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trans mountain

First Nations Victory Could Impact Future Pipelines

Douglas Channel

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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.


Kinder Morgan benefits overblown: independent study

Lower Mainland skyline 2

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Earlier this week, an independent study released by the SFU Centre for Public Policy Research, in collaboration with California-based consultancy the Goodman Group, found that Kinder Morgan has substantively over-stated the benefits of its proposed Trans Mountain Pipeline Expansion in its submission to the National Energy Board.

The report echoes past research from CRED which has found that BC’s provincial and municipal coffers will only get a tiny benefit from the Trans Mountain expansion. Instead, oil sands producers, Alberta and, of course, Kinder Morgan will be the main beneficiaries.

Municipal benefits from the Trans Mountain pipeline expansionCRED_km tax revenue Municipalities rev1-01

According to our research, Kinder Morgan’s stated tax benefits (which, as this report highlights, maybe also be overblown) would only fund a small fraction of provincial and municipal services – 0.3% of the costs of running the province’s schools, for example, or just 1% of the Coquitlam police department. Even the biggest municipal beneficiary, the City of Burnaby, could fund less than 9% of its Parks, Recreation and Cultural budget with tax revenues from the Trans Mountain Expansion. And this is a best case scenario, assuming no increased costs for servicing the pipeline right-of-way or any incidents to respond to.

BC provincial benefits from the Trans Mountain expansionCRED_km tax revenue BC rev1-01

The SFU report also found that Kinder Morgan has significantly over-estimated the number of jobs the pipeline would create, and downplayed the cost of a major oil spill because the company failed to take into account the high population density of the Lower Mainland, underestimating the costs of a catastrophic oil spill by potentially billions of dollars.

Download the full report here, and read CRED’s reaction here.


Chevron denied pipeline priority – what does this mean?

Burnaby refinery

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The background

The Chevron refinery in Burnaby supplies about a third of the Lower Mainland’s gasoline and almost half of the Vancouver International Airport’s jet fuel. Most of the crude oil that it refines is received via the existing Kinder Morgan Trans Mountain pipeline; however, around 6,500 barrels currently arrive by rail each day and another 1,000 barrels per day (of 55,000 barrels per day total refining capacity) arrive via tanker truck.

The refinery would prefer to receive their crude oil entirely by pipeline, but in recent years they haven’t been able to secure enough space on the Trans Mountain pipeline. Using a rationing (apportionment) system, Kinder Morgan allocates shares of pipeline space out to different customers, including onto tankers for export.

Over the past few years, the percentage of pipeline apportionment given to the refinery has steadily declined in the face of increasing demand for oil for export. Chevron representatives have stated that non-pipeline forms of transportation make up the current shortfall but they come at an “extraordinary expense”.

The priority application

In 2012, Chevron applied to the National Energy Board (NEB) for preferential shipping space on the Trans Mountain pipeline. Last week, they were denied this application by the NEB, who stated that priority apportionment should only happen in extraordinary circumstances, and noted that Chevron needs to investigate other options, such as receiving crude oil via tanker into the Burnaby Westridge terminal, before resorting to priority destination designation.

How does this relate to the proposed new Trans Mountain pipeline?

There isn’t a direct relationship, since the new pipeline would be designed to transport diluted bitumen products, which the Chevron refinery is unable to process. However, the current situation might be an indication that export demand will increasingly trump local gasoline security.

How will the decision impact BC residents?

This decision might not have a noticeable impact on people living and working in BC. However, there is a risk that gasoline prices will increase at the pump if the Chevron refinery has to continue to rely on costly methods of importing crude oil. There’s also a chance that the Chevron refinery could be forced to close down if unable to secure a sufficient long-term supply of crude oil, leaving the Lower Mainland and Metro Vancouver reliant on gasoline imports.

This blog used quotes and information from several news articles, including the Burnaby LeaderReuters and CBC news.

More background and information can be found in our recent report “Assessing the risks of Kinder Morgan’s proposed new Trans Mountain pipeline”.

Photo credit: Andy Clark/Reuters

Credible Conversations panel: Will new oil pipelines benefit BC businesses?

Panel BC biz and pipelines

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Our first Credible Conversations forum was held on May 29th at the Creekside Community Centre in Vancouver. Over 100 business leaders, entrepreneurs, politicians, First Nations representatives and BC residents came together to discuss the economic risks of pipeline expansion and explore how to build a more diversified economy here on the west coast. Over the next few days, we will be posting videos, photos and presentations from the forum here on our blog.

Will BC businesses benefit from new oil pipelines?

The first experts’ panel explored the economic impact of oil pipeline development on the province’s economy as a whole.

Moderated by Mandy Nahanee from the Squamish Nation, panelists included Karen Campbell, a staff lawyer with Ecojustice, Wes Regan, CEO of the Hastings Crossing Business Improvement Association, and Ngaio Hotte, an economist with the UBC Fisheries Economics Research Unit.

Watch the full discussion here:

And here are the slides used by Ngaio Hotte in her presentation. A more detailed analysis can be found on the UBC Fisheries Economics Research Unit “talking fish” blog.

Slide1 Slide2 Slide3 Slide4


CRED releases independent report highlighting Trans Mountain concerns


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On Tuesday February 26, CRED released a report highlighting the risks of Kinder Morgan’s proposed Trans Mountain pipeline. In addition to pulling together the most important data about the project’s background, Kinder Morgan’s safety record, and potential impacts of a spill, our group uncovered some of the project’s main economic risks. Some of our key findings:

Jobs: The proposal would create 35 permanent jobs. And oil spill would put at risk industries that together employ over 200,000 people locally including tourism, film and TV, real estate, high tech, agriculture and coastal industries.

Tax revenues: The expansion would not make a significant contribution to provincial tax revenues.

Liability: In the case of a major spill, taxpayers would likely be responsible for the burden of costs, as a company’s liability is limited to $1.3 billion and a major spill could easily cost ten times this amount.

Some of CRED’s advisors highlight the most concerning elements of the report here:

Read or download the full report to learn more about the risks we uncovered.

Thanks to chilliwack360 for the image we used in the banner

The bigger picture: pipelines across Canada

Photo credit: Ewan Nicholson. From Globe and Mail.

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Kinder Morgan’s new pipeline isn’t the only proposal on the table in Canada. Today’s article in the Globe and Mail highlights the six main pipelines under review or planned for the future. Here’s what they say about Trans Mountain:

Proponent: Kinder Morgan

Volume: 590,000 barrels per day (current pipeline is 300,000 barrels per day; expansion will take it to 890,000)

Destination: Burnaby, B.C., home of Kinder Morgan’s Westridge Marine Terminal, where smaller tankers would take Canadian oil primarily to California, although Asian shipments are also possible

State of play: Kinder Morgan is mid-way through an application asking the National Energy Board to approve commercial tolls for the project. A formal application seeking authority to build the expansion is expected later this year.

Decision expected: Depending on when Kinder Morgan applies, the regulatory review could be completed by 2015, with construction starting in 2016 and operations commencing in 2017.

Opposition: Local forces have begun to marshal against the project, including some first nations and the mayors of Burnaby and Vancouver. British Columbia’s provincial leaders – Premier Christy Clark and Adrian Dix, the NDP Leader expected to gain power this year – have not yet made public their thoughts on the expansion.

Pipe dream: TransMountain hopes its route to approval will be less contentious than the Gateway brouhaha, but the line ends at the waterfront near Vancouver and there is much local opposition to the increased tanker traffic it would bring. 50-50, at best.

Read the whole article

Kinder Morgan increases proposed expansion

Source: Kinder Morgan Canada

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Kinder Morgan announced today that, due to demand from shippers who want to move products from the oil sands to the coast, they are proposing to expand their Trans Mountain route by 20% more than previously stated. Instead of increasing the pipeline’s capacity to 750,000 barrels per day (current capacity is 300,000) they are now proposing to expand it to at least 890,000 barrels per day. Correspondingly, tanker traffic in Burrard Inlet would rise from 60 tankers per year to over 400 under this new proposal. Although Kinder Morgan has stated that they do not require this scale of export to go ahead with their expansion, some economists, including former head of ICBC Robyn Allen, have claimed that an expanded Trans Mountain route could accommodate up to 1.1 million barrels per day.

More information about the announcement