Power, Wealth, and Responsibility –Enbridge

On 13 February 1947, the Imperial Oil Company found crude oil at its Leduc #1 well, about 15 km west of Edmonton. The Leduc well began Alberta’s oil industry. However, finding crude oil was only the first step for it still needed to be transported to refineries to turn it into useable products.

Two years later, Imperial Oil created the Interprovincial Pipe Line Company (IPL). Its first pipeline cost $73 million to construct and, in October 1950, began transporting crude oil from Edmonton to Superior, Wisconsin. Within a year, the company had transported 30.6 million barrels of oil. In 1953, a new pipeline, Line 5, was constructed from Superior to refineries in Sarnia, Ontario, allowing Alberta oil to supply Ontario’s growing manufacturing base. Throughout the 1950s and 1960s, IPL and its American subsidiary, the Lakehead Pipe Line Company, built more pipelines that connected additional American cities including Buffalo, Chicago and Detroit.

The company also expanded in Canada. In 1972, IPL pipelines were transporting an over 1 million barrels of crude oil per day across North America. In June 1976, after an expenditure of $247 million, a pipeline transported Alberta oil to Montréal. In April 1985, IPL pipelines connected the oilfields at Norman Wells, Northwest Territories, to its pipelines in Zama, Alberta, and, through that junction, across Canada and into the United States.

In 1988, IPL changed its name to Interhome Energy Inc. The company expanded in 1994 when it purchased Consumers’ Gas. It was soon transporting natural gas from its sources and distributing it directly to businesses and homes. About this time, the company’s name changed to IPL Energy Inc. The company’s operations expanded internationally with the acquisition of a pipeline in Colombia. By the summer of 1996, its 829 km OCENSA pipeline was transporting crude oil from the Cusiana and Cupiagua fields in central Colombia to its west coast.

Enbridge Created

In 1998, IPL changed its name to Enbridge Inc. The name refers to what the company does by linking the words energy and bridge. Shortly afterward, Enbridge became involved with the exploitation of the Athabasca oil sands in northern Alberta, near Fort McMurray. The difficult process of extracting crude oil from the area by processing it from the rock and soil in which it rests began in 1964. By the 1990s, the oil sands promised to be North America’s largest depository of crude oil. By 1999, Enbridge had built one long-haul pipeline connecting the oil sands to its existing pipelines in Edmonton and Hardisty, Alberta, and, through them, to other parts of Canada and to the United States.

Question of Power - Enbridge

In 1999, Enbridge developed a natural gas distribution network into New Brunswick. Its 2001 purchase of Houston’s Midcoast Energy Resources was followed by a further expansion of its American natural gas distribution network. In 2005, Enbridge acquired Shell Gas Transmission LLC, including ownership interests in 11 natural gas pipelines in 5 offshore Gulf of Mexico pipeline corridors.

Beginning in 2001, Enbridge began to invest in sources of renewable energy. It invested in Saskatchewan’s SunBridge wind power project and by 2012 was involved with 10 wind farms, 4 solar energy operations, 4 waste heat recovery programs, and a geothermal energy project — all representing a $5-billion investment. At the same time, Enbridge altered many of its practices with the goal of becoming more environmentally responsible. It was subsequently listed as one of the world’s most sustainable companies eight years in a row. In 2016, American magazine Newsweek ranked Enbridge the world’s 12th most sustainable corporation.

Controversy

While pipelines play an essential role in the transportation of crude oil and natural gas from their sources to refineries and then to customers, they are controversial because they sometimes break, resulting in leaks onto land and into water. Several Enbridge lines have suffered spills. In 2017, the Great Lakes Region of the National Wildlife Federation (NWF) stated that Enbridge’s aging Line 5 — linking Superior, Wisconsin, and Sarnia, Ontario — had experienced 29 leaks between 1968 and 2015, resulting in the spilling of over 1 million gallons of oil and gas liquids in 64 years. The NWF insisted that the leaks threatened the water supply of more than 40 million people.

In 2005, Enbridge signed a deal with PetroChina stipulating that it would purchase oil from Alberta’s oil sands. A 1,172 km pipeline would bring the crude from northern Alberta to the small, northern British Columbia port of Kitimat. The pipeline’s construction would cost $6.6 billion and be called the Northern Gateway. The project was immediately opposed by environmental groups who worried about spills along the route and in the harbour and along the coast. Several First Nations communities objected to the pipeline crossing their land.

Meanwhile, Enbridge initiated government approval processes to rebuild and expand its aging 1,659 km Line 3 that took crude oil from Hardisty, Alberta, to Superior, Wisconsin. The $7.5-billion project proposed to fix problems, render the pipeline safer and increase its volume to allow the transportation of 760,000 barrels a day. Objections were raised by environmental protection groups and communities through which the pipeline ran, including many Indigenous communities.

The Northern Gateway and Line 3 proposals led to fiery public hearings and long, complex submissions to the Canadian government’s National Energy Board, the body responsible for issuing the necessary licences to proceed. Enbridge admitted, with respect to both projects, that there is always “residual risk” but promised to take all necessary precautions to mitigate them. It pledged, for example, to use tethered tugboats to pull big oil tankers out of the Kitimat harbour and through the Douglas Channel, to employ new radar and other navigation aids, and to enforce strict rules about the quality of ships that would be allowed to transport the oil.

In July 2010, Enbridge’s pipeline in Marshall Township, Michigan, ruptured, dumping 20,000 barrels of oil in the Kalamazoo River watershed. The US National Transportation Safety Board investigated the spill and accused Enbridge of lax safety standards, made worse by the fact that the company’s monitoring stations had been between shifts when the rupture happened so that no one was watching the line. Enbridge promised to make changes, but the damage was done to the environment, to people of the area and to the company’s reputation.

In November 2016, the Canadian government announced that it would not approve the Northern Gateway project. Prime Minister Justin Trudeau said that he was approving a proposal put forth by Enbridge’s competitor, Kinder Morgan Energy Partners, to build a pipeline from Alberta to a bigger and more southern British Columbia port. Trudeau said of Enbridge’s Northern Gateway: “It has become clear that this project is not in the best interest of the local affected communities, including Indigenous peoples.” Trudeau also announced that the government approved Enbridge’s Line 3 rebuild.

Continued Growth 

In September 2016, Enbridge had purchased Spectra Energy Corporation of Houston, Texas, for $37 billion. The move increased Enbridge’s value to $166 billion and made it North America’s largest energy infrastructure company. Enbridge was restructured with its natural gas pipeline business run from Houston, its liquid pipeline business from Edmonton and its headquarters remaining in Calgary. The move also meant that Enbridge laid off about 1,000 employees. The layoffs, potential for tax savings, and capacity for more growth in Canada and the United States increased Enbridge’s stock price and dividends for investors.

In November 2017, Enbridge filed an application with the Ontario Energy Board to amalgamate with Union Gas. Enbridge stated that the merger of the two natural gas distribution companies would allow a more efficient distribution to customers. Critics said it would create a monopoly that would allow Enbridge too much power to control distribution and prices.

The questions surrounding the amalgamation were the same as had been asked for years regarding balancing a return on shareholder investment, consumer rights, the power of government to regulate, and environmental responsibility.

This column is my latest entry in the Canadian Encyclopedia which is a great source of information on all things Canadian.

Advertisements

The Important Canadian You Should Know

Denham Jolly is a man we should know. He is a Canadian teacher, entrepreneur, publisher, broadcaster, philanthropist, civil rights activist, and community leader.

Family and Personal Life

Born in Negril, Jamaica, Jolly enjoyed an idyllic childhood, playing on his family’s 300 lush acres and long, natural beach. His father was a successful entrepreneur and his mother was the local justice of the peace. After graduating from secondary school in 1953, he became a clerk with the West Indies Sugar Company but agreed with his parents that a university education was essential for his future.

Jolly was accepted at the Ontario Agricultural College at the University of Guelph. Upon entering Canada, he was forced to sign a document pledging that he would leave the country the day that his student visa expired. He later learned that only Black students had to sign the pledge and so he became acquainted with Canada’s subtle, bureaucratic racism. He augmented his studies with two years at the Nova Scotia Agricultural College in Truro before completing his Science degree at McGill University. Jolly wanted to remain in Canada but, due to the immigration rules, he was forced to return to Jamaica.

In April 1961, he was finally able to secure the papers necessary to return to Canada. He worked for a few months as a City of Toronto air pollution researcher and then secured a position as a biology teacher at a secondary school in Sault Ste. Marie. In the spring of 1963, he met the young woman who would become his wife, Carol Casselman. After a year in the Soo, Jolly accepted a position teaching Physics and Chemistry at Toronto’s Forest Hill Collegiate. Carol moved to Toronto to pursue her nursing career, they were married in July 1965, and later had three children.

Entrepreneurship

While enjoying teaching, Jolly earned extra income through the purchase of a Toronto rooming house. He then bought a second one. In 1968, he opened the Donview Nursing Home and six months later the Tyndall Nursing Home. The success of his growing businesses led him to leave teaching and, in 1972, he built a state of the art nursing home that grew to 151 beds. His entrepreneurial spirit was seen when he discovered the astronomical sum spent each month for his residents’ laboratory work and reacted by arranging for the consolidation of two private labs and then the purchase of 51% of the new company. Then, in 1990, Jolly observed that family members visiting his residents had difficulty finding nearby accommodation and so he purchased land and built a 65-room hotel that he called the Jolly Inn. A year later he paid the fee to register the hotel as a Day’s Inn. His businesses became international when he purchased a 120-bed nursing home in Dallas, Texas and began a boat chartering company in Montego Bay, Jamaica. When after only two years the profits from neither justified the headaches of running them from afar he sold them both – for a handsome profit.

Community Engagement

While becoming an increasingly successful businessperson, Jolly never forgot the racist student visa document he been forced to sign and the racial segregation he had experienced in Nova Scotia where, because he was Black, he could not attend an all-white church or enjoy a meal in a whites-only restaurant. Later, Jolly met Toronto landlords who assured him on the phone that an apartment was available but then became suddenly unavailable when he arrived to see it. When Jolly arranged for a white friend to visit the landlord, the apartment was available again. When buying his first house, the unwritten rules about where Black people could live in Toronto forced him to have a white friend pose as the purchaser while he pretended to be a contractor. He also found that some banks had more stringent loan conditions for Black than for white entrepreneurs. Others bluntly refused loans for Black-owned businesses. Jolly believed it was his responsibility to do what he could to help fight for racial equality.

Jolly became the treasurer of the Jamaican Canadian Association (JCA). He learned more about racist organizations in Ontario such as the Western Guard Party that worked with the Canadian KKK to harass non-white people, spread racist propaganda, and urge the government to restrict non-white immigrants. The JCA’s headquarters was burned to the ground in a suspicious fire that all assumed but was never proven to be arson.

One of the targets of racist groups and individuals was Contrast, a Black newspaper that had been founded in 1969. Its articles reflected the kaleidoscope of the Black experience in Toronto from the perspective of long-time residents and more recent arrivals from Caribbean islands. In 1983, the paper was in financial trouble until Jolly saved it by infusing much-needed capital. He became its owner and publisher. The paper remained free to readers even as Jolly increased it from 16 to 24 pages, made it more professional looking with new computerized type-setting equipment, broadened its range of articles, and improved the quality of its writing. Under his leadership, Contrast became, according to the Toronto Star, the “eyes, ears, and voice of Canada’s Black community.” He ran the paper for three years before selling it to another Jamaican-born entrepreneur.

Jolly was angry when he saw Black Canadian athletes applauded for earning medals for their country in the 1982 Commonwealth Games but then having to endure racist discrimination when they returned home. He and some friends gathered leaders from Toronto’s diverse Black community and formed the Black Business and Professional Association. He was its founding president. It supported and publicized the success of Black businesspeople and professionals, partly through the annual Harry Jerome Awards and Scholarships. Meanwhile, he personally funded scholarships for even more aspiring young Black people.

In August 1988, Jolly became a founding member of the Black Action Defence Committee (BADC). Its goal was to stop the harassment of Black citizens and the frightening regularity of white police officers being exonerated after shooting young Black men. The BADC wrote articles, staged demonstrations, lobbied politicians, and helped victims’ families. The Ontario government responded to a May 1992 Toronto riot that followed a peaceful protest organized by the BADC with an investigation that revealed and confirmed the depth of Toronto’s systemic anti-Black racism.

Denham Jolly

Radio

Jolly observed that among the problems facing Black youth in Toronto were the divisions within the Black community and a feeling of isolation as a minority within a predominantly white city. Part of a response to the problems, he decided, might be the creation of a Black-themed radio station that would play a range of Black music while offering Black voices and perspectives. He gathered other Black leaders and businesspeople and became the founder, president, and chief executive officer of Milestone Radio Inc. He then led the effort to have the Canadian Radio and Television Commission (CRTC) grant Milestone the city’s one available radio frequency. The first question he was asked by the all-white commissioners was, “What is Black music?” He knew his group was in trouble. The license was granted to another group that proposed a country music station.

A few years later, another frequency came available and Jolly led another expensive and complex effort to earn it. The Canadian government sabotaged its own process by stating in advance that the frequency would go to the Canadian Broadcasting Corporation (CBC). Finally, twelve years after first applying to the CRTC, his third application bid was successful.

In February 2001, Jolly’s FLOW 93.5 began broadcasting an energetic mix of R&B, reggae, rap, and stories told by Black on-air personalities about the Black community. Instead of having to tune into American stations, Black youth heard themselves reflected and their tastes respected over the air in their own city. As the station became increasingly successful, Jolly increased the power of its range so that it reached six million listeners across southern Ontario.

While a financial success, the station maintained its broader mission by promoting emerging Black artists, such as Drake. It provided scholarships for Black youth, staged free concerts, and supported Caribana, the annual celebration of Black-island culture. Not surprisingly, given the racial makeup of the region, 60% of FLOW’s listeners were white. This meant that more than just Black listeners were learning of the presence and vibrancy of the diverse Black culture that was a part of the Canadian mosaic. Jolly happily helped other Black music stations to form, first in Calgary and then elsewhere. After five years on the air, FLOW 93.5 was chosen as Canada’s best contemporary radio station.

Legacy

In his 70s, and pleased with the impact the radio station had made and that Black music had become mainstream, in 2011 Jolly sold Flow 93.5. He also sold his nursing homes. Jolly’s first marriage had ended in divorce and he later married Janice Williams. They traveled extensively, including to South Africa, where he had made generous donations to Nelson Mandela’s African National Congress to support its actions that helped end the state-sanctioned discrimination of Apartheid.

Jolly’s business acumen and community engagement were recognized through numerous local and national awards. Each recognized his dedication to his community and country and to the idea that Canada and Canadians will be better when there is justice for all through and the creation of a more equitable, non-racial nation whose reality matches its international image and the principles for which it stands.

I was invited to write this piece as an entry to the Canadian Encyclopedia. If you enjoyed it, please share it with others through your social media of choice and consider leaving a comment.