North American demands for energy commodities exceeds indigenous supply, inciting the development of frontier reservoirs such as northern gas, northern Alberta oilsands, and Liquified Natural Gas (LNG). Enbridge is a reputable operator with a strong environmental track record with experience in these areas and is well positioned to participate in these developments.

Security of Supply

Given increasingly tight supply and geopolitical uncertainty, governments and large energy users are seeking diversification of energy supply, often broadening their reach to non-traditional supply sources. Enbridge is well positioned with respect to transporting Canadian exports of both oil and gas to the United States.

Commodity Price Volatility

As global energy supplies are tight, demand varies with weather, and infrastructure constraints exist, prices of natural gas, oil and electricity remain volatile. Enbridge has very little direct commodity price exposure as it doesn't find, generate, develop, sell or trade these commodities. Enbridge simply delivers them. High and volatile commodity prices can affect long term demand elasticity and therefore Enbridge is indirectly exposed to some degree.

Financial Flexibility

Credit rating agencies' scrutiny of industry participants remains high following the demise of Enron and other U.S. peers. Enbridge has significantly reduced its debt leverage and is committed to maintaining flexibility.

Consolidation

Numerous pipeline assets are available for purchase given asset sale programs of certain industry players following their de-leveraging initiatives. Enbridge continues to evaluate strategic opportunities but remains prudent and patient.

Incentive Regulation

The development between customers, regulators and utilities of alternative arrangements that provide financial incentives to achieve cost efficiencies, benefiting both customers and shareholders. Enbridge was the first crude oil common carrier in North America to implement a comprehensive incentive tolling agreement, and applies incentive tolling methodology to other core regulated businesses and new projects.

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