Enbridge Spreads Tentacles to Acquire Spectra, Creating 'Pipeline Enemy #1'
Merger 'would only enhance the power of the oil and gas industry to manipulate the energy marketplace and encourage the continued use of fracking,' says Wenonah Hauter
Two pipeline corporations have announced plans to merge, raising the hackles of climate activists who say the deal "would be bad news for energy consumers and terrible news for the clean energy revolution on which the future of our planet depends."
Canadian pipeline behemoth Enbridge said Tuesday that it plans to buy Houston-based Spectra Energy Corp. for stock worth $28 billion, creating what CBC News calls "a North American energy infrastructure giant."
"The proposed Enbridge-Spectra Energy merger is just the latest example of an evolving corporate energy monopoly—call it the Frackopoly—that is working to bind our society to a long future of dirty, dangerous fossil fuel extraction and consumption."
—Wenonah Hauter, Food & Water Watch
"We'll be the FedEx" of the pipeline business, Greg Ebel, Spectra's chief executive, said in an interview with the Calgary Herald. "We ship, we pick up, we store product," said Ebel, who will become non-executive chairman at Enbridge.
The Herald suggests that amid growing resistance on the ground, "[f]or pipeline companies, it may be easier to buy than build."
Indeed, the Wall Street Journal reports that both companies, "like many other pipeline operators, have both struggled to build new lines during the downturn, in part because of low prices and regulatory obstacles."
The Journal continues:
Spectra has been trying to expand its existing network across New England, but last month the Massachusetts Supreme Court ruled that the power utilities that would be Spectra's customers cannot pass along additional costs to homeowners and businesses, putting those plans in jeopardy. This summer a Canadian high court overturned an earlier approval of Enbridge’s proposed Northern Gateway oil pipeline connecting Alberta with the Pacific West Coast.
Spectra, which has pipelines in the Marcellus basin in the eastern U.S., controls one of the biggest natural gas pipelines that feeds New York City. Enbridge has expanded existing pipelines that carry oil across the border, helping Canada set new export records to the U.S.
Enbridge has also identified more expansions it can do on its old pipelines which will eventually carry another 800,000 barrels a day of oil across the border. The added capacity would be equivalent of building Keystone XL, but Enbridge won't need the same kind of U.S. State Department approvals to proceed that stymied rival TransCanada Corp.
With such ambitions in mind, the consolidation of these companies "would only enhance the power of the oil and gas industry to manipulate the energy marketplace and encourage the continued use of fracking, the widely used fossil fuel extraction method that is inherently hazardous to human health and our environment," warned Food & Water Watch executive director Wenonah Hauter on Tuesday.
"For more than 100 years, political influence peddling has facilitated the consolidation and control of our energy system by a handful of corporations and financial institutions," she said. "The proposed Enbridge-Spectra Energy merger is just the latest example of an evolving corporate energy monopoly—call it the Frackopoly—that is working to bind our society to a long future of dirty, dangerous fossil fuel extraction and consumption by aggressively developing an extensive network of pipelines and infrastructure projects that the oil and gas industry requires to survive and profit."
What's more, 350.org communications director Jamie Henn pointed out on Twitter, the merger "directly connects" the fight against the Dakota Access Pipeline in the Midwest with the battle to stop Spectra in the Northeast.
By purchasing Spectra, Henn told Common Dreams in an interview, Enbridge now finds itself at the center of "some of the highest profile climate fights in the nation"—which he predicted will bolster ongoing protests "as pipeline fighters find common cause."
— Jamie Henn (@Agent350) September 6, 2016
— Jamie Henn (@Agent350) September 6, 2016
— 350 Madison (@350Madison) September 6, 2016
— Rachel Marco-Havens (@woodstockwater) September 6, 2016
Henn also expressed optimism that news of the deal could "really turn up the heat on institutions that are investing in Enbridge," as the company emerges as a "lead villain in this drama."