Kinder Morgan stirs concern with proposed pipeline expansion, reroute

Kinder Morgan’s ambitious and contentious plan to expand the volumes of crude bitumen it ships from Alberta’s oil sands to the Pacific Coast has moved up several notches.

Already facing heat from First Nations, environmentalists and municipal governments, the company has said it now hopes to add 240,000 barrels per day to the existing proposal to increase capacity on its Trans Mountain pipeline system to 890,000 bpd from 300,000 bpd, while more than doubling the size of its oil storage facility at a tanker terminal in Port Metro Vancouver.

In addition, it has introduced a major routing change for the new pipeline when it enters the densely populated region of Vancouver.

As Kinder Morgan puts the final touches on its expected regulatory application, the latest revisions to its C$5.4 billion project have raised the ire of its critics.

New target 1.13 million bpd

The company said its new target of 1.13 million bpd would require more pumping horsepower and some new pipeline segments, as well as further regulatory applications to develop the largest delivery system from the oil sands, surpassing TransCanada’s hopes of shipping 1.1 million bpd on its Energy East pipeline to Ontario, Quebec, and Canada’s Atlantic Coast.

Kinder Morgan describes its latest expansion proposal as “theoretical” and dependent on a combination of market conditions and economic and technical feasibility studies.

The company said that as a matter of “prudent engineering” it has decided to integrate “a future expansion” into its design to ensure it has the necessary infrastructure in place to handle greater volumes.

But it conceded there are “many obstacles to the viability of this expansion scenario,” including limited space for storage tanks.

Capacity of the company’s Puget Sound spur line to Washington state and the ability of Port Metro Vancouver and the Burnaby terminal to handle additional tankers would pose challenges, Kinder Morgan said.

The major routing change would involve running a pipeline through a mountain in the Burnaby area and is now upgraded to “preferred route status” in a formal application to the National Energy Board.

Greg Toth, Kinder Morgan’s senior project engineer, said the option “minimizes disruption to individual landowners and the general public as a whole.”

Currently, all affected Burnaby residential property owners have refused to let Kinder Morgan inspect or survey their land, Toth said, while the revised plan means none of those owners would be “directly” affected.

Burnaby Mayor Derrick Corrigan, a prominent member of the New Democratic Party, the left-wing opposition party in the British Columbia legislature, told the Vancouver Sun the revisions are “not good news,” posing questions about what would happen in an earthquake and where oil would go if there was a rupture inside the mountain.

John Clarke, a plaintiff in a legal challenge to the NEB’s regulatory process, said the tunnel option is “certainly the least offensive,” but added he remains opposed to the project.

The existing storage facility at Burnaby can hold up to 1.7 million barrels of crude and refined products. Kinder Morgan wants to expand that capacity to 5.6 million barrels.

Burnaby’s Deputy Fire Chief Chris Bowcock, who previously has been an emergency management consultant specializing in tank-fire suppression in the oil sands, said the “risks are just too great” of a catastrophic fire at Burnaby.

Hugh Harden, Kinder Morgan’s vice president of operations, said Bowcock’s warning portrays an unrealistic scenario by making no allowance for mitigation or response.

He said the company is working on answering questions from the City of Burnaby and its fire department that have been posed through the NEB.

- Gary Park