[All] Fw: Concerns for the fiscal risks of Enbridge LIne 9 and 10

Thu Aug 30 21:51:15 EDT 2018

FYI 
Lulu 

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   ----- Forwarded Message ----- From: "Lanteigne" <water.lulu at yahoo.ca> To: "Justin Trudeau" <justin.trudeau at parl.gc.ca>, "Elizabeth May" <elizabeth.may at parl.gc.ca>, "Jagmeet Singh" <jagmeet.singh at ontariondp.emailnb.com>, "andrew.scheer at parl.gc.ca" <andrew.scheer at parl.gc.ca>, "Amarjeet.Sohi at parl.gc.ca" <Amarjeet.Sohi at parl.gc.ca>, "Bardish Chagger" <bardish.chagger at parl.gc.ca>, "Catherine Fife - CO" <cfife-co at ndp.on.ca>, "bill.morneau at canada.ca" <bill.morneau at canada.ca>, "ciec-ccie at parl.gc.ca" <ciec-ccie at parl.gc.ca>, "jody.wilson-raybould at parl.gc.ca" <jody.wilson-raybould at parl.gc.ca> Cc:  Sent: Sun, Aug 26, 2018 at 1:51 AM Subject: Concerns for the fiscal risks of Enbridge LIne 9 and 10  Dear Hon. Prime Minister and Ministers 
Here is the article confirming how the Minnesota Commerce Department concluded that Enbridge’s current general liability policies for its entire U.S. mainline oil pipeline system, which would include new Line 3, has “significant exclusions for insurance coverage related to damages caused by a crude oil spill.” With those exclusions, Enbridge’s insurance policies will not meet the conditions required by the Public Utilities Commission when it granted Enbridge a “certificate of need” for the Line 3 pipeline in June.
http://www.startribune.com/enbridge-oil-spill-insurance-inadequate-minnesota-regulators-say/490940011/

In the attachments is a list of all the US Mainline pipelines and the layout of how they all connect to Line 9. Line 10 and 11 go from the US and end at Westover Oil Terminal.  This information was found on Enbridge Energy Partners website. 
So the question must be asked: How reliable is the fiscal projection for Line 9,  if the US mainline pipelines feeding into it from the US in Sarnia and Westover all lack reasonable insurance?
The fiscal projection of Line 9 was made in 2011 and 2012 prior to the major drop in oil and natural gas prices. In the attachments is the Kinder Morgan Transmountain price projections which was completed around the same time as the Line 9 hearings.Natural Gas was priced at $3.80 and oil at $70/Barrel for WCS oil. The problem is in 2014, Fracking in the US ramped up US supply resulting in a drop of demand for Canadian product. The prices fell due to oil glut. 
Here is the Alberta Government's prices for Canadian Natural gas. It sits currently at .75 cents per gigajoule priced in Canadian dollars.http://economicdashboard.alberta.ca/NaturalGasPrice

WCS which is Alberta Oil, is priced from Jan to July 2018 at an average of $44.92/barrel Canadian dollars, which is the highest it's been in years... yet still no where close to the projected $70. http://economicdashboard.alberta.ca/OilPrice

In the US according to the Minnesota Tax Court, the Minnesota Department of Revenue overvalued Enbridge Energy's oil pipelines from 2012 to 2014 by $3.2 billion. Now the burden of paying refunds could fall on the 13 counties that the pipelines pass through. The amount needed to refund is greater than the municipal levy of many of these communities. Could the same happen in Canada?http://www.grandrapidsmn.com/free_press/judge-state-overvalued-enbridge-pipelines-by-billion-in--year/article_3d301464-59ef-11e8-917c-6b06a6d6b0c7.html

Enbridge is currently 61 billion in debt.https://business.financialpost.com/commodities/energy/enbridge-sells-4-3b-in-assets-to-brookfield-consortium-in-bid-to-reduce-61b-debt-pile

Enbridge is liquidating their pipeline assets to shares and flooding the market with cheap stock values ticking off shareholders.  Enbridge has issued over one billion shares in the past three-and-a-half years alone. https://business.financialpost.com/news/fp-street/one-billion-share-issuance-weighs-on-enbridge
Reuters exposed how oil pipeline firms are giving "occasional shippers" cheaper prices than their long term clients simply to fill the pipelines. Here is the link to the graph illustrating how this scheme worked. What incentive is there for people to renew long term contracts with Enbridge if it locks them into paying a higher rate? What does this mean for communities?  http://fingfx.thomsonreuters.com/gfx/rngs/USA-PIPELINES-TARIFFS/010041SG3WH/OIL.jpg 
It seems Enbridge is shifting into self destruction mode buying the short they are creating in the stock markets. They borrow shares, sell and devalue them then purchase shares back at a lower rate to replace what they took while pocketing the price difference but where does this leave communities, investors and beneficiaries of the pipeline systems? Are they being reasonably informed of this risk?  With MLP structures, the shareholders have the burden to cover tax expenses when a company fails. The US SEC issued a warning about this but I have yet to see Canadian warnings to communities, investors or taxpayers about this. https://www.sec.gov/oiea/investor-alerts-bulletins/ib_mlpintro.html
The need is there to clearly warn communities and investors about these types of risks. The need is there to re-assess the fiscal projections not only of the US mainline system but for the pipelines dependent on that flow in light of the policy changes and the lack of insurance. Communities have been far to over reliant on these revenue streams and not critical enough of the risks these payment schemes pose. We need communities to stop their addiction to the funding incase they are asked to give it back. They need a better contingency plan in place to protect themselves should Enbridge try to reclaim lost revenues back. 
Right now Enbridge is selling Line 10 to a US company. This means a Canadian made Master Limited Partnership pipeline asset is being moved to US ownership to benefit a US based company who may be able to use NAFTA against Canada if Line 9 is cancelled because it could impair their ability to move product eastbound. Do we want to give a US based company that kind of power? 
Please don't ignore the risks associated with the sale of Enbridge Line 10. The NEB is considering whether or not this case needs a hearing. In my view, it absolutely does. 
Enbridge Pipeline Inc. sold Line 9 and LIne 10 pipelines as an asset to Enbridge Income Fund back in 2015. By law they are two separate companies and yet currently Line 10's sale is happening and Enbridge Pipeline Inc. is claiming ownership and acting as the applicant for the sale of it.  Both firms are legally separate entities from Enbridge Inc. yet it appears they cannot make independent fiscal decisions without direction of Enbridge Inc. 
Recently I submitted a letter of comment to the NEB regarding the sale of Enbridge Line 10. You can view it online. The second document listed is my issues and questions along with the supporting attachments for your reference. https://apps.neb-one.gc.ca/REGDOCS/Item/Filing/A93434
Enbridge provided a written response suggesting that our concerns were out of scope even though I framed the questions specific to NEB Act section 52(1) (a) & (b).  I note the fact they did not refute my concerns regarding their use of shell companies. They failed to provide information outlining their corporate structure and have failed to provide answers for many questions presented to them by other parties. Here is their written response. https://apps.neb-one.gc.ca/REGDOCS/Search?loc=3594349&txthl=a93704-1&sr=1&er=1

Enbridge's response does not reflect reasonable planning and it certainly was not written in good faith. They simply gave false and in my view, defamatory allegations that stated we were out of scope. 
I have been involved with many public processes at the municipal, provincial and federal levels for years but this kind of condescending behaviour doesn't reflect a company willing to speak with people. The tone, the lack of professionalism along with the lack of actual answers doesn't facilitate a fair and reasonable planning process. 
The first Line 9 hearing, Enbridge's staff shook my hand and thanked me for telling them they need to hold a check worth the value of the engineering services they are provided so if issues happen based on flawed EA and the engineer was to blame they can cash the check. It gives a measure of accountability for the engineering firms and a better incentive to do good work to mitigate risks. 
The second hearing I won concessions to install new valves along major water ways which shows my concerns are neither frivolous nor vexatious. 
The third hearing they denied my right to give oral presentation without reasonable explanation.  And now they want to bypass even having a hearing regarding the sale of Line 10. This isn't showing an improvement here. 
We as taxpayers deserve better than this kind of treatment. We need standards set to get to the answers we need because right now Enbridge is using statements of opinion without reasonable merit to bypass public engagement. This fails the appearance of fairness. We a taxpayers and communities have a great deal at risk with the sale of Line 10.  Please help facilitate a hearing so we can get to the answers we need to reasonably mitigate the risks together. 
Thank you kindly for your time. 
Yours in good faith
Louisette Lanteigne700 Star Flower Ave.Waterloo Ont.N2V 2L2 

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