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Providing coverage of Alaska and northern Canada's oil and gas industry
June 2016

Vol 21, No. 25 Week of June 19, 2016

Pipeline feuding; Trans Mountain showdown over benefits, fears

Skirmishing over the future of new oil pipelines in Canada has turned into a brawl between big city and provincial leaders.

The industry, meanwhile, is left to watch the melee unfurl, while trying to appease its opponents.

Kinder Morgan has made another overture to gain approval for its plan to triple capacity on the Trans Mountain pipeline to 890,000 barrels per day by increasing the use of tugs to accompany tankers from Vancouver to the Juan de Fuca Strait, which separates the United States and Canada.

Master mariner Bikram Kanjilal, the lead for marine issues on the Trans Mountain project, said the company has decided to expand tug-escort requirements for third-party tankers.

He said that having escorts operate from the gateway to the Port of Vancouver to a point 10 miles west of Vancouver Island would mean that tug assistance would be immediately available to any vessel that lost power.

In addition, pilots would be disembarked by helicopter.

Christianne Wilhelmson, executive director of the Georgia Strait Alliance, a watchdog organization, welcomed “any efforts to reduce the possibility of an accident,” but said Kinder Morgan’s latest offer “does not deal with the myriad of other problems” linked to the company’s increase in tanker traffic to 34 a month from the current five.

Government clashes

However, that gesture by Kinder Morgan was quickly swallowed by intensified clashes between governments, sparked largely by Vancouver Mayor Gregor Robertson and three regional First Nations leaders who traveled to Ottawa to lobby against the C$6.8 billion pipeline project.

In particular, Robertson warned of the dangers inherent in increasing the volume of tankers, urging Prime Minister Justin Trudeau and his cabinet to reject the National Energy Board’s recommendation for government approval.

He said there is overwhelming opposition from First Nations and Metro Vancouver communities to a project that could put “hundreds of thousands of jobs at risk” and cost up to C$3 billion in damage in the event of a spill, while primarily benefitting a “Texas oil empire.”

Calgary Mayor Naheed Nenshi retaliated that it was “not helpful (of Robertson) to scare people using numbers completely out of context or based on no facts at all. Let the regulator do its job. This kind of political interference is not in fact helpful.”

Robertson stepped up the spat by telling Trudeau he would “absolutely” pay a political price if the federal cabinet, under pressure from Alberta to help that province’s struggling economy, gave Kinder Morgan the go-ahead.

He said Nenshi’s comments were not “helpful ... we need a dialogue across Canada on these energy issues.”

Saskatchewan view

Also joining the fray was Saskatchewan Premier Brad Wall, mocking Hollywood celebrities who object to oil sands development and the federal New Democratic Party which wants Canada to phase our fossil fuels within a generation.

It all amounts to an “existential threat to the (petroleum) industry” and its contributions to financing health care and education.

Wall said the industry spends billions of dollars meeting environmental regulations and reducing greenhouse gas emissions, while being characterized as “heedlessly plundering and despoiling the environment,” conveying a message that resource-dependent provinces have been a “bit flat-footed” in defending the oil sector.

He carried that message to Quebec Premier Philippe Couillard, who is directing some of the strongest opposition to TransCanada’s C$15.7 billion Energy East pipeline to an export point in New Brunswick.

Wall said that pipeline is expected to generate C$55 billion in economic benefits for Canada, including C$9.3 billion for Quebec.

Alberta Premier Rachel Notley said advocating for Trans Mountain will be one of her top priorities this summer, as she highlights Alberta’s aggressive climate change initiatives, including a cap of 100 million metric tons on oil sands emissions, Kinder Morgan’s safety record and the economic benefits for Alberta and British Columbia.

“I’m simply going to say the merits (of Trans Mountain) outweigh the arguments against it,” she said.

- GARY PARK






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