Enbridge has proposed building the Northern Gateway pipeline which would allow

bitumen from Alberta to be transported to Asian markets. The province is doing a policy

review to decide whether to build the project. They estimate in their review that there is

a $10\%$ chance that a large tanker would run aground during the life of the project

causing great environmental and economic harm. The provincial government estimates

the damage in the case of a catastrophic spill would be $$5$ billion. The province would

benefit through jobs and royalties to the amount of $60$ million a year and the project

would last forever. Using a discount rate of $10$ percent estimate the expected NPV of

the pipeline.