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Vol. 15, No. 51 Week of December 19, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

Tanker fight becomes flashpoint; lawmakers pass non-binding ban

The battle over crude oil tankers in British Columbia waters has climbed to the highest political levels, with a vote in the Canadian Parliament demanding that the government of Prime Minister Stephen Harper take conclusive action to impose a permanent ban.

A motion was passed 143-138 on Dec. 7, with the full backing of the opposition Liberal, Bloc Quebecois and New Democratic parties, in a bid to head off regulatory and government approval of Enbridge’s Northern Gateway proposal, a major step towards opening the door to large exports of Canadian oil sands crude to Asia, as well as Washington state and California.

Harper’s Conservatives voted en masse against the motion, arguing that a 1972 moratorium on petroleum exploration off the British Columbia coast and tanker traffic along the northern coast is sufficient protection.

Transport Minister Chuck Strahl told lawmakers the current “exclusion zone” is closely monitored and strictly enforced, barring tankers from coming within 25 to 80 miles of the coast, depending on the navigational dangers.

The zone, he promised, is in place, it is going to stay in place and we are “not going to change it.”

1972 moratorium voluntary

However, the Harper government conceded last year that the 1972 moratorium was only a voluntary agreement affecting tankers carrying crude from Alaska to California.

NDP leader Jack Layton said the vote is “clear direction” for the government to clarify its policy on tankers operating off the West Coast and enshrine the unwritten moratorium in legislation.

“For years the people of British Columbia and concerned Canadians have been calling on the federal government to protect their coast from the risk posed by oil tankers,” he said. “Now the government has clear direction … to move forward and bring in this much-needed legislation.”

Regardless of the government’s stance, the issue is likely to feature in the next federal election which could be called as early as spring 2011.

Liberal leader Michael Ignatieff, who is running neck-and-neck against Harper in the latest polls, has already declared his opposition to oil tankers in British Columbia waters and the Vancouver City Council is questioning the dangers of increased tanker movements in its own inlets. They join an array of First Nations, environmentalists, fishing and tourism industries, landowners and municipal governments, some of whom have said they are ready to engage in “civil disobedience” to block overland pipelines and tanker traffic.

Report questions oil response readiness

The vote coincided with a report by Scott Vaughan, federal commissioner of the environment and sustainable development, who said the government is “not ready to respond to a major oil spill” in Canadian waters.

Between 2007 and 2009, the Canadian Coast Guard responded to 4,160 incidents involving spills of oil, chemicals and other pollutants, most of them minor.

Vaughan said Canada’s response regime requires operators of tankers to lead cleanup efforts — policy he described as perilous given what happened after BP’s Macondo well blowout in the Gulf of Mexico.

He said risk assessments conducted by both Transport Canada and the Coast Guard have not been consistent or systematic, meaning effective emergency planning is not in place. His audit noted that the Coast Guard has not carried out a comprehensive assessment in the past decade.

Opposition increasing

The House of Commons vote increases widespread opposition to Enbridge’s Northern Gateway project to ship 525,000 barrels per day of oil sands crude from the northern deepwater port at Kitimat, the bulk of it destined for Asia, and import 193,000 bpd of condensate on a parallel pipeline.

The C$5.54 billion proposal, which has involved C$250 million in development spending so far, is currently under scrutiny by a federal environmental review panel and the National Energy Board.

Enbridge said in a news release it is concerned “a rigorous public regulatory process” could be ignored “in a rush to come to judgment without the benefit of reviewing or testing the evidence” and without acknowledging Northern Gateway’s job-generating potential.

It insisted there is “no imminent risk and threat” to the northern British Columbia coast and said Northern Gateway would make the B.C. coastline “a model of world-class marine safety.”

Enbridge said it would use only modern double-hulled tankers, independent British Columbia pilots and certified tanker crews, along with escort tugboats tethered to laden tankers, while all tankers would be vetted by a third-party agency before gaining entry to Kitimat.

Negative spinoff projected from ban

Over the past 25 years, more than 1,500 ships have used Kitimat without accident and 250 tankers a year use the Vancouver port (50 to 60 of them crude oil tankers).

The company said that if the tanker ban motion is successful it will create a negative spinoff by causing an increase in tanker traffic through Port Metro Vancouver, the Strait of Georgia, Haro Strait and the Strait of Juan de Fuca.

Moves in that direction are already under way with expansion of Kinder Morgan’s Westridge loading terminal in Vancouver, where an increasing number of tankers have delivered loads to Asia where refineries are testing their ability to process Canadian heavy crude.

Currently averaging about one 600,000-barrel tanker per month, Kinder Morgan is reportedly ready to seek NEB permission to issue firm-service contracts for 50,000 bpd of exports from Westridge to Asia, Washington state and California.

Kinder Morgan has upgraded the loading dock to handle more traffic and is working with the Port of Vancouver to install new navigation aids.

Also in the works is a plan by Apache and EOG Resources to build an LNG export terminal at Kitimat.

—Gary Park

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Offshore off the table

Richard Neufeld, British Columbia’s energy minister earlier this decade, once put a value of C$100 billion on his province’s offshore oil and natural gas resources.

Gordon Campbell, who departs as British Columbia’s premier early in 2011, once set a goal of using offshore gas to light the flame at the 2010 Winter Olympic Games in Vancouver.

Both hopes have disappeared beneath the waves, despite years of scientific research, hearings and attempts by British Columbia to negotiate removal of a 1972 federal government moratorium on offshore exploration.

The new energy minister Steve Thomson said Dec. 8 that his government has scrapped any thoughts of continuing the fight to open up the offshore, transferring its priorities to developing and exporting gas from British Columbia’s northeastern shale and tight gas regions.

The raging battle over plans to step up tanker shipments of crude through the coastal waters has only intensified resistance to any offshore development, which has attracted only lukewarm response from the leaseholders, who have insisted they would show no interest until the moratorium was lifted.

A spokeswoman for the Living Oceans Society, among other environmental groups, welcomed Thomson’s stance, but called for an end to uncertainty over the status of the moratorium and the imposition of a permanent, formal ban.

—Gary Park