The following presentation was delivered by Robyn Allan, March 27, 2013 at the Confederation Centre in Burnaby at an event hosted by the Institute for the Humanities – SFU, the Environment Committee of the Unitarian Church of Vancouver, ForestEthics Advocacy and BROKE. Live stream of the event.
Good evening.
Thank-you Councillor Thomas for the lovely greeting.
I would also like to thank the sponsors of tonight’s event including the Burnaby Residents Opposed to Kinder Morgan’s Expansion, the Environment Committee of the Unitarian Church of Vancouver, Simon Fraser University Institute for the Humanities and Forest Ethics Advocacy for inviting me to speak to you about the Economics of Oil Pipelines and Supertankers.
First, let me be clear.
The debate about oil pipelines and supertankers is not about economic benefit stacked against environmental cost to see if the risk is worth it.
That’s a false dichotomy. It’s developed by oil interests to pit ordinary Canadians against ordinary Canadians.
They hope our fear of economic loss if we don’t approve these pipelines, is greater than our fear of environmental harm if we do.
They fund made-to-order industry studies to pump up the economic benefits but knowingly turn a blind eye to economic costs and deliberately downplay environmental risk.
They voraciously lobby government to bring in legislation sensitive to their needs—at the expense of ours.
They wind-up our elected leaders and send them out to cheerlead on their behalf, and if that doesn’t work—to fear-monger for them.
The energy strategy in Canada is about multinational oil companies and national oil companies of foreign governments reaping vast financial gain and market power versus economic and environmental cost for the rest of us.
I am going to discuss the oil industry and how two pipeline projects—Enbridge’s Northern Gateway and Kinder Morgan’s Trans Mountain twining—fit into the oil sector’s strategy for Canada.
The costs of these pipeline proposals come in many forms.
What are they? Here’s the top 10:
- Decades of higher oil prices for Canadian consumers and businesses across the country;
- Lost opportunity to add value, create meaningful jobs and control environmental standards here at home;
- Hollowing out of the oil sector as raw bitumen exports take precedence over upgrading and refining;
- Twice the number of pipelines and almost double the tanker traffic to move diluted bitumen as compared to upgraded bitumen;
- As soon as Northern Gateway and Trans Mountain are approved, more pipeline capacity will be requested;
- Rapidly rising exchange rates along with rising diluted bitumen oil prices, impacting other sectors of our economy and our ability to export;
- Continued reliance on foreign, higher priced oil imports through eastern Canada;
- A growing dependence on foreign condensate imports through western Canada;
- Crowding out of BC’s legitimate and vibrant economic activity; and
- Supernatural British Columbia becomes a Supertanker terminal for Alberta.
As I expand on a few of the costs I’d like you to keep in mind that oil interests deliberately mislead, misrepresent, and obfuscate in order to exaggerate benefits, deny the costs and underplay the environmental risk.
That’s what they do.
We are told half-truths, we are made false promises, and—since our needs and concerns are inconvenient—we are viewed with contempt. If necessary, we get demonized.
We are asked to put at risk our economic, social, cultural and environmental capital, but are not shown the respect or courtesy we deserve when we seek appropriate due diligence.
Like missing islands in the proposed Douglas Channel oil tanker route, the industry paints the picture it wants us to see.
Like Enbridge’s false “Path to the Future” ad campaign, the industry tells us the story it wants us to hear.
Like boasting economic benefits from Trans Mountain’s twinning, but refusing to release supporting documentation, the industry shamelessly markets its false benefits without accountability.
Like being told by Enbridge and Kinder Morgan that their control room monitoring systems are capable of identifying leaks and shutting the pipelines off within tight timeframes, while studies show leak detection systems work less than 20 percent of the time.
Like being told by Enbridge and Kinder Morgan that diluted bitumen is the same as conventional oil and when it pollutes our waterways and marine environment it’s easy to clean up.
Easy to clean up as if the spill in Marshall Michigan almost three years ago—which is still not cleaned up because of sunken bitumen—never happened.
On December 12, 2012 in a CBC radio interview in Prince Rupert, Janet Holder, Executive VP of Northern Gateway stated, and I quote “basically we do not see any difference between bitumen and crude oil”. End quote.
When asked by the interviewer about the behavior of bitumen when it hits water she replied, quote “we can easily clean it up in water and in salt water if necessary.” End quote.
Kinder Morgan’s website clearly states their corporate position. And I quote: “What happens if there is a leak and diluted bitumen is spilled? Is it harder to clean up than conventional crude? No.” End quote.
What do they take us for?
These companies cannot and should not be trusted.
But it’s not just the risk of Enbridge and Kinder Morgan and how they can’t be trusted as transporters of crude, it’s the oil sands development export strategy driving the need for bitumen pipelines and what it means for the Canadian economy that can’t be trusted.
With pipeline proponents we have to be aware of how they deliver their message, carefully deconstruct what the message is, and dig deep to understand what they’ve elected not to tell us.
For almost two years Enbridge told us the benefits from Northern Gateway would come from higher prices paid in Asia for our oil. Pipeline proponents, and elected leaders, like Minister of Natural Resources Joe Oliver, told us this would contribute economic benefits to Canada.
What they didn’t tell us, and what my evidence filed with the National Energy Board last year disclosed, was that they planned to apply higher Asian prices on every barrel produced and sold in Canada every year for not one year, or five years—but every year for 30 years.
When refineries pay higher prices for their feedstock, they do pass these price increases onto Canadian consumers and businesses. That’s the primary purpose behind accessing new markets—get the highest price possible for one barrel and pass it onto all barrels.
We all know that higher oil prices mean a decrease in family purchasing power. As families adjust, they cut back spending or go deeper into debt.
We also know that when businesses face higher energy costs, they cut in other areas, like wages or postpone investment, leading to slower growth—or resort to downsizing and layoffs.
So whenever you are told access to foreign markets secures higher prices for our crude and this benefits Canada, know oil producers plan to charge those higher prices on every barrel they produce. And when they do, their refineries pass it onto us.
We don’t need to access Asian markets. The market access Canadians need is getting western Canadian crude to eastern Canadian refineries where the demand is more than 750,000 barrels a day.
Quebec and the Atlantic Provinces are almost completely dependent on foreign crude oil imports from volatile and uncertain markets—the same markets we are told China is trying to protect itself from by importing our crude.
These refineries in eastern Canada pay higher prices for their imports because they are priced off an international benchmark called Brent.
Satisfying eastern Canadian refinery demand requires a quality of oil those refineries can process so this means oil sands bitumen needs to be upgraded in Alberta before it can be used in any, and all, Canadian refineries.
Traditionally, Alberta upgraded about 60% of the bitumen pulled out of the ground. In 2007 Alberta promised the rate would rise to 72% bringing with it the benefits of value added, meaningful jobs, and greater tax revenue.
Alberta’s oil producers announced a wide range of upgrading and refining projects to make that goal happen. These projects would have taken Alberta’s already strong downstream activity up a notch and securely established a domestic value-added supply chain.
Then came the financial crisis and the upgrading projects were scrapped—in Canada.
In the US—particularly the Gulf Coast—investments in refineries were made—including investments made by Canadian oil producers with US refinery interests—these enhancements were made to accept Canada’s bitumen.
So instead of a Canadian upgrader, we get Keystone XL—a bitumen export pipeline to the United States.
And we all know China’s refineries—owned by the Chinese government’s National Oil Companies like Sinopec, Petro China and Chinese National Offshore Oil Company—CNOOC, who just bought Nexen—want our bitumen.
These National Oil Companies, which began buying the rights to our oil beginning in 2005, are all oil producers in Canada, are not stupid, and want to take the bitumen value added back home to Asia.
By 2017 Alberta will only upgrade 48% of the bitumen it produces and by 2021 it will be closer to 43%.
Chopping local downstream projects breaks the value-added chain. Canada’s oil resources increasingly become a pool of raw crude waiting to be siphoned off along pipelines serving economic development and energy security needs of other nations.
This why back in 2008 when Prime Minister Harper was running for re-election he promised bitumen would not be shipped to Asia.
His government continued to publicly support upgrading oil in Canada right up until Enbridge filed its application for Northern Gateway in May 2010. Exporting unprocessed bitumen is not good for Alberta’s value added and it’s not good for the environment—its only good for a handful of very large companies.
I have to tell you. Canada’s bitumen export strategy is like watching a cannibal eat with a knife and fork and being told its progress.
But, big oil’s cannibalization of our resource sector is not all.
Because bitumen is so dense, like tar or wet cement, in order to flow down a pipeline it requires diluent, like condensate. Condensate is a high quality oil by-product from natural gas and shale oil.
Up until 2005 Canada was self-sufficient in condensate production. When we produced a barrel of bitumen and mixed it with domestically produced condensate to make dilbit, we exported a barrel of dilbit.
Not true any more.
By 2006 condensate demand began exceeding domestic supply and oil sands producers started importing it from the US.
To import condensate you need pipelines. That’s why Enbridge reversed its Southern Lights oil export pipeline in 2010—to import condensate.
That’s why Kinder Morgan is reversing its Cochin pipeline to flow from Illinois in the US to Alberta.
The need for more condensate import pipelines is why Enbridge’s Northern Gateway project includes a twin pipeline—one dedicated to import condensate from the Middle East.
But the untold real clincher with this raw resource export strategy—as if a growing reliance on imports from the Middle East is not enough—in order to export diluted bitumen instead of upgrading it in Alberta, twice as much pipeline capacity is required.
Why twice?
You need the pipeline to bring condensate in, and when you mix it with bitumen at a ratio of 30% condensate to 70% bitumen, you need the same amount of pipeline capacity to export the condensate back out.
Because diluted bitumen is denser than upgraded or conventional oil, it also moves slower. Trans Mountain’s current pipeline transports about 60,000 barrels a day of heavy crude.
Kinder Morgan explains to its shareholders that when that volume is replaced by light oil, the capacity of its existing 300,000-barrel a day pipeline becomes 400,000 barrels a day.
So before we know it, twice the pipeline capacity is required to transport a barrel of diluted bitumen than if bitumen is upgraded to synthetic crude oil in Alberta.
Before leaving pipeline capacity, there is a critical distinction I want to point out between “applied for capacity” and “designed capacity.”
This distinction will be of particular importance here in Burnaby later this year when the terms of reference for Trans Mountain’s twin are developed.
It’s common knowledge that Northern Gateway is intended to transport 525,000 barrels a day of crude oil and 193,000 barrels a day of condensate.
It also understood that this triggers an average of 220 Aframax, Suezmax and Very Large Crude Carriers a year in the Douglas Channel and Hecate Straight.
This capacity is the scope of the environmental risk being reviewed by the National Energy Board.
What is not commonly known is that Northern Gateway has been designed to ship 60% more crude oil and 40% more condensate by simply adding pumping power.
And the supertankers needed to transport it? Well its not 220 a year, but closer to 340 a year—almost two supertanker transits a day in BC’s northern coastal waters.
More crude. More condensate. More Tankers. More Risk. Way more risk.
Spill risk is not additive—it’s exponential. If there are 60% more oil tankers there is more than a 60% increase in the risk of an oil spill.
None of that risk is being considered in the current approval process for Northern Gateway, but capital expenditures for expanded throughput are.
Northern Gateway recently informed the NEB they intend to increase the number of storage tanks at the marine terminal. These additional storage tanks facilitate expanded throughput.
Suncor intends to ship oil on Northern Gateway. At the recent Kinder Morgan Toll Application Hearing, Suncor explained to Kinder Morgan that, Founding Shippers on Northern Gateway can compel expansion, that it has been commercially contemplated, and is expected to be more efficient as its a streamlined regulatory process.
Until 2005 Kinder Morgan’s Trans Mountain pipeline capacity was 225,000 barrels a day. In 2005 and 2006 they applied for expanded capacity to 300,000 barrels a day under a streamlined process. This triggered a growth in oil tanker traffic in Burrard Inlet from about 22 tankers a year in 2005 into 69 tankers a year by 2010.
At no time has an adequate terrestrial and marine environmental assessment been conducted on this increased volume, nor has the unique risk presented by diluted bitumen been assessed.
Now Kinder Morgan plans to twin Trans Mountain and has a 36” diameter pipeline proposed—the same diameter as Northern Gateway’s oil pipeline.
It is possible that the proposed Trans Mountain twin has designed capacity much greater than what we are being led to believe. If this new pipeline can move up to 850,000 barrels a day this would mean the system flowing into the lower mainland of BC could accommodate over 1.2 million barrels a day.
That would mean either more supertankers—bigger supertankers—or both. We know in 2011 Kinder Morgan planned to dredge the Burrard Inlet to accommodate Suezmax supertankers, which can ship an average of 1 million barrels a day.
It becomes very important later this year when Kinder Morgan submits its Application to the NEB that the terms of reference cover full designed capacity and the risk of this capacity—not just the capacity Kinder Morgan wants us to see.
Crude oil pipelines through British Columbia make no economic sense.
Oil tankers along our coast make no economic sense.
We need to develop an energy policy in Canada, Made in Canada, for and by Canadians.
This is not what big oil wants, but it is what our country needs.
We have to say “no” to these pipelines and “no” to oil tankers along our coast, not just for the economic and environmental good of BC, but for the entire country.
We have to say “no” to corporate plans that crowd out British Columbia’s economic development and put at risk our domestic economy and existing jobs.
And when British Columbians stand behind a firm “no” to oil pipelines and a firm “no” to oil tankers along our coast what we are really saying is a definite “yes”.
“Yes” to a better economic and environmental future for British Columbia, for Canada and all Canadians.
Thank-you
The following presentation was delivered by Robyn Allan, January 15, 2013 at the University Women’s Club in Vancouver.
It is a pleasure to be invited here this evening by the University Women’s Club to speak to you about the economics of oil sands development and what it means for the future of BC and the rest of Canada.
I am going to discuss the oil industry and how two pipeline projects—Enbridge’s Northern Gateway and Kinder Morgan’s Trans Mountain twinning—fit into the oil sector’s energy development strategy for Canada.
I am going to explain why these projects are not in the economic, environmental or public interest of BC or the rest of the country…including Alberta.
I will provide examples of how pipeline companies deliberately obfuscate, misinform, exaggerate the benefits, and deny the costs of the industry’s plan in their dealings with the public. These companies, along with the oil producers they front, are not transparent, nor are they accountable.
They cannot and should not be trusted with our public capital.
Let me begin by being clear about the oil sector in Canada and who is running the show.
Canada’s energy strategy is determined in the boardrooms of a handful of multinational corporations and by the governments of foreign countries through their state-owned oil companies.
The strategy is communicated to the Federal and provincial governments through closed-door meetings with lobbyists and at state dinners over dessert in foreign countries.
It is supported by the vast changes in the Budget—Bill C-38—rushed through parliament by the Harper government.
It is endorsed by the Equivalency Agreement signed by the Campbell government in 2010 when BC waived its right to an environmental assessment.
It is entrenched by Premier Clark and her cabinet by their unwillingness to cancel the agreement and take back BC’s right to decide the fate of these oil pipelines.
So, what is big oil’s plan for us?
They want to rapidly extract oil sands heavy crude called bitumen, mix it with diluent to allow it to flow through pipelines and export it as diluted bitumen—or dilbit—to the U.S. gulf coast and Asia.
How much oil sands supply are they talking about? The Canadian Association of Petroleum Producers—CAPP—the industry funded lobby group—tells us the industry plans to increase oil sands supply from a current 2.1 million barrels a day to 5.1 million barrels a day by 2025…that’s 3 million more barrels a day in just 13 years.
That’s an annual average compound growth rate of 12% a year.
That’s what the industry tells the public. These are the numbers provided to the National Energy Board to impress the regulator with the urgent need for new pipeline capacity.
But there are a number of problems with CAPP’s ambitious forecasts the industry won’t tell you about.
First of all CAPP’s past forecasts are notoriously wrong. The future they try to paint is so rosy its not even believed by companies like Enbridge.
At the same time Enbridge is on record telling their investors the CAPP forecast is so bullish they had to adjust the forecast significantly downwards by more than 300,000 barrels a day by 2020…they turn around and used this ambitious CAPP forecast in their evidence for the National Energy Board review of Northern Gateway.
Thus, armed with these ambitious, and self-serving, forecasts the industry points to an urgent need for projects like Northern Gateway, Trans Mountain and Keystone XL.
All three companies behind these pipeline projects—Enbridge, Kinder Morgan and TransCanada, are complicit in misleading the Canadian public about the full economic implications of their bitumen export pipelines and the cost to Canadians.
As an economist I can tell you new pipeline capacity to export growing volumes of crude oil supply from Alberta to meet the energy needs of foreign countries—on the surface—sounds promising.
Resource expansion should mean wealth, an enhanced balance of trade, job opportunities, government revenues and economic growth.
Well, in this case it doesn’t. This is because we are not being told the whole story.
The oil industry has deliberately failed to explain they are talking about gross exports when they should be talking about net exports.
They are talking about oil sands supply when they should be talking about oil sands production.
They effusively promote export pipelines while downplaying the increasing number of condensate import pipelines necessary for these exports.
They sidestep discussions on value added and lost jobs shipped down the pipeline because bitumen is not upgraded in Alberta.
They ignore the environmental impacts of shipping bitumen to countries with lower environmental standards while waxing eloquently about their commitments to sustainable energy resource development.
They tell us they can get higher prices for exports in foreign markets but don’t tell us they fully intend to charge these higher prices to Canadian consumers and businesses.
And they don’t tell us that Northern Gateway and Trans Mountain are the beginning of a series of projects in a network of pipelines they intend to build throughout British Columbia.
Under big oil’s plan, Supernatural British Columbia becomes a Supertanker terminal for Alberta.
To fully understand big oil’s energy strategy we have to know the difference between oil sands bitumen and conventional oil.
Bitumen is not the same as conventional oil.
But, Enbridge, and Kinder Morgan are going to great lengths to pretend bitumen is the same, so you won’t hear anything about the difference from them.
Unlike conventional oil that flows through a pipeline, bitumen is dense, almost solid, and needs to be mixed with diluent, like condensate, then heated and forced more aggressively under pressure through a pipeline as dilbit.
Up until 2005 Canada was self-sufficient in condensate production. When we exported a barrel of diluted bitumen, we produced the condensate from natural gas and the bitumen from the oil sands. When both the diluent and the bitumen are domestically produced a barrel of dilbit exported means gross exports equal net exports.
Not true any more.
By 2006 condensate demand began exceeding domestic supply and oil sands producers started importing it from the US.
Increasing demand for condensate is why Enbridge reversed its Southern Lights oil export pipeline in 2010. This pipeline used to export crude oil to the US. Southern Lights now flows northward from Chicago, to Edmonton, and has the capacity to import 180,000 barrels a day of condensate for bitumen diluent purposes.
By 2010, 25% of the condensate needed by Alberta’s oil sands producers was being imported.
By next year more than half of the condensate required to facilitate exports will be imported.
Under the industry’s extraction strategy, by 2025 Canada will be dependent on foreign markets for 85% of the condensate needed to facilitate oil sands bitumen exports—Canada will import more than 700,000 barrels a day of condensate in order to export oil sands bitumen.
The industry does not want us to understand this growing dependency on condensate imports because the long-term, negative economic consequences are staggering.
A growing dependency on condensate imports is why Kinder Morgan recently completed an open season for the reversal of its Cochin Pipeline. Cochin, once reversed will facilitate 95,000 barrels a day of condensate imports from Illinois in the US in order to support raw bitumen exports from Alberta. This pipeline currently transports propane from Alberta to Ontario by way of the US.
The need for condensate imports to facilitate bitumen exports is why Enbridge’s Northern Gateway project includes a twin pipeline: one dedicated to condensate imports from offshore markets.
In September I participated at the Joint Review Panel Hearings in Edmonton as an expert witness. I was surprised when Enbridge admitted under questioning that the Panel has not one, but two applications before it: one for the condensate import pipeline and one for the crude oil export pipeline.
I was also surprised to learn that once approval for Northern Gateway is granted, the investors—Enbridge, and other companies such as Cenovus, Suncor, Chinese National Offshore Oil Company (CNOOC who recently purchased Nexen), Sinopec, another National Oil Company owned by the Communist Party of China, MEG Energy and French Multinational Total—it is these companies, not the public, that will have the right to decide whether or not they will proceed with only the condensate import pipeline, just the oil export pipeline, both pipelines, or nothing at all.
The National Energy Board Joint Review Process is not, as we have been led to believe, a public APPROVAL process. It a process to permit a small number of large oil companies and state owned enterprises to make an unfettered business decision about when and whether or not they want to proceed with all, none, or part of their project after the project has undergone public review.
None of the negative economic impact on Canada’s balance of trade from a growing dependence on condensate imports through Northern Gateway has been incorporated into Enbridge’s economic case.
Neither has Enbridge undertaken any analysis related to the sensitivity of bitumen production to changes in condensate import prices. Nor has the reliability of foreign import volumes needed to fill the pipeline been evaluated.
The story Enbridge does not want us to see is Northern Gateway’s role in ensuring a growing dependency on condensate imports—and the economic costs to Canada from such a strategy.
And where is that condensate likely to come from? Only after extensive questioning at the Hearings in Edmonton, and request for additional information, did Enbridge confess the majority of the condensate supply for Northern Gateway is likely to come from the Middle East.
And the untold real clincher with big oil’s strategy…as if a reliance on imports from the Middle East are not enough…in order to export dilbit instead of upgrading bitumen in Alberta, almost TWICE as much pipeline capacity is required.
Why almost twice as many pipelines?
A condensate import dependency means you need the pipeline capacity to import condensate, and then you need the pipeline capacity to send it back out.
So let’s say you import 100,000 barrels a day of condensate to support your export strategy.
You need the capacity to export the condensate back out again with oil sands bitumen, which also requires a capacity of 100,000 barrels a day.
Because the ratio of condensate to bitumen is about 30-70 this means that for 300,000 barrels a day of bitumen exports, you need 500,000 barrels a day of pipeline capacity.
So, by the time the requisite pipeline capacity is built to support big oil’s plan, over 40% more new pipeline capacity is required for a barrel of bitumen compared to that required to export a barrel of upgraded bitumen, or conventional oil. And for BC, this extra pipeline capacity also translates into way more oil tanker traffic.
Bitumen is not conventional oil.
In addition to bitumen’s physical properties and what it means for transportation economics, there’s another major difference between bitumen and conventional oil— bitumen mixed with diluent is toxic and environmentally challenging.
Unlike conventional oil, when dilbit leaks, the diluent evaporates exposing humans and animals to respiratory and other health risks from the harsh, gaseous chemicals. When heavy bitumen hits water, unlike conventional oil, it sinks.
Just as Kinder Morgan and Enbridge do not want us to fully recognize the transportation economics of dilbit versus conventional oil, they are going to great lengths to deny the environmental risk differences as well.
On December 12, 2012 in a CBC radio interview in Prince Rupert, Janet Holder, Executive Vice President of Northern Gateway stated “basically we do not see any difference between bitumen and crude oil”. When asked by the interviewer about the behaviour of bitumen when it hits water she replied, “we can easily clean it up in water and in salt water if necessary”.
What do they take us for?
Kinder Morgan’s website clearly states the corporation’s position. And I quote:
What happens if there is a leak and diluted bitumen is spilled? Is it harder to clean up than conventional crude? No. Pipeline operators have developed and implement (sic) emergency response plans and procedures tailored to the characteristics of the pipeline they operate, including the type of product it carries. However, in the event that diluted bitumen were to be spilled, the procedures for cleaning up the spill would be similar to cleaning up a conventional crude spill.” End quote.
This is not true. The procedures for cleaning up a dilbit spill, particularly when it hits water and sinks, are not similar to a conventional crude oil spill. Kinder Morgan’s and Enbridge are misleading the public and trying to generate a false sense of security around a potential diluted bitumen spill from Trans Mountain or Northern Gateway.
It is because of this difference between bitumen and crude oil that the US government recently requested the US Coast Guard review the risk from the proposed increases in Canadian tar sands exports from the proposed Kinder Morgan expansion.
The US Congress is concerned about the risk to Washington state’s coastal economy from an oil spill due to transporting dilbit by supertanker.
Meanwhile here at home, the corporate strategy is to deny any special risk related to a dilbit spill. The Federal government is assisting these corporations in getting away with the deception.
Throughout the Northern Gateway Hearings Enbridge has failed to provide risk assessments that include the response and clean up implications of dilbit that sinks.
Transport Canada, responsible for water borne tanker spills, has not undertaken the requisite risk assessments related to dilbit in a marine environment, nor have they provided evidence that suggests preparedness for submerged bitumen.
Spill response plans, capital equipment, clean up and remediation costs for a diluted bitumen spill are significantly greater than those presented by conventional oil. Enbridge and Kinder Morgan’s denial about there being any difference, means they are not, and will not, be prepared. Lack of preparation exposes us all to unnecessary risk.
Dangerous dilbit is currently transported through densely populated urban areas of Southern BC by Kinder Morgan. Their assertion that this product poses the same threat and spill response as conventional oil should send shock waves through our regulatory system.
This is a potential catastrophe waiting to happen.
Denial of the risks leads to increased systemic or human factor risk and, unfortunately for British Columbia, actually increases the likelihood of a spill event. Denial also increases the extent of the damage when a spill occurs.
Until the full extent of the economic and environmental risks related to the transport of dilbit is understood, all dilbit transport along the existing Trans Mountain pipeline should be STOPPED.
Bitumen is not conventional oil.
Just ask the people of Marshall, Michigan where more than 20,000 barrels of dilbit spilled from Enbridge’s line 6B in July 2010. Much of it reached the Kalamazoo River and sank.
Enbridge was unprepared for Kalamazoo. Trying to pretend they were dealing with conventional oil, the company denied on many occasions that dilbit had spilled.
Pat Daniel, then CEO of Enbridge told the US Congress during hearings into the company’s extremely poor handling of the response and claims settlement, it would only take them three months to clean up the spill.
Two and a half years later and over $800 million in cleanup costs and the Environmental Protection Agency in the US is still not satisfied with Enbridge’s clean up efforts.
Kalamazoo was the first instance where the Environmental Protection Agency had to deal with a dilbit spill of this magnitude and according to the agency, “responders are writing the book” on how to address the unique requirements of a diluted bitumen clean-up when bitumen sinks.
Denial over the unique characteristics of dilbit is only one of the misrepresentative claims regarding safety coming from Enbridge and Kinder Morgan. Both companies maintain their control room monitoring systems are capable of identifying leaks and shutting the pipelines off within tight time frames.
Unfortunately, these systems do not work. In January last year, Kinder Morgan failed to respond to leak warning signals as oil leaked near Abbotsford for more than six hours.
A recent study from the US Pipelines Hazardous Materials Safety Administration has found that leak detection systems work only 17% of the time.
Evidence filed by the Haisla Nation more than a year ago alerted the Northern Gateway Joint Review Panel to how difficult prompt leak detection can be and how unreliable control room technology is in detecting a spill and shutting the system down.
So who usually identifies oil spills? Members of the general public sees, or smells them, and calls it in.
But even with available research information to the contrary, and Enbridge’s own spill history, the company has consistently claimed in its Path to the Future ad campaign that there is no need to be concerned as the company has world class safety standards and the pipelines are monitored 24/7. What they didn’t include in their ad propaganda is that these systems don’t work.
So let me review.
Big oil’s plan will leave us with huge socio-economic and environmental costs and lost value added opportunity for decades to come.
The rapid extraction and export of unprocessed bitumen does not represent a growth opportunity for Canada—it is a profit maximizing strategy for large multinational corporations like Suncor, Cenovus, Imperial, BP, Husky, Total and MEG Energy. It is an energy security and price stabilization policy of foreign governments for the benefit of their citizens through their state owned companies such as China’s CNOOC, PetroChina, Sinopec, and Norway’s Statoil.
It is a growing dependency on imported condensate from the Middle East.
It is almost twice the pipeline capacity to ship dangerous bitumen.
It is higher energy prices because of restricted domestic supply in order to meet the energy security needs of foreign countries.
Crude oil pipelines through British Columbia make no economic or environmental sense.
We need to develop an energy policy in Canada, made in Canada, for and by Canadians.
This is not what big oil wants, but it is what our country needs.
We have to say “no” to these pipelines and “no” to oil tankers along our coast, not just for the economic and environmental good of BC, but for the entire country.
We have to say “no” to corporate plans that crowd out British Columbia’s economic development and put at risk our domestic economy and existing jobs.
And when British Columbians stand behind a firm “no” to oil pipelines, and a firm “no” to oil tankers along our coast, what we are really saying is a definite “yes” to a better economic and environmental future for Canada and all Canadians.
Thank-you