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Trans Mountain Oilsands Export Project Draws More BC Fire

The British Columbia’s (BC) left-leaning, avowedly green government Tuesday unveiled its weapon -- more official study -- for blocking an expansion of Kinder Morgan Canada Ltd.’s (KML) Pacific coast export pipeline expansion for the Alberta oilsands.

The BC New Democratic Party (NDP) regime’s environment minister, George Heyman, announced plans to restrict diluted bitumen (dilbit) deliveries by Trans Mountain Pipeline, while examining potential tanker spills and cleanups.

Shipments of the heavy Alberta crude are about 30% thinners, which are chiefly liquid byproducts of the natural gas that also fuels thermal oilsands extraction plants.

Alberta NDP Premier Rachel Notley called the province’s action “grasping at straws” and “political game-playing” that not only hurt the oil and gas industry, but “all cases where investors engage with lawmakers. Job creators need to be able to trust lawmakers.”

Heyman’s vow to enact dilbit restrictions added a provincial regulatory dimension to BC resistance against the 2016 federal approval of the C$7.4 billion ($5.9 billion) project to triple Trans Mountain’s capacity to 890,000 b/d.

Environmental, aboriginal and BC government protest lawsuits have failed so far, but they continue. A ruling is due soon on an attempt to have the Canadian Federal Court of Appeal overturn the project’s endorsements by the National Energy Board (NEB) and the Liberal federal cabinet.

Notley suggested Heyman’s regulatory move has no more chance of succeeding than court challenges of federal jurisdiction over projects crossing provincial and international borders. “The BC government has every right to consult on whatever it pleases with its citizens,” Notley said. “It does not have the right to rewrite our Constitution and assume powers for itself that it does not have. If it did, our Confederation would be meaningless.”

Heyman’s plan calls for a marathon of science, public and native consultation while stalling KML’s addition to 1,147-kilometer Trans Mountain’s line to a tanker dock in the Vancouver satellite of Burnaby from the Alberta capital in Edmonton.

His agenda calls for an advisory panel to hold a province-wide inquiry into questions raised about hazards posed by dilbit in a 489-page report by a technical committee of the Ottawa-based Royal Society of Canada, titled Behaviour and Environmental Impacts of Crude Oil Released into Aqueous Environments.

Two industry supporters, the Canadian Energy Pipeline Association and Canadian Association of Petroleum Producers, commissioned the report after bitumen spills and cleanups surfaced as hot issues in the NEB and cabinet reviews of the Trans Mountain project.

KML maintained the cooperative approach adopted for the scientific study after Heyman announced the BC review, and said it would “actively participate in their engagement and feedback process...

“The expansion project’s approval...included a thorough examination of the pipeline and products being shipped,” KML noted. “There are conditions on the project from both the National Energy Board and the BC Environmental Assessment Office related to diluted bitumen.”

The Royal Society report’s conclusions are a recipe for prolonged scientific studies of a large topic that remains not well understood.

“The environmental behavior of unconventional oils and blended oils currently cannot be predicted with confidence, which affects spill response planning and decisions,” said the science report. “Each oil spill is unique, due to the specific chemical nature of the oil and the complex interaction with different environmental and climate factors.

“Thus, to account for the environmental variables that might be experienced in a dilbit spill, a multitude of combinatorial trials would be required before empirical rules of its behavior can be developed.”

The Royal Society’s experts added, “There is an urgent need in Canada to develop science-based guidance and protocols for oil spill impact, risk assessments and cleanup.”

However, the job was described as too big for any one province, including BC, or single industry segment to tackle alone.

“This initiative requires a national level of coordinated scientific research in both the laboratory and the field -- including experimental field trials with controlled releases of oil -- that involves both support and funding from Indigenous communities, federal and provincial government agencies, private sector industries, academia and the public.”

During Kinder Morgan Inc.’s 4Q2017 conference call in January, CEO Steven Kean said the Trans Mountain project expansion is“the only outlet for Alberta crude...to get to the world market.”

Even though the NEB granted a motion to build, the Burnaby municipal government in BC refused to issue construction permits.

“Local governments are not typically in opposition, as we've established community benefit agreements covering 90% of the pipeline route,” Kean said. “But it is essential to be able for us to know that we can move forward even when local governments are opposed or are declining to act on permits.”

KML officials “have made some progress working with the provincial authorities in British Columbia on clarifying requirements and time frames on permits and authorizations,” Kean said. “We're still working on this, but we've made some progress.”

 

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