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February 2014

Vol. 19, No. 8 Week of February 23, 2014

Kinder Morgan gets no breaks

Tripling Trans Mountain capacity faces same First Nations, enviros, local government resistance as Keystone XL, Northern Gateway

Gary Park

For Petroleum News

Trans Mountain has discovered that 61 years of careful stewardship and building bridges to First Nations will carry little weight as it enters the regulatory review process for its planned C$5.4 billion Trans Mountain expansion from the Alberta oil sands to the British Columbia and Washington state coasts.

With Canada’s National Energy Board on the verge of setting a 15-month schedule for public hearings on the project it is being swamped with applications for intervener status, including an unprecedented request from the Coast Salish which crosses the Canada-U.S. border.

The proposal involves raising capacity on Trans Mountain to 890,000 barrels per day from 300,000 bpd, with 540,000 bpd tagged for the Westridge Dock in Port Metro Vancouver to be exported to the Asia-Pacific basin.

A large portion of the balance would be destined for refineries in Washington’s Puget Sound.

The project largely involves twinning the Trans Mountain system, with 600 miles of new 36-inch diameter pipe, a section entering the fast-growing and heavily populated Greater Vancouver region.

An expanded Westridge Dock would transfer up to 630,000 bpd of crude a month to 34 Aframax class tankers, each with capacity of about 650,000 barrels.

If the National Energy Board and Canadian government approve the plan, construction could start in 2015, with first deliveries of oil sands bitumen to the Pacific Coast set for 2017.

Five municipalities, including the City of Vancouver, have submitted their applications to participate in public hearings, while more than 40 First Nations, including four from Washington state, have joined the lineup.

The concerns are primarily concentrated on the danger of accidents and spills from the pipelines or tankers moving through the Port Metro Vancouver area and crossing the U.S.-Canada border in the gulf west of British Columbia and Washington state.

Kinder Morgan has suggested all along that it has an edge over Enbridge’s Northern Gateway project because of its record of involving communities and residents along the existing Trans Mountain right of way since 1953 that it hoped would tip the balance of public opinion in its favor.

But First Nations counter that until recently they have not even been entitled to hire lawyers to challenge resource projects.

The City of Vancouver has mounted increasing opposition to the expansion and said its application for intervener status is based on “substantial increases in tanker traffic, land-based storage and transport of dilbit (diluted bitumen), all of which directly impacts and increases risks to Vancouver’s economy, public health and safety and the environment.”

It estimated an oil spill would cost the Canadian economy C$20 million per day in lost shipping and cleanup work, endangering the city’s C$3.6 billion a year tourism industry and its C$250 billion of commercial and residential waterfront property.

Mayor Gregor Robertson said Kinder Morgan’s proposal “represents all risk and no benefit for Vancouver.”

First Nations say view has changed

The First Nations say their bid for participation reflects how dramatically the public view of pipelines and oil sands development has changed since Trans Mountain was brought into service.

“The wishes and wants and participation of (aboriginal communities) weren’t even considered then,” said Ernie Crey, a spokesman for the Sto:lo Tribal Council. “If a pipeline passed over or near a reserve, that was a matter between the company and government.”

A joint application by the four U.S. First Nations in the Coastal Salish community voices concerns about the impact of any spills on either side of the U.S.-Canada border.

“The tribes are part of the Coast Salish people, whose political, social and economic linkages spanned the international border long before that border existed,” said the U.S. tribes, who underscored their reliance on salmon and shellfish for traditional and economic purposes.

They said the Salish Sea has already been “deeply impacted by a pollution-based economy.”

Swinomish Chairman Brian Cladoosby said in a statement that “we have decided no more and we are stepping forward.”

Company has said it will address concerns

Kinder Morgan did not immediately react to the petitions, although its Canadian President Ian Anderson said two months ago that the company “will fully address the needs and interests of British Columbia and the residents.”

He said the regulatory filing includes the “views, concerns and observations” Kinder Morgan gathered during meetings with First Nations, affected citizens, the public and other stakeholders including the government of British Columbia.

Anderson said Kinder Morgan has developed a close relationship with First Nations during the operating life of Trans Mountain and is now seeking “explicit letters of support for the project.”

British Columbia Environment Minister Mary Polak said Feb. 14 her government will not prejudge the process, but insists on Kinder Morgan meeting five conditions, including a plan to handle spills on water or land, full consultation with First Nations and direct economic benefits for the province.






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