By R. Bruce Striegler
If Natural Resources Minister Joe Oliver and Minister of Transport, Infrastructure and Communities, Denis Lebel, had hoped their March 18 Vancouver announcement of federal initiatives to protect Canada’s West and East coasts from oil spills would quell criticism of proposed overland oil pipelines to the Pacific, they may be disappointed. Most Canadians are aware of the debate in British Columbia over proposed Alberta oil pipelines to the Pacific coast, with Enbridge’s Northern Gateway the chief target of opposition. In addition to Enbridge’s proposal, an existing Alberta oil pipeline, Kinder Morgan’s Trans Mountain pipeline constructed in 1953, is poised to expand.
The 1,150-kilometre pipeline currently carries 300,000 barrels per day to a Vancouver terminal, and the proposed expansion will raise capacity to 750,000 barrels a day. The expansion will see the approximate five tankers per month now transiting Vancouver’s harbour and past city beaches increase to as many as 30 per month.
Released on February 4, 2013, an Insights West online poll found that while 75 per cent of Alberta residents support Enbridge’s proposal, in British Columbia, 61 per cent oppose it. Residents of both provinces have concerns about the proposal, but in B.C., 93 per cent vs. 74 per cent of Albertans expect there will be an oil spill. Similarly, 91 per cent of British Columbians are concerned about an increase in oil tanker traffic and potential spills at Kitimat and the surrounding Pacific channels, compared to 85 per cent in Alberta. Eighty-eight per cent of B.C. residents have concerns about environmental impacts to the land and 87 per cent are concerned about Enbridge’s poor track record regarding pipeline spills and deficient maintenance, compared to only 65 per cent in Alberta.
Residents in both provinces who oppose the construction do recognize its potential economic benefits. In this poll, of the 61 per cent against the project in B.C., over three quarters agree the pipeline would create new jobs. Various polls show that the number of people in B.C. who oppose the project has risen steadily over the past 18 months. One telephone survey from December 2011 registered only 46 per cent opposed.
While it may be a case of too little, too late, the federal announcement included the appointment of a special envoy to B.C. First Nations, whose opposition is by now largely unified, in spite of a few joint partnerships Enbridge claims to have secured. Vancouver lawyer Doug Eyford, a former chief federal negotiator for comprehensive claims and self-government, is to examine First Nations concerns around the Northern Gateway proposal as well as the development of liquid natural gas plants, marine terminals and other energy infrastructure in B.C.
He will discuss environmental protection, jobs and economic development, and First Nations rights to a share of the wealth from natural resources. According to Minister Oliver, “He’s going to be reaching out to find out more about their interests and their concerns and to look for ways that resource development can help improve the lives of aboriginals, create more employment, create more opportunities for communities.”
Will the proposals meet B.C.’s requirements and bridge the credibility gap?
At the news conference, the two federal ministers employed the term ‘world-class’ more than half a dozen times as they highlighted the government’s proposed oil spill response. They announced implementation of eight tanker safety measures, introduction of new legislation, Safeguarding Canada’s Seas and Skies Act, and the creation of a Tanker Expert Panel to review Canada’s current tanker safety system and propose further measures to strengthen it, if required. “Our government is working to strengthen the safety of Canadians and better protect the environment,” said Minister Lebel. “I am pleased to announce the first steps towards the development of a World-Class Tanker Safety System off the West and East Coasts of Canada.”
Minister Oliver said, “As a trading nation, Canada depends on marine shipping for economic growth, jobs and long-term prosperity. There will be no pipeline development without rigorous environmental protection measures, and the tanker safety initiatives we are announcing today are an important aspect of our plan for Responsible Resource Development.” Speaking to the newly created Tanker Safety Panel, Captain Gordon Houston, the Chair, said, “Our panel will work on recommendations to make a strong tanker safety system world-class. Together, our panel members have 120 years of maritime experience and a deep commitment to the environment.”
Ray Johnston, President of the Chamber of Marine Commerce, said in a news release, “While Canada’s current tanker safety regime has served Canada well, we nonetheless applaud the steps the Government of Canada is taking to review the current system. We look forward to collaborating with the government and the Tanker Safety Expert Panel in the work they will be undertaking in the coming months. The marine shipping industry is committed to providing efficient, sustainable and safe transportation that is vital to the success of Canada’s economy.”
Minister Lebel acknowledged that Western Marine Response Corp. (WMRC) is the only existing oil spill responder in B.C. Established in 1976, WMRC was an industry cooperative of four major oil companies and a pipeline company, providing oil spill response within the Port of Vancouver. Certified by Transport Canada following new legislation in 1995, WMRC became Canada’s first such organization (although still funded by its founding industry partners) whose mandate was expanded to provide marine oil spill response services to ships and oil handling facilities along the 27,000 kilometres of B.C.’s coastline and interior navigable waters. Since its inception, WCMRC has provided response to more than 650 spills.
WMRC was to have its 23-metre oil-skimming vessel Burrard Clean 9 as backdrop to the news conference in Vancouver Harbour. Ironically, en route from its home port of Esquimalt, the vessel grounded on what was referred to as an “uncharted sandbar” at the mouth of the Fraser River and didn’t arrive for the federal photo-op. Coming on the heels of the sudden closure of the Kits Coast Guard station in the middle of Vancouver’s English Bay, considered one of Canada’s busiest stations, federal pronouncements are increasingly viewed with scepticism in B.C.
Steps the two federal ministers outlined, although few specifics were offered, include increased tanker inspections, systematic surveillance and monitoring of ships through an expanded National Aerial Surveillance Program, establishment of an incident command system, review of existing pilotage programs and tug escort requirements, the designation of Kitimat as a public port and a commitment to engage in scientific research on so-called ‘non-conventional petroleum products’ such as diluted bitumen, or “dilbit”, the term often applied to Alberta bitumen in transit.
Interestingly, the Mayor of Kitimat only spoke with federal officials about the new designation five days after the announcement. Kitimat will not become a public port for at least a year, since changes to legislation are required. Furthermore, since there are no federal lands in the Kitimat harbour, that amending legislation will cover only navigable waters in Kitimat. Transport Canada is promising “extensive consultation” and Kitimat’s Mayor Monaghan commented, “It seems to me that now they want to do consultation, sort of like closing the barn door after all the cows got out.”
In addition, the federal proposals call for new and modified navigation aids from the Coast Guard consisting of buoys, lights and unspecified ‘other devices’ to warn of obstruction and to mark the location of preferred shipping routes. The government has ordered the Coast Guard to develop options for enhancing Canada’s navigation system by the fall of 2013. Part of the package of proposals would also see all terminal facilities submit pollution prevention plans.
What may have been the genesis of the federal announcement is the July 2012 Technical Analysis prepared by the B.C. Government. The 56-page document outlined the provincial minimal requirements for the expansion of heavy oil export. The report stated that West Coast marine spill management needs strengthening to increase capacity for all types of spill scenarios. The report says it is possible that the existing capacity for crude oil spills, from training to equipment, may not be appropriate for bitumen. Thus, a major gap may exist for all current and future bitumen shipments taking place on Canada’s West Coast.
The report says, “The existing requirements for marine spill response organizations on the West Coast are insufficient given the potential impacts of a major spill. Chief among these insufficiencies is the modest requirement that response organizations maintain capacity to address spills up to a maximum of 10,000 tonnes. This maximum is the equivalent of 70,000 barrels of oil. The West Coast’s response organization would be completely overwhelmed by a spill similar in scope (260,000 barrels spilled) to the Exxon Valdez disaster.”
B.C.’s concerns seem not so idle, as noted in the February 2013 release of the federal Environment Commissioner’s report “2012 Fall Report of the Commissioner of the Environment and Sustainable Development”. In it, Commissioner Scott Vaughan warned that federal disaster plans for the B.C. coast have not kept pace with the increase of super tankers exporting oil from B.C. ports.
He points out that these vessels have the potential to spill up to 300,000 tonnes of oil. However, federal disaster response plans are only capable of handling spills up to 10,000 tonnes. In his report, Vaughan confirms the risk that current $1.3 billion per spill maritime liability limit “may not be sufficient in the wake of a major spill from a vessel in Canadian waters.” The report says that B.C. tanker traffic is expected to quadruple, from an estimated 600 in 2010 to 2,400 in the near future. The government is reportedly reviewing the liability limits.
The debate and unanswered questions around Alberta bitumen
While the rest of Canada seems largely puzzled by B.C.’s negative response to proposed oil pipelines from Alberta to the Pacific coast, there are a number of thought-provoking issues around the product itself, the integrity of pipelines, their operators and the transport of oil by tanker that in fact are vital to all Canadians, since similar pipelines criss-cross the country and ports on Canada’s East Coast as well as those along the waterways of the St. Lawrence Seaway handle oil.
One of those issues is the product itself. As detailed in an article that appeared in Canadian Sailings of October 22, 2012 (“Make B.C. a leader in oil spill response standards, says government”), the properties of Alberta bitumen are arguably different from conventional heavy crude oil. In order to attain a viscosity able to be pumped through pipelines, the thick processed bitumen is mixed with a variety of chemical additives including light natural gas or other petroleum products and includes sulphur and heavy metals.
According to many scientific sources, dilbit, when spilled in water, is more likely to sink. It is environmentally a higher-risk product than crude oil due to the additives. It is more difficult to recover bitumen and a greater remediation effort is required should an unintended release occur, particularly once bitumen sinks into the water column or into soils.
It’s clear, however, that the oil industry, including producers, pipelines and spill responders, treat dilbit in the same manner as crude, and in fact call it heavy crude. An October 2011 fact sheet published by the Association of Oil Pipelines states that dilbit has characteristics similar to other heavy crude currently transported by pipeline in Venezuela, Mexico and California. Their information concludes that diluted bitumen is essentially the same as any other type of crude and does not represent a greater risk to pipelines, people or the environment than other crudes already transported via pipeline.
The Association dismisses claims of increased risk to pipeline infrastructure, and states that, “No instances of crude oil release caused by internal corrosion from pipelines carrying Canadian crude are evident in the U.S. Department of Transportation’s pipeline accident data from 2002 through early 2011.” This contrasts with the events of July 25, 2010, when a 30-inch pipeline, Enbridge’s Line 6B, originating in Griffith, Ind. and crossing Southeastern Michigan ruptured in a wetland at Marshall, Michigan.
As documented in the U.S. Department of Transportation’s (USDOT) accident report, increased pressure during a planned shutdown ruptured the line. The report says, “The pipeline segment ruptured due to corrosion fatigue cracks that had grown in size until the pipe failed during the planned shutdown.” An estimated 3.2 litres of oil saturated the surrounding wetlands, flowed into a local creek and then the Kalamazoo River. Hundreds of residents were evacuated and 320 people reported medical problems.
Despite a massive clean-up effort, in March 2013 the U.S. Environmental Protection Agency ordered the company to undertake further dredging of the Kalamazoo River after finding more submerged oil, and required Enbridge to maintain sediment traps along the river to capture oil outside the area ordered to be dredged. This new directive could push the cleanup bill to almost $1 billion, above and beyond what is covered by the insurance on Enbridge’s U.S. affiliate. Enbridge had reported clean-up costs at over $700 million before this latest order. In response to media questions following the new dredging demand, spokespersons from Enbridge declined to discuss total out-of-pocket costs for the clean-up but noted that claims covered by Enbridge’s comprehensive insurance policy had an aggregate limit of $650 million.
In response to the federal announcement, one of the country’s top oil spill experts says the export of heavy crude pose added risk to the West Coast since some oil sands blends are likely to sink in the case of a spill. Quoted in a March 20th Globe & Mail article, Merv Fingas former chief of research and development, Emergencies Science Division at Environment Canada specializing in oil spills said that the dilutant used to thin the Alberta bitumen will evaporate. The remaining bitumen, if heavy enough, will drop through the water where its sticky remains will adhere to rocks and other sediments, making clean up more difficult if not impossible.
Economic benefits could be wiped out by spill
Published in 2012, an economic study sponsored by the World Wildlife Federation Canada, but conducted independently by the Fisheries Centre at the University of British Columbia, lays out a stark scenario. The North Coast encompasses coastal and inland areas, and has a scattered population of approximately 57,000. Economic activity is predominantly resource-based with significant commercial fishing and processing, a growing tourism sector and expanding industrial development. It’s estimated that ocean-based industries directly employ about 10 per cent of the population, and when indirect and induced jobs are considered, ocean-based industries provide employment for nearly 30 per cent of the population. One of the conclusions of the study suggests that a major tanker spill off the coast of Northern British Columbia could wipe out any potential economic gains from the proposed Northern Gateway pipeline.
Enbridge calculates it would create 3,000 jobs during the construction phase, 560 long term jobs and projected tax revenues over 30 years of $1.2 billion. The company projects benefits of $318 million in local goods and services, a further estimated $400 million for local goods and services in Central B.C., and $112 million worth of similar benefits for the Northeastern sector of the province. Northern Gateway is offering Aboriginal people a ten per cent share in a $5.5 billion project, forecast to generate about $280 million in net income to First Nations communities over 30 years.
As lawyers for the province of B.C. completed their cross-examination on March 22nd of Enbridge experts at the Joint Review Panel hearings, it seems there are many questions still unanswered. B.C. Environment Minister Terry Lake says the province was looking for more information on how Enbridge would deliver world-class spill prevention and response, promised as part of the project. He said that Enbridge did not demonstrate under oath that it would be able to access or respond to a Northern Gateway spill in the remote Interior areas the pipeline will cross, or that the company will be able to recover sunken oil.
The provincial Minister also noted that the company will not have land or marine spill response plans until after the project has been approved, and company experts confirmed that the plans won’t include a dedicated rescue tug or specific tanker routes. A reasonable person might conclude that with so many vague or unanswered questions still surrounding the pipeline proposal, a ‘pass’ might be a rational decision.