By Keith Norbury

Ways to improve the movement of project cargo from B.C. ports to Alberta’s industrial heartland are being analyzed by the governments of the two western provinces.

A “demand vs capacity analysis” is among the recommendations in a December 2013 report “Demand on the transportation trade network associated with expected Alberta destined heavy project cargo” prepared by deputy ministers in the two provinces for the Premiers of B.C. and Alberta on the issues associated with moving energy resources to new markets. That “demand/capacity gap analysis” has already begun, said a spokesperson for the B.C. Ministry of Natural Gas Development.

Working group established after Premiers’ dispute

The premiers set up that working group last July after settling a dispute about sharing the spoils and costs of energy pipelines across B.C. Ms. Clark, the Premier of B.C., had set five conditions for allowing those pipelines. They included a world-leading system for preventing and responding to oil spills as well as ensuring that B.C. receives a fair share of the benefits from the pipelines.

The working group established five working teams, including one devoted to transportation. Among the transportation team’s recommendations was “undertaking a detailed critical analysis of port, rail and road infrastructure needs,” according to the deputy ministers’ report. Sandra Steilo, a spokesperson for the B.C. Ministry of Natural Gas Development, said that Colledge Transportation Consulting Ltd. is leading a consortium of consultants that is undertaking that gap analysis, with completion scheduled for July 2014. The budget for the project cargo and energy products component of that analysis is $129,000. That analysis “will evaluate energy and project cargo demand, current capacity, and associated port, road and rail infrastructure needed,” she said. Ms. Steilo also noted that the analysis is “part of a broader needs assessment being undertaken for all commodities moving through the three western provinces.” The transportation working group consists of “multiple public servants” from Alberta and B.C., she said.

Transportation ministry’s involvement unclear

What involvement the B.C. Ministry of Transportation and Infrastructure might have in that process wasn’t immediately clear as this went to press. The ministry wasn’t able to provide an answer to that question and related inquiries on short notice.

Members of an industry-led ad hoc project cargo group that formed last summer to promote Vancouver as a project cargo gateway weren’t familiar with the deputy ministers’ initiative. However, they did say that the industry group is still working with the B.C. Ministry of Transportation to improve the flow of project cargo through B.C. The industry group consists of representatives from Port Metro Vancouver, the port’s two breakbulk terminals, and the B.C. Trucking Association. Louise Yako, president and CEO of the 1,200-member trucking association, said she had a “vague recollection” of the deputy ministers’ report. After speaking with consultant David Colledge, however, Ms. Yako came to the conclusion that “they’re looking at infrastructure and capacity as opposed to any policy impediments.”

And it’s those impediments, such as B.C.’s complicated and costly permitting process for wide loads that are the major concerns of industry. To resolve those concerns, the industry group has been meeting with officials of the B.C. Ministry of Transportation’s Commercial Vehicle Safety and Enforcement branch. The next meeting is scheduled for May 8, Ms. Yako said. “Unfortunately it takes a long time to get things done,” Ms. Yako said. “To the extent that there is interest in the province in supporting development of LNG (liquified natural gas), I think will help us out in that regard. But six months is actually not a long time for the province to do something.”

Red tape, not infrastructure, poses major obstacles

Doug Mills, senior account representative for bulk and breakbulk cargo for Port Metro Vancouver, said the industry group has examined the issues around moving project cargo through the Pacific Gateway and determined that infrastructure isn’t a major issue. “It has little to do with topography or anything like that,” Mr. Mills said. “Most of the issues are around permitting processes and bureaucratic red tape, to be honest with you.”

The industry group took its findings to the provincial government and found a sympathetic ear. In fact, the government has commissioned a study “to quantify the cargo opportunities coming forward in the next dozen years or so,” Mr. Mills said. The study would also examine the infrastructure needs and regulatory changes required “to accommodate that opportunity.” But again, it wasn’t clear if the study he was referencing is the gap analysis commissioned by the deputy ministers or another study entirely. Mr. Mills, however, indicated that the important thing is that a government body is examining the issues surrounding the movement of project cargo through B.C.

“I think our initial intent was to raise the visibility of the opportunity,” Mr. Mills said. “And the fact that these studies are being done is good news.” Brady Erno, Manager of Sales and Customer Service at Fraser Surrey Docks, said that quicker approvals for wide and heavy loads remains an objective of the project cargo working group. “But we’re not quite there yet,” Mr. Erno said. He did, however, note that the group now has a better indication of what is required to obtain specialty permits for oversized loads, a development that he called “a big step.”

Last summer, the B.C. Ministry of Transportation and Infrastructure issued a statement confirming that it “is working with major ports on an initiative that will simplify and improve transportation planning for international shippers that work with project cargo.” The initiative also “includes identifying maximum weights and dimensions that can be accommodated on the provincial highway system and making this information available to shippers and freight forwarders.” The statement also noted that oversize cargoes “can be handled within the framework of existing regulations and approval processes” and pointed out that shippers can apply for permits through the website of the ministry’s Commercial Vehicle Safety and Enforcement branch,

Project cargo working group battles disinformation

Meanwhile, Port Metro Vancouver has added a project cargo page to its website. It contains such details as weight and dimensions guides for truck and rail, as well as a link to a project cargo fact sheet. On another front, the project cargo working group promoted the Pacific Gateway at Port Metro Vancouver’s booth at the Breakbulk Americas conference in New Orleans last September. The group plans to return to the upcoming Breakbulk Americas conference this fall in Houston.

Both Mr. Mills and Mr. Erno said their presence at last September’s show led to major project developers approaching them after the conference. While they didn’t provide details about those projects, Mr. Erno said they included project cargoes from the Far East for cements plants in Alberta, mobile cranes, and oil and gas modules. That was despite rumblings that competing ports were spreading disinformation about the viability of Vancouver as a project cargo gateway into Alberta. “At the conference, we got reports from all kinds of people that the other west coast ports in particular were running around refuting everything we were saying,” Mr. Mills said.

Mr. Erno, however, said those reports were “more hearsay than anything.” He also heard, as he has for years, of ports in the U.S. Pacific northwest marketing themselves as gateways into Canada. On the other hand, he has heard of U.S. municipalities along those routes complaining about heavy cargo beating up roads and other infrastructure.

Criticisms of Vancouver as a project cargo port aren’t confined to the U.S., however. “Vancouver is a very difficult port,” said Ed Bernard of Ontario-based Precision Group. Only about five per cent of the company’s project cargo business comes through the west coast, but when it does, it is usually through the port of Tacoma, Wash., said Mr. Bernard who is Vice-President of the company’s Precision Project Cargo Division Inc. and Precision Specialized Division Inc. “Almost everything big comes into Tacoma,” Mr. Bernard said. “And in some cases, if it’s really big, it’ll get barged to Idaho and from Idaho it comes off the barge and then it’s trucked up into Alberta.”

Mr. Erno said he doesn’t expect that Vancouver will ever capture 100 per cent of the project cargo trade with Alberta. For example, it might make sense for a ship carrying multiple cargoes with multiple destinations in Canada and the U.S. to discharge at Tacoma. A few years ago, though, shippers wouldn’t even consider Vancouver as an option, he said. “But now they have that option,” Mr. Erno said.

Controversy swirls around pipeline proposals

Whether that cargo will include breakbulk and project cargo to build future pipelines for oil, diluted bitumen, or LNG remains an open question. The proposed projects remain highly controversial in B.C. For example, in a non-binding referendum in April, Kitimat residents voted 58.4 per cent against the Enbridge Northern Gateway pipeline. And later that month, federal Green Party leader Elizabeth May and B.C. Green Party MLA Andrew Weaver called upon the B.C. government to allow cross-examination into hearings for the proposed Kinder Morgan pipeline in the south of the province.

The Kinder Morgan proposal, which would twin an existing pipeline, has garnered support from union workers, a traditional constituency of B.C.’s New Democrats. Then NDP leader Adrian Dix’s opposition to that pipeline was blamed for costing the NDP the provincial election last May.

Also in April, the federal government pledged $9.1 million toward a $20 million Ocean Networks Canada’s early warning system for detecting earthquakes and oil spills. Critics considered that to be a sign of the federal government’s determination to forge ahead with pipelines and their associated increase in tanker traffic. However, in making the announcement, minister of state for Western Economic Diversification, Michelle Rempel, said the government won’t support any project unless it’s proven to be safe.

And as for that deputy ministers report, Will Horter, Executive Director of the Dogwood Initiative environmental organization, said in a statement: “This report does not change the fact that a clear majority of British Columbians do not want an expansion of crude oil tanker traffic on our coast, nor the increased threat of an oil spill that would come with it.”