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Vol. 23, No.35 Week of September 02, 2018
Providing coverage of Alaska and northern Canada's oil and gas industry

Alberta now 17-0

Notley elated by Supreme Court verdict against Burnaby’s attempt to block Trans Mountain

Gary Park

for Petroleum News

The Alberta government is “batting a thousand” in its legal defense of the Trans Mountain pipeline project after notching its 17th straight court victory, the province’s Premier Rachel Notley declared when the Supreme Court of Canada rejected an appeal against expansion of the line from Alberta to the Pacific Coast.

“When the British Columbia government tried to overstep its legal and constitutional authority, we took bold action (threatening to cut off shipments of Alberta crude to B.C.) - and they backed down,” she said in a social media post.

“When the City of Burnaby tried to block the Trans Mountain pipeline in court, we intervened - and we won in court.”

The Burnaby appeal of the project approval by Canada’s National Energy Board was one of the final court challenges being waged by British Columbia and First Nations against the Alberta and federal governments.

Burnaby asked Canada’s highest court to overturn a lower court decision that allowed pipeline owner Kinder Morgan to bypass local bylaws during construction of the pipeline expansion.

The court also ordered Burnaby to pay all of the court costs incurred by Alberta and Kinder Morgan.

Although the final bills have not been made public, they are expected to reach millions of dollars.

But Burnaby Mayor Derek Corrigan is undeterred, insisting his city will “continue to oppose this project with all the legal means available to us,” including four pending legal challenges.

Greenpeace campaigner Mike Hudema said the court verdict allows the Canadian government to override municipalities that are “just trying to protect the health and safety of our citizens.”

Government stands by decision

A spokesman for federal Natural Resources Minister Amarjeet Singh said the government stands by its decision to buy the existing Trans Mountain link and related infrastructure for C$4.5 million, plus about C$6.3 billion in expansion costs, noting the additional 590,000 barrels per day of capacity is needed to establish new markets for Canadian crude.

Although many British Columbia First Nations oppose the pipeline and are participants in a Federal Court of Appeal challenge, 43 aboriginal communities have signed benefit agreements and welcomed the Supreme Court’s verdict.

Cheam First Nation Chief Ernie Grey said there is a “growing interest on the part of indigenous people to take out a stake in the pipeline.”

“We have the option of buying shares, but my impression from the leadership in Alberta, Saskatchewan and B.C. is that they want a substantial interest in the pipeline,” he said.

Margot Young, a law professor at the University of British Columbia, said the Supreme Court’s decision reinforces that federal tribunals supersede municipal governments.

She said it was not surprising that that the top court did not hear Burnaby’s appeal, although she said it may hear an appeal from the B.C. government.

Imports, exports both up

While the legal fights continue, imports of gasoline, diesel and jet fuel through the Port of Vancouver climbed sharply over the first half of 2018 and exports of petroleum products also posted a strong gain, with combined inbound and outbound volumes up 40.3 percent over the same period of 2017.

The port authority said oil shipments for all of 2017 were 1.8 million metric tons, or 12.6 million barrels, compared with 1.2 million metric tons, or 8.5 million barrels in 2016.

Kinder Morgan, which owns the Trans Mountain pipeline pending an expected sale to the Canadian government, said the majority of shipments leaving the company’s Westridge Marine Terminal at Burnaby in Greater Vancouver are destined for the United States, although one tanker went to Korea and one to China.

“The mix of products and destinations varies from year to year and is based on market demand,” Kinder Morgan told the Vancouver Sun.

Robyn Allan, an independent economist, said the market conditions make it attractive for California refineries - which are looking for new feedstocks to replace declining supplies from Alaska - to take advantage of the over-subscribed Trans Mountain system, noting that reflects the price of US$26 a barrel between Western Canada Select heavy oil and the benchmark West Texas Intermediate crude which has been close to US$65 recently.

The port authority’s Chief Executive Officer Robin Silvester said the import and export volumes of crude underline how reliant the Vancouver region remains on fossil fuels, with the inbound crude almost exclusively used by consumers.

The Westridge terminal can handle both imports and exports, making it the largest volume entry and exit point, but four other terminals, including a former Chevron refinery, also play a role in the crude business.



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