Friday, July 19, 2019
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In the shadow of Enbridge, Kinder Morgan pipeline looms large

On March 24, 1989, the Exxon Valdez oil tanker ran aground off the coast of Alaska, resulting in the one…


Protester at the 'No Tanker Rally' on the steps of the Vancouver Art Gallery. March 26th, 2012
Protester at the 'No Tanker Rally' held on the steps of the Vancouver Art Gallery on March 26, 2012

On March 24, 1989, the Exxon Valdez oil tanker ran aground off the coast of Alaska, resulting in the one of the worst ecological disasters in history.

The 23rd anniversary of the spill was marked by the gathering of hundreds of people at the Vancouver Art Gallery who, at the same time, voiced their opposition to the proposed Enbridge Northern Gateway Pipeline project, which would carry oil from Northern Alberta to the west coast of British Columbia.

But lost in the shadow of the Enbridge debate are plans for the expansion of a different pipeline that has received comparatively little media attention.

Kinder Morgan (KMI) wants to “twin” — essentially construct a new pipe next to the existing one — its Trans Mountain oil pipeline, which runs from Edmonton, Alta. to Burnaby, B.C. Should the company’s proposal be accepted, the Trans Mountain pipeline’s transport capacity of tar sands crude to the West Coast would double to an estimated 700,000 barrels per day.

The expanded pipeline would subsequently mean roughly double the number of oil tankers would pass through the Port of Vancouver, much to the dismay of environmental groups and First Nations whose traditional territories are located in the region.

Economic incentives

There is strong economic incentive to expand access to Canadian oil on the west coast of B.C., according to Juan Plessis, a pipeline and power analyst at Canaccord Genuity. Currently, a shortage of capacity to transport crude oil out of Alberta is depressing prices for Canadian oil producers and reducing tax revenues for both the province and the country.

Trans Mountain pipeline terminus at Kinder Morgan's Westbridge Terminal
Trans Mountain pipeline terminus at Kinder Morgan's Westbridge Terminal

According the Government of Alberta, the oil sands currently produce approximately 1.3 million barrels per day. The inability to ship much of that oil, due to pipeline bottlenecks, is causing Albertan crude prices to trade at discounts of almost $35 per barrel to international oil prices, said Werner Antweiler, professor of empirical economics at the Sauder School of Business.

“Canadian producers are losing in the magnitude of $18 billion dollars a year because they can’t get their oil to market,” said Antweiler.

“Building a new pipeline that will facilitate exports will benefit  [Canadian producers] economically, and there is quite a lot of money on the table. The only solution is to build more pipeline.”

Safety concerns

The Trans Mountain pipeline began operations in 1953 and was sold to Kinder Morgan in 2005. The company notes that it’s “the only pipeline system in North America that transports both crude oil and refined products to the west coast.”

The idea to twin the Trans Mountain pipeline has local environmental groups concerned. “Oil spills are a regular occurrence; the risk goes up the more tankers [you’ve] got,” said Ben West, a campaigner from the Wilderness Committee, a environmental advocacy group.

“So if you are talking about reducing the likelihood of a spill, the obvious thing to do is not increase the amount of [tanker] traffic,” said West.

Ben West, from the Wilderness Committee
Ben West, campaigner from the Wilderness Committee on Tsleil-Waututh land, across from Westbridge Terminal

Since Kinder Morgan purchased the Trans Mountain pipeline in 2005, the company’s facilities in both B.C. and Alta. have had several oil spills, all of them on land. On July 24, 2007, workers digging in Burnaby punctured the pipeline, which, according to a Transportation Safety Board of Canada investigation, released almost 1,500 barrels of oil into the surrounding neighbourhood.

On May 7, 2009, a storage tank at Kinder Morgan’s Westridge Terminal in Burnaby, leaked more than 1,900 barrels of crude. On April 23, 2011, the Trans Mountain pipeline released 70 barrels of oil near Chip Lake, Alta.

Another spill occurred on Jan. 24, 2012, when a storage tank in Abbotsford, B.C., released approximately 70 barrels of crude oil.

Andrew Galarnyk, director of external relations for Kinder Morgan Canada, asserted the company’s positive safety record.

“We place the highest priority on safety and environmental responsibility,” wrote Galarnyk in an emailed statement. “The Trans Mountain pipeline has a safe and efficient track record.”

Assurances from Kinder Morgan about the safety of its operations are no consolation to the Tsleil-Waututh First Nation (TWN). Situated directly across Burrard Inlet from Kinder Morgan’s Westridge Terminal, where the crude oil is loaded onto tankers for export, TWN worries about recent increases in oil tanker traffic.

“I grew up on that inlet and the waters have always been important to me. I have had nightmares of a ship turning over and all that oil coming towards us,” said Tsleil-Waututh Elder Amy George.

Barbara Joy Kinsella, spokeswoman for Port Metro Vancouver (PMV), said, “Vancouver has never had a navigational issue with an oil tanker. All oil tankers [arriving] in Vancouver are doubled hulled and subject to strict international, national and Port Authority standards.”

Kinder Morgan, for its part, is aware of the safety concerns surrounding its plans to twin the Trans Mountain pipeline. “We know that many residents of B.C. have questions about our proposed expansion plans,” said company spokeswoman Lexa Hobenshield.

“We will undertake extensive environmental, socio-economic and other assessments and an open and thorough engagement process with communities along the pipeline route and the marine corridor as well as First Nations, industry, governments, and non-government organizations.”

Economics vs. Safety

An Oil tanker loading at Kinder Morgan's Westridge Terminal in Burnaby, B.C.
An oil tanker at Kinder Morgan's Westridge Terminal in Burnaby, B.C.

Kinder Morgan has yet to submit its application to twin the pipeline to the National Energy Board of Canada, the regulatory body responsible for approving the pipeline proposal. On January 19, it completed tendering an “open season process,” aimed at assessing the interest in the pipeline on the part of other companies. It plans to turn in its formal application within the next 18 to 24 months.

Until then, Kinder Morgan is not obliged to provide any definitive answers to the public, said Carol Leger-Kubeczek of the National Energy Board of Canada.

Still, said Kubeczek, “People want to know [about Kinder Morgan’s plan].” Given the current public discussion about pipelines, “It is the right time to get the information out about KMI’s expansion plans,” she said. “But it is still too early for answers.”

One way or another, the debate over the Trans Mountain pipeline production is expected to be a big one.

“Depending on who you talk to, you get very different opinions,” said Sauder’s Antweiler. “The oil people say all the environmentalists are out to lunch, [that] they don’t understand the issues. They’re worried about tanker traffic. If you talk to the environmentalists, they think we’re going have another Exxon Valdez every other day. Basically, you get both extremes.”

And Antweiler’s take? “I’m sitting somewhere in the middle.”

 

Dr. Antweiler discusses the economic benefits of expanding pipeline capacity to the west coast of B.C.

Ben West discusses the dangers of expanding pipeline capacity to the west coast of B.C.