environmental performance

Climate Change

Climate change is an issue of strategic importance to all Enbridge businesses, regardless of where they operate.

As one of North America’s major energy delivery companies, Enbridge operates and has equity ownership in an extensive network of pipelines and facilities to transport oil and natural gas to a wide variety of commercial, industrial and residential customers. Our international involvement includes a 24.7 per cent equity ownership of the Oleoducto Central S.A. (OCENSA) crude oil pipeline in Colombia and 25 per cent of Compañia Logistica de Hidrocarburos CLH, S.A. (CLH), Spain’s largest refined products transportation and storage business.

Our North American network includes natural gas gathering, processing, transmission and distribution pipelines that move natural gas from production fields to distributors, storage and ultimately to customers. Liquids pipelines transport oil and other liquid hydrocarbons across the continent. Each of these different types of pipelines and facilities has a unique mix of GHG emission sources and characteristics.

We view the development of a carbon management strategy to identify the risks and opportunities associated with our GHG emissions as an integral part of our broader commitment to CSR.

Top of page Managing our Climate Change Initiatives

Board CSR Committee

The CSR Committee of Enbridge’s Board of Directors has specific oversight responsibility for the development of a carbon management strategy. This Board Committee is supported by Enbridge’s senior management Corporate Leadership Team, as well as our Climate Change Sub-Committee.

Climate Change Sub-Committee (CCSC)

The CCSC meets monthly and provides focus for the corporation for all climate-change related activities. The CCSC reviews business and environmental risks associated with climate change and identifies policies and actions to mitigate this risk. Initially, the CCSC comprised representatives from our business units in Canada and the United States. To ensure a global focus, we expanded CCSC membership in early 2006 to include representatives of our international operations in Colombia and Spain. This committee also oversees the development of consistent internal methodologies for GHG inventorying and reporting and approves the reporting protocols to be used.

Top of page Public Reporting

We have been publicly reporting GHG emissions from our Canadian operations since 1995 and use internationally recognized reporting protocols developed by the World Resources Institute and the World Business Council for Sustainable Development.

To provide a clearer picture of our global carbon footprint, Enbridge is currently expanding GHG reporting to include all of our international operations and our Sponsored Investments in the United States where we have operational control over CSR policies and procedures.

In this year’s CSR report, we are for the first time reporting on our Spanish GHG emissions. Regarding our Colombian and United States operations, it is our intention to complete an inventory of GHG emissions from these assets as soon as possible. We anticipate that we will be able to report this information and our progress in setting GHG reduction targets for these business units in our 2007 CSR report.

Reporting to regulators

In Canada, while there is at present no regulation limiting GHG emissions, we submit data to the Canadian federal government’s (Environment Canada’s) mandatory GHG reporting program, as well as to the National Pollutant Release Inventory.

Our United States operations are not currently subject to any GHG regulatory regime. However, we actively participate in the United States Environmental Protection Agency’s voluntary Natural Gas STAR Program and report our activities to them. (See the page on broadening our commitment to the EPA’s STAR program.)

Reporting to stakeholders

In Canada, we report annually to the Canadian Standards Association’s Canadian GHG Challenge Registry. Our reports from all major Canadian business units are publicly available on the Registry’s website.

In early 2006, the Carbon Disclosure Project (CDP), through the Conference Board of Canada, invited Enbridge, as one of Canada’s 300 largest companies by market capitalization, to report on our GHG performance. We were pleased to respond to their request. The CDP is a secretariat for the world’s largest institutional investor collaboration on the business implications of climate change. CDP’s website is the worlds largest registry of corporate GHG emissions.

Top of page Our Targets

The base year for our targets is 1990, when Enbridge consisted of only five Canadian-based companies that emitted 377 thousand tonnes of direct carbon dioxide-equivalent (CO₂e) emissions. Another 899 thousand tonnes of indirect emissions were a result of electricity consumed by Enbridge facilities and operations.

In 2005, Enbridge achieved its corporate target to reduce its direct Canadian GHG emissions by 15 per cent below 1990 levels.

Our new interim target is to reduce our Canadian direct GHG emissions to 20 per cent below 1990 levels by 2010. Given the expansion of our company’s operations globally over the past few years, we will be reviewing our GHG target setting process as we continue to develop our broader corporate carbon management strategy. We will report on our progress in this area in our 2007 CSR report.

As of June 2006, the recently elected Canadian federal government had not stated its position on mandatory GHG emission reduction targets for companies such as Enbridge.

Top of pageOur Performance in 2005

In 2005, our Canadian operations had direct and indirect GHG emissions totaling 312 and 1,019 thousand tonnes of CO₂ equivalent emissions respectively. Direct emissions from our Canadian operations were 16 per cent less than in 1990, even though we delivered 33 per cent more liquids and 25 per cent more natural gas on our Canadian energy transportation and distribution systems. Enbridge Gas Distribution is our largest source of direct emissions in Canada and in 2005 was responsible for 90 per cent of our Canadian direct emissions.

We also continued to improve our emission intensity (our GHG emissions per unit of product transported). In 2005, emission intensity from our Canadian operations was 23 per cent better than in 1990. We are committed to further improving our emission intensity as part of our long-term carbon management strategy.

In Canada and the United States, our Enbridge business units undertake varying initiatives to address GHG emissions, depending on legislative and regulatory requirements. In each case, our approach has involved a management strategy to help Enbridge manage the risks from GHG emissions and take advantage of the opportunities. Some of the initiatives that have arisen from this strategy are described below.

Improving energy efficiency of our liquids pipelines

Pipelines use significant amounts of energy to transport oil and other liquids over long distances. As a result, one of the major opportunities for managing GHG emissions in our liquids pipelines is to improve energy efficiencies. In 2005, through improvements to our Liquids Pipelines system in Canada, including improving pumping efficiencies, we realized savings of almost 46 gigawatt hours (GWh), enough electricity for about 4,200 houses a year, and an efficiency improvement of 3.3 per cent.

Correction: In our 2005 Corporate Social Responsibility report, due to an editing error, we incorrectly reported that through this program we had saved 1,174 GWh of electricity in 2004. In fact, we saved 69 GWh in 2004 on a total consumption of 1,474 GWh. We apologize for the error.

Replacing cast iron pipe in our gas distribution system

Natural gas is mostly methane (about 95 per cent), a significant GHG. This presents Enbridge with another important opportunity to minimize GHG emissions from our systems by limiting the release of natural gas into the atmosphere.

In our Enbridge Gas Distribution system, one of the ways we are reducing fugitive methane emissions is by replacing older cast iron pipe with new polyethylene and steel pipe. Since the start of this program, we have replaced 1,261 kilometres (784 miles) of our cast iron mains in Ontario. In 2005, these activities avoided the loss of 5.4 million cubic metres of natural gas, the equivalent of avoiding 76.4 kilotonnes of CO₂e. This program is expected to be completed in 2008.

Encouraging the efficient use of natural gas by customers

We also reduce GHG emissions by helping our 1.8 million Enbridge Gas Distribution customers implement demand-side management (DSM) programs. These use a combination of tools, including information, audits and financial incentives, to encourage and enable customers to use natural gas more efficiently. Over the past decade, these programs have delivered 2.3 billion cubic metres of natural gas savings. This has resulted in “avoided” CO₂ emissions of about 4.3 million tonnes – the equivalent of removing about 930,000 cars from Ontario’s roads for a year.

Promoting renewable energy

Investing in emissions-free renewable energy is an important part of our contribution to mitigating the causes of climate change.

By 2007, Enbridge and Enbridge Income Fund investments in wind power will have the capacity to generate more than 270 MW. By displacing fossil fuel generating sources of electricity, our 270 MW of wind power generation will avoid 6.2 megatonnes of CO₂ equivalent emissions each year.

Enbridge Gas Distribution is also reviewing the role that renewable technologies could play in generating energy in a revitalized and refocused Ontario energy marketplace. Experience from elsewhere leads us to believe that new commercial opportunities exist in Ontario and beyond for the successful deployment of technologies such as ground source heating, solar thermal, and solar photovoltaic (PV) systems. We are now conducting feasibility studies to determine the optimum combination of such technologies with natural gas within a district energy and individual residential energy delivery framework. We already use solar PV technology at three of our sites and we are also looking at expanding the use of these technologies, such as ground source heat on our own gas delivery system to help reduce our GHG footprint. Our Liquids Pipelines group has also installed solar PV panels at 21 of their remote block valve sites to provide power between the months of April and October. (Please see the Sustainable Energy Commitments section page of this report for more information about our commitment to renewable energy.)

Top of pageBroadening our commitment to the EPA’s STAR program

We are committed to minimizing our environmental impacts through participation in voluntary programs that promote GHG emission reductions, spill prevention and pipeline integrity. Lowering air emissions and reducing loss of product is better for the environment, good for our customers and good for our bottom line.

Our United States Natural Gas Business is an active participant in the Natural Gas STAR Program, which the United States Environmental Protection Agency (EPA) introduced to encourage companies that produce, process, and transmit and distribute natural gas to implement cost-effective technologies and practices that reduce emissions of methane, a greenhouse gas.

Since the STAR program’s inception in 1993, 110 partner companies have eliminated 9.6 billion cubic metres (338 billion cubic feet) of methane emissions – the equivalent of removing more than 27 million cars from the road for one year or planting more than 103 million acres of trees. At the same time, partner companies have saved over US$1 billion by keeping more gas in their systems for sale in the market. Our United States Natural Gas Business has been a STAR program partner since late 2003, when we enrolled our 35 gas processing plants and 13,000 kilometres (8,000 miles) of intrastate pipelines in the program.

In 2005, our STAR program activities helped us avoid the loss of 37 million cubic metres (1.3 billion cubic feet) of methane or about 527,000 tonnes of CO₂ equivalents. Most of these reductions resulted from our use of aerial infrared imaging to identify pipeline methane leaks. In 2005, we conducted routine monthly surveys, flying over approximately 960 kilometres (600 miles) of lines and discovering and repairing 32 leaks.

We have been so pleased with the methane emission reductions we have achieved through the STAR program that in November 2005 we enrolled our interstate natural gas pipelines, which are located in the United States Midwest and along the United States Gulf Coast area and include our offshore pipelines, to participate in the program.

Also in November 2005, the EPA recognized our United States Natural Gas Business as the 2004 STAR Processing Partner of the Year at its annual conference and awards ceremony. We received the award largely due to our use of innovative leak detection technologies in helping to reduce methane emissions.

Compañia Logistica de Hidrocarburos CLH, S.A. (CLH)

Although not currently required by the European Union to report their CO₂e emissions, CLH has been internally tracking and reporting its basic data to allow its GHG emissions to be calculated. Under the auspices of Enbridge’s Climate Change Sub-Committee, we are currently developing internal data management systems to allow better tracking, verification and reporting of GHG emissions from CLH.

Oleoducto Central S.A. (OCENSA)

As an ISO 14001 certified company, OCENSA has developed the internal management systems to allow the tracking of data to calculate their GHG emissions. Under the guidance of the Enbridge Climate Change Sub-Committee, the company is developing internal procedures to allow calculations and public reporting of its GHG emissions in the future. This is being managed by an external consultant and we anticipate that we will be able to report OCENSA’s GHG emissions in our 2007 CSR report.

Top of pageContributing to Climate Change Policy

With the ratification of the Kyoto Protocol, Canada pledged to cut its GHG emissions by six per cent from 1990 levels by 2012. However, the recently elected federal government has stated publicly that Canada will not reach its Kyoto targets and has indicated it is seeking a “made-in-Canada” response to climate change.

As the federal and provincial governments develop major climate change policies, Enbridge is and will remain actively involved in discussions with them and is committed to providing constructive input and balanced approaches. We will also remain engaged in the discussions through key industry bodies, including the Canadian Gas Association, the Canadian Association of Petroleum Producers, the Canadian Energy Pipelines Association, and the Canadian Energy Partnership for Environmental Innovation.

In the United States, our company monitors and provides input to policy development, regulatory processes and legislative actions, which are driven by clean air standards, including lowering GHG emissions.