Enbridge distances itself from condo agreement between EPA head and a U.S. lobby group

Enbridge Inc. denied conflict of interest claims on Tuesday after a media report found that the head of the U.S.’s energy regulator had been paying US$50 a day for a property near Capitol Hill linked to the chairman of a key Washington lobby firm that represents the Calgary-based pipeline company.

The rebuttal came after the New York Times reported that Scott Pruitt, the head of the Environmental Protection Agency (EPA), had been renting a condominium from the wife of Steven Hart, the chairman of Williams and Jensen, around the time the EPA approved Enbridge’s controversial Line 67 replacement project.

Liz Bowman, a spokeswoman for Pruitt, told the New York Times in a written statement that “any attempt to draw that link is patently false.” 

Enbridge said in a written statement Tuesday that the lobbying group’s recent activity didn’t involve regulatory dealings tied to the pipeline project, and instead focused on broader policy issues. 

“The facts do not support the reporter’s insinuation,” the company said. “Williams and Jensen has not worked on any regulatory matters before the current administration on behalf of Enbridge. This includes matters before the EPA related to the Line 67 permit mentioned in the NYT story.”

The company went on to say that Hart “has never been registered to lobby on behalf of Enbridge.”

The lobbyist registry for the U.S. House of Representatives shows one Williams and Jensen lobbyist registered to represent Enbridge as recently as the fourth quarter of 2017. The lobby group did not provide more details around the nature of those lobbying efforts, but filings on the U.S. lobbying disclosure website state the discussions focused on “issues related to Canadian oil sands” and issues “affecting pipelines and construction of new pipelines.” Other discussions included “tax reform” and “pipeline safety issues and U.S. source requirements on pipe,” according to filings. 

Enbridge, for its part, said in a written response that “Williams and Jensen participated in advocacy on broader public policy issues, but not before the EPA and not regarding the Line 67 presidential permit.” 

In a search on the disclosure website, Enbridge’s name turned up 137 times as a client for lobbyists to the U.S. House of Representatives, with Williams and Jensen representing the company 47 times since 2006, including four times last year alone.

Pruitt was renting a condominium near Capitol Hill for $50 per night that was partly owned by Hart’s wife, according to the New York Times story, which claimed the transaction presents a potential conflict of interest. The story said the rental rate was well below other similar rental options in the region.

The EPA signed off on Line 67, also known as the Alberta Clipper line, in 2017. The expansion project that runs from Hardisty in Alberta to Superior, Wisconsin will allow the company to boost capacity to around 890,000 barrels per day, up from around 450,000 bpd today.

Enbridge said that the entire regulatory process for the Line 67 expansion, also known as the Alberta Clipper, took more than four years and was “exceptionally thorough.”

Enbridge stock tumbled on Tuesday following the news, with shares on the Toronto Stock Exchange slid more than three per cent in afternoon trading, before closing down 1.7 per cent to $38.81 per share.

The expansion comes as the company also looks to boost capacity through its replacement of Line 3, another artery in the company’s massive mainline system that ships some two million barrels of oil from Alberta to the U.S. Midwest every day. Line 3 has met some resistance from aboriginal groups and local communities on the U.S. segment of the pipeline, and has yet to secure all state-level permits.

The news report on Tuesday comes after allegations that Pruitt had misused taxpayer money during foreign trips, as well as a series of news reports in recent weeks suggesting the EPA head has maintained close ties to the industry he regulates. The EPA Office of Inspector General initiated an investigation into his spending in August 2017 after reports he had spent thousands on first-class plane tickets.

Allegations of Pruitt’s close industry ties come as Canadian companies struggle to build even pipeline expansions and replacements, as larger developments such as TransCanada Corp.’s Keystone XL and Kinder Morgan Canada Ltd.’s Trans Mountain expansion remain tied up in court challenges and opposed by local interest groups. 

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