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BC rejects Trans Mountain Provincial government says Kinder Morgan has failed to meet its safety conditions, but company insists pipeline plan isn’t dead GARY PARK For Petroleum News
Relations between Canada’s two most western provinces threaten to turn sour with the British Columbia government stunning its Alberta neighbor by calling on the National Energy Board to reject Kinder Morgan’s bid to triple capacity on its 60-year Trans Mountain pipeline to 890,000 barrels per day.
Just weeks before the NEB is scheduled to deliver its verdict on the project in March, British Columbia, in a final submission, said Kinder Morgan has not provided an adequate plan to prevent or respond to an oil spill on land or in the ocean.
B.C. Environment Minister Mary Polak said the company has failed to meet her government’s standards, but added the door has not completely closed on the company “to meet our test potentially in the future.”
Ian Anderson, president of Kinder Morgan Canada, said his company still hopes to satisfy the province’s demands by August, in hopes of obtaining a go-ahead from the federal cabinet this fall for the C$6.8 billion plan - one of four designed to open offshore markets for Canadian crude.
“I’m optimistic we will satisfy the conditions” for a “world-class” system to handle oil spills, he said. “Clearly we have more work to do, (but) it’s not over until I’ve got the NEB decision. We continue to make progress.”
Anderson asked the province to specify gaps in his company’s response plan, while pressuring the federal government to step up its participation by increasing the number of Coast Guard stations along with Transport Canada’s role.
Other conditions British Columbia listed as unresolved require Kinder Morgan to obtain First Nations support and to provide the government with a fair share of economic benefits.
“This is about the test that would allow this pipeline to move forward,” Polak said. “The company has been vocal in saying they believe they can meet the conditions. They are welcome to work toward that.”
In the meantime, she said her government is developing marine- and land-based standards to prevent and/or respond to spills.
Polak said legislation will be introduced this spring on a land-based emergency response system, while the province works with the Canadian government on the marine element.
“These are real conditions, they are not a straw man put up to make sure no one can ever meet them,” she said.
Refusal praised However, the government’s refusal to endorse the pipeline expansion was hailed by environmental and municipal officials in the Metro Vancouver area.
Vancouver Mayor Gregor Robertson said the province’s stance “reflects the strong opposition to this project throughout Metro Vancouver and British Columbia.”
“A seven-fold increase in oil tanker traffic through Vancouver’s local waters is simply not worth the immense risks posed to our economy and environment in the event of a major oil spill,” he said.
Burnaby city councillor Sav Dhaliwal said the province should not have waited until the 11th hour to make its submission.
“I’ve always believed they weren’t doing their part” by joining others in taking court action against Trans Mountain.
Alberta: nothing new Alberta Premier Rachel Notley said that “fundamentally there is nothing new” in the British Columbia filing.
She told reporters she believes there is “still a path forward” to get the project approved.
“We will not get pipelines built by picking fights with other provinces through the media,” Notley said, adding that will only happen when Alberta demonstrates “clearly and calmly why pipelines help every economy in Canada (and) by taking real action on climate change.”
But so far Alberta’s strategy to gather support for diversifying Canada’s oil markets has fallen flat, with every proposal - Trans Mountain, Northern Gateway, Keystone XL and Energy East - stalled by government, regulatory, environmental and First Nations resistance.
What frustrates Alberta and its petroleum industry is that the province’s efforts to trade approval for access to offshore markets by introducing a sweeping climate change policy late last year appears to have backfired and is now unravelling.
The best Notley could offer was a pledge to “keep talking (to pipeline proponents and other governments) until the door is closed.”
BC support not critical Gaetan Caron, a former chairman of the NEB, said support or the lack of it from British Columbia is not critical in determining whether Trans Mountain should be approved.
“The NEB does not look at provincial or territorial interests. It looks at Canada’s national interests” and the related social, environmental and economic factors, he said.
The Alberta government submission on Trans Mountain to the NEB quoted the Conference Board of Canada’s latest impact estimates that the expansion would generate C$46.7 billion in government revenues and 820,000 person years of employment over more than 20 years, with British Columbia enjoying 12 percent of the fiscal returns and 24 percent of the jobs.
“The economic benefits from dividend payments, oil and gas investment and tanker traffic, can be added to the impacts previously estimated by the board from the construction and operations of the pipeline, as well as higher netbacks (for oil sands crude),” the group said.
It said the additional 348 Aframax size tankers would support 1,300 jobs a year and bring in C$2.5 billion in spending over the first 20 years of operation.
Economics vs. risks Glen Hodgson, the board’s chief economist, said the economic benefits of the pipeline expansion outweigh the environmental risks of a system that has operated almost trouble free on a reduced scale from the planned 890,000 bpd.
“If this project does not proceed, we’re leaving a lot of money on the table, foolishly,” he told a Calgary energy conference.
Brian Jean, leader of the opposition Wildrose Party in the Alberta legislature, said Notley has until now failed to advocate strongly for pipelines.
“This premier is building a habit of making the case for pipelines either after they’ve been rejected, or once they face strong opposition,” he said.
Liberal Party leader David Swann said it is possible to build industrial projects that benefit all of Canada while being environmentally responsible and maintaining good relationships with First Nations and affected communities.
“This project carries the least risk of all the pipelines by following an existing route. If it can’t be built, it is unlikely that any other will be,” he said.
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