As we noted in a recent issue of Maple Leaf Memo, pipeline companies are being forced to learn how to navigate issues well beyond their core expertise. Indeed, the number of constituencies involved in approving a massive pipeline project means that companies have to undertake some serious cultural diplomacy, particularly in the key coastal province of British Columbia, where First Nations, environmental groups, and labor unions wield considerable clout.

And Canadian pipeline company Enbridge Inc (NYSE: ENB, TSX: ENB) may have just learned an important lesson in cultural sensitivity.

Late last month, British Columbia officially declared its opposition to Enbridge’s Northern Gateway pipeline due to concerns about how the company would prevent and handle possible spills and other environmental disasters, both logistically and financially. However, this move is likely just another part of a complex negotiation to extract concessions from Enbridge.

The project is currently undergoing final review for approval, with all sides delivering oral arguments before a three-member Joint Review Panel that includes representatives from the National Energy Board and the Canadian Environmental Assessment Agency.

According to the Financial Post, the company’s final remarks before the panel included a dramatic plea that the project be approved for the sake of the Canadian economy, with Enbridge lawyer Richard Neufeld rhetorically asking, “You want to see an economic ‘black swan’ for Canada?” before detailing a worst-case scenario should Canada continue to rely on US demand.

Still, British Columbia has left open the possibility of changing its mind if Enbridge can meet five key conditions, including “world leading” marine and land oil spill prevention, response and recovery systems.

Enbridge’s management team understands that they’ll have to address BC’s environmental concerns and appears more than willing to do so, though one executive said that these conditions can’t be fully met until the end of the review panel process.

But management’s conciliatory tone was in stark contrast to their lawyer, who asserted that no amount of additional information on the project could hope to pacify environmental groups opposed to it. The groups arrayed against the project argue that what Enbridge has provided thus far has been largely conceptual, lacking the detail necessary to determine if the company can truly operate in accordance with the high standards it’s promising.

However, the federal government is naturally interested in seeing this project come to fruition in order to boost exports, so it’s also working with all parties to make it happen.

Indeed, the Canadian government and energy producers alike are hoping to reduce the country’s dependence on the US by building the infrastructure necessary to ship landlocked energy products overseas, with Asia as a prime destination for these commodities. And Enbridge’s proposed 731-mile Northern Gateway pipeline will be one of the main avenues for moving inland crude to coastal export facilities.

The CAD6 billion pipeline is expected to transport an average of 520,000 barrels of crude oil per day from the oil sands in central Alberta to the west coast in British Columbia. That amount would account for one-third of oil sands production, based on 2011 numbers.

The final hearings conclude in two weeks, and the panel has until the year’s end to make a recommendation to the federal government, which presumably means there will still be ample time for all parties to achieve some sort of compromise.

The bottom line is that although BC’s formal opposition is certainly a setback for the project at this late juncture, we expect both Enbridge and the federal government will do what it takes to appease the provincial government.