Author: Robin Rowland

Enbridge faces $68,000 fine for not inspecting pipeline branch in Ohio

Enbridge is facing a new penalty from the US Pipeline and Hazardous Materials Administration for not inspecting a pipeline branch in Ohio and Michigan. The decision by the PHMSA comes just after a couple of days after the agency acknowledged that Enbridge had paid the civil penalty for the Marshall, Michigan oil spill with a wire transfer to the US Treasury of $3,699,200 on August 12. It was the Marshall pipeline breach and spill that led to bitumen entering the Kalamazoo River.

The new proposed penalty is much lower, just $68,000. It relates to the PHMSA inspection of Enbridge’s Toledo pipeline between July 12 and July 15, 2010.

The PHMSA says it found three alleged violations of federal pipeline safety regulations.

As well as the proposed civil penalty of $68,000, Enbridge Toledo is required to submit past records for inspections of subsequent overpressure safety devices and out-of-service tanks
The agency lists the violations as:

1. Failure to adequately inspect the right-of-way at a mainline valve location in Toledo as required by 49 CFR §195.412.
No proposed penalty — Warning Item.
1. Exceeding the maximum interval for inspection of 12 overpressure safety devices as required by 49 CFR §195.428.
Proposed penalty is $39,000 + PCO.
1. Exceeding the maximum interval for API 653 internal inspections of two breakout tanks located at Stockbridge, MI as required by 49 CFR §195.432.
Proposed penalty is $29,600 + PCO.

Enbridge can, if it wishes, challenge the NOPV (Notice of Possible Violation) in court.  In the case of the original Marshall, Michigan, spill NOPV, Enbridge did not challenge the findings of the PHMSA and paid the penalty.

The new document sent to Enbridge by David Barrett, PHMSA Director, Central Region says that the company failed to perform internal inspections or establish a corrosion rate for the bottom plates of its tanks within the 10 year period as required by US regulations. It also says Enbridge failed to demonstrate that they had established a basis for the corrosion rate for the tank bottoms and exceeded the 10 year maximum internal inspection interval for unknown corrosion rates.

Additionally, Enbridge did not have similar service experience, or procedures to apply similar service experience available to make this inspection interval determination.

The PHMSA also says that Enbridge Enbridge failed to inspect its overpressure safety devices at intervals not exceeding 15 months, but at least once each calendar year. The inspection intervals exceeded the maximum 15 month interval by 14-24 days for the overpressure safety devices listed int the order.

The compliance order calls for Enbridge to submit documentation of all inspections performed on
each of the tanks and overpressure devices listed in the PHMSA order from 2010 to present. Enbridge has to internally inspect each of the tanks and to submit to the PHMSA documentation on the “safety improvement costs” needed to comply with the order.

As for the Marshall, Michigan spill, while Enbridge promptly paid the civil penalty, the PHMSA order notes

This Order does not resolve any existing or potential civil or criminal liability that Enbridge may have for any other violations of the federal Pipeline Safety Laws, or any regulations or orders issued thereunder, not specifically enumerated herein. Further, this Order does not resolve any existing or potential civil or criminal liability that Enbridge may have for violations ofany other federal laws arising from or otherwise related to the events or conduct giving rise to this Order or
to the consequences or damages resulting from the Failure.

Link: PHMSA Inspection of Enbridge (Toledo) Pipeline Results in NOPV and Civil Penalty

PHMSA Final Order Marshall Michigan spill PDF

Haisla, BC government sign agreement for third LNG facility at Kitimat

Updated with map, agreement details

Map of Haisla Framework Agreement
A map, released by the BC government, shows the area of Crown land covered by the Haisla Framework agreement that could lead to another LNG project in Kitimat. (Govt of BC)

The Haisla Nation and the BC government have signed an agreement that will lead to a third liquified natural gas project near Kitimat.

The “Haisla Framework Agreement” allows for the lease or sale of up to approximately 700 hectares of Crown land near the Douglas Channel, and for the foreshore lease of submerged lands of up to 102 hectares for a berthing facility.

 

The area is just north of the Haisla Reserve land  at Bish Cove where the KM LNG project will be located, but south of the proposed BC LNG and Enbridge terminals.  It is all undeveloped and unserviced land within the boundaries of the District of Kitimat.

That could mean, if all projects go ahead there the west side of Douglas Channel from Kitimat almost to Jesse Falls would see three, perhaps fourm hydrocarbon facilities and terminals.

The agreement provides the Haisla with the options for up to a 60-year lease or the possibility of purchasing of the land outright.

The agreement also commits both parties to start work on land-use planning for areas around the Douglas Channel, which, the BC government says, has tremendous potential as a marine port.

A news release from the BC government today does not specify the backer of the terminal, While the most obvious candidate could be the  Shell project LNG project (last fall Shell purchased the old Methanex site and the associated marine terminal at Kitimat) there is now media speculation that there could be other players involved, possibly another giant Exxon Mobile.

A news release from the BC government says that the “framework agreement” is a “significant step toward government’s commitment to have three terminals and their connecting pipelines operating by 2020, creating more than 1,400 ongoing jobs and generating an estimated $600 billion in economic activity over 30 years.”

The release says the agreement “provides the structure for a land purchase or lease that will Haisla Framework agreement logoallow the Haisla to partner with industry to develop a liquefied natural gas (LNG) facility and marine export terminal on the west side of the Douglas Channel in the areas around Haisla Reserve #6.”

The release quotes, Ida Chong,  BC Minister of Aboriginal Relations and Reconciliation  as saying:

Our government is working with First Nations like the Haisla to create new jobs and opportunities throughout British Columbia. This agreement builds on our strong partnership with the Haisla Nation, and it is the key to unlocking the vast potential of a whole new natural gas export industry in British Columbia which will provide long-term stability for families and communities.

It also  quotes Ellis Ross, Chief Councillor of the Haisla Nation: –

This agreement allows the Haisla to look at the land on the west side of the Douglas Channel in a different light. This gives the Haisla and associated projects the certainty needed for the LNG proposals and other projects coming forward for our territory. If we are able to do this, the Haisla people will benefit, as will all British Columbians and Canadians.

Ida Chong and Ellis Ross sign agreement
Ida Chong and Ellis Ross sign the Haisla Framework Agreement in Vancouver, Sept.14, 2012 (Govt of BC photo)

The release goes on to say that the agreement signals a closer working relationship between the Haisla and BC in and around the Kitimat and Douglas Channel area. It commits both parties to start work on land-use planning for areas around the Douglas Channel, which has tremendous potential as a marine port. This certainty will allow other development projects in the area to proceed.

The agreement says the Haisla will work independently to find a suitable partner for the development of the land. Details of the lease or sale are expected to be finalized this fall.

Spectra Energy, BG Group propose natural gas pipeline to Prince Rupert, creating fourth NW BC LNG project

Spectra Energy Corp of Houston, Texas, today announced that the company has signed a Project Development Agreement with BG Group PLC, based in the United Kingdom, to jointly develop plans for a natural gas transportation system from northeast B.C. to serve BG Group’s potential liquefied natural gas (LNG) export facility in Prince Rupert.

The BG group signed an agreement last February with the Prince Rupert Port Authority  for a feasibility study to develop an LNG terminal at the port.

Spectra Energy BC project map
A map released by Spectra Energy shows the proposed pipeline project from the shale gas fields of northeastern BC to Prince Rupert (Spectra Energy)

 

 

A release from Spectra Energy and BG Groupsays each company will initially own a 50 per cent interest in the proposed transportation project. Spectra Energy will be responsible for construction and operation and BG Group has agreed to contract for all of the proposed capacity.

The approximately 850-kilometre, large diameter natural gas transportation system will begin in northeast B.C. and end at BG Group’s potential LNG export facility in Prince Rupert.

A fact sheet released by Spectra says the project would provide 50 to 60 permanent jobs on completion and about 4,000 jobs during construction.

BC Group logoThe Spectra BG project will be the fourth using BC’s strategic position on the Great Circle Route to Asia to export liquified natural gas. TransCanada has signed a deal with Shell for a pipeline, Coastal GasLink, that would initially carry up to 1.7-billion cubic feet a day of gas to the Shell Canada project at Kitimat The Pacific Trails pipeline, could carry more than 1-billion cubic feet a day to the KM LNG partners ship where Apache, EOG and Encana are building a terminal at Bish Cove, south of Kitimat. The fourth project, BC LNG, would use either existing pipelines or share one of the proposed Kitimat pipelines to produce LNG for customers at a barge-based floating terminal at what is sometimes called North Cove, between the KM LNG project at Bish Cove and the proposed Enbridge Northern Gateway project which would be close to the Rio Tinto Alcan smelter.

Spectra Energy LogoThe Spectra release says the new transportation system will be capable of transporting up to 4.2 billion cubic feet per day of natural gas. The project will connect with the Spectra Energy facility at Fort St. John, the centre of the still growing shale gas production and exploration in the northeastern BC.

Greg Ebel, president and chief executive officer, Spectra Energy says in the release:

We are excited to be partnering with BG Group, a recognized world leader in natural gas and more specifically, LNG. This project offers B.C. a unique opportunity to access new markets, strengthen its energy infrastructure, engage stakeholders in economic growth and job creation, and ultimately secure the province’s position as a competitive energy leader.

Furthermore, today’s announcement initiates our next wave of investment opportunity in B.C.  We are ideally positioned to create further value for our investors by leveraging surplus B.C. natural gas supplies and facilitating its export to high-demand markets in Asia. This, in turn, will provide multiple opportunities for further investment in our gathering and processing facilities in the province.

Doug Bloom president of Spectra Energy Transmission West adds in the release:

For more than half a century, Spectra Energy has been a part of communities in B.C. This project will build on our expertise and track record of delivering natural gas responsibly, listening to the needs of Aboriginal and local communities, and protecting the environment, as we help deliver on B.C.’s energy potential.
Working together with affected stakeholders and based on preliminary assessments of environmental, historical, cultural and constructability factors, early conceptual routes have been developed. Spectra Energy and BG Group will continue engaging with interested and affected stakeholders, including Aboriginal and local communities, environmental organizations and regulatory agencies, to further refine the project route.

Spectra Energy Fact Box
Fact box from Spectra Energy on the proposed pipeline to Prince Rupert (Spectra)

As is now common with proposed energy projects for northwestern British Colulmbia, Spectra  has set up a website for consultations Energy for BC.

Spectra says: “The new outreach initiative is designed to engage with stakeholders on the jobs, revenues and environmental benefits that natural gas can create in British Columbia.”
Spectra also makes the usual commitment to “spend the next several years closely conferring with stakeholders and working through the permitting process for the proposed transportation system.”

Spectra Energy Project Fact Sheet
  PDF

What is it about Douglas Channel islands? Now a US agency has added a “Douglas Island”

US FERC Map of LNG terminals in North America
Map from the United States Federal Energy Regulatory Commission showing LNG export terminal projects in North America (FERC)

What is it about the islands in Douglas Channel? First, Enbridge gets in to a lot of hot water, so to speak, for erasing the islands in Douglas Channel in an animation promoting the Northern Gateway Pipeline.  See for example The Vancouver Sun on back on Aug. 16, 2012, when it picked up a story from the Times Colonist – Enbridge map sinks islands, angers critics.   The controversial video segment showed Douglas Channel wide open for navigation, rather than marked with about one thousand square kilometres of mountainous islands. Map of Douglas Channel Islands from Leadnow.ca This map, created by the Leadnow.ca and  Sumofus.org websites was widely used by the media to show the difference.  Enbridge later amended its video with a disclaimer that it is “broadly representational.” A video by Shortt and Epic Productions “This is Not An Enbridge animation” showing the beauty of northwestern BC quickly went viral.

As this was happening, the United States government Federal Energy Regulatory Commission issued a map that shows Liquified Natural Gas import and export terminals across North America, a map that adds an island to the Channel–“Douglas Island.”

In fact, the map manages to get a lot about Canadian LNG projects wrong. It locates the BC LNG project on the non-existent Douglas Island. The company’s name Douglas Channel Energy Partnership actually gives the proper location this way

 south of the Moon Bay Marina, within the District of Kitimat and the asserted traditional territory of the Haisla Nation. The site is approximately 10 km southwest of Kitimat and 7 km north of Bees Cove Indian Reserve 6 (Bish Cove)

The small cove where BCLNG will put its barges to create the LNG is often locally called North Cove.

The FERC map also misplaces the Shell LNG project, now known as LNGCanada, in Prince Rupert, even though Shell confirmed the Kitimat location on May 15, 2012. It also calls it Prince Rupert Island, although the town of Prince Rupert is actually located on Kaien Island.

The map does apparently get the KM LNG project somewhat correct, attributing it to Apache Canada, but leaving off Apache’s partners, Encana and EOG.

The map recently also appeared on the website of Oregon Public Broadcasting in an article Five Keys To The Pacific Northwest’s Natural Gas Export Debate by reporter Amelia Templeton, which outlines the growing controversy over the plans to export US LNG through Coos Bay, Oregon via the Jordan Cove Project.

It appears that in Oregon, the Coos Bay LNG project is becoming as controversial as the Northern Gateway project is in Canada.

The issues outlined by Templeton include the threat of expropriation (called “eminent domain” in the US and also a key issue in the debate over the Keystone XL pipeline on the plains).  There are arguments on jobs versus the environment, especially the perceived threat to wild rivers and salmon spawning grounds. Finally one issue that is lower on the agenda in northwestern BC but a big worry in Oregon, the potential for a devastating earthquake along the Cascadia fault.

During the NEB hearings on the KM LNG (Apache/EOG/Encana) project in June, 2011, many of the  “expert” witnesses urged that that first Kitimat project go ahead quickly because of perceived competition from Oregon.

Unlike in Oregon, LNG projects are generally perceived positively in the northwest and all three are going ahead, although not as quickly as originally planned due to market volatility among prime potential customers in Asia.

 

How “On the Waterfront” could decide the fate of Enbridge’s Kitimat terminal

There’s one question about the Enbridge Northern Gateway project that many people ask and few can answer: Who is responsible for the port of Kitimat? Who would be liable should there be a disaster in the port? Nobody really knows.

Unlike many harbours in Canada, the port of Kitimat is “private,” although as the District of Kitimat says, “Transport Canada and other federal agencies continue to regulate navigation, security and environmental safety.” Kitimat has promoted that private status as an economic advantage.

If there’s a dispute, the question of responsibility and liability would probably end up in the Supreme Court of Canada, with the justices sorting out a historic puzzle. Or perhaps that historical puzzle could mean that the future of the port of Kitimat might be decided by the next B.C. provincial election.

Most of the other harbours in Canada are the responsibility of Ports Canada, a branch of Transport Canada or run by (usually not-for-profit) semi-public port corporations or local harbour commissions.

To find out why Kitimat is one of the few private ports in Canada, the first thing to do is watch Eliza Kazan and Bud Schulberg’s classic 1954 multiple Oscar winning movie, On the Waterfront, starring Marlon Brando, about how the mob ran the New York docks.

What has On the Waterfront got to do with Kitimat? It goes back to when the then Aluminum Company of Canada/Alcan (now Rio Tinto Alcan) was planning the Kitimat project; much of that work was done in New York both by employees and consultants. It was in 1949, that Malcolm Johnson, a New York Sun reporter, wrote a Pulitzer Prize winning series of investigative reports called “Crime on the Waterfront,” exposing corruption and Mafia involvement with the docks and the longshoremans’ union. The movie was based, in part, on that investigative series.

So in its planning, Alcan was determined that the longshore unions would not be involved in running the docks in Kitimat. The publicly stated reason has always been that Alcan wanted a seamless 24/7 operation that would be integrated with the aluminum smelter. Alcan would sign a collective agreement with the United Steelworkers that covered both the smelter and the docks. (CAW 2301 now represents most of the workers at the Kitimat smelter.)

When the Kitimat project was being finalized in 1949 and 1950 at the height of the Cold War, aluminum was a strategic commodity, security was high on the agenda, and it was not just the Soviet bloc but the mob as well that worried the authorities.

Add two factors. First, in 1949 the province of British Columbia was anxious to promote what would today be called a “mega-project.” Second, in the post-war era when corporations were relatively enlightened compared to today, Alcan was determined not to create the traditional “company town.”

To promote private-sector development of both hydro-electricity and aluminum, B.C. signed a rather loosely worded agreement with Alcan, noting that the project was going on “without investment by or risk to the government.” That agreement was implemented by the Legislative Assembly of B.C. by an equally wide open Industrial Development Act. One aim of both was try to ensure that future “socialists” would not expropriate the project.

Industrial township

With the province handing over the Crown land at the head of Douglas Channel at a very nominal price to Alcan, next came the creation of the District of Kitimat. With the town under construction, with few buildings and a small population, under normal B.C. practice, the area would be “unincorporated” and would not have a municipal government. But Alcan and the province came up with a new concept, which they called “an industrial township,” which would allow a municipal government to be established in anticipation of future growth.

The act that established the District of Kitimat put the boundaries outside the land owned by Alcan (excluding land reserved for the Haisla Nation).

Alcan began selling off the land in the planned areas of the town and other land it didn’t need. Individuals bought houses and businesses bought the land for their own use. Alcan retained ownership of the harbour and estuary lands and the small “Hospital Beach.”

The District of Kitimat has some legal responsibility for “wharfs” at the port of Kitimat. At council meetings, the environmental group, Douglas Channel Watch, has raised the question of the district’s responsibility and liability in case of an Enbridge incident but there’s been no definitive response from district staff. There is no municipal harbour commission as there is in other jurisdictions.

Up until recently, it was a convenient arrangement for everyone involved. Alcan, Eurocan and Methanex ran their dock operations without any interference, beyond standard Transport Canada oversight.

Things began to change in 2007, when the Rio Tinto Group bought Alcan, creating Rio Tinto Alcan. A couple of years ago, a senior staff source in the Canadian Auto Workers explained it to me it this way. “Alcan was a big corporation, but Alcan was a corporation with a big stake in Canada. As a union, we could do business with them. Rio Tinto is a transnational corporation with businesses in lots of countries but no stake in any of them. So it’s a lot harder now.”

With the Rio Tinto acquisition of Alcan, things tightened up in Kitimat. Negotiations between the District and RTA for the District to obtain more land stalled. Access to the estuary and other RTA lands that had been somewhat open under Alcan became more restrictive. In 2010, the Eurocan paper mill shut down along with its dock. In 2011, Rio Tinto bought the dock from West Fraser, owner of Eurocan. The Kitimat community noted that when the dock was repainted, it said just “Rio Tinto.” not “Rio Tinto Alcan” and that led to lots of gossip and wondering about what the Rio Tinto Group really plans for Kitimat. Last fall, Shell Canada purchased the former Methanex dock for part of its liquified natural gas operations.

With the Enbridge Northern Gateway project, the BC LNG project at North Cove and the KM LNG project at Bish Cove all along the shore of Douglas Channel and within the boundaries of the District of Kitimat which extends as far south as Jesse Lake, the question that has to be asked is, what happens now? If the Enbridge project is built, it will start just beyond the boundaries of the land owned by Rio Tinto Alcan.

That old arrangement between Alcan and the District of Kitimat is facing many new challenges.

The district once had a harbour master, but the position was eliminated because he had nothing to do. Alcan owned its docks, Alcan managed the docks and Alcan union employees worked on the docks. Later came the Eurocan (now owned by Rio Tinto) and Methanex (now owned by Shell) docks, again owned and operated by private corporations.

The District of Kitimat, nominally in charge, was content to sit back and collect taxes.

With the Enbridge Northern Gateway project, the B.C. LNG project at North Cove and the KM LNG project at Bish Cove all along the shore of Douglas Channel and within the boundaries of the District of Kitimat, the question that has to be asked is, what happens now? If the Enbridge project is built, it will start just beyond the boundaries of the land owned by Rio Tinto Alcan.

In Canada, ports and harbours are normally under federal jurisdiction and Transport Canada has oversight. But Alcan’s “private port” and the District of Kitimat were created by acts passed by the B.C. government.

The original agreement between the province and Alcan mentions an “aluminum plant” and “low-cost electrical power,” it doesn’t mention bitumen or liquified natural gas. Those provincial acts do not cover bitumen, supertankers and liquified natural gas.

B.C. Opposition Leader Adrian Dix has made it clear that his New Democratic Party opposes the Northern Gateway project. The federal government has said the province can’t really do anything to stop Enbridge Northern Gateway once Stephen Harper has decided that the pipeline project is in the national interest.

At this moment, Dix is a “contender” for the premiership, with Christy Clark and the B.C. Liberals dropping in the polls and with key members of her government deciding not to run in the election next spring.

So, if, as expected, Adrian Dix becomes the next B.C. premier, he has one very strong hand to play. Any act can, with proper legal advice, be amended by the B.C. legislature. That means the “socialists” so feared by Alcan and the premier of the day, Byron “Boss” Johnson, could alter the 1949 law. That in turn may upset the decades-old arrangement that created the private port which Enbridge is banking on.

Water, not oil, is the hot issue this summer in Kitimat

Kitimat's "Hospital Beach" on March 17, 2012, with the construction at the Rio Tinto Alcan plant in the background, before the area was closed to the public. (Robin Rowland) (Robin Rowland)
Kitimat’s “Hospital Beach” on March 17, 2012, with the construction at the Rio Tinto Alcan plant in the background, before the area was closed to the public. (Robin Rowland)

 

The hottest issue in Kitimat this summer is water, not oil. For us, this summer can be summed up by saying: “Water, water everywhere, but you can’t get there from here.”

Even with David Black’s proposal for an oil refinery on a hill 25 kilometres north of Kitimat, residents here know that the Enbridge Northern Gateway debate has gone on for years and will go on for many years to come.

As environmentalists worldwide celebrate the beauty of Douglas Channel, and decry the dangers that tanker traffic could pose to the channel, many people in Kitimat are cut off from the waterfront.

At the District of Kitimat Council meeting on August 7, Coun. Mario Feldhoff introduced a motion calling for a study in an effort to find ways to launch kayaks into the ocean. Yes that’s right, according to members of council, you can’t even drop a kayak into the waters of Douglas Channel unless you pay the kind marina a launch fee usually charged for larger fishing boats. Kitimat is down to only one expensive boat launch.

In 2010, there were three marinas in Kitimat: one privately operated at a place called Moon Bay, a large marina owned by the Kitimat Stikine Regional District at MK Bay and a small marina at Minette Bay, also the site of a log export operation. There was also a boat launch on land known as “Alcan beach” or “Hospital Beach” on property owned by Rio Tinto Alcan (RTA) near the aluminum smelter. Hospital Beach is the only beach in Kitimat (named because it is on the site of the town’s original hospital in the 1950s). Moon Bay was located on land owned by RTA, and in April 2010, it ordered the marina shut down.

According to RTA spokesperson Colleen Nyce, that was largely due to concerns about how the marina was being operated.

Some people who moored their boats at Moon Bay moved to MK Bay (if there was room). Others hauled their boats out of the water and parked them in their driveways. In the ensuing two years, there have been increasing stories about mismanagement at MK Bay and complaints about moorageand launching fees that are much higher than elsewhere in the province.

This spring, citing construction at the smelter, RTA closed public access to Hospital Beach for picnics, kids’ play and just looking at the water. That meant the boat launch was also off-limits. RTA spokesperson Nyce said:

The Rio Tinto Alcan site is now a full fledged construction zone with constant vehicular and heavy duty construction traffic. To that end, and as Rio Tinto Alcan representatives have always said, during construction we will take necessary steps to eliminate potential hazards to the general public on our road including access to Hospital Beach. Therefore, Hospital Beach will be closed to the public until construction is complete or until we believe it is more safe for public access.

Before access was closed, if a Kitimat resident was driving to Hospital Beach, they pass what was once a rough logging road that snaked its way along the shores of Douglas Channel toward Bish Cove. Now Bish Cove is the site of the Kitimat LNG project terminal. As part of the construction process, KM LNG upgraded the road. However, as the pace of construction increases KM LNG is now limiting access to the road and its views of the channel.

Why is there no access to the waterfront, or for that matter to the magnificent Kitimat River estuary?

It goes back to 1950 when the province of B.C., in a loosely worded agreement with what was then Alcan and in an equally non-specific Industrial Development Act, handed over the land where Kitimat is now to the company.

That included almost all the waterfront and the estuary. On the estuary, there is one small area of land that is a reserve for the Haisla Nation and one small area not in RTA domain owned by the District of Kitimat — but there is no right of way through a potential private development. Over the years, and especially since Rio Tinto took over Alcan, there have been more and more restrictions placed on access to Kitimat’s waterfront.

Restricted access has become such an important issue that it came up during the National Energy Board hearings on the Kitimat LNG project and was part of the NEB ruling granting KM LNG its export licence. Access to Kitimat’s waterfront is also a factor in the Enbridge Northern Gateway project, although that part is lost in all the bigger issues.

The fact that you can’t get to the waterfront and the estuary are a problem not only for community recreation; the inability for a resident or visitor to launch a kayak or small boat into the channel, much less larger fishing or recreational vessels, has put the brake on expansion of Kitimat’s already lucrative fishing, guiding and boating services.

There is already a lot of skepticism in Kitimat — due to the boom and bust of the industrial cycle — about all those promises of jobs and prosperity from industrial development. Restricted access to the ocean means that despite the growing number of jobs in Kitimat, corporate policy makes it hard to enjoy the benefits of living on the Douglas Channel.

It is the kind of externality that is always ignored by economists and is totally irrelevant to those business writers who claim to be experts in Kitimat but who have never been within 1,000 kilometres of the town.

You look out your window at the mountains and ocean of Douglas Channel and ask why can’t the residents and tourists go to the beach? That could be a key issue in the Enbridge Northern Gateway debate.

Douglas Channel in Black and White

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Photogallery. For full screen mode with captions, click on the box to the right of the bottom menu bar.

The long, magnificent fjord known as Douglas Channel was carved by a glacier thousands of years ago, some of the islands are rock uplifted by tectonic forces, others piled up by retreating glaciers.

So far, since I returned to Kitimat, I have had few chances to “go down the Channel,”  as the people of Kitimat say.

Of course, when I do go,  I always have a camera with me, even in the roughest weather–and the Channel can be rough most of the year.

It is in these waters that the energy industry, both the Enbridge Northern Gateway and the Liquefied Natural Gas projects want to use supertankers to send their products to markets in Asia. Many of the photographers who come to Douglas Channel in high summer choose to capture the brilliant colours of ocean, forest and mountain, as I have on several assignments.

For this gallery, I have chosen to use black and white to show the stark beauty of the mountains, the often menacing seas and the clouds, ever changing, as the westerly winds from the Pacific drive those clouds against the mountains.

Images from this gallery are available for purchase for personal, editorial and commercial  use on Photoshelter. Simply click on the image above.

US calls for study that could relax double-hulled oil tanker regulations, citing costs to build, energy consumption

The United States Department of Transportation Maritime Administration has issued a call for a study that is calling into question the future of double-hulled oil tankers.

On August 6, 2012 the Maritime Administration, also known as MARAD, issued a “solicitation” for a study on the Safety, Economic and, Environmental Issues of Double Hulls.

In the call for the study, MARAD says:

Following the Exxon Valdez disaster, the passing of the Oil Pollution Act of 1990 (OPA 90) led to the requirement to replace single hull petroleum tankers with double hull tank vessels sailing in U.S. waters. This requirement was soon adopted by the International Maritime Organization (IMO) and became a worldwide regulation. This means that, today, tank vessels worldwide are carrying thousands of extra tons of steel in order to meet the double hull requirements.

Though these double hulls reduce the threat of oil pollution as a result of grounding, they significantly increase the amount of energy needed to propel a vessel and increase the amount of air pollution into the atmosphere. As a result, the maritime industry’s carbon footprint and criteria pollutant emissions are increased.
In addition to the need to burn more fuel, it is acknowledged that double hulls can cause several other problems which will be detailed in this study.

Here in Canada, Enbridge Northern Gateway and its supporters, in briefings on maritime and tanker safety on the west coast of British Columbia, have always said that the changes following the Exxon Valdez disaster in Prince William Sound and the subsequent US Oil Pollution Act as almost guaranteeing that such a disaster could not happen again.

Now it appears that some people in the U.S. Department of Transportation may be worried that increased use of double-hulled tankers will cost too much. There’s also the apparent question of balancing the carbon footprint of increased emissions from tankers with the danger from a hydrocarbon spill.

The request for the study was covered by tanker industry sites such as Marine Link but only surfaced in major media on Sunday, when The National, an English-language newspaper in Abu Dhabi broke the story, “US maritime agency considers overhaul of oil-spill regulation”

Reporter David Black notes:

In July last year, the IMO adopted binding regulations to limit the expected gas emissions increase by reducing fuel consumption of ships by as much as 15 million tonnes in 2020, a 14 per cent reduction, and by 2050, by as much as 1,013 million tonnes. This will lead to savings in fuel costs for the shipping industry of up to US$200 billion a year, says the IMO.

Black says that the US agency seems “to suggest by abandoning the additional weight of double hulls the savings would increase and pollution be cut further, adding “On the other hand, since the introduction of double hulls, pollution from major oil spills has been reduced to practically zero.”

The National story says even the tanker industry itself is worried about the move, quoting the the international tanker owners’ organization.

“We have noted reports about Marad’s intended study on tanker double hulls but, except for what we gather from press articles, we have little knowledge on the reasoning behind this,” said Bill Box, Intertanko’s senior manager for external relations.
“From our members’ experience, double-hull designs have evolved into safe and reliable ships with an excellent safety and pollution prevention record. We might provide comments when such a study would be released by Marad.”

 

The requirements for the double-hull study, as posted by the US government are:

1. The Contractor shall conduct an assessment of the history in the evolvement of “The Double Hull Rules”.

2. The Contractor shall conduct the assessment of any rules that are being proposed in bodies such as the IMO, U.S. Congress and other such bodies’ worldwide as they relate to additional hulls for environmental reasons.

3. The Contractor shall assess all the relevant safety issues related to double hulls for each class of vessel. E.g. Double bottoms are difficult and expensive to maintain and can result in corrosion problems. Unchecked corrosion in older double hull vessels can lead to cargo leakage into a double bottom and the buildup of dangerous vapor which could cause an explosion under certain conditions. The Contractor will obtain data from appropriate organizations which details the issues in double bottoms on older vessels including cracking, leakage, and the potential for vapor buildup.

4. The contractor shall conduct a complete economic study of the consequences of Double Hulls. E.g. they significantly add to the construction cost of vessels. They result in the loss of cargo space which also adds to the carbon footprint since an additional vessel(s) is needed to carry the same cargo tonnage.

5. The contractor shall assess the complete consequences of the carbon footprint of designing, constructing, maintaining and operating vessels with double hulls. E.g. Apart from the extra propulsive forces and fuel needed, the carbon footprint of double hull maintenance is substantially increased.

6. The Contractor shall prepare a report on the results of the project. The report shall be grammatically correct and must be professionally written to a high level of competence in the English language. The report must clearly specify the safety, economic and environmental issues details above.

 

Romney endorses Harper’s environmental fast track policy–if oil goes to the United States

Mitt Romney, the Republican candidate for president of the United States today issued his “white paper” on energy policy. It calls for an integrated energy market with Canada, the United States and Mexico. Romney also endorses Prime Minister Stephen Harper’s environmental fast track “one project one review” policy.

The PDF version of The Romney Plan for a Stronger Middle Class Energy Independence is posted on his campaign site.

In the Executive Summary Romney says:

A crucial component of Mitt Romney’s Plan for a Stronger Middle Class is to dramatically increase domestic energy production and partner closely with Canada and Mexico to achieve North American energy independence by 2020. While resident Obama has described his own energy policy as a “hodgepodge,” sent billions of taxpayer dollars to green energy projects run by political cronies, rejected the Keystone XL Pipeline as not in “the national interest,” and sought repeatedly to stall development of America’s domestic resources, Romney’s path forward would establish America as an energy superpower in the 21st century.

It’s key recommendations are:

• Approve the Keystone XL pipeline;

• Establish a regional agreement to facilitate cross-border energy investment,
infrastructure, and sales;

• Promote and expand regulatory cooperation between governments to encourage
responsible energy production, including the creation of a forum for sharing best
practices and technologies; and

• Institute fast-track regulatory approval processes for cross-border pipelines and other infrastructure.

While the white paper is supposed to be the foundation of Republican energy policy, it is itself a “hodgepdge,” mostly a cut and paste job of various reports in the US and Canadian media. While the paper does cite those many sources, it is the kind of compiliation that would get a university freshman a fail, for lack of original content. It also get the name of Canada’s finance minister wrong in one reference, calling him correctly Jim Flaherty in the headline but “Jay Flaherty” in the story credit.

Romney’s paper also seems to be worried that the fact from the prime minister, many economists and policy analysts are saying that it is imperative that Canada diversify its market away from the United States.

Some key highlights of Romney’s white paper of quotes includes:

Obama’s Rejection Of Keystone Will Force Canada To Ship Its Vast Supplies Of Oil To China. “Ronald Liepert, the energy minister in Alberta, said that while Canada would prefer to sell its oil to the United States, ‘this commodity will go someplace.’ In particular, he said, China is already a major consumer of other Canadian natural resources and a small investor in the oil sands. ‘I can predict confidently that at some point China will take every drop of oil Canada can produce.’” (Ian Austen, “Oil Sands Project in Canada Will Go On If Pipeline Is Blocked,” The New York Times, 6/6/11)

Romney then quotes SunMedia:

Canadian PM Harper: “Look, the very fact that a ‘no’ could even be said underscores to our country that we must diversify our energy export markets…We cannot be, as a country, in a situation where our one and, in many cases, only energy partner could say no to our energy products. We just cannot be in that position.” (Bryn Weese, “Harper Determined To Get Canadian Oil To Asia,” Sun News, 4/3/12)

So while Romney wants to approve the Keystone XL pipeline, there is no mention of the Northern Gateway project, but it is clear they don’t want bitumen oil going outside of the continent.

However, the Republicans seem to like quoting Harper’s fast track approach which has caused an uproar here in Canada, quoting the Wall Street Journal:

Compare The Canadian Approach: “One Project, One Review.” “The budget also treats Canada’s energy resources as national assets to be exploited—with as few delays as possible. Thus the budget proposes to eliminate overlapping federal and provincial environmental reviews for major projects. It proposes firm review timelines, including for projects that are already underway, such as the Northern Gateway pipeline from northern Alberta to the Pacific coast. Mr. Flaherty’s catch phrase is ‘one project, one review.’” (Editorial, “Canada Beats America,” The Wall Street Journal, 4/3/12)

and also appearing to endorse downloading to the provinces (or in the case of the US, the states), while warning Americans about Finance Minister Jim Flaherty’s statement in the Commons about diversifying Canada’s markets.

Compare The Canadian Approach: “Respect Provincial Jurisdiction … Streamline The
Review Process.” CANADIAN FINANCE MINISTER JIM FLAHERTY: “Canada’s resource industries offer huge potential to create even more jobs and growth, now and over the next generation. This potential exists in every region of the country–natural gas in British Columbia, oil and minerals on the Prairies, the Ring of Fire in Ontario, Plan Nord in Quebec, hydro power in Atlantic Canada, and mining in Canada’s North. Recently it has become clear that we must develop new export markets for
Canada’s energy and natural resources, to reduce our dependence on markets in the United States.
The booming economies of the Asia- Pacific region are a huge and increasing source of demand, but Canada is not the only country to which they can turn. If we fail to act now, this historic window of opportunity will close. We will implement responsible resource development and smart regulation for major economic projects, respecting provincial jurisdiction and maintaining the highest standards of environmental protection. We will streamline the review process for such projects, according to the following principle: one project, one review, completed in a clearly defined time period. We will ensure that Canada has the infrastructure we need to move our exports to new markets.” (Canadian Finance Minister Jay Flaherty, The House Of Commons, Remarks, 3/29/12)

One has to wonder if Mitt Romney’s other policies are also cut and paste jobs and, if elected, how often he will be calling Stephen Harper for advice.