The Canadian Coast Guard says it will undertake “a significant environmental response operation” because more oil is leaking from the sunken Second World War United States Army Transport vessel, the Brigadier General M.G. Zalinski.
Hot tapping is a well-known and frequently used method of removing oil from the tanks of stricken vessels. Holes are carefully drilled into the side of the vessel to access fuel-tanks and then hot steam is pumped into the tanks. The steam increases the temperature of the oil and enables it to flow more easily. The oil is then pumped to the surface for safe disposal.
The procedure can be done with holes of very small sizes up to very large diameters. Hot tapping is used in both marine and land-based scenarios.
The red sections in the image above represent the fuel tanks of the Zalinski; the possible locations for hot tapping of the vessel. The yellow sections represent the cargo holds. (Canadian Coast Guard)
The Canadian Coast Guard says it “has engaged the Gitga’at First Nation and the Province of British Columbia to participate in the operation and maintain a presence at the wreck site” and will keep the Gitga’at First Nation informed of what is going on:
The Coast Guard recognizes that given their proximity to the Zalinski site and their interest in the oil recovery operation, the Gitga’at need to be informed on the progress of the operation and that they have important local knowledge and skill that will be beneficial to the operation.
The Coast Guard says that environmental monitoring in January and March of 2013, discovered “further upwelling” of oil and added new patches to the sunken vessel.
The Coast Guard says: “Although the patches from 2012 and 2013 remain in place, early patches have begun to leak and the Canadian Coast Guard has determined that the structural integrity of the vessel is deteriorating.”
USAT Brigadier General M.G. Zalinski (Canadian Coast Guard)
The USAT Brigadier General M.G. Zalinski was built in 1919 and served as a United States Army Transport vessel during the Second World War. It ran aground during a storm and sank in 1946 in the Grenville Channel about 100 kilometres south of Prince Rupert.
According to a Coast Guard News release, the wreck was “undetected” until the fall of 2003 in 34 metres of water near an underwater cliff about 20 metres from shore.
In September 2003, the United States Coast Guard Cutter Maple reported pollution in the Grenville Channel to the Canadian Coast Guard.
The CCGS Tanu investigated the source of the pollution and collected oil samples, but, the news release says, the vessel remained elusive and undetected.
A month later, more oil pollution was spotted so the Canadian Coast Guard used a remotely operated underwater vehicle which located the Zalinski.
New pollution was reported in the channel in October 2003 by a commercial airline pilot and at this time the Coast Guard suspected that the source of the upwelling of oil was an old wreck.
In 2003 and 2004, the Canadian Coast Guard contracted divers to patch the vessel to prevent the leak of oil.
The Coast Guard says it regularly monitored the site with the help of Transport Canada’s National Aerial Surveillance Program. Local First Nations Groups also monitored the wreck site.
More oil was spotted in April 2012, and at that time, contract divers patched the Zalinski with an epoxy that hardens underwater.
The Coast Guard says new dive footage has shown that metal rivets that hold the hull’s plates are corroding and that the hull is buckling.
as the state of the vessel deteriorates, the Coast Guard has determined that to prevent any harm to the environment, a significant operation should be undertaken to remove the oil from the vessel. The Canadian Coast Guard will be the on-scene commander for the duration of the operation, directing the recovery and the removal of marine pollutants from the vessel and actively monitoring the operation.
The Canadian Coast Guard has also engaged the province of British Columbia and local First Nations groups to solicit their feedback on the operation. On July 26, 2013, Public Works and Government Services Canada posted two requests for proposal seeking a third-party to conduct the oil removal operation and oil spill response services to assist in the case that any oil leaks from the vessel as the operation progresses.
Wreck sites for M.G. Zalinksi and Queen of the North (Canadian Coast Guard)
It is expected that the operation will begin in September 2013 and will conclude in December 2013. The Coast Guard says because the Grenville Channel is so narrow, some restrictions on vessel traffic in the Inland Passage will be needed.
The Grenville Channel is a narrow fjord-like waterway with significant tidal fluctuations and currents up to three knots. The shoreline is rocky and steep with little shoreline vegetation.
The Grenville Channel sees commercial fishing vessels, ferries, cruise ships, and pleasure craft transiting its waters on a regular basis, with increased frequency in the summer months. These waters, naturally shielded from stronger offshore winds and weather conditions, are the preferred route of many cruise ships.
The more mild sailing conditions and the stunning natural beauty of the area make the Grenville channel one of the scenic highlights of many marine travellers on Canada’s West Coast.
Natural Resources Minister Joe Oliver (centre) meets District of Kitimat Councillors, left to right, Rob Goffinet, Mary Murphy, Mayor Joanne Monaghan and Corinne Scott. (District of Kitimat)
Natural Resources Minister Joe Oliver made a brief visit to the Kitimat area on Tuesday July 23, 2013, meeting Haisla Chief Counsellor Ellis Ross. In the original planning for the visit, Oliver was not scheduled to meet with District of Kitimat Council or other members of the community, snubbing Kitimat in only his second visit to the region since he was appointed minister after the 2011 federal election.
A half hour meeting with available members of the District of Kitimat Council was squeezed in only after intense lobbying from Mayor Joanne Monaghan.
The Natural Resources department public relations staff also chose to ignore (or exclude) local media, with the exception of the Northern Sentinel. Northwest Coast Energy News, Kitimat Daily, CFTK and CRFN were not informed and did not accompany Oliver on his hour long tour of Douglas Channel.
After the meeting, Natural Resources Canada issued a news release saying that he had concluded “a successful visit to Kitimat,” hosted by the Haisla:
Minister Oliver discussed opportunities to increase First Nations’ participation in resource development and received a tour of the Douglas Channel hosted by Chief Councilor Ellis Ross.
“I am privileged to have been invited by the Haisla Nation to gain their perspective, listen to their concerns and discuss our plans for Responsible Resource Development and our initiatives to strengthen environmental protection,” said Minister Oliver. “Resource development presents a tremendous opportunity for First Nations groups like the Haisla. Our government has also been clear that development will only proceed if it is safe for the environment…”
“Responsible resource development has the potential to create significant new opportunities for Aboriginal peoples across Canada,” said Minister Oliver. “The Government will make every effort to ensure that…
Aboriginal peoples in Canada have the opportunity to share the benefits of energy resource development in the years ahead, while ensuring that projects are developed in a manner that has the highest regard for safety and the environment.”
“The safe and responsible diversification of our energy markets is a priority for the Government of Canada,” said Minister Oliver. “Our energy industry must remain competitive to ensure communities across Canada continue to benefit from our natural resource wealth.”
The Northern Sentinel reported that Oliver mainly concentrated on liquified natural gas development and tried to avoid questions about the Enbridge Northern Gateway project. Oliver repeated the federal government’s position on safety outlining the programs announced last march to expand pipeline expansion and increase penalties for safety violations.
On LNG, Oliver told the Sentinel, “These are decisions made by the private sector, it’s not us telling us don’t do this project…they’re going to figure that out themselves,” he said.
On the Enbridge Northern Gateway Pipelines Project, Oliver told the Sentinel, “We have a very strong interest in seeing the markets diversify, and that includes moving oil to Asia,” he said. “However, we’re not going to stomp over the regulatory process. It’s subject to regulatory review, the joint review panel will be coming to its conclusion this December. We’re waiting for what they have to say…I know people have a view of what our opinion is but we don’t offer an opinion before we hear from the regulator.”
He added that once the review is done, “At that point we’ll know more because they will have a done a comprehensive, scientific audit.”
Councillor Mary Murphy told Northwest Coast Energy News that she was told by a Haisla friend early Tuesday morning that Oliver was coming to visit Kitamaat Village and immediately informed Mayor Joanne Monaghan.
Monaghan said, “I called his office in Ottawa and said I wanted a meeting as well seeing he was here. After an all day back and forth until three o’clock he said he would come at four for half an hour.”
Councillor Corinne Scott said. “As none of us were aware of the Minister being in Kitimat, we scrambled to have Mary, Rob, the Mayor and I available to meet with him, along with [DOK Chief Admnistrative Officer] Ron [Poole] and [Economic Development Officer] Rose Klukas.”
Councillors Mario Feldhoff, Phil Germuth and Edward Empinado were unable to attend because they working at the time and could not get away with such short notice. Sources tell Northwest Coast Energy News that even pro-development members of the local business community were not informed about Oliver’s visit.
Murphy described the meeting “as very beneficial to us.” A couple of other sources, familiar with accounts of the meeting, however, both told Northwest Coast Energy News there was barely enough time after formalities to ask questions of the minister before he dashed out the door for the airport.
A study by two scholars at Simon Fraser University says that the Enbridge Northern Gateway project is much more hazardous to Kitimat harbour, Douglas Channel and the BC Coast than Enbridge has told the Joint Review Panel.
The study by Dr. Thomas Gunton, director of the School of Resource and Environmental Management at SFU and Phd student Sean Broadbent, released Thursday May 2, 2013 says there are major methodological flaws in the way Enbridge has analyzed the risk of a potential oil spill from the bitumen and condensate tankers that would be loaded (bitumen) or unloaded (condensate) at the proposed terminal at Kitimat.
Enbridge Northern Gateway responded a few hours after the release of the SFU study with a statement of its own attacking the methedology used by the two SFU scholars and also calling into question their motivation since Gunton has worked for Coastal First Nations on their concerns about the tanker traffic.
Combination of events
One crucial factor stands out from the Gunton and Broadbent study (and one which should be confirmed by independent analysis). The two say that Enbridge, in its risk and safety studies for the Northern Gateway project and the associated tanker traffic, consistently failed to consider the possibility of a combination of circumstances that could lead to either a minor or a major incident.
Up until now, critics of the Northern Gateway project have often acknowledged that Enbridge’s risk analysis is robust but has consistently failed to take into consideration the possibilty of human error.
As most accidents and disasters happen not due to one technical event, or a single human error, the SFU finding that Enbridge hasn’t taken into consideration a series of cascading events is a signficant criticism.
Overall the SFU study says there could be a tanker spill every 10 years, not once in 250 years, as calculated by Enbridge.
It also says there could be 776 oil and condensate spills from pipelines over 50 years, not 25 spills over 50 years as projected by Enbridge. (And the life of the project is estimated at just 30 years, raising the question of why the 50 year figure was chosen)
Enbridge track record
The study also bases its analysis of the possibility of a spill not on Enbridge’s estimates before the Joint Review Panel but on the company’s actual track record of pipeline spllls and incidents and concludes that there could be between one and 16 spills (not necessarily major) each year along the Northern Gateway pipeline.
Findings for Kitimat
Among the key findings for Kitimat from the SFU study are:
Enbridge said the possibility of tanker spill was 11.3 to 47.5 per cent over the 30 year life of project. The SFU study says the possibility of a spill within the 30 years is 99.9 per cent.
The SFU study says it is likely there will be a small spill at the Kitimat Enbridge terminal every two years.
The SFU study estimates that there will be eight tanker transits each week on Douglas Channel if the Northern Gateway project goes ahead and more if it is expanded. (This, of course, does not include LNG tankers or regular traffic of bulk carriers and tankers for Rio Tinto Alcan)
The SFU study says that while Endridge did study maneuverability of tankers, it paid little attention to stopping distance required for AfraMax, SuezMax tankers and Very Large Crude Carriers.
The SFU study says Enbridge inflated effectiveness of the proposed tethered tugs and maintains the company did not study ports and operations that use tethered tugs now to see how effective tethering is.
The SFU says Enbridge’s risk analysis covered just 233 nautical miles of the British Columbia coast, where as it should have covered entire tanker route both to Asia and California, raising the possibility of a tanker disaster outside British Columbia that would be tied to the Kitimat operation.
Based on data on tanker traffic in Valdez, Alaska, from 1978 to 2008, the SFU study estimates probability of a 1,000 barrel spill in Douglas Channel at 98.1 per cent and a 10,000 barrel spill at 74.2 per cent over 30 year Gateway life. The Valdez figures account for introduction of double hulls after Exxon Valdez spill in 1989 and notes that spill frequency is much lower since the introduction of double hulled tankers.
According to a study by Worley Parsons for Enbridge in 2012, the Kitimat River is the most likely area affected by an unconstrained rupture due to geohazards in the region. According to the Worley Parsons study, geohazards represent the most significant threat to the Northern Gateway pipeline system.
Flawed studies
The SFU scholars list a series of what they say are major methological or analytic flaws in the information that Enbridge has presented to the Joint Review Panel, concluding that “Enbridge significantly understates the risk of of spills from the Northern Gatway.
Enbridge’s spill risk analysis contains 28 major deficiencies. As a result of these deficiencies, Enbridge underestimates the risk of the ENGP by a significant margin.
Some of the key deficiencies include:
Failure to present the probabilities of spills over the operating life of the ENGP
Failure to evaluate spill risks outside the narrowly defined BC study area
Reliance on LRFP data that significantly underreport tanker incidents by between 38 and 96%.
Failure to include the expansion capacity shipment volumes in the analysis
Failure to provide confidence ranges of the estimates
Failure to provide adequate sensitivity analysis
Failure to justify the impact of proposed mitigation measures on spill likelihood
Potential double counting of mitigation measures
Failure to provide an overall estimate of spill likelihood for the entire ENGP
Failure to disclose information and data supporting key assumptions that were used to reduce spill risk estimates
Failure to use other well accepted risk models such as the US OSRA model
SFU reports that Enbridge provides separate estimates of the likelihood of spills for each of the three major components of the project:
tanker operations,
terminal operations,
the oil and condensate pipelines.
The SFU scholars say Enbridge does not combine the separate estimates to provide an overall estimate of the probability of spills for the entire project and therefore does not provide sufficient information to determine the likelihood of adverse environmental effects……
It notes that “forecasting spill risk is challenging due to the many variables impacting risk and the uncertainties in forecasting future developments affecting risk. To improve the accuracy of risk assessment, international best practices have been developed.”
Part of the problem for Enbridge may be that when the company appeared before the Joint Review Panel it has repeatedly said that will complete studies long after approval (if the project is approved), leaving large gaps in any risk analysis.
The SFU study may have one example of this when it says Enbridge did not complete any sensitivity analysis for condensate spills at Kitimat Terminal or the condensate pipeline.
Our experts have identified a number of omissions, flawed assumptions and modeling errors in the study and have serious concerns with its conclusions:
The spill probability numbers are inflated: The author uses oil throughput volumes that are nearly 40 per cent higher than those applied for in this project which also inflates the number of tanker transits using these inflated volumes
The pipeline failure frequency methodology adopted by Mr. Gunton is flawed, and does not approximate what would be deemed a best practices approach to the scientific risk analysis of a modern pipeline system
Mr. Gunton based his failure frequency analysis on a small subset of historical failure incident data. Why would he limit the source of his data to two pipelines with incidents not reflective of the industry experience and not reflective of the new technology proposed for Northern Gateway?
The study results are not borne out by real world tanker spill statistics. Based on Mr. Gunton’s estimates we should expect 21 to 77 large tanker spills every year worldwide while in reality after 2000 it has been below 3 per year and in 2012 there were zero.
Most of Enbridge’s rebuttal is a personal attack on Gunton, noting
We are very concerned about the misleading report released by Mr. Gunton, who was a witness for the Coastal First Nations organization during the Northern Gateway Joint Review Panel process.
Mr. Gunton should have made his study available to the JRP process, the most thorough review of a pipeline that’s ever taken place in Canada. All of Northern Gateway’s conclusions have been subject to peer review, information requests and questioning by intervenors and the Joint Review Panel.
In response, Gunton told the Globe and Mail “the report took over a year to complete and it was not ready in time to be submitted as evidence before the federal Joint Review Panel which is now examining the proposed pipeline.”
Enbridge’s statement also ignores the fact under the arcane rules of evidence, any study such as the one from Simon Fraser had to be submitted to the JRP early in the process, while evidence was still being submitted.
The recent ruling by the JRP for closing arguments also precludes anyone using material that was not entered into evidence during the actual hearings.
That means that the SFU study will be ignored in the final round of the Joint Review Panel, which can only increase the disillusionment and distrust of the process that is already common throughout northwest British Columbia.
“There is no need to scare people,” about tankers, Transport Minister Denis Lebel told the House of Commons on Thursday, March 28.
Lebel was answering a question from Skeena Bulkley Valley MP and NDP House Leader Nathan Cullen.
The official transcript from Hansard records Cullen’s question about the federal government’s unexpected declaration that Kitimat would become a public port.
Mr. Speaker, last week, in their panic to ram a bitumen pipeline through to British Columbia’s north coast, the Conservatives simply decreed that they would take over the Port of Kitimat. Rather than picking up the phone and talking with the local council or the Haisla Nation, the government parachuted in a minister from Toronto to make the announcement. There was no consultation, no respect, just bulldozers.
We see again the fundamental disrespect the government has for first nations here today. Now the Conservatives are scrambling, saying that they will consult after they have clearly made up their minds, the exact approach they take on the pipeline. When will the government start to respect the people of the northwest?
Lebel replied in French, and as is usual in Question Period did not answer Cullen’s question.
Mr. Speaker, last week we announced the creation of an expert panel. These people will work together to think of how to improve things.
We have a very good system for dealing with oil spills. We will continue to move forward and keep everyone safe.
Canada has not had any major oil spills in its history. There is no need to scare people. We will continue to work on measures.
I thank all members of the panel led by Mr. Houston for their ability to find solutions.
This Youtube video shows Cullen’s question and Lebel’s response. The live translation is a little different, but the effect is the same.
Cullen later issued a news release commenting
Cullen’s question came on the heels of reports that neither Kitimat Council nor the Haisla Nation were consulted in advance of the federal government’s decision to take over the Kitimat port. The move represents an apparent ongoing tendency by the Conservative federal government to offer consultation with communities and First Nations, but only after they’ve already made their decision.
Cullen later reflected that, regardless of one’s position on the Northern Gateway pipeline, open and prior consultation is crucial to fostering good governance and the trust of the general public. By contrast, said Cullen, “the Conservatives are writing the book on how to ignore communities and First Nations, and damage public faith. This is just the latest chapter.”
a large, relatively shallow lake in south-central Quebec, Canada, in the Laurentian Highlands. It is situated 206 kilometres north of the Saint Lawrence River, into which it drains via the Saguenay River. It covers an area of 1,053 km2 (407 sq mi), and is 63.1 m (207 ft) at its deepest point.
It is unlikely there will ever be a Very Large Crude Carrier on Lac St. Jean.
In its earliest statements the Harper Conservatives were careful to say that there had never been a tanker disaster on the west coast. Now, in its Orwellian fashion, the government is now saying “Canada has not had any major oil spills in its history.”
That statement, of course, ignores the Arrow tanker disaster off Chedabucto Bay, Nova Scotia on February 4, 1970, which the Environment Canada website, (as of April 1, 2013), describes this way
the calamity had reached catastrophic proportions. Out of the 375 statute miles of shoreline in the Bay area, 190 miles had been contaminated in varying degrees.
The Panama registered bulk carrier Azuma Phoenix is seen tied up at Kitimat harbour on the afternoon of Jan 9, 2012. In March 2013. the federal government announced it was making the private port of Kitimat into a public port. (Robin Rowland)
When the story of the Stephen Harper government is told, historians will say that the week of March 17 to 23, 2013, is remembered, not for the release of a lacklustre federal budget, but for day after day of political blunders that undermined Harper’s goal of making a Canada what the Conservatives call a resource superpower.
It was a week where spin overcame substance and spun out of control.
The Conservative government’s aim was, apparently, to increase support for the Enbridge Northern Gateway pipeline project with a spin campaign aimed at moving the middle ground in British Columbia from anti-project to pro-project and at the same time launching a divide and conquer strategy aimed at BC and Alberta First Nations.
It all backfired. If on Monday, March 17, 2013, the troubled and controversial Enbridge Northern Gateway project was on the sick list, by Friday, March 23, the Enbridge pipeline and tanker scheme was added to the Do Not Resuscitate list, all thanks to political arrogance, blindfolded spin and bureaucratic incompetence. The standard boogeymen for conservative media in Canada (who always add the same sentence to their stories on the Northern Gateway) “First Nations and environmentalists who oppose the project” had nothing to do with it.
Stephen Harper has tight control of his party and the government, and in this case the billion bucks stop at the Prime Minister’s Office. He has only himself to blame.
All of this happened on the northern coast of British Columbia, far out of range of the radar of the national media and the Ottawa pundit class (most of whom, it must be admitted, were locked up in an old railway station in the nation’s capital, trying interpret Finance Minister Jim Flaherty’s spreadsheets).
The story begins early on that Monday morning, at my home base in Kitimat, BC, the proposed terminal for Northern Gateway, when a news release pops into my e-mail box, advising that Natural Resources Minister Joe Oliver would be in nearby Terrace early on Tuesday morning for an announcement and photo op.
I started making calls, trying to find out if anyone in Kitimat knew about Oliver’s visit to Terrace and if the minister planned to come to Kitimat.
Visitors to Kitimat
I made those calls because in the past two years, Kitimat has seen a parade of visitors checking out the town and the port’s industrial and transportation potential. The visitors range from members of the BC provincial Liberal cabinet to the staff of the Chinese consulate in Vancouver to top executives of some of the world’s major transnational corporations (and not just in the energy sector). Most of these visits, which usually include meetings with the District of Kitimat Council and District senior staff as well as separate meetings with the Council of the Haisla Nation, are usually considered confidential. There are no photo ops or news conferences. If the news of a visit is made public, (not all are), those visits are usually noted, after the fact, by Mayor Joanne Monaghan at the next public council meeting.
It was quickly clear from my calls that no one in an official capacity in Kitimat knew that, by the next morning, Oliver would be Terrace, 60 kilometres up Highway 37. No meetings in Kitimat, on or off the record, were scheduled with the Minister of Natural Resources who has been talking about Kitimat ever since he was appointed to the Harper cabinet.
I was skeptical about that afternoon’s announcement/photo op in Vancouver by Transport Minister Denis Lebel and Oliver about the “world class” tanker monitoring.
After all, there had been Canadian Coast Guard cutbacks on the northwest coast even before Stephen Harper got his majority government. The inadequacy of oil spill response on the British Columbia coast had been condemned both by former Auditor General Sheila Fraser and in the United States Senate. The government stubbornly closed and dismantled the Kitsilano Coast Guard station. It’s proposing that ocean traffic control for the Port of Vancouver be done remotely from Victoria, with fixed cameras dotted around the harbour. Leaving controllers in Vancouver would, of course, be the best solution, but they must be sacrificed (along with any ship that get’s into trouble in the future, on the altar of a balanced budget).
The part of the announcement that said there would be increased air surveillance is nothing more than a joke (or spin intended just for the Conservative base in Alberta, Saskatchewan and the Toronto suburbs,that is not anyone familiar with BC coastal waters). Currently the Transport Canada surveillance aircraft are used on the coasts to look for vessels that are illegally dumping bilge or oil off shore. As CBC’s Paul Hunter reported in 2010, Transport Canada aircraft were used after the Gulf of Mexico oil disaster to map where the oil was going after it erupted from the Deepwater Horizon.
Given the stormy weather on the west coast (when Coast Guard radio frequently warns of “hurricane force winds”) it is highly unlikely that the surveillance aircraft would even be flying in the conditions that could cause a major tanker disaster. Aerial surveillance, even in good weather, will never prevent a tanker disaster caused by human error.
I got my first chance to look at the Transport Canada website in late afternoon and that’s when a seemingly innocuous section made me sit up and say “what is going on?” (I actually said something much stronger).
Public port
Public port designations: More ports will be designated for traffic control measures, starting with Kitimat.
(Transport Canada actually spelled the name wrong—it has since been fixed—as you can see in this screen grab).
Kitimat has been one of the few private ports in Canada since the Alcan smelter was built and the town founded 60 years ago (the 60th anniversary of the incorporation of the District of Kitimat is March 31, 2013).
The reasons for the designation of Kitimat as a private port go back to a complicated deal between the province of British Columbia and Alcan in the late 1940s as the two were negotiating about electrical power, the aluminum smelter, the building of the town and the harbour.
For 60 years, Alcan, later Rio Tinto Alcan, built, paid for and operated the port as a private sector venture. For a time, additional docks were also operated by Eurocan and Methanex. After Eurocan closed its Kitimat operation that dock was purchased by the parent company Rio Tinto. The Methanex dock was purchased by Royal Dutch Shell last year for its proposed LNG operation.
The announcement that Kitimat was to become a public port was also something that the national media would not recognize as significant unless they are familiar with the history of the port. That history is known only to current and former residents of Kitimat and managers at Rio Tinto Alcan.
The port announcement came so much out of left field; so to speak, that I had doubts it was accurate. In other words, I couldn’t believe it. I went to Monday evening’s meeting of District of Kitimat Council and at the break between the open and in-camera sessions, I asked council members if they had heard about Kitimat being redesignated a public port. The members of the district council were as surprised as I had been.
Back from the council meeting, I checked the Transport Canada news release and backgrounders. I also checked the online version of Bill C-57, the enabling act for the changes announced earlier that day. There was no mention of Kitimat in Bill C-57.
Tuesday morning I drove to Terrace for Joe Oliver’s 9 am photo op and the announcement at Northwest Community College (NWCC) that the government had appointed Douglas Eyford as a special envoy to First Nations for energy projects, an attempt on the surface to try and get First Nations onside for the pipeline projects, an appointment seen by some First Nations leaders as an attempt by the Harper government to divide and conquer.
As an on site reporter, I got to ask Oliver two questions before the news conference went to the national media on the phones.
In answer to my first question, Oliver confirmed that the federal government had decided to make Kitimat a public port, saying in his first sentence: “What the purpose is to make sure that the absolute highest standards of marine safety apply in the port of Kitimat.” He then returned to message track saying, “we have as I announced yesterday and I had spoken about before at the port of Vancouver we have an extremely robust marine safety regime in place but we want to make sure that as resource development continues and as technology improves, we are at the world class level. As I also mentioned there has never been off the coast of British Columbia a major tanker spill and we want to keep that perfect record.”
For my second question, I asked Oliver if he planned to visit Kitimat.
He replied. “Not in this particular visit, I have to get back [to Ottawa] There’s a budget coming and I have to be in the House for that but I certainly expect to be going up there.”
The question may not have registered with the national media on the conference call. For the local reporters and leaders in the room at Waap Galts’ap, the long house at Terrace’s Northwest Community College, everyone knew that Kitimat had been snubbed.
Back in Kitimat, I sent an e-mail to Colleen Nyce, the local spokesperson for Rio Tinto Alcan noting that Joe Oliver had confirmed that the federal government intended to make the RTA-run port a public port. I asked if RTA had been consulted and if the company had any comment.
Nyce replied that she was not aware of the announcement and promised to “look into this on our end.” I am now told by sources that it is believed that my inquiry to Nyce was the first time Rio Tinto Alcan, one of Canada’s biggest resource companies, had heard that the federal government was taking over its port.
The next day, Kitimat Mayor Joanne Monaghan told local TV news on CFTK the Kitimat community was never consulted about the decision and she added that she still hadn’t been able to get anyone with the federal government to tell her more about the plan.
Who pays for the navigation aids?
Meanwhile, new questions were being raised in Kitimat about two other parts of the Monday announcement.
New and modified aids to navigation: The CCG will ensure that a system of aids to navigation comprised of buoys, lights and other devices to warn of obstructions and to mark the location of preferred shipping routes is installed and maintained. Modern navigation system: The CCG will develop options for enhancing Canada’s current navigation system (e.g. aids to navigation, hydrographic charts, etc) by fall 2013 for government consideration.
Since its first public meeting in Kitimat, in documents filed with the Northern Gateway Joint Review Panel, in public statements and advertising, Enbridge has been saying for at least the past four years that the company would pay for all the needed upgrades to aids to navigation on Douglas Channel, Wright Sound and other areas for its tanker traffic. It is estimated that those navigation upgrades would cost millions of dollars.
Now days before a federal budget that Jim Flaherty had already telegraphed as emphasizing restraint, it appeared that the Harper government, in its desperation to get approval for energy exports, was going to take over funding for the navigation upgrades from the private sector and hand the bill to the Canadian taxpayer.
RTA not consulted
On Thursday morning, I received an e-mail from Colleen Nyce with a Rio Tinto Alcan statement, noting:
This announcement was not discussed with Rio Tinto Alcan in advance. We are endeavoring to have meetings with the federal government to gain clarity on this announcement as it specifically relates to our operations in Kitimat.
On Friday morning, Mayor Monaghan told Andrew Kurjata on CBC’s Daybreak North that she had had at that time no response to phone calls and e-mails asking for clarification of the announcement. Monaghan also told CBC that Kitimat’s development officer Rose Klukas had tried to “get an audience with minister and had been unable to.” (One reason may be that Oliver’s staff was busy. They ordered NWCC staff to rearrange the usual layout of the chairs at Waap Galts’ap, the long house, to get a better background for the TV cameras for Oliver’s statement).
Natural Resources Minister Joe Oliver (front far right) answers questions after his news conference at the Northwest Community College Long House, March 19, 2013. (Robin Rowland)
Monaghan told Kurjata, “I feel like it’s a slap in the face because we’re always being told that we’re the instrument for the whole world right now because Kitimat is supposed to be the capital of the economy right now. So I thought we’d have a little more clout by now and they’d at least tell us they were going to do this. There was absolutely no consultation whatsoever.”
By Friday afternoon, five days after the announcement, Transport Canada officials finally returned the calls from Mayor Monaghan and Rose Klukas promising to consult Kitimat officials in the future.
Monaghan said that Transport Canada told her that it would take at least one year because the change from a private port to a public port requires a change in legislation.
Transport Canada is now promising “extensive public and stakeholder consultation will occur before the legislation is changed,” the mayor was told.
On this Mayor Monaghan commented, “It seems to me that now they want to do consultation….sort of like closing the barn door after all of the cows got out!”
Blunder No 1. Pulling the rug out from Northern Gateway
Joe Oliver and the Harper government sent a strong political signal to Kitimat on Tuesday; (to paraphrase an old movie) your little town doesn’t amount of a hill of beans in this crazy world.
There are a tiny handful of people in Kitimat openly in favour of the Northern Gateway project. A significant minority are on the fence and some perhaps leaning toward acceptance of the project. There is strong opposition and many with a wait and see attitude. (Those in favour will usually only speak on background, and then when you talk to them most of those “in favour” have lists of conditions. If BC Premier Christy Clark has five conditions, many of these people have a dozen or more).
Oliver was speaking in Terrace, 60 kilometres from Kitimat. It is about a 40 to 45 minute drive to Kitimat over a beautiful stretch of highway, with views of lakes, rivers and mountains.
Scenic Highway 37 is the route to the main location not only for the controversial Northern Gateway pipeline but three liquefied natural gas projects, not to mention David Black’s proposed refinery half way between Terrace and Kitimat.
Why wouldn’t Kitimat be a must stop on the schedule for the Minister of Natural Resources? In Terrace, Oliver declared that Kitimat was to become a public port, run by the federal government. Although technically that would be the responsibility of Denis Lebel, the Minister of Transport, one has to wonder why the Minister of Natural Resources would not want to see the port that is supposedly vital to Canada’s economy? You have to ask why he didn’t want to meet the representatives of the Haisla Nation, the staff and council of the District of Kitimat and local business leaders?
Oliver has been going across Canada, the United States and to foreign countries promoting pipelines and tanker traffic, pipelines that would terminate at Kitimat and tankers that would send either bitumen or liquefied natural gas to customers in Asia.
Yet the Minister of Natural Resources is too important, too busy to take a few hours out of his schedule, while he is in the region, to actually visit the town he has been talking about for years.
He told me that he had to be in Ottawa for the budget. Really? The budget is always the finance minister’s show and tell (with a little help from whomever the Prime Minister is at the time). On budget day, Oliver would have been nothing more than a background extra whenever the television cameras “dipped in” on the House of Commons, between stories from reporters and experts who had been in the budget lockup.
According to the time code on my video camera, Oliver’s news conference wrapped at 9:50 a.m., which certainly gave the minister and his staff plenty of time to drive to Kitimat, meet with the representatives of the District, the Haisla Nation and the Chamber of Commerce and still get to Vancouver for a late flight back to Ontario.
On Tuesday, Joe Oliver’s snub pulled the political rug out from under the Northern Gateway supporters and fence sitters in Kitimat. Oliver’s snub showed those few people in Kitimat that if they do go out on a limb to support the Northern Gateway project, the Conservatives would saw off that limb so it can be used as a good background prop for a photo op.
Prince Rupert, Terrace and Smithers councils have all voted against the Northern Gateway project. Kitimat Council, despite some clear divisions, has maintained a position of absolute neutrality. Kitimat Council will continue to be officially neutral until after the Joint Review report, but this week you could hear the air slowly leaking out of the neutrality balloon.
Oliver may still believe, as he has frequently said, that the only people who oppose Northern Gateway are dangerous radicals paid by foreign foundations.
What he did on Tuesday was to make the opposition to Northern Gateway in Kitimat into an even more solid majority across the political spectrum.
Blunder No 2. Rio Tinto Alcan
It doesn’t do much for the credibility of a minister of natural resources to thoroughly piss off, for no good reason, the world’s second largest mining and smelting conglomerate, Rio Tinto. But that’s just what Joe Oliver did this week.
I am not one to usually have much sympathy with rich, giant, transnational corporations.
But look at this way, over the past 60 years Alcan and now Rio Tinto Alcan have invested millions upon millions of dollars in building and maintaining the Kitimat smelter and the port of Kitimat. RTA is now completing the $3.3 billion Kitimat Modernization Project. Then without notice, or consultation, the Conservative government—the Conservative government—announces it is going to take over RTA’s port operations. What’s more, if what Transport Canada told Mayor Joanne Monaghan is correct, the federal government is going to start charging RTA fees to use the port it has built and operated for 60 years.
Too often RTA’s London headquarters acts like it is still the nineteenth century and the senior executives are like British colonialists dictating to the far reaches of the Empire on what do to do.
No matter what you think of RTA, it boggles the mind, whether you are right wing, left wing or mushy middle, that the federal government simply issues a press release–a press release– with not even a phone call, not even a visit (even to corporate headquarters) saying “Hey RTA, we’re taking over.”
There’s one thing that you can be sure of, Rio Tinto Alcan’s lobbyists are going to be earning their fees in the coming weeks.
(One more point, even if there wasn’t a single pipeline project planned for Kitimat you would think that the Minister of Natural Resources would want to see what is currently the largest and most expensive construction project in Canada, a project that comes under his area of political responsibility).
It took five days, from the time of the minister’s news conference on Monday until Friday afternoon, for officials in Transport Canada to return phone calls from Mayor Joanne Monaghan and Rose Klukas, to explain what was going to happen to the Port of Kitimat.
This week was yet another example of the decay of Canadian democracy under Stephen Harper. Executives from Tokyo to Houston to the City of London quickly return phone calls from the District of Kitimat, after all Kitimat is where the economic action is supposed to be. At the same time, the federal government doesn’t return those calls, it shows that something really is rotten in our state.
Blunder No 5. LNG
There are three liquefied natural gas projects slated for Kitimat harbour, the Chevron-Apache partnership in KM LNG, now under construction at Bish Cove; the Royal Dutch Shell project based on the old Methanex site and the barge based BC LNG partnership that will work out of North Cove.
None of these projects have had the final go ahead from the respective company board of directors. So has the federal government thrown the proverbial monkey wrench into these projects? Will making Kitimat a public port to promote Enbridge, help or hinder the LNG projects? Did the Ministry of Natural Resources even consider the LNG projects when they made the decision along with Transport Canada to take over the port?
And then there’s…..
Kitimat has a marina shortage, especially since RTA closed the Moon Bay Marina. The only one left, the MK Bay Marina, which is straining from overcapacity, is owned by the Kitimat-Stikine Regional District. That means there will be another level of government in any talks and decisions on the future of the Kitimat harbour. There are also the controversial raw log exports from nearby Minette Bay.
Although Transport Canada has promised “extensive public and stakeholder consultation,” one has to wonder how much input will be allowed for the residents of Kitimat and region, especially the guiding and tourism industries as well as recreational boaters. After all, the Harper government is determined to make Kitimat an export port for Alberta and the experience of the past couple of years has shown that people of northwest count for little in that process. Just look at the Northern Gateway Joint Review, which more and more people here say has no credibility.
Big blunder or more of the same?
I’ve listed five big blunders that are the result of the decision by the Harper government to turn Kitimat into a public port.
Are they really blunders or just more of the same policies we’ve seen from Stephen Harper since he became a majority prime minister?
This is a government that has muzzled scientific research and the exchange of scientific ideas. The minister who was in the northwest last week, who has demonized respect for the environment, is now squeezing the words “science” and “environment” anywhere into any message track or speech anyway he can.
That’s just the point. Joe Oliver’s fly-in, fly-out trip to Terrace was not supposed to have any substance. Changing the chairs at the Waap Galts’ap long house showed that it was more important to the Harper government to have some northwest coast wall art behind Joe Oliver for his photo op than it was to engage meaningfully with the northwest, including major corporations, First Nations and local civic and business leaders.
Joe Oliver’s visit to Terrace was an example of government by reality television. The decision to change the private port of Kitimat into a public port was another example of Harper’s government by decree without consulting a single stakeholder. The problem is, of course, that for decades to come, it will be everyone in northwest British Columbia who will be paying for those 30 second sound bites I recorded on Tuesday.
Epilogue: Alcan’s legacy for the socialist Prime Minister, Stephen Harper
If an NDP or Liberal government had done what Harper and Oliver did on Monday, every conservative MP, every conservative pundit, every conservative media outlet in Canada would be hoarse from screaming about the danger from the socialists to the Canadian economy.
That brings us to the legacy left by R. E. Powell who was president of Alcan in the 1940s and 50s as the company was building the Kitimat project.
As Global Mission, the company’s official history, relates, in 1951, Alcan signed an agreement with the British Columbia provincial government, that “called upon the company to risk a huge investment, without any government subsidy or financial backing and without any assured market for its product.”
According to the book, Powell sought to anticipate any future problems, given the tenor of the times, the possible or even likely nationalization of the smelter and the hydro-electric project.
So Powell insisted that the contract signed between Alcan and the province include preliminary clauses acknowledging that Alcan was paying for Kitimat without a single cent from the government:
Whereas the government is unwilling to provide and risk the very large amounts of money required to develop those water powers to produce power for which no market now exists or can be foreseen except through the construction of the facilities for the production of aluminum in the vicinity and….
Whereas the construction of the aluminum plant at or near the site of the said waterpower would accomplish without risk or to the GOVERNMENT the development power, the establishment of a permanent industry and the new of population and….
(Government in all caps in the original)
…the parties hereto agree as follows (the agreement, water licence and land permit)
Powell is quoted in the book as saying:
I asked the political leaders of BC if the government would develop the power and sell the energy to Alcan and they refused. We had to do it ourselves. Someday, perhaps, some politician will try to nationalize that power and grab it for the state. I will be dead and gone but some of you or your successors at Alcan may be here, and I hope the clauses in the agreement, approved by the solemn vote of the BC legislature, will give those future socialists good reason to pause and reflect.
In the late 1940s and early 1950s, the federal government had very little to do with the Kitimat project. With the declaration that Kitimat will be a public port, the federal government comes to the party 60 years late. But one has to wonder if the late Alcan president, R.E. Powell, ever considered that the “future socialists” he hoped would “pause and reflect” would be members of Canada’s Conservative party, Stephen Harper, Joe Oliver and Denis Lebel?
Five days after the announcement that the private port of Kitimat will become a public port under federal jurisdiction, Transport Canada is now promising to consult District of Kitimat officials as the Douglas Channel waterfront transitions to a public port.
Both Kitimat Mayor Joanne Monaghan and Economic Development Officer Rose Klukas, after numerous calls and attempts over the past few days, finally spoke to different Transport Canada officials Friday.
According to the mayor, both were told that Kitimat will not become a public port for at least one year because the change from a private port to a public port requires a change in legislation. (Something Transport Canada may only just be realizing since Bill C-57, introduced Monday to cover all the changes for what the Harper government calls a “world-class” tanker policy makes no mention of Kitimat).
Transport Canada is now promising “extensive public and stakeholder consultation will occur before the legislation is changed,” the mayor was told.
On this Mayor Monaghan commented, “It seems to me that now they want to do consultation….sort of like closing the barn door after all of the cows got out!”
Transport Canada says that beause there are no federal lands in the Kitimat harbour, the amending legislation will only cover navigable waters in Kitimat.
Transport Canada will appoint a harbour master and the cost of that office will be “paid by offsetting fees charged to ships coming into the harbour.”
But it looks like the fees charged to incoming ships by the federal government could be causing a headache for Rio Tinto Alcan. Claudine Gagnon, an RTA spokesperson based in Shawnigan, Quebec, told Radio Canada, the French language network of the CBC, that the company is trying to assess the impact of the announcement on its operations in Kitimat. Among other things, the change in the port’s status could result in higher transportation costs for the company.
At this point, Transport Canada officials told the District is unlikely that there will be Port Authority in Kitimat like the one in Prince Rupert.
Cullen surprised
Asked about the port announcement during a post budget news conference on Thursday, Skeena Bulkley Valley MP and NDP House Leader Nathan Cullen said, “I’m as surprised as everybody in Kitimat is. I’ve been phoning around to local leaders to find out if anyone had been consulted or spoken to about this. And it’s a shock for everyone including people from Alcan.
“This doesn’t make any sense at all. The conversation around a public port is a good one and one we need to have and we’re open to the idea, but what a terrible start to the process, when a minister flies in from Ottawa, announces something, doesn’t tell any of the local government about it and then expects everyone to pop the champagne corks. You want to get this thing right. You want to make sure the public interests are met.
“There’s a real arrogant feeling, when a minister flies in from Toronto and says this is how it’s going to be and there’s no need to talk to anyone in the region about it.
Cullen was also asked about the provisions in the safe tankers announcement on Monday by Transport Minister Denis Lebel and Natural Resources Minister Joe Oliver that the federal government appears to be taking over responsibility for navigation aids on the British Columbia coast, something that until now, Enbridge Northern Gateway has said they will pay for.
“Suddenly taking costs away from a multi-billion dollar oil company, seems to be what this Conservative Canadian government wants to do. It’s so wrong, I can’t describe it any better than that,”Cullen said, “that we’re supposed to be picking up the tab for Enbridge’s project, while all the while running huge deficits and not getting the training support and cuts to health care programs that continue.”
Minister of Natural Resources Joe Oliver answers a reporter’s question during a news conference in Terrace, March 19, 2013 (Robin Rowland)
Joe Oliver, the Minister of Natural Resources, has confirmed that the federal government intends to make Kitimat a public port.
Oliver was in Terrace, March 19, 2013, to announce the appointment of Vancouver lawyer Douglas Eyford as “Special Federal Representative on West Coast Energy Infrastructure.” Eyford’s job will be to “engage aboriginal communities in British Columbia and Alberta that are most likely to have an interest in West Coast energy infrastructure.”
Oliver replied: “The news release was accurate. What the purpose is to make sure that the absolute highest standards of marine safety apply in the port of Kitimat. And we have as I announced yesterday and I had spoken about before at the port of Vancouver we have an extremely robust marine safety regime in place but we want to make sure that as resource development continues and as technology improves, we are at the world class level. As I also mentioned there has never been off the coast of British Columbia a major tanker spill and we want to keep that perfect record.”
No visit to Kitimat
Oliver was also asked if he intended to visit Kitimat during his visit to the northwest (Kitimat is a 40 minute drive from Terrace). Oliver replied, “Not in this particular visit, I have to get back [to Ottawa] There’s a budget coming and I have to be in the House for that but I certainly expect to be going up there.”
The federal budget will be released on Thursday.
At Monday’s meeting of District of Kitimat council, some members quietly expressed frustration, to say the least, that Oliver, the man responsible for pushing the Northern Gateway pipeline through British Columbia to Kitimat had not bothered to include the town in his visit to the northwest.
Members of the District of Kitimat council, which on paper at least, is responsible for the port of Kitimat (even though it is really run by Rio Tinto Alcan) also expressed frustration that no one in Ottawa gave the council advance notice of the government decision to take the port public.
Asked for comment on Oliver’s statement, Rio Tinto Alcan officials in Kitimat also seemed unaware of the government announcement and promised a statement in the near future.
Oliver’s announcement in Vancouver Monday about a “world class” marine safety system and today’s announcement about the appointment of Douglas Eyford, appear to be a campaign by the Harper government to establish a stake in the middle ground in the pipeline debates, in hopes of undermining the opponents of the projects.
Skeena Bulkley Valley MP Nathan Cullen, in a news release, expressed reservations about Eyford’s appointment.
“The primary concern with the appointment, Cullen said, is that Mr. Eyford will report to the Prime Minister, not to Parliament or the public. “So, if Mr. Eyford’s report is in any way unfavourable to the Conservative pipeline agenda, what assurances do we have that his report will make its way into the public eye?
“It is also unclear how the appointment would affect Eyford’s work as the chief government negotiator for the federal government’s comprehensive land claims process, and what kind of effect his absence will have on that process.”
The federal government outlined new tanker safety measures in Vancouver Monday, measures aimed at increasing support for the Enbridge Northern Gateway project and the Kinder Morgan pipeline twinning projects.
Other measures as outlined in the news release are:
Today, the government has also tabled the Safeguarding Canada’s Seas and Skies Act, which is amending the Canada Shipping Act, 2001. The proposed amendments will:
strengthen the current requirements for pollution prevention and response at oil handling facilities;
increase Transport Canada’s oversight and enforcement capacity by equipping marine safety inspectors with the tools to enforce compliance;
introduce new offences for contraventions of the Act and extend penalties relating to pollution; and
enhance response to oil spill incidents by removing legal barriers that could otherwise block agents of Canadian response organizations from participating in clean-up operations.
In addition, the Ministers announced eight measures to strengthen Canada’s tanker safety system:
Tanker inspections: The number of inspections will increase to ensure that all foreign tankers are inspected on their first visit to Canada, and annually thereafter, to ensure they comply with rules and regulations, especially with respect to double hulls.
Systematic surveillance and monitoring of ships: The government will expand the National Aerial Surveillance Program.
Incident Command System: The government will establish a Canadian Coast Guard (CCG) Incident Command System, which will allow it to respond more effectively to an incident and integrate its operations with key partners.
Pilotage programs: We will review existing pilotage and tug escort requirements to see what more will be needed in the future.
Public port designations: More ports will be designated for traffic control measures, starting with Kitimat.
Scientific research: The government will conduct scientific research on non-conventional petroleum products, such as diluted bitumen, to enhance understanding of these substances and how they behave when spilled in the marine environment.
New and modified aids to navigation: The CCG will ensure that a system of aids to navigation comprised of buoys, lights and other devices to warn of obstructions and to mark the location of preferred shipping routes is installed and maintained.
Modern navigation system: The CCG will develop options for enhancing Canada’s current navigation system (e.g. aids to navigation, hydrographic charts, etc) by fall 2013 for government consideration.
Skeena Bulkley Valley MP Nathan Cullen called the statement by Natural Resources Minister Joe Oliver and Transport Minister Denis Lebel as “greenwash.”
Cullen called the announcement in Vancouver “another attempt to distract from the real and serious environmental, social and economic threat the Northern Gateway pipeline poses to British Columbia.”
The government’s announcement that it will take new steps to increase inspections and aerial surveillance of tankers does not come close to addressing the real concerns that British Columbians and Canadians have about oil spills on the majestic BC coast, said Cullen.
“I think concerned citizens will look at these proposals and, like we have, conclude they’re half-measures,” said Cullen. “People have credible fears about the project,” noting a recent study from the University of British Columbia which pegged the potential costs of a major oil spill on BC’s north coast at $9.6 billion, and the fact that Northern Gateway hasn’t provided convincing real-world evidence that their primary spill response mechanisms – booms, skimmers and dispersants – will be able to work along the BC coast. Cullen also pointed to calculations by a 25-year veteran in the oil spill response industry, which used Enbridge’s own research to show a 8.7% to 14.1% chance of a major oil spill in the project’s first fifty years.
“The risks are enormous, and the consequences of a spill would be devastating,” Cullen noted. “But the prime minister and his cabinet appear to have already made up their minds about the project, so rather than actually listen and respond to the concerns of British Columbians, they’ll resort to half-measures and playing the public relations game.
“Since they came to a majority, the government has taken every opportunity to undermine our environmental assessment process, muzzle scientists, and slash protections for our lakes and rivers. And now they’re realizing they’ve axed their own credibility on the environment and public engagement. If the government were serious about convincing the public that this is a safe project, they’d take the time to sit down with the communities and address the big picture facts about this project, instead of going for the low-hanging fruit like they’ve done today.”
The future of tankers sailing along the British Columbia coast, and the export of crude through BC could change drastically by the end of 2014.
By some time in 2014, the planned expansion of the Panama Canal will be complete, allowing more large ships, including tankers, to pass through the Canal and ply up and down the west coast.
It is also possible that British Columbia coastal ports could not only be used for export of bitumen from the Alberta oil sands and liquified natural gas from northeast BC, but also for oil shale crude found in the Bakken Shale formation in North Dakota and Montana, possibly later shale oil from Saskatchewan and Manitoba.
The Keystone EIS surprisingly contains a number of scenarios in British Columbia, even though BC is thousands of kilometres from the proposed TransCanada pipeline from the bitumen sands to the refineries on the US Gulf Coast.
The State Department report had to give President Barack Obama all possible options and that it why the EIS report included what it calls “no action alternatives” –what would happen to the bitumen and oil if Obama rejects the Keystone pipeline. Assuming that the oil, whether bitumen or Bakken oil shale has to get to the Gulf refineries by other means, the EIS takes a close look at one case, via CN rail to Prince Rupert, from Prince Rupert by tanker down to the expanded Panama Canal, then through the Panama Canal to the oil ports of Texas and Louisiana.
Another possibility, although less detailed in the EIS, also considers scenarios where bitumen from the Alberta oilsands or shale crude from the Bakken formation was shipped to Vancouver via the Kinder Morgan pipeline system, to Kitimat via the proposed Northern Gateway pipeline.
The State Department rejected the Kinder Morgan and Northern Gateway options for detailed analysis because of the controversy over both projects.
The Keystone EIS was released by the State Department on Friday, March 1, 2013, and is seen as generally favouring TransCanada’s Keystone XL pipeline project. Despite the EIS report conclusions that the Keystone project would have little adverse impact, the final decision by President Obama will be largely political.
The Prince Rupert scenario
The State Department “Supplementary Enviromental Impact Statement” on the Prince Rupert and several other scenarios were undertaken
In developing alternative transport scenarios, efforts were made to focus on scenarios that would be practical (e.g., economically competitive), take advantage of existing infrastructure to the extent possible, used proven technologies, and are similar to transport options currently being utilized.
The State Department studied a scenario that would
Use of approximately 1,100 miles (1,770 kilometres) of existing rail lines from the proposed Lloydminster rail terminal complex to a new approximately 3,500-acre (1,400 hectare) rail terminal complex where the oil would be offloaded from the rail cars, with a short pipeline connection to the port at Prince Rupert.
That possible replacement for Keystone scenario calls for adding approximately 13 trains with 100 tanker car per day on the CN and Canadian Pacific rail lines between Lloydminster and Prince Rupert. (There is also a separate scenario for a rail route from Alberta to the US Gulf Coast. That scenario is not examined in this report)
That, of course, would be in addition to the already heavy rail traffic to Prince Rupert with grain and coal trains outbound and container trains inbound, as well as the VIA Skeena passenger train.
(David Black who is planning a possible refinery at Onion Flats, north of Kitimat, has said that if the Northern Gateway pipeline is stopped, the Kitimat refinery could be serviced by six trains per day, 120 cars in each direction.)
The railway to Prince Rupert is evaluated using the same criterion under US law that was used to evaluate the Keystone project, including affects on surface water, wetlands, the coast, wildlife, threatened and endangered species, fisheries, landuse, construction, green house gases and even sea level rise.
The EIS for Prince Rupert, however, dodges one of the key questions that is plaguing the Northern Gateway Joint Review panel. While it points out the possible dangers of an oil spill, the report does not go into any great detail,
The overall EIS view of the impact of a Prince Rupert project would likely bring protests from those who already oppose the Northern Gateway pipeline project.
the transport of the crude oil via tankers from Prince Rupert to the Gulf Coast area
refineries would not have any effects on geology, soils, groundwater, wetlands, vegetation, land use, socioeconomics, noise, or cultural resources, other than in the event of a spill.
The State Department scenario says there would be
one to two additional Suezmax tanker vessels per day (430 tankers per year) would travel between Prince Rupert and the Gulf Coast area refinery ports via the Panama Canal.
That, of course, could be in addition to any tankers from the Northern Gateway project, if it is approved, as well as tankers from the liquified natural gas projects at both Kitimat and Prince Rupert.
Expanded Panama Canal
The concept of the Suezmax tankers is critical to the west coast, even if none of the scenarios eventually happen.
The State Department report notes that the Panama Canal is now being expanded, and that beginning sometime in 2014, larger ships, including tankers, can go through the canal. The current size is Panamax (maximum size for the current Panama Canal) to Suezmax (the maximum size for the Suez Canal).
According to the State Department that means even if the even bigger Very Large Crude Carriers are not calling at west coast ports to take petroleum products to Asia, the Suezmax tankers might likely be calling in Vancouver at the terminal for the existing (and possibly expanded) Kinder Morgan pipeline.
Both Kinder Morgan and Port Metro Vancouver have said that the ships that call at the Kinder Morgan Westridge Terminal are Aframax tankers, and even they are not loaded to capacity, because of the relatively short draft in the Burnaby area of Vancouver harbour. Both Kinder Morgan and Port Metro Vancouver say that there are no current plans for larger tankers to call at Westridge.
Port Metro Vancouver diagram showing the tankers that are permitted and not allowed in Vancouver harbour. (Port Metro Vancouver)
So one question would be is the State Department report pure speculation or is there, perhaps, somewhere in the energy industry, a hope that one of Vancouver’s deeper draft ports could be the terminal for a pipeline?
Rails to Rupert
The Keystone EIS for the first time outlines the railway to Rupert senario, which has long been touted by some supporters as an alternative to the Northern Gateway project, but without the detailed analysis provided for Northern Gateway by both Enbridge and those opposed to the project. Although based largely on published documents and in some ways somewhat superficial (the State Department can’t find any cultural resources in Prince Rupert), the EIS largely parallels the concerns that are being debated by in Prince Rupert this month by the Northern Gateway Joint Review Panel.
So that’s why the EIS took a couple of looks at Kitimat, with two possibilities for replacing the Keystone XL with a Kitimat terminal.
• Rail to Vancouver or Kitimat, British Columbia and tanker to the Gulf Coast area refineries
• The proposed Nothern Gateway Pipeline project.
The study doesn’t just include various forms of diluted bitumen from the Alberta bitumen sands, but petroleum products from the Western Canadian Sedimentary Basin (WCSB) and crude oil from the Bakken shale shipped to the refineries on the US Gulf Coast which would be served by the Keystone XL pipeline if it was not approved.
The EIS examined the Northern Gateway project and rejected the Enbridge pipeline as a possibility for Alberta bitumen and crude because of the continuing controversy.
However, a reading of the report shows that there could be pressure in the future for a bitumen or crude export terminal at Kitimat that would be served by the existing CN rail line (even though the State Department report prefers Prince Rupert as the best choice as an alternative to Keystone).
Enbridge is proposing to construct the Northern Gateway pipeline, which would transport up to 525,000 bpd of crude oil 1,177 km from Bruderheim, Alberta, to the Port of Kitimat, British Columbia. The port would be improved with two dedicated ship berths and 14 storage tanks for crude oil and condensate. Enbridge intends for the pipeline to be operational around 2017. A regulatory application was submitted in 2010, which is undergoing an independent review process led by the Canadian National Energy Board and the Canadian Environmental Assessment Agency. The pipeline would traverse First Nation traditional lands and important salmon habitat. The project has been controversial and has encountered opposition from some
First Nation bands and other organizations. Opposition to the project remains strong as evidenced by media reports of the January 2013 public hearings in Vancouver on the permit application. It remains uncertain at this time if the project would receive permits and be constructed, and therefore the option of moving additional crude to Kitimat was eliminated from detailed analysis.
The report goes on to say that Enbridge is moving the target for the Northern Gateway due the controversy and the longer than expected Joint Review Panel hearings
Enbridge is now stating in investor presentations that the Northern Gateway pipeline
(525,000 bpd expandable to 800,000 bpd) may be operational by “2017+”
However the State Department report does seriously consider transportation of WCSB crude by rail to Vancouver, Kitimat and Prince Rupert. The report takes an in-depth look at the railway to Prince Rupert option.
One reason is that even if it is transported by rail, the market in Asia is still more attractive to the energy industry than using Kitimat or Prince Rupert as a possible terminal for export to the US Gulf.
The transportation costs of shipping to Asia via the Canadian or U.S. West Coasts
would be significantly cheaper than trying to export it via the U.S. Gulf Coast.
The total per barrel cost of export to Asia via pipeline to the Canadian West Coast and onward on a tanker is less than just the estimated pipeline tariff to the U.S. Gulf Coast for the proposed Project, and is less than half the cost of the Gulf Coast route to Asia. If pipelines to the Canadian West coast are not expanded or approved, even incurring the additional cost of rail transport to the West Coast ports (Vancouver, Kitimat, or Prince Rupert), estimated at $6 per barrel, results in a total transport cost to Asia that is still 40 percent cheaper than going via the Gulf Coast Absent a complete block on crude oil exports from the Canadian West Coast, there would be little economic incentive to use the proposed project as a pass through. The high costs of onward transport to other potential destinations tend to mitigate against WCSB heavy/oil sands crudes being exported in volume from the Gulf Coast.
The EnSys 2011 study found that the rail systems of the United States and Canada were not at that time running at capacity, that there is significant scope to expand capacity on existing tracks through such measures as advanced signaling, and that adequate cross-border Canada/U.S. capacity exists to accommodate growth in rail traffic that would be associated with movements at the level of 100,000 bpd cross-border increase per year or appreciably higher. In addition, rail lines exist to ports on the British Columbia coasts (notably Prince Rupert, Kitimat, and Vancouver), which could be used for export of Western Canadian crudes.
And later in the report:
both of these proposed pipeline projects to Canada’s West Coast face significant
resistance and uncertainty, but there are strong cost advantages when compared with moving WCSB crude to the Gulf Coast even if rail were used to access the Canadian West Coast In fact, using rail and tanker to ship crude oil from the WCSB via the West Coast to China is comparable to the pipeline rate to reach the U.S. Gulf Coast. An increase in the transport costs to the Gulf Coast (utilizing alternative transport options such as rail) would have a tendency to increase the
economic incentive to utilize any West Coast export options, if they are available.
The report also notes the change in Canadian laws in the omnibus bills pushed through by Stephen Harper’s Conservative government:
Also not examined above, are more speculative political impacts that might occur as a result of a decision on the permit application for the proposed Project. In 2012, the Canadian government enacted new laws changing the way some major infrastructure projects, such as pipelines, are reviewed. Among the changes made were limits on the amount of time for such reviews. A declared intent was to promote alternative routes for the export of WCSB crude oils, especially
ones that would reduce reliance on the United States as, essentially, the sole market option.
In other words, even if Northern Gateway is stopped, there could be considerable pressure to export bitumen and crude oil from Alberta not only through Prince Rupert, the site preferred by the State Department EIS, but though Kitimat as well.
That might just open the door for David Black’s proposed $16 billion refinery at Onion Flats near Kitimat. As noted elsewhere on the site Black has possible investors for construction of a new oil refinery approximately 25 kilometers to the north of Kitimat BC on a 3,000 hectare site.
Black’s Kitimat Clean website says the refinery would process 550,000 barrels per day (87,445 cubic meters per day) of diluted bitumen from the oilsands region of Alberta delivered to the site by pipeline or by rail. The diluent will be extracted at the refinery and returned to Alberta if needed there. If not, it would be processed into gasoline. The bitumen will be converted into fuel products, primarily for export.
Black’s plans call for connecting the Northern Gateway bitumen Pipeline to the site. From the refinery six dedicated product pipelines will run to a marine terminal on the Douglas Channel. The Douglas Channel is a wide and deep fjord. VLCC (Very Large Crude Carrier) tankers will transport the refined fuels to markets around the Pacific Rim.
If the Northern Gateway is stopped, Black’s plans call for 12 additional 120 car trains running through every day. (Six in each direction) Northwest Coast Energy News Special report links
