/dtrprt/2015nbrdg-sft/index-eng.html
Brown, Stephen, Point: Safe passage for tankers? Vancouver Sun, June 18,
2013. http://www.vancouversun.com/business/2035/point+safe+passage+tankers/8544274/story.html#ixzz3rxkXlfPx