Kinder Morgan’s plans to boost the export of Alberta tar sands oil to Asia through its British Columbia pipeline picked up more opposition south of the border Tuesday when Seattle-based Sightline Institute released research critical of the company’s safety and environmental record. The report adds to aggressive efforts by the U.S.-based nonprofit Forest Ethics and environmental groups in the San Juan Islands to stop Kinder Morgan from expanding its Trans Mountain pipeline in southern British Columbia.
Sightline’s report breaks little new ground and appears to be aimed at ramping up opposition to fuel exports, which the institute consistently opposes. Crosscut invited Kinder Morgan to respond, but no response was received at the time this story was filed.
The Canadian oil industry is in a desperate push to get its Alberta tar sands oil to saltwater. At this time, the only Pacific Coast outlet is the existing Trans Mountain line to British Columbia. Kinder Morgan is also betting on the Keystone Pipeline, which would cross the central U.S. on its way to the Gulf of Mexico. Keystone has been stalled in the Obama Administration but the pipeline may get a helping hand from new Republican gains in the next Congress.
The (Canadian) Trans Mountain pipeline runs from Alberta to Burnaby, a Vancouver suburb, then splits with one line running to Vancouver’s Westridge export terminal and the other, smaller line supplying refineries at Cherry Point in Whatcom County and Anacortes in Washington State.The Trans Mountain expansion proposed by Kinder Morgan would boost the carrying capacity of the present pipeline from 300,000 to 890,000 barrels per day. The pipeline has been in operation since 1953.
Other proposed pipelines are a long way from approval.
Perhaps the most controversial is the giant Enbridge project at Kitimat on the narrow Douglas Channel in northern British Columbia. Staunch opposition from First Nations in the pipeline’s path has been a serious challenge for Enbridge. A federal pipeline permit earlier this year contains 209 conditions that the company must meet. Many are significant, and legal challenges are a certainty. Then there are the opposition parties in Canada’s federal government, which have pledged to reverse any permits granted by the administration of current Premier Stephen Harper if they gain control of Parliament in 2015. Two other pipeline proposals would take Alberta oil on a longer trip — to the Atlantic and Gulf coasts.
Trans Mountain has long been considered the “best bet” for expanding exports because it runs along an established route and would not involve any right-of-way battles.
Kinder Morgan may also have contingency plans for an even larger expansion of itsTrans Mountain pipeline. Canada’s Financial Post reported that the company “buried” in a lengthy report to regulators the possibility that it will seek to expand pipeline output by an additional 240,000 barrels per day if future opportunities arise. The Financial Post noted that the 1.3 million (890,000 plus 240,000) barrels per day in that scenario would be “about equal to all crude oil pumped from conventional wells in Canada in 2012, according to industry statistics.”
The expansion project has been opposed from the start by the cities of Burnaby and Vancouver. And that position is unlikely to soften. British Columbia voters in November re-elected Vancouver Mayor Gregor Robertson and Burnaby Mayor Derek Corrigan, and polls have shown a large majority of citizens in both cities oppose the pipeline expansion.
The current Trans Mountain pipeline terminates at Burnaby and then feeds two separate pipelines; the larger goes to the Westway Terminal in Vancouver, the smaller Puget Sound pipeline feeds oil into refineries at Cherry Point, Ferndale and Anacortes. Observers believe the current flow in the Puget Sound pipeline is about 135,000 barrels per day. The pipeline’s capacity is about 180,000 barrels. Although the local refineries may push for more product, Kinder-Morgan statements indicate that most of its additional capacity is headed to Vancouver for export to Asia.
Canadian federal regulators have delayed their expected decision date for a Trans Mountain expansion until January 2016. The project drew large and angry crowds of protestors in November when Kinder Morgan crews began doing tests in a park area in Burnaby. Over 100 protesters were arrested and charged with civil contempt for violating an injunction ordering them away from the drilling sites. Those arrested included an 84-year-old woman, several children and Grand Chief Stewart Phillip of the Union of B.C. Indian Chiefs. Charges were later dropped.
Much of the concern over pipelines carrying Alberta tar sands oil involves the nature of the oil itself, known as “bitumen.” The industry describes oil sand as “a naturally occurring mixture of sand, clay or other minerals, water and bitumen, which is a heavy and extremely viscous oil that must be treated before it can be used by refineries to produce usable fuels such as gasoline and diesel.” The process of readying bitumen for shipment in a pipeline or a ship, which involves diluting it, is a major source of concern for opponents.
Mining and ultimately burning bitumen takes a heavy toll on the environment, but dilution requires a complex chemical process. Bitumen must be diluted by lighter oils in order to be transported in a pipeline. "Pipeline opponents argue that even diluted, bitumen is too troublesome, both inside the pipes and out, to risk transporting it," wrote Crosscut's Eric Scigliano nearly two years ago. "Their case turns not just on [bitumen's] density, but on its levels of sulfur, acidity, abrasive particles and friction-generated heat, all of which may speed corrosion in pipelines or tanker hulls.
“The problem,” Scigliano continued, “lies partly in bitumen’s stickiness — in air, it dries like varnish on rocks and other surfaces — and partly in its weight. Conventional crude is lighter than water; it mostly floats to the surface, where it can evaporate and be skimmed. Straight bitumen is denser; it sinks to the bottom and penetrates sediments and substrates. Diluted bitumen has about the same density as water, which makes it hang in the water column.”
The dangers of transporting dilute bitumen in tankers involves the risk of a shipping accident dumping the heavy mixture into the Salish Sea or other fragile waterways. Of particular concern is a spill in the Douglas Channel at Kitimat, but Vancouver officials and environmental leaders also worry about Burrard Strait, and residents of the San Juan Islands have objected to moving additional oil ships through the narrow passages in that island chain.
An expanded Trans Mountain pipeline would add about 400 crude-oil tankers a year to existing traffic in the Salish Sea. Eric DePlace, Sightline’s policy director, told a teleconference on Tuesday that the San Juan Islands are particularly vulnerable, “a real source of concern both economically and environmentally.” The spill danger, he noted, depends upon tides and ocean conditions.
Kinder Morgan has said that it is proud of its pipeline safety record and committed to working with those concerned about the expansion. Kinder Morgan is the third-largest energy company in the United States, with major holdings in Canada as well; it specializes in transportation of energy via pipelines and terminals. A large export terminal on the Columbia River downstream from Portland was abandoned earlier this year after strong opposition from Oregon officials and community groups. A neighbor of the proposed terminal, Portland General Electric, also opposed the plan, citing a fear of coal dust.
The Texas-based Kinder Morgan is a multinational with ties to Enron. Richard Kinder, who owns 24 percent of the company, is a former Enron executive. The company’s tax strategies have been controversial in Canada. A prominent Canadian economist charged earlier this year that Kinder Morgan pays few Canadian taxes, despite major holdings in the country, by using the U. S. tax system to avoid paying Canadian taxes.
Investment in the Trans Mountain expansion represents about a third of the company’s current capital budget, according to the financial service Trefis. Further delays in the project “might impact the company’s profitability significantly.”
Kinder-Morgan had hoped to begin work in 2017. It now appears that construction might begin at least a year or two later, if the project is approved.
