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Trans Mountain fight far from over Conditional NEB approval to tripling Kinder Morgan crude system, prompting hard line from First Nations, munis, environmentalists GARY PARK For Petroleum News
More than four years after formally stepping into the batters’ box with plans to triple capacity of its Trans Mountain crude oil pipeline system, Kinder Morgan has limped to first base.
The question now is whether there is any hope that the company can steal second base, let alone make home base.
Like every other major pipeline originating in the Alberta oil sands it faces an array of opponents to its C$6.8 billion project, with First Nations and Vancouver-area municipalities in the forefront, that say they will resort to litigation to block plans for starting construction in 2017 and coming on line in 2019.
For now, Kinder Morgan has only cleared the first actual hurdle, gaining conditional approval from Canada’s National Energy board to build a parallel system to increase Trans Mountain’s volumes to 890,000 barrels per day from 300,000 bpd.
Alberta Energy Minister Marg McCuaig-Boyd, a rock-solid supporter of the Trans Mountain expansion and a baseball fan, said “it’s not a home run yet, but we’re making some progress.”
Others point to research by the Angus Reid Institute which shows 60 percent of British Columbians oppose the pipeline, with 40 percent strongly opposed, more than enough to give the Canadian and British Columbia governments reason to stall progress.
NEB conditions In a 533-page report, the NEB set 157 conditions, 93 of which have been implemented following public hearings, said the NEB’s Chief Environment Officer Robert Steedman.
“On the whole, taking into account all of the evidence in the hearing, considering all relevant factors, and given that there are considerable benefits nationally, regionally and locally, the board found that the benefits of the project outweigh the residual burdens,” he said.
The conditions require Kinder Morgan to carry C$1.1 billion in liability insurance covering oil spills or tanker accidents, along with a plan to handle a spill at the tanker terminal and a plan to reduce and offset related greenhouse gas emissions.
Kinder Morgan said in a statement that the NEB recommended the project’s approval by the cabinet of Prime Minister Justin Trudeau “because it is in the public interest.”
The company said it needs more time to review the full list of conditions, which include further consultation with communities along the pipeline right of way and communities affected by marine shipping from Kinder Morgan’s Port of Metro Vancouver tanker terminal in Burnaby and a detailed plan for hiring and training aboriginal workers along the route.
Kinder Morgan is also required to conduct and file details of an earthquake analysis before it starts construction.
NEB decision called ‘milestone’ Tim McMillan, chief executive officer of the Canadian Association of Petroleum Producers, said the NEB decision is a “milestone for the future of Canada.”
“The NEB is sending a clear message to Canada: building the infrastructure to get our resources to market is in the best interest of our country,” he said.
Research by FirstEnergy Capital earlier in May underscored the vital need to chase international crude prices by estimating the discount between unrefined heavy Canadian crude and West Texas Intermediate oil at US$14.75 a barrel.
The NEB acknowledged evidence from the City of Vancouver, the City of Burnaby and the Tsleil-Waututh First Nation that a crude spill in the Vancouver board would have adverse effects, but concluded that “a large spill ... is not likely.”
Also called a ‘disappointment’ However, Vancouver Mayor Gregor Robertson said the NEB’s findings are a “profound disappointment,” and vowed to continue the fight against Trans Mountain.
“This project is a direct threat to Vancouver’s successful economy and environment,” he said.
Robertson said Vancouver has a “solid economy that is firmly grounded in our clean and green brand ... and we can’t risk an oil spill affecting hundreds of thousands of jobs.”
Burnaby Mayor Derek Corrigan said he plans to organize a mass citizens’ campaign to send a strong message to Trudeau to stop the project and “continue to fight ... it’s not over.”
The NEB said the project would deliver several “important benefits” to Canada, notably increasing “access to diverse markets for Canadian oil (and) considerable government revenues.”
Cabinet has until December The federal regulator’s recommendations now go to Trudeau’s cabinet, which has until December to deal with its first major test - deciding between two factions who show no desire to move towards compromise.
Over the next six months, two new elements of the regulatory process must be completed - a panel named in mid-May by the Trudeau government must present a comprehensive review to the cabinet after consulting with the public and indigenous communities, and the British Columbia government will conduct its own environmental assessment.
Trudeau said he supports getting resources from the Alberta oil sands to international markets, but not without the support of First Nations and environmentalists - a goal widely seen as unattainable if he means gaining unanimity.
The Trudeau government said it aims to restore public trust and confidence in Canada’s environmental assessment processes.
“If we’re going to attract the investments we need to sustainably develop our energy resources, then we have to better engage Canadians, conduct deeper consultations with indigenous peoples and base decisions in science, facts and evidence,” said Natural Resources Minister Jim Carr.
Review process ridiculed But opposition parties have dumped ridicule on Trudeau’s additional review process, with interim Conservative leader Rona Ambrose asking: “When will the prime minister stop reviewing his reviews and make a decision?”
Kenny Stewart, a Vancouver-region Member of Parliament from the New Democratic Party, said the new panel falls far short of the wholesale revamping of Trans Mountain’s environmental assessment that was promised by the Liberal government.
He said the “add-on process (is) little more than a smokescreen and would actually do nothing to fix the NEB review process.”
It is not yet clear how far First Nations can advance towards stalling or stopping work on the pipeline expansion, but key communities on the British Columbia coast - notably Tsleil-Waututh, Squamish and Musqueam - are resolutely opposed to the project.
They have the support of aboriginal communities in northwest Washington state, where Trans Mountain already delivers oil sands crude to refineries and tanker ports.
The opponents draw strength from the fate of Enbridge’s Northern Gateway proposal to export 525,000 bpd and import 193,000 bpd of condensate through Kitimat in northwestern British Columbia.
That C$7.9 billion projects was approved, along with 209 conditions, by the NEB and Canadian government in 2014, but remains in limbo because of the same concerns that face Trans Mountain, forcing Enbridge to apply recently for a three-year extension on its construction deadline.
Rueben George, who leads the Tsleil-Waututh’s opposition to Trans Mountain, said he is confident that a Supreme Court of Canada ruling in 2014 and the Canadian Constitution protecting indigenous rights will give his community “veto power” over the project.
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