On the heels of the NEB’s approval of Kinder Morgan’s pipeline proposal, a raft of research points in the other direction.
(This story was first published in Focus Magazine in July, 2016.)
THERE IS A STRANGE IRONY to the timing of the National Energy Board’s recommendation that the controversial $6.8-billion Kinder Morgan pipeline expansion should get a green light from the federal cabinet.
Almost simultaneously with the May release of the NEB report, which concluded that, subject to 157 conditions, the Trans-Mountain pipeline would be in the national interest, a flurry of reports and scientific studies appeared documenting the risks of continuing to extract and burn fossil fuels. These were followed by a number of court challenges to the NEB recommendation.
The studies gave momentum to the leave-it-in-the-ground movement and added to public discomfort with the prospect of Kinder Morgan tripling the amount of diluted bitumen flowing from the Alberta oil sands to Burnaby. The expansion would also mean 400 tankers a year—a sevenfold increase—carrying dilbit through the sensitive waters of the Strait of Georgia and Strait of Juan de Fuca.
Opponents are emphasizing the project’s climate change implications and questioning how the increase in oil sands output, as the pipeline opens up new Asian markets, can fit with Canada’s commitment at the Paris climate talks to reduce greenhouse gas emissions to 30 percent below 2005 levels by 2030.
“Expanding fossil fuel production flies in the face of what is needed to tackle climate change,” said David Suzuki in an email to supporters. “So why is the government still talking about building fossil fuel infrastructure?”
The NEB report looked only at direct emissions from pipeline construction and operation, and made nine recommendations. For the first time in its history, the board recommended offsets to ensure no net emissions, but it did not look at upstream or downstream emissions or at the overall effect on climate change.
The final pipeline decision will rest with the federal cabinet. Natural Resources Minister Jim Carr has appointed a three-person panel to hear from BC residents, with promises that at least upstream greenhouse gas emissions will be examined in detail. The panel will finish its’ report in November and Carr has promised a government decision no later than December 19, 2016.
In the meantime, scientific evidence of harm—both from the processes used to extract bitumen from the oil sands and from greenhouse gas emissions released later on—continues to mount.
A study, led by Environment and Climate Change Canada scientists, published in the journal Nature in May, found the oil sands pose another big problem, beyond their contributions to greenhouse gas emissions: They are one of the largest sources of “secondary organic aerosol” pollution in North America. The pollution is now “comparable to downwind of megacities such as Mexico City and Paris, and is higher than that observed in Tokyo and New England.” The tiny airborne particles, which result in what we call smog, have been linked to major health problems like respiratory and cardiovascular diseases.
Other studies examined the impacts of climate change on Canada. As carbon dioxide continues to be released into the atmosphere, Canada’s future, according to different scientific papers, includes both increasing droughts and floods. David Schindler, ecology professor at the University of Alberta, in a paper published in the Proceedings of the National Academy of Sciences, said the Prairies are likely to see droughts worse than the 1930s. Meanwhile, the Fraser Basin Council warned that climate change is increasing the risk of major floods in the Lower Mainland.
Tim Takaro, Simon Fraser University health sciences professor, finds it difficult to understand why the NEB did not adequately consider climate change.
“Climate change is huge. You can see the evidence happening in Fort McMurray. It affects our health and you can’t ignore that in a project of this scale,” he said. “It is unconscionable to me that we can be discussing this dramatic expansion of fossil fuel infrastructure without considering climate changes and the health impacts,” Takaro said in an interview.
Health problems could come from a spill of diluted bitumen, but the effects of air pollution, temperature increases, flooding and sea level rise must also be considered, said Takaro.
“The International Panel on Climate Change of the UN has very clearly said that, if we [are to] have any chance of getting hold of this tiger and controlling it, we have to stop building super-large fossil fuel infrastructure,” he said.
An examination of what will happen if we don’t take such action came in May from a team of climate scientists, led by University of Victoria PhD student Katarzyna Tokarska. Published in Nature Climate Change, their study warned that if the Earth’s remaining untapped fossil-fuel resources are burned, the average global temperature is likely to rise between 6.4 and 9.5 degrees Celsius by 2300, with Arctic temperatures warming an astounding 14.7 and 19.5 degrees Celsius by that year.
These increases are a far cry from the 2.0 degrees of warming that is accepted as the upward limit to avoid the most serious effects of climate change. Such warming would end life as we know it on planet Earth.
Tokarska applied sophisticated climate models to the current estimate of known fossil fuel reserves, with their conservative associated five trillion tonnes of carbon emissions when burned, to project “considerably more profound climate changes than previously suggested.”
“What we are doing is showing it’s relevant to know what will happen if we don’t take any action to mitigate climate change—if we don’t ever implement the Paris agreement or other such agreements. It’s a worst case scenario if we don’t do anything now,” Tokarska said in an interview.
Climate scientist and MLA Andrew Weaver, a co-author of Tokarska’s paper, said in an interview that if Canada is serious about the Paris agreement, the government should not even consider the Kinder Morgan pipeline expansion.
“Signing that agreement says we shouldn’t be building pipelines and we shouldn’t be building new LNG facilities,” said Weaver, who is also leader of the BC Green Party.
“Canada investing in infrastructure to enhance its extraction of a resource, 80 percent of which, globally, has to be left in the ground if we are going to meet our targets, makes no sense,” Weaver added.
Continued reliance on fossil fuels also does not make economic sense, said Weaver. He pointed to Saudi Arabia’s decision to move to an economy that does not rely on oil and Norway’s decision to eliminate fossil fuel vehicles.
“Canada is in a very precarious position. If we double down on the 20th century economy, which is dependent on resource extraction, we are going to be very poorly positioned when other jurisdictions transition away from fossil fuel,” he said.
The economic uncertainty is echoed by a federal government think-tank that, in a draft report obtained by the CBC in May, said the rapid transformation of the world’s energy landscape could jeopardize economies based on fossil fuels.
Policy Horizons Canada, which provides future-looking advice to federal bureaucrats, said in the report that electricity from wind and solar is becoming competitive with electricity generated by fossil fuels and nuclear power.
“The shift to an electricity-dominated global energy mix will be accelerated as decreasing costs combine with increasing government and private sector concerns over climate change, energy security and air pollution, particularly in developing countries where the need for additional energy capacity is greatest,” says the report.
David Hughes, former research director at the Geological Survey of Canada, agrees that the economic case for new pipelines is flawed. In another new study, he noted that the international price of oil is no longer significantly higher than North American prices.
“The idea that exporting more oil sands bitumen to Europe or Asia will boost returns to Alberta simply doesn’t hold water,” Hughes wrote in the study conducted for the Corporate Mapping Project, led by the University of Victoria, Canadian Centre for Policy Alternatives, and Alberta’s Parkland Institute.
“Oil sand bitumen will always sell at a discount due to its lower quality, regardless of whether it’s sold in North America or on international markets,” says the study.
Hughes also eviscerates claims by politicians that it is possible to meet climate commitments while significantly expanding oil and gas production and building new export pipelines.
“Short of an economic collapse, it is difficult to see how Canada can realistically meet its Paris commitments in the 14 years remaining without rethinking its plans for oil and gas development,” he wrote.
Hughes, who also factors in the five liquefied natural gas export terminals envisioned by the provincial government, found that with projected oil sands growth, emissions in other sectors would have to shrink by 55 percent to meet Paris Agreement commitments.
“If Canada is to have any hope of meeting its Paris commitment, the aggressive oil and gas growth ambitions of the Alberta and BC governments will have to be reconsidered and reduced,” he said.
Environment and Climate Change Canada, in a May review, estimated that, if the pipeline expansion is approved, upstream emissions—those associated with the production, processing and transportation of oil—could be between 20 and 26 megatonnes of carbon dioxide equivalent per year. The NEB previously estimated that the pipeline itself would generate about one million tonnes of greenhouse gases during construction and another 400,000 tonnes annually once in operation.
The government review, however, also noted that the upstream emissions might occur whether or not the Trans Mountain pipeline is built; if oil sands production does not happen in Canada, investments would be made in other jurisdictions and global oil consumption would be materially unchanged in the long-term.
That assumption is being challenged by critics such as Ecojustice lawyer Dyna Tuytel who wrote in her blog that it amounts to a failure to take responsibility for Canadian upstream emissions.
“This means that Environment Canada will not consider the emissions from additional tar sands production itself and, instead, will focus on the difference in emissions intensity of oil production in Canada compared to other hypothetical jurisdictions if Canada were not to produce it here,” she wrote.
Ecojustice, representing the Living Oceans Society and Raincoast Conservation Foundation, is among the groups now challenging the NEB report in the courts.
Lawyers for Ecojustice have filed for a judicial review of the report saying that the board failed to adequately consider the adverse effects of tankers on endangered southern resident killer whales and their habitat.
The Squamish Nation has filed for a judicial review, as well, claiming that the First Nation’s concerns were not adequately taken into consideration and that the NEB process was flawed. And in June the City of Vancouver filed for a judicial review saying the NEB report is “flawed and biased” and ignores scientific evidence about the consequences of a major spill and the effect on greenhouse gas emissions.
Meanwhile, the federal Liberal government has launched a lengthy review of the NEB process and other legislation governing the way major projects are assessed.
Many of the laws, such as the Fisheries Act, Environmental Assessment Act, and the Fisheries and Navigation Protection Act, were changed in 2012 by the former Conservative government in an effort to get industrial and resource projects fast-tracked and approved more quickly.
Expert panels will now review the legislation and issue a report in January. Some of the laws will also be studied by two parliamentary committees. However, the Liberal government has already said that projects already in the process—such as Kinder Morgan—will not be required to go back to square one and instead will face additional regulation through already-announced interim measures, including more consultation with First Nations and more emphasis on the effect projects will have on greenhouse gas emissions.
Despite the continuing controversy, Kinder Morgan is confident that it can meet NEB’s conditions, including controlling emissions. A communications spokesman said in an emailed statement that the company welcomes the NEB’s requirement for a GHG offset plan. Although pipelines account for only about one percent of Canada’s greenhouse gas emissions, the industry is ready to do its part, he said. “It is a sign of the times and an appropriate reflection by the NEB, taking into consideration an issue of great public interest and importance,” he said. “We understand climate change is an important global issue requiring action across many industries around the world.”
PROVINCIALLY, KINDER MORGAN’S pipeline faces hurdles into 2017 when it will likely become a provincial election issue.
Before that it will have to face a provincial environmental review following a BC Supreme Court ruling that the province cannot rely solely on the federal process and, so far, the provincial government is not ready to give a go-ahead.
“Our government position has always been clear and consistent. We will only support heavy oil pipelines in BC if our five conditions are met,” said Environment Minister Mary Polak. “We are not there yet.”
Polak noted that some conditions set by the NEB do address BC’s concerns, but there is work yet to do on issues such as marine spill response, First Nations and benefits for BC.
The provincial conditions include a world-class response to spills and for BC to receive its fair share of benefits, but do not mention climate change or emissions. That’s because pipeline greenhouse gas emissions are a federal responsibility, explained BC Ministry of Environment spokesman David Karn. “As the regulator of interprovincial pipelines, it is the federal government’s responsibility to ensure emissions are managed so that federal commitments are achieved,” he said.
The province will rely on information from the NEB environmental assessment, but provincial Environmental Assessment Office staff will meet with aboriginal groups to determine whether Kinder Morgan has adequately consulted First Nations, Karn said.
The provincial cabinet decision is likely to be made after the federal ruling in December and it is not clear what will happen if the two do not dovetail.
Leading towards May 2017’s provincial election, where do the parties stand on the pipeline?
George Heyman, NDP environment critic, says the NDP has consistently opposed the project, partially because of the NEB failure to consider climate change and lack of information on what part the pipeline plays in an overall climate plan.
“This not in British Columbia’s interest,” Heyman said, counting off potential risks to the environment and the economy and accusing the BC Liberals of trying to have-their-cake-and-eat-it-too by taking an ambivalent stance.
During the last provincial election, the NDP loss was partially blamed on then-leader Adrian Dix coming out against the pipeline during the campaign, but Heyman said that there are no concerns that it will deter voters next spring. “One of the reasons we took this position clearly and early is so people know where we stand. We will go forward into an election telling people what we are going to do to create jobs and a healthy economy as well as what clear measures we will take to have a good climate action plan,” he said.
Weaver also believes the issue could still be knocking around during next spring’s provincial election and, as Green Party leader, he wants to see the Province just say “No.”
“I have said very clearly that Kinder Morgan is simply not going to happen on my watch and they should not be wasting people’s time going through a process that is not in the interest of British Columbians or Canadians,” he said.
The government always seems focused on “getting to yes, no matter what the question is,” Weaver said. “But with some projects the answer should be ‘No’—and Kinder Morgan is one of those projects.”
Judith Lavoie is an award-winning journalist specializing in the environment, First Nations, and social issues. Twitter @LavoieJudith.
How the National Energy Board found itself under attack by everyone in January.
(This story was first published in Focus Magazine in February, 2016.)
JANUARY 2016 WAS A MONTH FULL OF NEWS around Kinder Morgan’s Trans Mountain pipeline. As dozens of intervenors gave their final arguments in the closing days of the National Energy Board’s hearings, the federal government made moves towards living up to their pre-election promises.
The NEB hearings on the risks and benefits of the 987-kilometre pipeline will be wrapped up on February 5. During ten days of hearings in Burnaby, a flurry of intervenors delivered varied condemnations of both the project and its approval process, deeming the NEB process flawed and reliant on inadequate data. Of particular concern to coastal British Columbians is the quadrupling of tankers shipping dilbit off our shores. On January 25, Victoria Mayor Lisa Helps and Councillor Ben Isitt joined the chorus, expressing grave concern about the effects of an oil spill on Victoria’s environment and economy.
Earlier, on January 11, the BC Liberals rejected the project in their final argument in front of the NEB on the basis of inadequate details of spill-response plans, noting these plans fall short of a “world-leading standard.”
BC Green Party leader, scientist and MLA Andrew Weaver delivered his final argument January 20, concluding the application is incomplete with inadequate data on the behaviour of bitumen.
Federal Green leader and Saanich Gulf-Islands MP Elizabeth May was also an intervenor and gave a scorching testimony, citing serious issues with evidence, First Nations rights, and process, particularly the exclusion of the public from hearing rooms and the lack of oral cross-examination. “In essence, none of the witnesses were available to answer any question—whether orally or in writing,” she said.
(Neither federal nor provincial NDP representatives appeared as intervenors, though the party has stated the NEB process is a failure.)
The BC Civil Liberties Association also appeared as an intervenor and, like Elizabeth May, condemned the hearings as potentially unlawful by not allowing the public to attend.
First Nations from all over BC, as well as US indigenous groups, appeared in late January, too, expressing concerns about the impact of all that coastal oil tanker traffic on their fishing rights and cultural heritage. The additional 350 tankers a year mean “all risk and no reward,” said a lawyer for the US tribes.
Among environmental intervenors were Raincoast Conservation Foundation’s Misty Macduffee and Karen Wristen of Living Oceans, both veteran researchers. Along with lawyers at Ecojustice they helped prepare a joint final argument based on the behaviour of spilled diluted bitumen in the marine environment. Their particular concern is its impact on marine and Fraser River fish species and the southern resident killer whales. They also looked at air quality and other human health impacts, as well as economic considerations. They argued that the NEB doesn’t have enough information before it about the project’s environmental effects and how they will be mitigated; that the project will have significant environmental impacts that are not justified by any benefits of the project; and, relatedly, that the project is not in the public interest.
The rules, however, are such that they were not allowed to present what they believe is critical new evidence from the US independent non-profit National Academy of Sciences (NAS). Coming out just one week before Kinder Morgan’s final written evidence in December, the NAS report provides evidence that diluted bitumen doesn’t behave like Kinder Morgan says it behaves.
With the new principles and longer timeframe announced by the federal government on January 27, there’s now a good possibility that the NAS information will factor into the government’s final decision, but meanwhile the NEB has indicated it is too late for their process.
What the NAS concluded in their 126-page report is this: “In comparison to other commonly transported crude oils, many of the chemical and physical properties of diluted bitumen, especially those relevant to environmental impacts, are found to differ substantially from those of the other crude oils. The key differences are in the exceptionally high density, viscosity, and adhesion properties of the bitumen component of the diluted bitumen that dictate environmental behaviour as the crude oil is subjected to weathering…For this reason spills of diluted bitumen pose particular challenges when they reach water bodies. In some cases, the residues can submerge or sink to the bottom body. Importantly, the density of the residual oil does not need to reach or exceed the density of the surrounding water for this to occur.” (italics theirs)
This is a hugely important finding from a highly authoritative source. It means that within hours of an ocean spill, dilbit separates into its original components. The hydrocarbons evaporate and the air around the spill becomes explosive, while the bitumen sinks. Normal spill response technologies like skimmers and dispersants, the NAS found, are inadequate because the time window for their effectiveness is very small. Once bitumen has sunk, there really is no way to clean it up.
According to the NAS report, the “weathered” bitumen components that form within days of a spill mean that “spills of diluted bitumen should elicit unique, immediate actions in response.”
According to Macduffee this is the most comprehensive review on dilbit yet produced and renders Kinder Morgan’s final submission inadequate since all its modelling of environmental impacts and oil spills is predicated on earlier assumptions that spilled dilbit performed like any other crude oil and didn’t sink. Kinder Morgan stated in their submission to the NEB that “Dilbits…[and other Group 3 hydrocarbons] have been transported throughout the world and the general behaviour of these oils are quite comparable with respect to fate and weathering, and spill countermeasures.” (italics added) Kinder Morgan also stated that dilbit proved “no different than what might be expected of other conventional heavy crudes when exposed to similar conditions.”
The NAS report, commissioned by the US Congress to consider that country’s own spill response preparedness, first became available in its pre-publication form online in early December. Raincoast and Living Oceans immediately filed a motion to have its evidence included because of its significance. The NEB, however, accepted Kinder Morgan’s argument that it was “procedurally unfair to permit the filing of new evidence, prepared by third parties, on the eve of argument. Kinder Morgan said fairness requires that participants have a sufficient opportunity to test new evidence by asking questions to those who prepared it, and there is not enough time to do so in this case.”
Raincoast and Living Oceans argued back that most evidence is from third party research, and that doesn’t provide a basis for dismissal—just an argument for bringing back oral cross examination which Stephen Harper got rid of in his last fiddle with the NEB. Kinder Morgan also argued that it was a pre-publication report and “it was difficult to ascertain which part of the Report contained errors.” According to Macduffee, the NEB could have gone back to the federal government to ask for an extension to provide time for the company to review this critical evidence, but didn’t.
Now, with the federal government giving itself more time to make a decision, and promising its decision will be based on science (as well as traditional indigenous knowledge and other relevant evidence), the NAS’ findings do stand a chance, ultimately, of being weighed in the final decision on the project.
At a press conference on January 27, Natural Resources Minister Jim Carr and Environment Minister Catherine McKenna introduced five new principles that will guide its decision-making on major natural resource projects while the government undertakes a broader review of environmental assessment processes (which is expected to take two years). For the Trans Mountain Expansion project, the government promised to “undertake deeper consultations with Indigenous peoples and provide funding to support participation in these consultations; assess the upstream greenhouse gas emissions associated with the project; and appoint a Ministerial Representative to engage communities, including Indigenous communities potentially affected by the project, to seek their views and report back to the Minister of Natural Resources.”
While the NEB deadline for its recommendations on Trans Mountain remains May 2016, the government has given itself until December 2016 (it had been set for August 2016) to consider the NEB’s recommendation and carry out the extra consultations and assessments before making a decision on the pipeline.
Elizabeth May spoke at a press conference after the announcement and expressed her approval, given the situation. She said the Conservatives, through Bill C-38, had “wrecked” the environmental assessment process, allowing the Energy Board to leave climate change out of their review. “Energy regulators should never be asked to do environmental reviews,” May said. Explaining that Canada would be mired in litigation if the government interfered at this stage in the NEB process, she felt these new measures offered a “reasonable approach” and “provide more confidence” until a complete overhaul could be done.
Andrew Weaver said he was thrilled with the federal government’s announcement: “As a climate scientist, I see including upstream emissions on energy projects as a major step forward for Canada.” He is still opposed to the Trans Mountain pipeline going ahead: “This announcement does nothing to alleviate my concerns on spill response and spill preparedness. For British Columbians the central issue is about the potential for a catastrophic accident and not as much about the climate impacts of the project. On these grounds the project should still be rejected.”
Not everyone was happy with the fed’s interim measures. Besides condemnation from Conservatives, regional First Nations chiefs from Quebec, Manitoba and BC issued a strong joint statement slamming “artificial timelines, the sidelining of critics, a lack of oral cross-examination of the companies’ evidence, and the exclusion of key elements of evidence such as the behaviour of sinking dilbit,” as well as the NEB itself—“a politicized and industry-captured ‘rubber stamper’ that pays only lip service to the respect for the positions and rights of First Nations.” UBCIC President Grand Chief Stewart Phillip said, “What needs to be demonstrated is the federal government’s willingness to take NO for an answer from First Nations like Tsleil-Waututh Nation who are exercising their sovereign decision-making power.”
The chiefs and others also complained that the new review guidelines omit reference to the downstream greenhouse gas emissions of tarsands bitumen, which comprise most of the total emissions (climate economist Mark Jaccard’s analysis estimates 90 percent).
In that same last week of January, the NEB itself was reprimanded by the federal Commissioner of the Environment and Sustainable Development Julie Gelfand who came out with the results of an audit of the NEB. In her statement, she said, “Our audit concluded that the Board did not adequately track companies’ implementation of pipeline approval conditions, and that it was not consistently following up on company deficiencies. We found that the Board’s tracking systems were outdated and inefficient.” In both types of cases that were audited, about half were lacking in proper oversight, which means the NEB was not meeting its regulatory mandate. The NEB has agreed with the auditor’s conclusions and stated it will, among other things, “clarify the consequences for companies that do not undertake corrective action.”
Lack of faith in the NEB, combined with Minister Carr’s stated determination to move oil resources to tidewater, mean pipeline opponents are, at most, cautiously optimistic about the new government’s direction.
Briony Penn PhD is the author of the new book, The Real Thing: The Natural History of Ian McTaggart Cowan.
The Houston-based pipeline company says it’s a good corporate citizen but its record in Canada doesn’t support that claim.
(This story was first published in Focus Magazine in January, 2015.)
THE COMPLEXITIES OF CORPORATE TAX LAW rarely make compelling reading, but Robyn Allan believes British Columbians will be fascinated and outraged if they take a close look at her analysis of how Kinder Morgan is sucking money out of Canada and paying minimal taxes.
Allan is a thorn in the corporate paw of Kinder Morgan, which wants to twin the Trans Mountain pipeline and triple the flow of bitumen from Alberta’s oil sands to Burnaby. While opposition to the planned pipeline has been strong, what sets Allan apart is a background that makes it tough for critics to discount her in-depth financial investigations.
The independent economist is a former president and CEO of the Insurance Corporation of BC and her many private and public sector executive positions have included a stint as senior economist for BC Central Credit Union and financial vice-president of Parklane Ventures Ltd.
The path tracing how Kinder Morgan avoids paying Canadian taxes is labyrinthine, but the nub is that Houston-based Kinder Morgan was set up in the US as a Master Limited Partnership, an entity that does not exist in Canada.
“It’s a different kind of company…it’s traded publicly on the stock exchange and you could buy a unit and then have the right to receive income from its activities, including the Trans Mountain pipeline,” Allan said in an interview.
Instead of creating net income, a Master Limited Partnership creates cash flow, which is distributed to unit holders and, as a bonus, avoids most US taxes because it derives its income from the development and transportation of minerals or natural resources.
Kinder Morgan consolidated its tax position in August by restructuring, something that the company announced to investor analysts in Houston would “realize over 20 billion dollars in cash tax savings over the next 14 years.”
Allan believes Kinder Morgan’s corporate culture of minimizing taxes spills over into the company’s Canadian dealings and she discovered from poring over documents that, despite the company’s profits and sizeable Canadian interests, Trans Mountain has paid an average of only $1.5 million annually over the last five years in federal and provincial taxes and received Canadian tax refunds in 2009 and 2011.
For example, Trans Mountain generated $167 million in distributable cash flow in 2013, but received a Canadian tax refund of $4.2 million, Kinder Morgan Canada president Ian Anderson told analysts in Houston.
Allan points out that represents a siphoning off of resources from the Canadian economy to be given to US shareholders. “And that flies in the face of the fairy tale they want to tell us about how much they contribute to the economy,” she says. “They suck money out, which is why I asked Revenue Canada for an audit. I have serious concerns that this tax planning they are engaged in may not be appropriate under the law or in the spirit of the law…I have a feeling they are making decisions on avoiding taxes,”
Calls from Focus to Trans Mountain were referred to Kinder Morgan Canada external relations, but there was no response before our deadline.
Meanwhile, Allan has not heard whether Canada Revenue Agency will agree to conduct an audit and CRA spokeswoman Colette Turgeon said in an emailed response to Focus’ questions that confidentiality provisions of the Income Tax Act prevent the CRA from confirming if an audit is planned or ongoing. Turcotte noted that individual cases relating to Master Limited partnerships cannot be discussed, but Canadian legislation has a basic requirement of a 25 percent withholding tax on certain payments to non-residents. “A tax treaty may reduce the amount, but not to zero.”
The oil and gas sector is considered one of Canada’s significant industry sectors, Turgeon wrote. “To effectively manage the tax-related risks of the sector, the CRA has established an Oil and Gas Industry Coordinating Office, where industry specialists provide technical advice to oil and gas specialized auditors.”
Corporations can claim federal and provincial tax credits if they meet the criteria, which helps make Canada an increasingly attractive place to do business, Turgeon said. “Corporate tax credits are part of this system.”
Kinder Morgan, with an enterprise value of more than $100 billion, has a history linked to Enron Corp, best known for its massive accounting fraud and subsequent bankruptcy. Founder and CEO Richard Kinder is a former Enron president, who left in 1996 after he was passed over for the position of CEO—a job handed to Jeffrey Skilling, who is now serving a 24-year prison sentence after being convicted in 2006 of multiple federal felony charges related to Enron’s financial collapse.
Kinder Morgan was formed in 1997 when Kinder and William Morgan acquired Enron Liquids Pipeline for $40 million. The company, relying heavily on Master Limited Partnerships, grew rapidly and, through numerous partnerships and subsidiaries, now owns or operates 180 terminals and about 83,000 kilometres of pipelines, including more than 4000 kilometres in Canada.
Kinder takes a salary of only $1 a year, but, according to financial journals, collected $380 million in dividends from his companies in 2013.
Allan believes it is common for energy companies that want to build pipelines or terminals to overestimate the amount of taxes they will be contributing to the local economy, but she is convinced Kinder Morgan is taking the exaggeration to levels that amount to misinforming Canadians.
“Here’s what concerns me most, as an intervener at the [National Energy Board] hearings, that they say they are great contributors to the fiscal purse when the exact opposite is true. It’s most troubling,” she said. “It doesn’t make sense to me whatsoever that a company that pays that kind of benefits to US shareholders can have such a minimal [tax] obligation in Canada.”
The Province failed to ask economic questions at the hearings and the lack of information was exacerbated by the National Energy Board, which, operating under new rules, refused to order Kinder Morgan to answer Allan’s economic questions.
“Kinder Morgan said they were irrelevant and the board said it agreed with Kinder Morgan. I was shocked,” said Allan, who then went to other sources to obtain information about the company’s finances and tax plans.
“It shows the absurdity of the National Energy Board process. The public thinks the NEB is looking at something and they’re not,” said Allan. She believes policy changes brought in by the Harper government, including time restrictions, mean the NEB process favours companies rather than a fair and balanced review.
Allan worries that, especially with the backdrop of arrests of pipeline opponents on Burnaby Mountain, once people discover they are being given misleading information about financial benefits, they will start to distrust the system and that could undermine civil society.
One of those who believe the public trust has already been undermined is Nathalie Chambers of Madrona Farm in Saanich, whose activism is usually centred on protecting farmland and the Agricultural Land Reserve.
Chambers, who was among those demonstrating on Burnaby Mountain, said she has come to believe that energy and farmland issues are linked. “Everywhere I turn, big oil is coming up. The ALR is being dismantled because the regulations are getting in the way of oil and gas development,” she explained.
Chambers feels that with 2015 being a federal election year it is extraordinarily important that Canadians educate themselves about how the Harper government is supporting tar sands development and the major energy companies while muzzling scientists.
“We need political reform. We need to be able to trust the science and we need to be able to finance [opposition]. We are up against the deepest, deepest pockets,”said Chambers.
Adding to public suspicion of Kinder Morgan is the company’s history of accidents and critics have accused the company of focusing on increasing dividends for shareholders rather than spending resources on pipeline maintenance.
Burnaby Mayor Derrick Corrigan, an implacable opponent of the pipeline twinning, told Vancouver council last year that the company’s reaction to a 2007 spill that damaged 50 houses and dumped 250,000 litres of crude oil into Burrard Inlet convinced him that Kinder Morgan is not a good partner. “They underestimate risks, they constantly trivialize risks, they continually talk about the remoteness of odds in those risks and then they work to limit their own liability,” Corrigan told council. “If you look at research on them, Kinder Morgan has a history of pipeline accidents all over North America.”
In addition to the 2007 pipeline rupture, Kinder Morgan has seen several smaller spills in BC. In June 2013 a small spill near Kingsvale forced a shutdown of the Trans Mountain pipeline; a 2012 spill at the Sumas terminal in Abbotsford infuriated residents, although the company said the 110,000 litre spill was completely contained; and in 2009 crude oil spilled from a tank at Kinder Morgan’s Burnaby Mountain terminal.
For those who oppose the Trans-Mountain twinning, a temporary respite may come with dropping oil prices, which is forcing energy companies to look carefully at expensive capital projects.
But Allan wants Canadians to take a more philosophical view and question why they have to expend energy fighting the company.
“It’s bad economic strategy, so we should not have to waste time and effort asking about what it will do to the environment. The pipeline expansion will not bring financial or economic benefits to Canada,” she said emphatically.
Judith Lavoie has won four Webster awards and has been nominated for a National Newspaper Award and a Michener Award. Twitter @LavoieJudith.
Prime Minister Justin Trudeau says his cabinet's decision on Trans Mountain was based on "evidence," but didn't say what evidence. One of the prime concerns about transport of diluted bitumen is the question of what will happen to it after a spill. If it were to sink, it would be impossible to clean up. As Katherine Palmer Gordon reported in 2014, there’s little evidence to support the Joint Review Panel’s critical June 2014 conclusion that diluted bitumen is “unlikely to sink.” Although her story focussed on the Northern Gateway project—which Trudeau's cabinet has rejected on the basis of its environmental risks—all the same issues regarding the fate of spilled dilbit apply to the Kinder Morgan project.
(This story was first published in Focus Magazine in July, 2014.)
WHETHER DILUTED BITUMEN WILL FLOAT ON THE SURFACE or sink in the ocean, says chemical scientist Thomas King wryly, “is a simple question, but it trails a raft of complex issues.”
King, based in Halifax, Nova Scotia, is leading Fisheries and Oceans Canada’s research into the behaviour of diluted bitumen under various environmental conditions. “The trouble is,” he says, “that we have very limited information about dilbit’s properties in water. Very little research has been done so far.”
Yet, despite the lack of research, the National Energy Board’s Joint Review Panel (JRP) recommended approval of Enbridge’s Northern Gateway Pipeline project (subject to 209 conditions). And on June 17, the federal government did just that.
The Northern Gateway Pipeline, if completed, will carry 525,000 barrels of diluted bitumen (“dilbit”) daily from Alberta’s oil sands to Kitimat for export to Asia. Kinder Morgan Canada’s expanded Trans Mountain Pipeline is intended to carry another 890,000 barrels of dilbit daily to the Port of Vancouver, also for export. Together, according to Transport Canada, that represents an additional 600 oil-laden tankers a year traversing British Columbia’s coastal waters.
The ability to recover dilbit spilled by an errant tanker in these turbulent, rock-strewn waters hangs on the response to that so-called simple question: Does it sink or does it float?
The JRP seemed to think it had a simple answer, stating in its report: “The evidence does not indicate that dilbit is prone to sink in the marine environment.”
Unfortunately, it would seem that the evidence is nowhere near that clear. If anything, the indications to date suggest that dilbit is prone to sink in the ocean.
Either way, two things are clear. We’re a long way yet from getting the information needed to answer the question definitively. And, until we have it, Canada’s ability to respond effectively to any dilbit spill will remain severely impoverished.
Canada has experience dealing with surface spills of conventional light oil and has developed techniques to deal with such spills, says King. But those techniques aren’t foolproof by any means. And when dilbit is spilled, he points out: “Standard recovery approaches can’t be used anyway.” Submerged dilbit is much harder to locate and remove. It may be completely irrecoverable in deep water.
There is one thing we do know for certain, he adds: “Damage to marine habitat and its living resources [from sinking bitumen] is expected to be much greater.”
The great sink/float debate Conventional light oil typically floats on the surface of water—hence the oily sheen commonly seen around docks, for example. Undiluted bitumen, a form of a heavy, viscous crude oil, is considerably denser (which is why it is sometimes referred to as “heavy oil”). Bitumen deposits are often referred to as “tar sands” because of the thick, sticky texture of the oil.
Undiluted bitumen is too thick to transport by pipe. Various types of condensate or light synthetic crude oil are therefore used as diluents. The end product is referred to by the generic term “dilbit” or “synbit,” but there may be dozens of different varieties. No-one knows for sure how many currently exist, however, because the development of new chemical combinations is not only industrial proprietary property, but constantly changing as new research is undertaken.
Oil companies, including Enbridge, have typically taken the stance that dilbit floats and therefore doesn’t pose a greater risk to the environment than conventional oil.
Alberta-based Crude Quality Inc, for example, reported in 2011 to American authorities in relation to the proposed Keystone XL Pipeline that “under standard conditions,” dilbit will float on water. A 2012 report by Ottawa-based SL Ross Environmental Research Ltd drew a similar conclusion. A year later Dr Alan Maki, a witness for Enbridge at National Energy Board hearings on the Northern Gateway project, told the NEB even more strongly: “It is an immutable fact of physics that [dilbit] will float. It simply cannot sink in water.”
Independent scientists believe exactly the opposite, however. Dr Merv Fingas, an Edmonton-based environmental physicist, former head of Environment Canada’s oil spill R&D unit and the author of seven books about oil spills, told the Globe and Mail that Maki’s claim was simply “not true.” Fingas added: “Every time we did get a sample of any kind of bitumen in the lab and analyzed it, it always sank.”
Last year American environmental chemist Dr Jeffrey Short, who assessed the impacts of the 1989 Exxon Valdez spill for the Alaska and US governments, looked into the susceptibility of dilbit to sinking on behalf of Kitkatla’s Gitxaala Nation. Short reviewed previous studies and then assessed that data against the typical rough, windy weather and cold temperature conditions in the Douglas Channel and Hecate Strait.
He concluded that those previous studies had failed to take into account these typical conditions. The studies were therefore unreliable at best, and completely invalid in some cases. He also pointed out that testing has taken place on only two dilbit products to date. There are many varieties of dilbit being produced, so to conclude that all dilbit floats based on those tests, stated Short, simply doesn’t add up. In fact, he posited the opposite: “Because…only a very few bitumen products have been evaluated experimentally, it is plausible that other products that might be shipped through the proposed Northern Gateway pipeline might be even more susceptible to sinking.”
Short also told The Tyee that he was “mystified” by the lack of available scientific information about dilbit given its importance in analyzing the environmental impact of the Northern Gateway proposal. “On a project of this significance,” he commented to writer Andrew Nikiforuk, “Canadians should go into it with their eyes open and not base your public policy on fantasies.”
Unfortunately, it seems independent Canadian experts able to speak knowledgeably about dilbit’s buoyancy are thin on the ground on the west coast. The University of Victoria, Simon Fraser University, and the University of British Columbia all failed to identify anyone on faculty with this kind of expertise. The provincial Ministry of Environment admitted that there is also no one within the BC government who can speak to the science.
Even Merv Fingas, who was so outspoken on the topic just last year, can apparently no longer speak about the issue. Fingas refused an interview request, writing: “Due to commitments on a particular study I am unable to do that.”
Unprepared for 600 tankers On November 30 last year, the government released a multi-departmental report confirming what King is saying: “The potential range of behaviour, fate and treatment options for a possible marine spill of diluted bitumen products is not well understood. There is little information on the spill behaviour, fate, impacts and remediation options for diluted bitumen spills.” It did, however, note: “When fine sediments were suspended in the saltwater, high-energy wave action mixed the sediments with the diluted bitumen, causing the mixture to sink or be dispersed as floating tarballs.”
About the same time, Transport Canada released two reports reviewing Canada’s ship-source oil spill and response regime and assessing the risk of spills in Canadian waters south of the 60th Parallel. It made this disturbing admission: “Advances in research and development of response techniques are not captured in the Canadian [response] regime and there has also been a gradual weakening of the regime in other respects. Over time, knowledge and skills sets within Government have eroded…The Commissioner of the Environment and Sustainable Development also identified a number of gaps, largely the result of insufficient data and information collection and analysis.”
In other words, despite the push to export oil, the government isn’t even close to being prepared for a conventional oil spill at sea, let alone a dilbit disaster. The reports contain further bad news for west coasters: One of the areas of highest probable risk right now for a crude oil spill over 10,000 tonnes is the area around the southern tip of Vancouver Island. “In the Strait of Juan de Fuca,” notes one report in unequivocal terms, “Canada should be prepared for a spill of crude oil.”
What happens when 600 additional oil-laden tankers a year start navigating British Columbia’s wild waters? It would seem neither Transport Canada—nor any other arm of the federal government—has any idea.
Only recently, as the result of heavy public pressure, is the issue being taken seriously by the feds. The November 30 report also announced the launch of the coordinated scientific research initiative in which Tom King is participating. In collaboration with DFO, Environment Canada and Natural Resources Canada have begun investigating what may happen in the event of a dilbit spill in Douglas Channel or Hecate Strait. The primary goal of the research initiative is to “improve the preparedness and response for marine spills” of dilbit so that responders can “make informed decisions on the appropriate oil spill response options and strategies.”
King’s team is looking not only into whether, how quickly and how far dilbit sinks in water, but also how the heavy oil behaves in different weather conditions; the impacts of salinity, rainfall, wind, sunlight, water temperature and sedimentation; and the environmental impacts of bitumen in different situations. They are also reviewing the effectiveness under water of existing conventional oil recovery techniques and chemical dispersants—all issues that must be understood before effective dilbit recovery methods can be developed.
The first phase of the research work isn’t expected to be completed before March 2016. Funding has been provided to continue development of ocean and dilbit behaviour models through to the end of 2018. It’s uncertain whether this is sufficient time for the work to be completed, however. In the meantime, the environmental impacts of a major bitumen spill are still only being guessed at.
We do know that three years after the 2010 Deepwater Horizon oil disaster in the Gulf of Mexico, tar balls—sticky, solid pieces of oil that form when water combines with spilled oil and which can travel hundreds of kilometres—could still be found in the coastal marshes of Louisiana. In 2013, it was estimated that approximately 680 million litres of dilbit remained in Michigan’s Kalamazoo River after an Enbridge pipeline burst in 2010, spilling more than three times that amount into the Kalamazoo. Portions of the river still remain closed.
The JRP’s conclusions Notwithstanding the scientific uncertainty, the JRP was dismissive of evidence suggesting that dilbit will sink, stating: “Although there is some uncertainty regarding the behavior of dilbit spilled in water, the Panel finds that…dilbit is unlikely to sink due to natural weathering processes alone, within the time frame in which initial, on-water response may occur, or in the absence of sediment or other particulate matter interactions. The Panel finds that a dilbit spill is not likely to sink as a continuous layer that coats the seabed or riverbed.”
The JRP also stated—in contradiction to the concerns expressed by Transport Canada about the negative impact of a lack of scientific information on response capability—“In the Panel's view, the weight of evidence indicates that disagreement among experts on the fate and behaviour of spilled oil is related to specific details that may not be significant from a spill response perspective.”
That’s despite the fact that the JRP also admitted it didn’t have enough information: “Additional research is required to answer outstanding questions related to the detailed behaviour and fate of dilbit. All parties with technical expertise on the topic were in agreement with this. The Panel finds that research on the behaviour and cleanup of heavy oils is required to inform detailed spill response planning and heavy oil spill response in marine and freshwater environments.”
Condition 167 of the JRP’s approval requires Enbridge to file much more detailed information on spill modelling and response with the National Energy Board at least three years prior to commencing operations. How that might change the JRP’s conclusions remains unclear.
Federal scientists’ investigations Environment Canada, the lead federal agency investigating potential environmental impacts of spilled dilbit, could not “accommodate” a request to interview one of their scientists. Communications staff, however, confirmed: “In certain environmental conditions, dilbit can sink in saltwater environments. In general, how combinations of factors might cause oil to sink is not well known currently. Further research is needed.”
DFO did permit Tom King and another of its senior scientists, Sidney-based Dr Charles Hannah, to speak about the latest state of the science on this subject. In Halifax, Tom King has been conducting experiments in flume tanks with two variations of dilbit. “There are several things that are important to understand,” he explains. “Dilbit will float at first, because it is less dense than water. However, lighter diluent material will start to evaporate. You can smell it—it’s the kind of smell you get at a gas station.” Some of the oil will start to dissolve. What remains will be subject to “weathering”—the effects of rain, temperature, sunlight, turbulence, wind, and microbes in the water.
“Our tests, which mimic what will happen in a real world environment, indicate that by the sixth day of natural weathering, bitumen will sink.” Other factors may cause it to sink more rapidly. “If it spills in freshwater, bitumen will sink faster because freshwater is less dense than brackish (partly salty) or ocean water. In the Kalamazoo River, parts of the oil sank within four days.”
Heavy seas will also make bitumen sink faster. So will the presence of sediment in the water. Many sediment-laden glacial rivers empty into Douglas Channel: “We’re looking at that right now and the impact when bitumen combines with sediment suspended in water,” says King.
Where the spill occurs is also critical. In deep water, the oil won’t necessarily sink to the bottom but may instead hit a point of neutral buoyancy where it will remain suspended. In shallower waters, oil will likely coat the ocean floor or riverbed. As we’ve learned from the Kalamazoo River experience, it may be just as difficult to remove in that situation as if it were floating freely in sub-marine waters.
The next step, King continues, is to use the data being generated by his lab to develop ocean models predicting what will happen in a range of different circumstances. That’s where Charles Hannah comes in.
“What we’re doing here at DFO in Sidney,” says Hannah, “is collecting ocean observations on the north coast and building an ocean circulation model that factors in what happens to water movement based on wind, tides, current, weather conditions and so on. That will inform the development by Environment Canada of different oil spill scenarios and remediation methods to deal with different situations.”
In Hecate Strait and the Douglas Channel, says Hannah, ocean conditions vary widely from location to season. “At Kitimat, for example, when the rivers are in full flood there is more freshwater entering the Channel. So at some times of year bitumen might sink faster, or have different neutral buoyancy zones.”
The problem for the modellers is the same as the one King and other researchers face: a lack of information. Asked what other factors he is taking into account in developing ocean models specific to the north coast, for example, Hannah replied: “We just don’t know yet.”
He cites Kitimat again as an example. “It’s the rainfall capital of the world, but what weathering impact does rain have on bitumen? The knowledge may be out there but we don't have it yet. We do know a lot about wave impacts, but the wave environment varies enormously in that area. We need to start to study that too, and its importance. ”
Sailing into dangerous waters Will dilbit-laden tankers be plying Hecate Strait—one of the most dangerous bodies of water in the world (waves can reach 26 metres)—or indeed Juan de Fuca Strait, already identified as high risk for an oil spill—before all these questions have been answered?
Asked to confirm whether current spill response capacity still remains insufficient, Transport Canada replied instead: “As part of new measures for our World Class Tanker Safety System announced on May 13, 2014, the federal government will be implementing Area Response Planning starting in four local areas. Under Area Response Planning, response plans will be tailored to reflect local conditions such as geography, environmental sensitivities, and vessel traffic.”
It also admitted again that it doesn’t yet have the information it needs: “As well, the Government will be undertaking additional research and development on the behaviour of petroleum products and a range of response measures to quickly and effectively respond to and clean up a marine oil spill, should one occur.” Translation: No, as things stand, we aren’t ready for a spill.
Bitumen certainly doesn’t sink if it isn’t permitted to spill in the ocean in the first place, but there appears to be no appetite on the part of the federal government to consider whether dilbit-laden tankers should be allowed in those tempestuous waters in the first place, given the associated risks. Nor, given its acceptance of the JRP’s recommendation to approve the Northern Gateway project, does it seem concerned about the discrepancies between the JRP’s conclusions and the views of several of its own departments.
That may change as a plethora of lawsuits challenging the JRP’s findings starts hitting the courts. Joining several other environment groups and dozens of First Nations in attacking the decision, the BC Federation of Naturalists launched its suit within hours of the federal government’s decision. The view expressed by President Kees Visser is typical of the opposition being expressed: “We cannot stand by and allow Cabinet to approve this ill-conceived project on the basis of a JRP report that is so flawed and incomplete.”
Even if unsuccessful, the litigation may tie up the process long enough for the vital missing research to be completed and for response capability to be improved.
Whether that will be enough is another outstanding question. In the meantime, British Columbians will have to hope that question will only ever have to be answered in theory.
Katherine Palmer Gordon is the author of six books of non-fiction, including several BC Bestsellers and a Haig-Brown prize-winner.
US studies show a near doubling of risk if Kinder Morgan proceeds, and tens of billions in economic loss if a major spill occurs.
(This story was first published in Focus Magazine in December, 2013.)
IT WAS THE KIND OF SPARKLING DAY on Haro Strait that lifted the soul and showcased BC’s unique beauty. Against a backdrop of the Gulf Islands and the snowy outline of Mount Baker, a humpback whale surfaced in front of our boat.
But, as bright yellow plywood drift cards were tossed into the ocean from Raincoast Conservation Foundation’s research vessel Achiever, it was also a stark reminder of all that could be lost if oil spills into the Salish Sea. Staring into the water as the cards drifted towards land, I found it was too easy to imagine the whale emerging through a sheen of oil.
On the horizon looms the likelihood of a proliferation of oil tankers, freighters, fuelling barges and coal bulk carriers, making the Salish Sea a carbon export superhighway. Fears are growing on both sides of the US/Canada border that increasing the number of tankers carrying diluted bitumen from Alberta oil sands through the fragile environment of the southern Gulf Islands and San Juan Islands could be a recipe for disaster when combined with other projects boosting marine traffic.
The Kinder Morgan proposal to twin its Trans Mountain Pipeline, due to be submitted to the National Energy Board later this year, would see the number of laden tankers leaving Westridge Marine Terminals in Burnaby increase from five to a possible 34 tankers a month, with the flow of oil growing to 890,000 barrels a day from 300,000 a day. The company wants the expansion in place by 2017.
Startling figures in a US study show that the risk of an oil spill in Juan de Fuca Strait or Haro Strait will almost double with approval of projects such as the pipeline twinning, the Pacific Gateway coal export terminal at Cherry Point in Washington, and expansion of coal exports from Fraser Surrey Docks.
“The early word [from a US vessel traffic risk assessment study] is that when we look at the increase in vessel traffic, it looks as if the relative risk of an incident leading to a spill is about 189 percent above the 2010 baseline,” said David Byers, response manager for Washington State’s Department of Ecology. Washington is keeping a careful eye on the Kinder Morgan plan. Byers explained: “What we are looking at is a dramatic shift in how energy is being transported and the increased probability of spills as energy is being transported…There’s increased concern about a spill with different types of oil, such as the new, heavier oils being developed in Alberta.”
Preliminary results from the same study, conducted by George Washington University for the Puget Sound Partnership, say that although tug escorts, ship pilots, and increased co-operation between the US and Canadian coastguards are effective ways of reducing risks, as the spill probability rises, areas in most danger are Haro Strait, Juan de Fuca Strait, and the coastline stretching to Cape Flattery on the Olympic Peninsula.
The financial implications are astounding. Another study by Washington State Department of Ecology concluded that a major spill could cost $11.8 billion (in 2013 dollars) and 165,000 jobs. That study, described as “conservative” in its estimates, looks at closed fisheries and the impact on tourism only until the spill is cleaned up. Categories studied include the value of killed fish, loss of the shellfish industry, vessel delays and port disruption, lost park income, lost wages and loss of recreational fishing and boating business.
The story told by the 1644 drift cards released by Raincoast and Georgia Strait Alliance, in areas where vessels must turn or navigate narrow channels, should alarm British Columbians, assuming similar losses would be seen on southern Vancouver Island. The cards show an oil slick would rapidly foul the area from the San Juan Islands and Gulf Islands to Victoria Harbour, Clover Point, Gordon Head, Metchosin, Cadboro Bay, Point-No-Point, French Beach, and Sandcut Beach.
“One of the big concerns is the speed at which oil can move when it’s windy,” said Andy Rosenberger, Raincoast marine biologist and study coordinator. “One drop at the mouth of the Fraser ended up at Saturna Island the next day, a distance of more than 30 kilometres. If the cards were oil, it would have moved and spread a considerable distance before any response would even have been undertaken.”
Proponents of the $5.4 billion Kinder Morgan project emphasize that oil tankers have safely sailed the route for decades. Seattle Marine Exchange data shows about 60 tankers a year now visit Westridge and Kinder Morgan envisages that, if the project is approved, the number would rise to about 350 a year.
“A 60-year record of crude oil tanker safety on the south coast doesn’t just happen. This has been achieved because the safety regime in which tankers operate has continuously improved and changed significantly over those six decades,” says Kinder Morgan’s submission to the Tanker Safety Expert Panel.
Rosenberger concedes that, in recent decades, the number of tanker and freighter collisions have decreased, but, as he tracks the drift card pickups, he worries that it will take only one major accident to permanently change the Salish Sea environment. “Collisions happen when there’s more traffic. Technology is rarely a problem, but there’s always a human behind the technology,” he said.
Brian Falconer, Achiever’s captain, has tracked accidents and resulting oil spills and has little confidence in either assurances that a Salish Sea accident is unlikely to happen or that there is the capacity to clean it up. “This crude oil dilutant is going into tankers operated by the Chinese and they do not have the same standards as we have here.”
As the humpback again surfaces beside yellow cards bobbing on the surface, Raincoast biologist Misty MacDuffee wonders what chance endangered southern resident killer whales would have if there was a spill. “It would be devastating for such a small population if they were in the wrong place at the wrong time,” she said. “We’re also looking at the salmon in Georgia Strait and the estuary of the Fraser River. What kind of threat would more tankers bring to that habitat?”
Such unease is compounded by fears that oil cleanup plans are ineffective and most of the oil will remain in the environment.
An oil spill preparedness study by Alaska-based Nuka Research and Planning Group, commissioned by the BC government, found that in Juan de Fuca Strait, depending on conditions, between 9 and 31 percent of a 70,000-barrel spill would be recovered. Compounding the growing perception that BC would be incapable of adequately responding to a spill are internal government documents showing that even a medium-sized spill would overwhelm provincial resources.
BC has not conducted direct risk assessment or dollar-loss studies, but the Nuka information may be the basis for future studies, said a ministry spokesman.
The Islands Trust, representing those likely to be smack in the middle of any spill, has pushed BC to increase its response capabilities. Background to a 2012 Islands Trust resolution to the Union of BC Municipalities, asking the province for a permanent BC spill response fund with funding from industry, includes graphs showing BC’s spill program budgets and staff are miniscule compared to those of Washington and Alaska.
BC’s Environmental Emergency Program has 16 full-time staff, including 10 response officers in 7 communities, and about $2.4 million a year in dedicated funding—numbers which pale compared to Washington with about 70 staff and a budget of $13 million. There are no rescue tugs in BC and, instead, the province relies on commercial tugs. The closest rescue tug is in Washington.
The federal government leads marine spill response and Sheila Malcolmson, Islands Trust council chair, knows that BC is largely relying on the feds and the polluter-pay principle, but she believes the province must step up to the plate. “The reality is that, when the oil hits the beaches, it’s a provincial responsibility, and we feel the Ministry of Environment has ducked that,” she said.
Minister of Environment Mary Polak has said gaps in oil spill response must be closed with the help of the federal government and industry and an Environment Ministry spokesman said the province is working with the federal tanker safety expert panel while looking at ways to beef up its own system.
One of BC’s conditions for construction of heavy oil pipelines is a world-class oil spill prevention, response and recovery system. “We recognize the need to strengthen our policy and create world-class land-based and marine spill response and preparedness systems and one of the aspects being examined during this process is the number of environmental emergency response officers,” said the ministry spokesman.
The province is also proposing an industry-funded clean-up model that companies would pay into ahead of time. Government and industry are now looking at the costs, he said.
Meanwhile, the plywood cards are continuing to wash up on beaches around the region, so for each one found, think about the damage that would have been done if it was oil. Do British Columbians feel confident that, unlike in other oil spills around the world, BC is capable of cleaning up the oil before it causes catastrophic damage to a unique environment and endangered species?
Studies similar to those conducted in Washington, taking an unvarnished look at the likelihood of spills and probable impact, would help inform discussion. And British Columbians need absolute, cash-backed assurances that industry will pick up every penny of the tab if something goes wrong. Potentially hitting the corporate bottom line may provide the best hope for minimizing the risk of disaster.
Award-winning journalist Judith Lavoie was an environment and First Nations reporter for the Times Colonist for many years and now writes freelance stories on environmental and marine issues. Twitter @LavoieJudith.