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The Global Significance of a New Kinder Morgan Pipeline

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DOWNLOAD Analysis ‘The Global Significance of a New Kinder Morgan Pipeline’

Building the Kinder Morgan pipeline not only commits BC’s west coast to a specific economic development path, it also jeopardizes our international and national climate commitments. It will cost far more to deal with the impacts of climate change than it will to build a low-carbon economy.

 

New Economic Trends and Realities, and Kinder Morgan

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DOWNLOAD ‘What’s Fuelling Our Economy: Is Kinder Morgan’s Proposed Pipeline Inconsistent with New Economic Trends and Realities?’

Which Industries Employ British Columbians?

BC is made up of thousands of small businesses, mainly in service-based sectors. We may think of BC as a resource-based province, but only 1.2% of British Columbians work in the oil and gas sector.

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What About the National Economy – Where Does Canada’s Wealth Come From?

Real estate is by far Canada’s largest sector overall, contributing a full 13% of national GDP. Manufacturing and retail and wholesale trade are also significant, each bringing in 11% of GDP. Although key industries vary across regions, some clear national trends are also evident.

Would the Kinder Morgan Oil Pipeline Create Jobs?

According to Kinder Morgan, building the pipeline would create 50 permanent jobs in BC and 40 permanent jobs in Alberta. It’s uncertain how many temporary jobs would be created, and if they would benefit otherwise unemployed workers.

Download our report to read more

Oil Spill and Leak History in BC

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It’s a fact that oil spills are a risk with any oil transport – we know from past incidents. Take a look at the overview of the more significant leaks and spills that happened in BC, most along the existing Kinder Morgan pipeline route.

Since we produced this infographic, there was yet another fuel spill in BC waters, near Bella Bella in 2016. The costs to the economy and environment must be weighed, as a decision on a new Kinder Morgan pipeline is considered.

 

The Panel Report Is Out, and the Kinder Morgan Decision Looms…

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After an overwhelming number of people spoke, wrote, or presented their opinions on Kinder Morgan’s proposed oil pipeline, the Ministerial Panel has released their report to Cabinet.

The Ministerial Panel received the highest-ever response rate to a government of Canada questionnaire. 35,259 people responded to the questionnaire, and the panel’s online portal drew over 20,000 email submissions from people expressing their views on the proposed project. There were 2,500 people who took time out of their day to participate in person at a panel meeting in Alberta or BC.

The report includes verbatim comments and general themes heard during the public engagement period. It also identifies six high-level questions that the panel heard repeatedly and commends to the Government of Canada for serious consideration.

The six questions are as follows:

  1. Can construction of a new Trans Mountain Pipeline be reconciled with Canada’s climate change commitments?
  2. In the absence of a comprehensive national energy strategy, how can policy-makers effectively assess projects such as the Trans Mountain Pipeline?
  3. How might Cabinet square approval of the Trans Mountain Pipeline with its commitment to reconciliation with First Nations and to the UNDRIP principles of “free, prior, and informed consent?”
  4. Given the changed economic and political circumstances, the perceived flaws in the NEB process, and also the criticism of the Ministerial Panel’s own review, how can Canada be confident in its assessment of the project’s economic rewards and risks?
  5. If approved, what route would best serve aquifer, municipal, aquatic and marine safety?
  6. How does federal policy define the terms “social licence” and “Canadian public interest” and their inter-relationships?

CRED can answer some of these questions. No, it is not compatible to build the Kinder Morgan pipeline and still meet Canada’s climate commitments.

In addition, CRED finds that the pipeline would create few jobs, minimal tax revenues and would not impact energy security. The Kinder Morgan pipeline also comes with the additional concerns (and costs) of an oil spill. Beyond the direct cleanup costs, the indirect economic impacts would be long lasting, impacting sectors from tourism to agriculture.

Look for our specific findings to be published in the coming days.

A Key Moment for the Kinder Morgan Pipeline

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We let ourselves exhale a little when the Liberal government introduced additional pipeline review measures back in February. Three months later, we’re at a key moment where the National Energy Board’s role in the Kinder Morgan review is about to conclude, and the interim measures by the federal government are about to commence.

The National Energy Board will announce their decision later today on whether or not the Kinder Morgan pipeline should be built from Alberta through to BC’s coast. With the entire review process to date being criticized as unfair and unjust, many are expecting the NEB to endorse the project.

On the bright side, the recommendation by the NEB is not the final stamp; Cabinet will ultimately determine the fate of this project. Here’s what we know so far about what happens next: a new, three-member panel will consult with First Nations and communities along the pipeline route. Making up the panel are:

  • Annette Trimbee, the president of the University of Winnipeg and former deputy finance minister in Alberta. She served on Alberta Premier Rachel Notley’s royalty review panel last year.
  • Tony Penikett, the former premier of Yukon and the author of Reconciliation: First Nations Treaty Making in British Columbia.
  • Kim Baird, former elected chief of B.C.’s Tsawwassen First Nation, who now runs her own consulting firm specializing in indigenous policy, governance and development issues.

Additional details on when and how these consultations will roll out are still to be announced, but they’ll be led by the new ministerial panel.

This is the final phase of the review for this project that could shape our economy for 40 years or more, so it’s imperative that the economic case be scrutinized, as with any business proposal.

We’ve been hearing chatter about a potential alignment between premiers Christy Clark and Rachel Notley around the Kinder Morgan pipeline, where Alberta could buy site C power from BC, in exchange for BC endorsing the Trans Mountain Pipeline. Several articles have reported a change in tune from Clark’s formal opposition to the pipeline project and it seems that she is confident that any resource project in BC only has to meet its five conditions to get to a ‘yes’.

The same hopefulness to have both stringent environmental goals and investment in pipelines is coming from Trudeau, so all eyes will be on this new period of consultation to ensure all voices are heard and evidence reviewed. The Kinder Morgan pipeline decision is an opportunity to be a leader in climate change and player in the new economy. Will we invest in projects that spark innovation, benefit our growing industries, and keep up as the world moves to a low-carbon economy or will we continue with uncertainty and risk to BC’s coast in a slowing industry?

 

Photo Credit: Sarama

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BC Business Groups Call for Additional Interim Measures in Kinder Morgan Review

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VANCOUVER, B.C – Leading business groups Conversations for Responsible Economic Development (CRED), the Board of Change, and the Green Chamber of Commerce BC are calling on the federal government to add measures to the Kinder Morgan review that will reflect the concerns of coastal businesses. The business groups and their numerous member businesses and organizations outline concerns in an open letter to Prime Minister Trudeau that asks for additional measures that will accurately estimate how bitumen behaves in coastal waters, take into consideration the economic risks of a significant spill, and allow for rigorous cross-examination of the evidence presented so far.

Prominent business leaders and entrepreneurs in the high tech, tourism, renewable energy, finance and creative sectors are concerned that the business case for the Kinder Morgan pipeline is weak. Michael Tippett, CEO of Wantoo saysWe need to be assured that our government is looking out for our best economic interests far into the future. I’m not confident that this pipeline review has done that to date”.

The signatories urge the Prime Minister to take action on his commitments to subject the project to a review that is open and inclusive, and to ensure that the business case and potential impacts to BC businesses – especially those dependent on a healthy marine environment – are fairly assessed.

CRED Program Director Andrew Grant comments, “As business people, we know that investors and project proponents need certainty. As it currently stands, even with recently announced interim measures of increased First Nations consultations and inclusion of upstream GHG emissions, many BC businesses have significant concerns about the review and approval process. It is in the best interests of all stakeholders – including the proponents – to have the review conducted under a mandate that Canadians consider valid, and that demonstrates the rigour we would expect in fully acknowledging and addressing project risks.”

In August of last year, 35 intervenors stepped away from the review process because it was seen as flawed, biased and unfair. Meeru Dhalwala, co-owner of celebrated local restaurants Vij’s and Rangoli, says I am not convinced that the project has undergone any form of fair examination.”

Board of Change Director and Hamazaki Wong Marketing Group Creative Director Sonny Wong echoes the need for a robust, fair review of the Trans Mountain expansion: “BC’s unique brand is integral to establishing ourselves as the hub of the new economy. If this one project has the potential to significantly impact the brand that businesses depend on to attract talent and investment, that project needs to be very carefully considered, in a process that has the support of British Columbians.

Interim measures announced last week by Ministers Carr and McKenna are unlikely to clarify the economic case for the project, and may not effectively capture the risks that other BC businesses face by an oil spill along the BC coast. The signatories feel it is important to do the hard work now of conducting a review process that is effective, transparent and has the support of Canadians before potentially subjecting a major infrastructure project to significant resistance from local residents, affected businesses, First Nations and governments at the provincial and municipal levels.

BC business groups encourage the federal government to protect the long-term prosperity of Canadians by carefully considering this proposed pipeline expansion that could impact our economy for 40 years or more.

Trans Mountain Review Gets a Facelift, Sort of…

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As we approach the final week of the National Energy Board (NEB) review of the Trans Mountain pipeline, the federal government just announced an added environmental assessment and community engagement process to all currently proposed bitumen pipeline and LNG projects. These added components will apply to the Trans Mountain pipeline expansion, and is considered an interim measure while the federal government takes at a longer period to rebuild the NEB.

The Who, What and When of the Interim Measures

Minister of Natural Resources James Carr and Minister of Environment and Climate Change, Catherine McKenna announced the measures in an attempt to restore the faith of Canadians in the NEB process, and to set the tone for a later overhaul of the NEB. The federal government announced that they would manage the following activities after the NEB oral hearings have concluded:

  • ‘Deeper’ First Nations consultations, with attached funding to support participation
  • Assessment and public dissemination of upstream GHG emissions associated with the project

The time frame indicated for these activities will tack on an extra four months to the review process before Cabinet will make a final decision – effectively extending the final decision date to December 2016.

CRED welcomes the important addition of incorporating upstream GHG emissions into the environmental review and engaging in direct consultation with First Nations. We are concerned that it does little to resolve the ‘core’ concerns of a broken review process in the context of Trans Mountain. While these interim measures are a step forward, they don’t go far enough. Intervenors are still left with mountains of unanswered questions to Kinder Morgan, evidence of economic impact has still not been cross examined, and key scientific research related to bitumen in the marine environment remain outside of the purview of the board. CRED is concerned about the lack of substantive discussion around the business case for the TMEP, and the potential negative economic impacts of increased bitumen traffic on BC businesses.

Significant questions remain about the details and tactics of this added review component. Do these new measures rectify the concerns heard in Burnaby in last week’s oral hearings? We’ve summarized the main points we found interesting:

Highlights of the Burnaby Oral Hearings

The vast majority of intervenors at the Burnaby hearings were against the pipeline expansion project on grounds of poor consultation as well as environmental and social impact. Some intervenors, however, did focus in on the economic realities and risks of the project:

City of Burnaby – Burnaby legal counsel Gregory McDade gave the NEB panel a scathingly articulate rebuke of the review process, and left no doubt as to the disposition of the City where the pipeline would meet tidewater. McDade reminded the panel that while proponents and some stakeholders want the project to be perceived as being in the national interest, the negative economic, environmental and social impacts disproportionately accrue to British Columbians. He reiterated a major concern for CRED members: the unsatisfactory state of evidence on bitumen spill risk being considered by the panel. He challenged as to whether there has been testing of competing scientific evidence than that put forward by the project proponents. We are all gaining awareness of the potential impact to BC coastal businesses across a spectrum of industries in the case of a bitumen spill in our waters.

Perhaps the most incisive comment of all, however, was when he stated, “Burnaby should not be the last victim of a flawed process.”  Indeed.

Living Oceans Society – Most of the Living Oceans Society presentation concentrated on the significant deficiencies in Kinder Morgan’s environmental impact assessments in the marine environment – including the impossibility of cleaning up diluted bitumen in open water.  They also presented timely research findings on the actual economic impacts of the potential pipeline expansion.

In December of 2015, the Living Oceans Society and SFU published findings that the economic benefits of the pipeline expansion have been grossly overstated, while the negative impacts – environmental and economic – are not quantified at all by the KM impact measurement methodology.  We encourage people to read this research to get a more fulsome understanding of how a comprehensive, triple-bottom-line review of industrial projects will more accurately assess the benefits and potential risks of a project.

Independent Contractors and Businesses Association of BC – Association President Phil Hockstein spoke briefly but eloquently about the interests and concerns of the many BC contractors who stand to benefit significantly during the construction stage of the project. While Mr. Hockstein represented his membership well, and rightly articulated the potential benefits of pipeline construction to them, we were disappointed at his assertion that a ‘small minority’ in BC oppose the pipeline expansion.  The Provincial government, all lower mainland municipal governments, several First Nations, multiple businesses and, in fact 68% of British Columbians are asking for the NEB to be revamped before a decision is rendered on the pipeline.

While we await more information, CRED and our partners the Board of Change and the Green Chamber of Commerce BC will be launching our Open Letter to Prime Minister Trudeau next week, encouraging him to go ahead and revamp the National Energy Board in advance of making a decision on Trans Mountain.  We invite you to sign on to the letter and encourage other interested businesses to do the same.

First Nations Victory Could Impact Future Pipelines

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Big news – A BC Supreme Court ruling yesterday has set the Enbridge Northern Gateway bitumen pipeline project back a few steps. The court ruled that the BC government failed in their duty to consult First Nations when they signed an equivalency agreement regarding the assessment of environmental and social impacts of Northern Gateway.

The agreement that BC signed effectively waived the province’s responsibility to do an environmental assessment of Northern Gateway, putting the final say in the hands of the National Energy Board (NEB). Gitga’at First Nation and the Great Bear Initiative Society – representing coastal First Nations – challenged the province in court when they were not consulted prior to this agreement.

Where does that leave Northern Gateway?

The Supreme Court has deemed the equivalency agreement invalid for Northern Gateway. That means that although the NEB has approved the project, BC is now obligated to carry out a full environmental assessment and must consult with and accommodate the needs and concerns of First Nations. This essentially brings the project back to the beginning, though the province does not agree with that sentiment: Justice Minister Suzanne Anton has stated there is no need to duplicate the review process.  We will see how this rolls out in the coming months.

This will be an interesting challenge for Enbridge, the project proponent, as the clock is ticking on them meeting the 209 conditions laid out by the NEB, while at the same time attempting to secure contracts for the bitumen. This all speaks to the uncertainty of the pipeline project, and the overall challenges facing companies who want to extract and transport bitumen across our province.

While the company is stating that it is simply a ‘jurisdictional issue’ between the federal and provincial governments, they are well aware that statement belies the actual challenges that lie ahead – both in terms of process, as well as meeting the needs and expectations of policymakers and stakeholders.

How does this affect the Trans Mountain Expansion Project (TMEP)

Not only is this ruling a significant setback for Northern Gateway, it could mean changes for future pipeline projects, including the Trans Mountain expansion. The ruling affirms our provincial government’s duty to consult with First Nations, and it will also apply to the province’s obligation to conduct assessments in relation to five other projects, including the Trans Mountain Expansion. It is unclear yet if the equivalency agreement will also be voided for the TMEP, but it is perhaps the clearest indication yet of the importance of First Nations engagement in these reviews, and in the development of all industrial projects in the province which have a potential impact on First Nations.

Hopefully a diligent environmental assessment, as well as a revised National Energy Board and review process will be the norm for all energy projects as we continue to move towards a responsible, forward-looking and prosperous economy in BC.

 

BC Government Rejects Trans Mountain Pipeline Expansion

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We walked to work on Monday morning with an extra spring in our step after we heard the announcement that the Government of British Columbia is formally opposing the Trans Mountain pipeline expansion. This was welcome news to CRED, our members, supporters and partner organizations! 

While the eleventh hour decision may be politically motivated rather than driven by concerns over inadequate bitumen spill response as indicated, the end result is what we all want: attention to the need for a review board that thoughtfully and transparently weighs the risks of economic activities against potential benefits.

Provincial opposition is just one step. We need the federal government to make a move and recognize that transformation of the National Energy Board isn’t enough. The transformation needs to happen before the Trans Mountain Expansion review is concluded under the current framework.

CRED is working to make this concern heard through an open letter to Prime Minister Trudeau. As many of you know, on top of generating fact-based research and stimulating dialogue around our economy, the CRED team advocates for responsible economic development at the municipal, provincial and federal levels.  We are partnering with like-minded business organizations in our efforts to engage policymakers in supporting industries that generate employment and benefits for society without degrading our land and water.

As part of this process, in the coming days, CRED will be active in the following:

  • We will publish an open letter to Prime Minister Trudeau from BC businesses to put a halt to the NEB process, and overhaul the NEB before pronouncing on the Trans Mountain expansion in May 2016. The timing will coincide with the upcoming NEB final hearings in Burnaby.
  • We are generating infographics to illustrate the worsening economics of the pipeline expansion project, as outlined in recently published research by SFU and the Living Oceans Society.

Please go to http://credbc.ca/neb-open-letter-trudeau/ to sign on to the Open Letter, and stay engaged with us as we continue to work towards a vibrant economy.

 

Revamping the NEB Process – If Not Right Now… When?

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When Kinder Morgan first introduced a proposal to threefold expand the Trans Mountain pipeline in 2013, few would have predicted that the review process itself would be as controversial as the actual proposal.

Jump ahead to today. Two years into the review, and the cost has increased, oil markets are in a prolonged slump, opposition to the project grows, and new governments in Ottawa and Edmonton have taken the reins of energy policy. All this, framed by uncertainty around how Canada’s oil sands and LNG development plans will square with our newly minted commitments signed in Paris at the COP21.

The new Liberal government has promised to revamp the National Energy Board (NEB) process, and in this promise CRED sees opportunity for real change. In fact, meaningful change seems so close, and the impacts so significant, that we see it as imperative that the process not just be tweaked at some undefined moment in the future. CRED and our members want the current process halted, and a new process built starting now. If we as a nation are going to contemplate an overall energy strategy in accordance with our international commitments, let’s do that NOW, while there are projects under review that could significantly hamstring or even compromise our ability to meet those commitments. Let’s do it so we can have a fair and transparent review of the Trans Mountain expansion, a project that could impact our province for years to come.

Let’s not forget that the current process is the same one that prompted two environmental organizations and over 35 individuals to publicly withdraw from the hearings. Economist Robyn Allan called the process “rigged” when she pulled out in May. There is also legal action against the NEB: the Tsleil-Waututh Nation has asked the Federal Court of Appeal to stop the review due to flaws in the process itself, and legal errors made by the NEB. Landowners, business people, academics and environmental advocates launched a constitutional challenge against the NEB on the basis that it unfairly restricts public participation and refuses to hear concerns related to climate change or oil sands development.

CRED was one of 100 signatories to a letter to Prime Minister Trudeau, asking for a halt to the Trans Mountain expansion pipeline review prior to the historic Paris meetings. The government has stated that the two pipelines currently under review – the TMP and Energy East – will continue in a transitional review process, but it remains unclear what changes will be made, and when.

CRED wants to ensure that the federal government implements changes immediately to ensure that these pipelines are subject to a proper climate review, including both upstream and downstream impacts, and particularly taking into consideration the potential economic impacts to BC businesses.

We are crafting an open letter to Prime Minister Trudeau and his Cabinet to revise the NEB process now, so that the Trans Mountain expansion project will be reviewed under the new process. Look for our letter to be circulated; we value your thoughts and support.

Image via Flickr creative commons user rickz