Pipeline looms large as Canada's British Columbia votes

By Jennifer Kwan

VICTORIA, British Columbia (Reuters) - The left-leaning New Democratic Party is leading the election race in Canada's Pacific province of British Columbia, raising new doubts about a pipeline that would take Canadian crude oil from neighboring Alberta to the coast for export to Asia.

The NDP, about 17 percent ahead of the ruling Liberals in recent opinion polls, promises a new review of the $6 billion Northern Gateway pipeline if it wins the May 14 election, a process that would likely bring new legal challenges and delays.

"Northern Gateway is not in our economic or environmental interest," NDP leader Adrian Dix told Reuters in an interview. "We obviously think this decision should be made in British Columbia."

The pipeline, proposed by Calgary-based Enbridge Inc, is a key plank of efforts by the federal and Alberta governments to promote oil exports to Asia as a way to boost economic activity and create jobs. It would bring Canadian crude to the deepwater Pacific port of Kitimat for export to Asia.

Northern Gateway could also serve as a key link for export markets if the U.S. government denies TransCanada Corp's proposed Keystone XL pipeline, designed to take Alberta oil sands crude to U.S. markets. President Barack Obama is under heavy pressure from environmentalists to block the project.

Environmental and aboriginal groups also oppose Northern Gateway, and a poll released in February by Insights West showed 61 percent of adults in the province oppose the project.

The Liberals, led by Christy Clark, are also unenthusiastic and say they would only let the pipeline be built if Alberta and Enbridge meet a series of fiscal and environmental conditions.

But the Liberals have already signed a so-called "equivalency agreement" with Ottawa, agreeing that any decision by the federal government following the existing review of the pipeline constitutes B.C.'s stance as well.

Dix said he planned to revoke that agreement and proceed with his own review.

Chris Tollefson, executive director of the Environmental Law Centre at the University of Victoria, said it was anyone's guess long that process might take.

Even with federal approval, the pipeline would likely require hundreds of provincial approvals, licenses and permits to proceed, he said.

REVIEWS UPON REVIEWS

A federally appointed review panel is already holding public hearings into Northern Gateway, seen as key to lifting returns for oil producers by allowing their supply to be sold in more lucrative international markets.

The panel is due to rule by the end of this year, although recent changes to environmental legislation make it easier for the Conservative government of Prime Minister Stephen Harper to overrule the panel's findings if it wants to do so.

Environmentalist groups and aboriginals are worried about the risk of spills, recently embodied in a television commercial that features footage of the Exxon Valdez oil spill in the late 1980s, played to Simon & Garfunkel's "The Sound of Silence."

"Don't be silent. Vote for an oil-free coast," it says.

The Liberals, in power since 2001, are promising a tough campaign, regardless of their position in the polls, with a focus on balanced budgets and debt-reduction.

"British Columbia is at a crossroads, with two very different choices," Clark said in a statement that highlighted her party's efforts to control spending.

Both parties have proposed increases in corporate and personal income taxes, while the NDP says it will fund its spending promises by reintroducing a tax on banks and credit unions, as well as expanding the province's carbon tax base.

That's a red flag to the Vancouver Board of Trade.

"What I'd like is some inclusion in an NDP platform, if indeed they form government, some indication or some gesture that gives the green light for investment; a welcome mat for growing business and starting businesses and capital investment into the province of B.C.," said Iain Black, chief executive of the Vancouver Board of Trade and a former Liberal minister.

(Editing by Janet Guttsman and Bob Burgdorfer)

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