lucie shoddy: Bill Mann's Canada: Big Gateway pipeline hearings starting in B.C.

By Bill Mann, MarketWatch

PORT TOWNSEND, Wash. (MarketWatch) -- Lights, cameras ... testimony. What?s being called ?the mother of all public hearings? begins next week in tiny Kitimat, B.C., over Enbridge?s proposed Northern Gateway pipeline from Alberta?s oil fields to tiny Kitimat, where an oil- tanker terminal would be built to get all that crude to foreign markets ? mostly China.

With the southward-bound Keystone-XL pipeline already very much in the public spotlight, this Canada-only pipeline is also causing major battle lines ? and media strategies ? to be drawn. Over 4,000 individuals and groups have signed up to testify in two dozen planned hearings across the province. Major Enbridge supporters have just come forth this week ? four major oil companies with oil-sands operations.

Prior to this week, only giant Chinese energy company Sinopec had revealed financial support to Enbridge. Canada?s National Energy Board released documents this week also revealing that Cenovus Energy Inc. /quotes/zigman/47102 CA:CVE +0.26% , Suncor Energy /quotes/zigman/43712 CA:SU +0.03% ?, Nexen Inc. /quotes/zigman/22967 CA:NXY +0.29% , and Total E&P Canada have filed paperwork outlining their support to the federal review panel.

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Each has signed up as a ?funding participant,? joining the others in buying some of the 10 units that make up a $100-million fund Enbridge (ENB-T37.30-0.45-1.19%) sold in 2007 and 2008. The money was used to fund pre-construction development and engineering of the big pipeline project.

The supporters all say Enbridge?s /quotes/zigman/20610 CA:ENB +1.58% $5.5 billion Northern Gateway project is needed to export Alberta?s growing oilsands production to new markets, largely in the Pacific basin.

Keystone, of course, has become a political football being kicked around between Barack Obama and Congress. The pipeline game has also moved north. But Gateway, unlike Keystone, is a Canadian decision, although plenty of U.S.-based environmental activists, fresh from getting Keystone to relocate in Nebraska and possibly killed, will be at the Canadian hearings.

Suncor says Northern Gateway is a critical piece of infrastructure for Canadian oil producers.

All that crude has to go somewhere, and building the 600-mile Northern Gateway through pristine B.C. forests is arguably the best way, despite the risks of spills (which Enbridge, of course, is minimizing). Many First Nations tribes in B.C. strongly oppose Northern Gateway, although a few have signed on with Enbridge as equity partners.

B.C. residents support pipeline?

Enbridge has commissioned a new poll showing that B.C. residents now support the pipeline by 48-32. The Ipsos-Reid survey released this week counters the perception that an overwhelming majority of British Columbians are against the megaproject, says Enbridge spokesman Paul Stanway.

Northern Gateway critics have long cited another poll two years ago that suggested broad public opposition as a key factor in the campaign to block the project.

But here?s more pro-pipeline ammo: If Northern Gateway doesn?t go ahead, a recent analysis commissioned by the Alberta government says it could cost Canadian oil producers $72 billion over nine years.

It?s obvious where China is placing its bets: Just this week, Athabasca Oil Sands Corp. triggered an option on a 2009 deal with CNPC subsidiary PetroChina, so the Chinese government oil giant is not just a shareholder but also the owner and operator of Alberta?s MacKay River oil sands project, to open in 2014. In December, Sinopec closed a $2.2 billion deal for Daylight Energy Ltd.

Chinese own the companies

So Chinese firms are no longer just buying oilsands stakes, they?re buying whole operations; it?s a new phase of China?s step-by-step Canada strategy. The state-owned Chinese companies will actually run these companies. And China doesn?t want to lose any part of that $72 billion cited by Alberta?s provincial government. .

As the Toronto Globe and Mail puts it, China?s all-in approach ?will change not just the oil patch but Canada?s foreign policy. A game of international energy politics is afoot in Canada?s West.?

The Chinese are placing their bets on B.C., it?s becoming obvious, rather than Keystone, as the destination for their Alberta oil.

The gavel comes down and the show starts Tuesday in tiny Kitimat, which hasn?t had this much attention since....well, since never.

Correction: In my recent column on Canadian investors being saved from losses in the MF Global fiasco by a safety net, I implied that the Canadian Investor Protection Fund, which provided that net, was run by the Canadian government. Read the corrected column .

Helpful CIPF senior public affairs specialist Paul Lalonde e-mails this clarification: ?CIPF is not a government program; it?s an industry program to protect clients of IIROC-regulated firms only.? That?s the privately operated Investment Industry Regulatory Organization of Canada. Thanks, Paul.

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