On June 25, under the fluorescent lights of a Best Western ballroom in Terrace, British Columbia, Dentons’ Richard Neufeld made a last pitch for his client. More than a decade had passed since the Calgary-based pipeline company Enbridge Inc. had first floated the idea of piping half a million barrels a day of diluted bitumen from Alberta’s oil sands to the Pacific Coast. Now, 18 months into a contentious hearing process over the pipeline, Neufeld told a government-appointed review panel that his client’s $6.3 billion, 727-mile long project, Northern Gateway, was more vital to Canada than ever. The country’s 178 billion barrels of proven oil reserves are second only to Saudi Arabia’s—and burgeoning Asian markets are eager to buy them.

And there aren’t a lot of other options for moving bitumen out of Alberta. Prospects for TransCanada Corporation’s Keystone XL pipeline to the Gulf of Mexico have dimmed. Meanwhile, each year without a new pipeline, oil companies are losing more than $20 billion—and the province of Alberta is missing out on substantial royalties. If Enbridge’s pipeline is not approved, Neufeld told the panel, “Canadians would be facing, we submit, an economic catastrophe of unprecedented proportions.”

The panel, which has until next month to decide whether to recommend the project, is assessing its potential economic and environmental impact at a politically charged time. There is intense disagreement among Canadians over Alberta’s oil sands and their country’s future. The Northern Gateway project, like Keystone XL in the United States, has exposed the seemingly unbridgeable divide between environmental coalitions on the one side, and the pipeline company and its oil industry backers on the other. The province of British Columbia—politically left of and considerably greener than neighboring Alberta—opposes the project, while Alberta and the Conservative national government of Prime Minister Stephen Harper both strongly support it. Ultimately, the final decision belongs to Harper—but in the meantime, almost everyone has had their say.

As an example of grassroots engagement in a quasi-judicial process, the hearings were a wild success, with roughly 275 groups and individuals registering as “intervenors” and dozens of interest groups offering evidence and cross-examining witnesses.

But for the oil industry, and for the Harper government, the sprawling, tumultuous hearings were the poster child for a regulatory system run amok. Beyond the cost of delays, Enbridge will have spent more than half a billion dollars on the regulatory process, including legal, marketing, and engineering costs, before the pipeline even breaks ground. Citing the excesses associated with Northern Gateway’s hearing process, the Harper government last year overhauled Canadian environmental laws to restrict intervenors in Canada’s National Energy Board public review process to “interested parties” only.

Neufeld, a Calgary native, has spent much of the past 15 years advising on some of the largest pipeline projects in Western Canada. This work includes guiding Alliance Pipeline in the late 1990s through a review of its 2,311-mile gas line from Northeast British Columbia to Chicago, and advising prospective shippers in the now-tabled 785-mile Mackenzie Valley gas line from the Northwest Territories to Alberta. But little about the Northern Gateway review followed past playbooks. Neufeld’s previous efforts occurred generally out of the national spotlight; this one unfolded on the front pages of Canadian dailies. Dozens of opponents challenged Enbridge’s experts and evidence at every turn, and at times, close to 30 witnesses appeared en masse to answer questions at the hearing. In addition to the eight-volume application itself, the panel is considering voluminous evidence offered by intervenors, as well as 22,000 pages of oral evidence and hearing transcripts.

Neufeld’s job was further complicated by Enbridge’s own PR problems during the hearings. In July 2010 an Enbridge pipeline carrying Albertan oil ruptured in Michigan in the largest on-land U.S. spill ever recorded. In July 2012, just as Northern Gateway evidentiary hearings got rolling, the U.S. National Transportation Safety Board issued a report damning the company’s spill response in Michigan as grossly inadequate. And in March 2013, during heated cross-examinations of experts on both sides evaluating Enbridge’s spill response plans, the Environmental Protection Agency ordered Enbridge to dredge the Kal­amazoo River because some 180,000 gallons of oil remained mired on the river bottom. Enbridge also could not banish from the proceedings the ghost of the 1989 Exxon Valdez spill, which had devastated a marine inlet in neighboring Alaska.

The intense emotions surrounded the hearings “brought a different dimension that counsel had to pay attention to,” acknowl­edges the unflappably courteous Neufeld. “We had to try to depersonalize things so we were dealing with issues, rather than personalities. That’s difficult when people have pretty strong views.”

Enbridge first floated the idea of a pipeline to the Pacific in the late 1990s. At the time, two coastal B.C. communities, Prince Rupert and Kitimat, both expressed interest in hosting the project’s terminus. In 2005 Enbridge signed a memorandum of understanding with PetroChina International to partner on a then $3 billion project to pump the oil across the Rockies to the Pacific. Tapping Neufeld, Enbridge filed a preliminary project description with the Canadian Environmental Assessment Agency and the National Energy Board. Enbridge executives began a campaign to win over native Canadians, known in Canada as aboriginals or First Nations, promising jobs and other benefits. (Under Canada’s constitution, the government has a duty to consult First Nations on proposed development affecting lands over which they have traditional claims; in practice, companies try to strike deals up front with the individual aboriginal groups, also known as bands.) But in 2006, it put plans on the back burner, and abruptly pulled out of talks with First Nations, leaving behind ill will among some groups. In 2008, with the Albertan oil patch undergoing a frenzied development, Enbridge obtained $100 million in commitments from Asian refiners and Alberta oil producers to finance the regulatory process and dusted off pipeline plans, but this time, nearly a dozen British Columbia First Nations quickly began agitating against the project.

By the time Neufeld filed Enbridge’s formal application in May 2010, environmental activists had jumped into the pipeline fray. Ad campaigns in the U.S. and Canada targeted Canada’s “dirty oil”; increasingly, the mission was to stop all oil sands pipelines to slow production. The extraction and processing of bitumen, a viscous hydrocarbon, releases more climate-changing gases than production of lighter grades of crude, and generates large quantities of toxic wastewater.

A growing chorus of environmental advocates and community leaders succeeded in getting the government to expand the review panel’s mandate beyond the inland pipeline route to include potential impacts on marine life in channels through which tankers would pass. But when the panel members were announced, none was a maritime expert. The panel’s composition—two Albertans and one from Ontario—also created problems of legitimacy in B.C.

In 2011 the panel invited individuals to register to give 10-minute oral statements at community hearings. In a “mob the mike” campaign organized by environmental/First Nation coalitions, more than 4,300 people signed up, virtually all pipeline opponents. Some 1,179 would actually show up to testify, and 9,400 people wrote letters of comment, according to the NEB.

The day before community hearings kicked off in January 2012, Canada’s minister for natural resources, Joe Oliver, lashed out in an open letter. Environmental and other “radical” groups, he wrote, “threaten to hijack our regulatory system to achieve their radical ideological agenda,” stack the hearings with people to delay or kill “good projects,” and use funding from “foreign special interest groups.”

With the battle lines now drawn, the panel began evidentiary hearings in Edmonton in July 2012. Helping Neufeld press the economic case were some of the country’s leading business-side regulatory lawyers. Five oil majors funding the pipeline enlisted Norton Rose Fulbright’s Don Davies; the Canadian Association of Petroleum Producers relied on Lawson Lundell’s Keith Bergner; and MEG Energy Corp., a large oil sands company partly owned by CNOOC Ltd., tapped Bennett Jones’ Loyola Keough. The government of Alberta also argued for the project, looking to Ronald Kruhlak of Alberta’s McLennan Ross. Between filing and early 2013, Neufeld flew in 59 experts, and responded to hundreds of intervenor motions and informational demands. Meanwhile, the community hearings continued at intervals. For 18 months, Neufeld, a rotating batch of four Dentons partners and three associates, and the panel itself put aside normal life to attend hearings in tiny towns along the pipeline route, some accessible only by airplane.

The opposition argued that the economic case for the project was weaker than the oil industry claimed, but focused its main efforts on the environmental case against the pipeline. Tensions rose throughout the hearings. Last winter, faced with increasingly unruly protests, the panel barred the public from community hearings in Vancouver, Victoria, and Kelowna, B.C. At final oral arguments, Neufeld’s team and a handful of Enbridge executives had to leave the hearings through a back door, accompanied by security, while roughly 70 protesters beat drums and chanted slogans in front of the Best Western.

In 2011 Chris Tollefson, a law professor at the University of Victoria who founded the country’s first environmental public interest law clinic, received a $2.75 million grant to expand law students’ clinical opportunities. He had been following the Northern Gateway hearings, and saw that some groups—including Nature Canada and B.C. Nature, whose members are nature enthusiasts and birders—didn’t have outside counsel. With his grant money, Tollefson and a few of his students began representing the groups pro bono in August 2012. He proved a pugnacious presence at the hearings, challenging Enbridge to show how it would protect B.C.’s endangered (and iconic) woodland caribou and calling attention to gaps in the company’s assessment of potential impacts on marine birdlife.

Another formidable opponent was Barry Robinson, the Calgary-based staff lawyer for Canada’s EcoJustice, a legal advocacy group loosely affiliated with the U.S.’s EarthJustice. Representing ForestEthics Advocacy and two other provincial green groups, Robinson and cocounsel Timothy Leadem attempted to cast doubt on Enbridge’s ability to operate a pipeline safely and to prevent or respond to spills; they put forward more than 60 exhibits and 21 experts to counter those forwarded by Neufeld’s team. Partly in response to issues raised by ForestEthics and others, Enbridge in July 2012 amended its plans, adding $500 million in upgrades that increased pipe thickness and the number of safety shut-off valves.

Neufeld told the panel that Enbridge had tried to do everything “practicably possible” to ensure that the project protected the environment. Enbridge’s opponents’ “overarching argument against approval was that the panel didn’t have enough information,” he said. But the truth, Neufeld said, was far from that: “The written record is, in a word, massive.”

Enbridge “keeps on saying, ‘We’ve never put forward as much information as we have here,’ ” says Tollefson, “ but to those of us involved, that doesn’t reassure us.”

Aboriginal groups inhabiting the evergreen forests and fjords of coastal British Columbia also lawyered up to oppose the pipeline at the hearings. If the government approves the plan, lawyers for several opponents say, it is likely that these groups will be the first to seek an injunction. Unlike environmentalists, First Nations wield constitutional tools to fight unwanted development. In 1984, in a case that lawyers say could be a model for future litigation against Northern Gateway, an aboriginal group on an island near Vancouver obtained a court injunction that halted a logging venture pending settlement of the tribe’s land claims. The injunction is still in force three decades later, with no treaty signed.

“This is the case I went to law school to do,” says aboriginal law boutique JFK Law Corporation cofounder Rosanne Kyle, whose firm has led representation for the 1,800-member Gitxaala First Nation, one of Enbridge’s most effective opponents at the hearings. “A project like this, because there are potentially large economic benefits, is just a stark example of what it means to have constitutionally protected aboriginal rights. This will be a test of whether those rights really mean anything. Because if it’s just a matter of economics always trumping everything else, then we really have to question why we have these rights and these review processes in the first place.”

Kyle’s client is one of several groups, including the Haisla and the Haida, that claim lands bordering channels that form the 93-mile route between the pipeline terminus and the Pacific. With much of the Gitxaala’s diet coming from the channel, even the slightest risk of a spill represents a catastrophic threat, Kyle asserted at the hearings.

The Gitxaala presented more than 5,000 pages of exhibits and retained 10 experts, including a Columbia University economics and statistics professor who testified that Enbridge’s mathematical risk assessment models didn’t properly take into account extremely rare “Black Swan” events like an Exxon Valdez–type spill. Another expert, a chemist, contradicted Enbridge’s experts on whether spilled bitumen would float in the channel, and a third expert ran thousands of spill scenarios, testifying that the oil would likely hit the shore in less than the six-hour window in which Enbridge had promised to respond to spills. Kyle, who got hooked on aboriginal law 20 years ago as a student, notes that British Columbia has few signed treaties with its First Nations. “That creates a lot of uncertainty and land issues,” she says. And the B.C. coastal bands “have historically been prepared to fight.”

If Northern Gateway is ever to break ground, Enbridge will also need to win over the likes of Gerald Amos, a Haisla leader and commercial fisherman from Kitimaat Village, just across the Douglas Channel from the proposed terminal site. On a cool June morning, Amos steered his fishing boat down the narrow channel. To accommodate the 525,000 barrels of diluted bitumen pumped each day, Amos notes, some 240 supertankers annually will be required to make the 16-hour trip to the open ocean, navigating island-strewn passages and channels less than a half-mile wide, often in poor visibility and high winds. And even without an accident, “the effects of all the tanker traffic start piling up,” Amos says. “It’s not rocket science.” In 1952, when Amos was 3 years old, Alcan Aluminum Unlimited (now Rio Tinto Alcan) was granted land two miles up the channel from his village to build a smelter. Back then, he claims, the government could sell development rights to anybody without consulting his people. Amos alleges that wastewater from the smelter and from a pulp mill upstream decimated the tribe’s main food source, an oily smelt called an oolichan.

By the time Amos was elected chief in the 1980s, however, First Nations’ claims on federal lands had been recognized by Canada’s Supreme Court. Amos used that new leverage to strike a first-ever deal with a liquefied natural gas company. The Haisla, numbering 1,781, have used cash from this and more recent LNG projects [see "In Canada, Some Pipeline Plans Find Little Resistance"] to buy up development rights in federal lands they have claimed as ancestral territories, granting them more certain control.

At the Northern Gateway hearings, the Haisla’s counsel at Vancouver aboriginal law boutique Donovan & Company also proved a formidable opponent. Jennifer Griffith, a former aquatics biologist turned lawyer, weighed in on the triple threat of the pipeline, the port terminal, and the tanker traffic on the Haisla territory. Among other things, in July 2012, she convinced the panel to allow her to enter into evidence an expert review of the NTSB’s report on Enbridge’s Michigan spill. The report, which was attached as an exhibit to her filings, identified serious response problems in Kalamazoo. “[Enbridge] employees performed like Keystone Kops and failed to recognize their pipeline had ruptured and continued to pump crude,” NTSB chairman Deborah Hersman wrote.

Despite safety concerns raised by the coastal First Nations, Enbridge says that more than half of the 45 eligible First Nations bands have quietly telegraphed their acceptance of a 10 percent equity offer in the pipeline—most in Alberta, but including some inland B.C. bands. According to the Vancouver Sun, that equity is worth about $7 million per year over 30 years, or $230,000 per native community—$280 million in total. One Sun columnist called the offer the 21st-century equivalent of beads and blankets; but Neufeld, whose firm provided advice on the equity offer, says benefits would be broader, including contracting and procurement opportunities. Together with a package the company has more recently offered the coastal areas, the company says broader benefits are worth approximately $1 billion.

Neufeld says claims by several First Nations that they had been inadequately consulted are far from the truth. “The evidence showed pretty clearly that the project not only listened, but in fact responded with extraordinary measures to ensure that the pipeline and marine transportation will be safe,” he says. “In an ideal world, every person, every community, every region would be satisfied that the benefits of a particular proposal outweigh its burdens to them. But we don’t live in an ideal world. Trade-offs are a fact of life.”

Still, it remains unclear whether extending even substantially more money will convince the coastal First Nations that the trade-off is worth the risk. “There’s still a feeling that Enbridge didn’t really ‘get’ the aboriginal thing,” says Nature Canada’s Tollefson. “They didn’t understand the B.C. aboriginals. They still don’t.”

“I’m sure the company wouldn’t agree with that,” responds Neufeld. “Enbridge has an excellent track record in dealing with aboriginal communities, and it understands quite well the lay of the land with regard to BC coastal groups.”

“You’re trying to build consensus, and where you do, that’s going to fly under the radar,” he adds. “What you are left with at the hearings are people who, by definition, have the most strongly held views.”

Enbridge hasn’t given up the quest, But Quietly it has already
moved toward Plan B. In April the company filed a new application to bring the Albertan bitumen east to the St. Lawrence River via retooled natural gas lines. Neufeld’s colleagues Douglas Crowther and Ann Bigué are handling the NEB regulatory filing, known as Enbridge Line 9B Reversal Project. Meanwhile, TransCanada announced its own East-bound pipeline plan in August. A third pipeline company, Kinder Morgan Canada Inc., indicated in September that it would file a formal proposal by the end of the year to double its existing Trans Mountain oil pipeline, which terminates in Vancouver. Already that company, represented by Osler, Hoskin & Harcourt’s Shawn Denstedt, is facing opposition from the same green groups, local communities, and First Nations leaders. (Osler said it was not authorized to speak about the project.)

Many of the same opponents of Northern Gateway registered to intervene in the Line 9B review. But this time around, some, including ForestEthics, were excluded under the 2012 law curtailing participation. The law, enacted in large part in response to the Northern Gateway hearings, also gives the government authority to override a negative NEB panel decision.

In August, ForestEthics, together with an Ontario resident who had also been barred from official intervenor status at the Line 9B hearings, launched a legal challenge. The lawsuit, filed in Toronto, calls for the Federal Court of Canada to strike down provisions that unreasonably restrict public comment on proposed energy projects. The Conservative government “has undermined the democratic rights of all Canadians to speak to the issues that impact them,” said Clayton Ruby, a high-profile Canadian human rights lawyer handling the suit. “Right now, they cannot question the development of the tar sands itself. We’re challenging the legislation and the NEB’s new rules because they violate fundamental free speech guarantees.”

Neufeld says that whatever its perceived excesses, the Northern Gateway process has served the public interest. The adversarial-style process, he argues, “is an excellent way to evaluate the merits of contentious projects. It’s really designed to get to the facts as opposed to positioning and opinions.” As counsel to Enbridge, his role was to try to find and stake out the middle ground occupied by those still undecided. “That’s just good strategy,” he says—even when that middle ground is harder and harder to find.