Tag: Northern Gateway

New Joint Review Panel possible for Coastal GasLink pipeline project to Kitimat

The federal Environment Assessment Agency is asking northwestern British Columbia to comment on whether or not a federal assessment is needed for the TransCanada Coastal GasLink pipeline project that would feed natural gas to the proposed Shell facility in Kitimat.

In a news release from Ottawa, the CEAA said:

As part of the strengthened and modernized Canadian Environmental Assessment Act, 2012 (CEAA 2012) put in place to support the government’s responsible resource development initiative, the Canadian Environmental Assessment Agency must determine whether a federal environmental assessment is required pursuant to the CEAA 2012 for the proposed Coastal GasLink Pipeline Project in British Columbia (B.C.). To assist it in making its decision, the Agency is seeking comments from the public on the project and its potential effects on the environment.

Coastal GasLink Pipeline Ltd. is proposing the construction and operation of an approximately 650-km pipeline to deliver natural gas from the area near the community of Groundbirch, B.C. (40 km west of Dawson Creek) to a proposed liquefied natural gas facility near Kitimat, B.C. The project will initially have the capacity to flow approximately 1.7 billion cubic feet of natural gas per day and could deliver up to approximately 5.0 billion cubic feet per day of natural gas after further expansion.

Written comments must be submitted by December 3, 2012.

Like the current Enbridge Northern Gateway project Joint Review Panel and the National Energy Board hearings in June 2011 on the Kitimat LNG project all comments received will be considered public.

The CEAA says after it has received the comments whether or not there should be an assessmet, it will post a decision on its website stating whether a federal environmental assessment is required.

The CEAA goes on to say:

If it is determined that a federal environmental assessment is required, the public will have three more opportunities to comment on this project, consistent with the transparency and public engagement elements of CEAA 2012.

Projects subject to CEAA 2012 are assessed using a science-based approach. If the project is permitted to proceed to the next phase, it will continue to be subject to Canada’s strong environmental laws, rigorous enforcement and follow-up, and increased fines.

If there is a federal assessment, the most likely course would be to create a new Joint Review Panel. However, this will not be a JRP with the National Energy Board, because the Coastal GasLink project does not cross a provincial boundary, thus it would not make it subject to scrutiny by the NEB.

Instead, if current practice is followed (and that is uncertain given the evolving role of the Harper government in environmental decisions) the new JRP would be in partnership with the British Columbia Oil and Gas Commission, which has jurisdiction over energy projects that are entirely within the province of BC.

However. Shell will have to apply to the NEB for an export licence for the natural gas as both the KM LNG and BC LNG projects did last year. That could result in parallel hearings, one for the export licence, and a second on the environmental issues, which, of course, is the direct opposite of what the Harper government intended when it said it would speed up the reviews with its “one project, one review” policy.

 

Confusion at Alberta Jackpine JRP

At present, there is a  CAEE-Alberta Energy Resources Conservation Board Joint Review Process underway in northern Alberta for the controversial Shell Canada Jackpine project.  Shell has proposed expanding the Jackpine Mine about 70 kilometres north of Fort McMurray on the east side of the Athabasca River. The expansion project would increase bitumen production by 100,000 barrels per day, bringing production at the mine to 300,000 barrels per day.

The Jackpine Joint Review Panel is the first to held under the new rules from Bill C-38 that limit environmental assessment.

The lead up to the Alberta Jackpine Joint Review Panel hearings was mired in confusion, partly because of the restrictions imposed by the Harper government in Bill C-38 which limited the scope of environmental assessments.

The local Athabasca Chipewyan First Nation is opposed to the project and, in October, argued that it should be allowed to issue a legal challenge against Shell’s proposed expansion of the Jackpine project.

According to initial media reports in The Financial Post, the Joint Review Panel excluded First Nations further downstream from the Jackpine project ruling and individual members of the Athabasca Chipewyan First Nation that they were not “interested parties.” The Post cited rules on who can participate were tightened up when the Harper government changed the criterion for environmental assessment under Bill C-38. The Financial Post reported a French-owned oil company was permitted to participate.

On October 26, the Jackpine JRP ruled that it did not have the jurisdiction to consider questions of constitutional law, but told the Athabasca Chipewyan First Nation and the Alberta Metis that it would “consider the evidence and argument relating to the potential effects of the project brought forward by Aboriginal groups and individuals during the course of the hearing.”

A few days after the Financial Post report, Gary Perkins, counsel for the Jackpine Joint Review Panel released a letter to participants including Bill Erasmus, Dene National chief and Assembly of First Nations regional chief, who said he was denied standing. There appears to have been confusion over how people could register as intervenors for the Jackpine hearings, since according to the Perkins letter they apparently did so on a company website that no relation to the Jackpine JRP. Perkins also attempted to clarify its constitutional role with First Nations, saying it did not have jurisdiction to decide whether or not the Crown was consulting properly. (PDF copy below)

The Perkins letter also said that the Fort McKay First Nation, Fort McMurray First Nation #468, the Athabasca Cree First Nation, Fort McKay Metis Community Association and the Metis Association of Alberta Region 1 plus some individual members of First Nations are allowed to participate in the hearings.

Controversy continued as the hearings opened, as reported in Fort McMurray Today, that there was poor consultation between Shell and the local First Nations and Metis communities.

On November 8, ACFN spokesperson Eriel Deranger and Athabasca Chipewyan Chief Allan Adam said the project was a threat to the traditional life of Alberta First Nations: “Our land … have shrunk and continue to shrink because of the development,” Adam told the newspaper.

Hot potato for the District of Kitimat

The arcane rules of the Northern Gateway Joint Review Panel has caused months of confusion and frustration for many of those who participated, whether they from the BC provincial Department of Justice or other government participants, intervenors or those making ten minute comments.

Although most people in northwestern British Columbia support the liquified natural gas projects, the prospect of a new Joint Review Panel could likely quickly become controversial in this region. A Coastal GasLink JRP will be the first real test of the restrictions on environmental review imposed on Canada by the Harper government. Environmental groups, especially the few groups that oppose any pipeline projects, will be wary of precedents and likely to test the limits from Bill C-38. Both environmental groups and First Nations will be on alert for any limitations on who can participate in a review. First Nations, even if they support the LNG projects, as most do, will be wary of any attempt by the federal government to limit consultation, rights and title.

A Coastal Gaslink JRP will be a big hot potato for District of Kitimat Council, which has taken a controversial strictly neutral position on the Enbridge Northern Gateway pipeline project until after that Joint Review Panel reports sometime in 2014. Can the District Council now take a positive position on a natural gas pipeline, which from all appearances council supports, long before a Coastal GasLink JRP report (if there is a panel) without facing charges of hypocrisy?

The northwest is in for interesting times.

Canadian Environmental Assessment Page for Coastal GasLink Project

CEAA Coastal GasLink project description  (pdf)

Letter about participation in the Jackpine JRP

 

TransCanada plans rugged over-mountain route for gas pipeline to Kitimat

 

Coastal GasLink map
A map from TransCanada’s Coastal GasLink showing the conceptual route of the proposed natural gas pipeline from the shale gas fields in northeastern BC through the mountains to Kitimat and the proposed Shell LNG facility. (TransCanada)

TransCanada plans a rugged over-mountain route for its proposed Coastal Gaslink pipeline to the Shell Canada liquified natural gas project in Kitimat, BC, company officials said Monday, Oct. 15, 2012, in two presentations, one to District of Kitimat Council and a second at a community town hall briefing.

The pipeline would initially carry 1.7 billion cubic feet of natural gas per day from the Montney Formation region of northeastern British Columbia along a 48 inch (1.2 metre) diameter pipe over 700 kilometres from Groundbirch, near Dawson Creek, to Kitimat, site of the proposed Shell Canada LNG Canada project.

Rick Gateman, President of Coastal GasLink Project, a wholly owned TransCanada subsidiary told council that the project is now at a “conceptual route” stage because TransCanada can’t proceed to actual planning until it has done more detailed survey work and community consultations.

At the same council meeting, documents from Shell Canada notified the District that it has formally applied to the National Energy Board for an export licence for the natural gas.

Rick Gateman
Rick Gateman, president of TransCanada’s Coastal GasLink addresses District of Kitimat Council, Oct. 15, 2012. (Robin Rowland)

Gateman told council that since the pipeline itself will be completely within the province of British Columbia, it comes under the jurisdiction of the British Columbia Environmental Assessment process and the BC Oil and Gas Commission and that the NEB will not be involved in approving the pipeline itself.

At first, the Coastal Gas Link pipeline would be connected to the existing Nova Gas Transmission system now used (and being expanded) in northeastern British Columbia.

From Vanderhoof, BC to west of Burns Lake, the Coastal GasLink pipeline would be somewhat adjacent to existing pipelines and the route of the proposed Enbridge Northern Gateway bitumen pipeline and the proposed Pacific Trails natural gas pipeline.

Somewhat south of Houston, however, the pipeline takes a different route from the either the Northern Gateway or Pacific Trails Pipeline, going southwest, avoiding the controversial Mount Nimbus route.

Howard Backus, an engineering manager with TransCanada told council that the route changes so that Coastal GasLink can avoid “congestion” in the rugged mountain region.

Backus said that the Pacific Trails Pipeline for Apache and its partners in the Kitimat LNG project “is skirting” Nimbus while Enbridge plans to tunnel through the mountain. That tunnel is one of the most controversial aspects to the Northern Gateway project. The local environmental group Douglas Channel Watch has repeatedly warned of the dangers of avalanche and geological instability in the area where the Northern Gateway pipeline emerges from the tunnel. Enbridge has challenged Douglas Channel Watch’s conclusions in papers filed with the Northern Gateway Joint Review panel.

Under TransCanada’s conceptual route, the pipeline heads southwest and then climbs into the mountains, crossing what Backus calls “a saddle” (not a pass) near the headwaters of the Kitimat River. The pipeline then comes down paralleling Hircsh Creek, emerging close to town, crossing the Kitimat River and terminating at the old Methanex plant where Shell plans its liquified natural gas plant. (That means that if the conceptual plans go ahead, the TransCanada pipeline would climb into the mountains, while Pacific Trails finds a way around and Enbridge tunnels).

Backus told council that going north “created more issues,” but did not elaborate.

Backus assured people at the town hall that energy companies have a lot of experience in building pipelines in mountainous areas, including the Andes in South America.

Asked by a local businessman at the town hall if it was possible to build a road along the route of the pipeline, Backus said the mountain areas would be too steep.  Any pipeline maintenance would have to be done by tracked vehicle, he said.

Gateman told council that the pipeline would be buried along its entire route. If Shell increases the capacity of its LNG facility in Kitimat, the Coastal Gaslink pipeline could increase to 3.4 billion cubic feet a day or perhaps even more. For the initial capacity, the company will have one compressor station at the eastern end of the line. If capacity increases or if the route requires it, there could be as many as five additional compressor stations. (TransCanada’s long term planning is based on the idea that Shell will soon be adding natural gas from the rich Horn River Formation also in northeastern BC to the Kitimat export terminal.)

TransCanada will begin its field work, including route and environmental planning and “community engagement” in 2013 and file for regulatory approval in 2014. Once the project is approved, construction would begin in 2015.

Gateman said that TransCanada is consulting landowners along the proposed right of way and “on a wide area on either side.” The company also is consulting 30 First Nations along the proposed route. Gateman told council, “We probably have the most experience of any number of companies in working directly with and engaging directly with First Nations because of our pipelines across Canada.”

(Despite Gateman’s statement, the TransCanada maps showed that the Coastal Gaslink Pipeline would cross Wet’suwet’en traditional territory and officials seemed to be unaware of the ongoing problems between Apache and the Pacific Trails Pipeline and some Wet’suwet’en Houses who oppose that pipeline).

Gateman told council that the pipeline would be designed to last at least 60 years. He said that in the final test stages, the pipeline would be pressured “beyond capacity” using water rather than natural gas to try and find if any leaks developed during construction.

He said that the company would restore land disrupted by the construction of the pipeline, but noted that it would only restore “low-level vegetation.” Trees are not permitted too close to the pipeline for safety reasons.

TransCanada made the usual promises the region has heard from other companies of jobs, opportunities for local business and wide consultations. (TransCanada may have learned lessons from the botched public relations by the Enbridge Northern Gateway. A number of Kitimat residents have told Northwest Coast Energy News that TransCanada was polling in the region in mid-summer, with callers asking many specific questions about environment and the spinoffs for communities).

Councillor Phil Germuth questioned Gateman about the differences between a natural gas pipeline and a petroleum pipeline. Gateman replied that the pipelines are pretty much the same with the exception that a natural gas pipeline uses compressor stations while a petroleum pipeline uses pumping stations. Gateman did note that the original part of the controversial Keystone XL pipeline that would carry bitumen through Alberta and US mountain states to Texas was a natural gas pipeline converted to carry the heavier hydrocarbons.

Although the natural gas projects have, so far, enjoyed wide support in northwestern British Columbia, environmental groups and First Nations have raised fears that sometime in the future, especially if there is overcapacity in natural gas lines, that some may converted to bitumen, whether or not Northern Gateway is approved and actually goes ahead.

Shell application to NEB

In a fax to District of Kitimat council, Shell Canada Senior Regulatory Specialist Scot MacKillop said that the Shell had applied to the National Energy Board on September 25, 2012 for a licence to export LNG via Kitimat for the next 25 years.

The Shell proposal, like the previous Kitimat LNG and BC LNG proposals, are export applications, unlike the Enbridge Northern Gateway which is a “facility application.”
In its letter to Shell’s lawyers, the NEB took pains to head off any objections to the project on environmental or other grounds by saying:

the Board will assess whether the LNG proposed to exported does not exceed the surplus reaming after due allowance has been made for the reasonably foreseeable requirements for use in Canada. The Board cannot consider comments that are unrelated…such as those relating to potential environmental effects of the proposed exportation and any social effects that would be directly related to those environmental effects.

New US pipeline safety report finds more problems with Enbridge, problems also found in other big pipeline companies

Leak detection report coverA new draft report for the U.S. Congress from the United States Pipeline and Hazardous Materials Safety Administration takes new aim at Enbridge for failures in its pipeline leak detection and response system.

Not that the PHMSA is singling out Enbridge, the report is highly critical of leak detection systems on all petroleum and natural gas pipeline companies, saying as far as the United States is concerned, the current pipeline standards are inadequate.

The release of the “Leak Detection Report” written by Kiefner & Associates, Inc (KAI) a consulting firm based in Worthington, Ohio, comes at a critical time, just as Enbridge was defending how it detects pipeline leaks before the Joint Review Panel questioning hearings in Prince George, where today Enbridge executives were under cross-examination by lawyers for the province of British Columbia on how the leak detection system works.

In testimony on Wednesday, October 12, Enbridge engineers told the Joint Review Panel that the company’s pipelines are world-class and have a many prevention and detection systems.

Northern Gateway president John Carruthers testifed there is no way to eliminate all the risks but the company was looking for the best way of balancing benefits against the risk.

However, the KAI report points out that so far, all pipeline company cost-benefit analysis is limited by a short term, one to five year point of view, rather than looking at the entire lifecycle of a pipeline.

Two Enbridge spills, one the well-known case in Marshall Michigan which saw bitumen go into the Kalamazoo River and a second in North Dakota, both in 2010, are at the top of the list in the study for PHMSA by the consulting firm.

On the Marshall, Michigan spill the KAI report goes over and adds to many of the criticisms of Enbridge in the National Transportation Safety Report in July which termed the company’s response like the “Keystone Kops.”

The second spill, in Neche, North Dakota, which, unlike the Marshall spill, has had little attention from the media, is perhaps equally damning, because while Enbridge’s detection systems worked in that case–the KAI report calls it a “text book shutdown”– there was still a spill of 158,928 gallons (601,607 litres) of crude oil, the sixth largest hazardous liquid release reported in the United States [between 2010 and 2012] because Enbridge “did not plan adequately for containment.”

(The KAI report also examines problems with natural gas pipelines, including one by TransCanada Northern Border line at Campbell, Wyoming in February 2011. Northwest Coast Energy News will report on the natural gas aspects of the report in a future posting.)

The highly technical, 270-page draft report was released on September 28, as Enbridge was still under heavy criticism from the US National Transportation Safety Board report on the Marshall, Michigan spill and was facing penalties from the PHMSA for both the Marshall spill and a second in Ohio.

Looking at overall pipeline problem detection, KAI says the two standard industry pipeline Leak Detection Systems or LDS didn’t work very well. Between 2010 and 2012, the report found that Computational Pipeline Monitoring or CPMs caught just 20 per cent of leaks. Another system, Supervisory Control and Data Acquisition or SCADAs caught 28 per cent.
Even within those acronym systems, the KAI report says major problem is a lack of industry standards. Different companies use different detector and computer systems, control room procedures and pipeline management.

The report also concludes that the pipeline industry as a whole depends far too much on internal detectors, both for economic reasons and because that’s what the industry has always done. External detectors, the report says, have a better track record in alerting companies to spills.

A significant number of spills are also first reported by the public or first responders, rather than through the pipeline company system and as KAI says of Enbridge, “Operators should not rely on the public to tell them a pipeline has ruptured.”

The consultants also say there are far too many false alarms in spill detection systems.

Although the KAI report concentrates on the United States, its report on Enbridge does raise serious questions about how the company could detect a pipeline breach or spill in the rugged northern British Columbia wilderness where the Northern Gateway Pipeline would be built, if approved by the federal government.

The report comes after the United States Congress passed The Pipeline Safety, Regulatory Certainty, and Job Creation Act, which was signed into law by President Barack Obama on January 3, 2012. The law called on a new leak detection study to be submitted to Congress that examines the technical limitations of current leak detection systems, including the ability of the systems to detect ruptures and small leaks that are ongoing or intermittent. The act also calls on the US Department of Transportation to find out what can be done to foster development of better technologies and economically feasible ways of detecting pipeline leaks. The final report must be submitted to Congress by January 3, 2013.

(The draft report does note in some ways, Canadian standards for detecting pipeline leaks are better than those in the United States. For example, Canada requires some pipeline testing every year, the United States every five years. It also finds European pipeline monitoring regulations also surpass those in the United States).

The spills studied in the report all found weaknesses in one or more of those three areas: people, company procedures and the technology. It appears that the industry agrees, at least in principle, with executives telling the consultants:

The main identified technology gaps – including those identified by operators – include: reduction or management of false alarms; applicable technical standards and certifications; and value / performance indicators that can be applied across technologies and pipelines.

The report echoes many of the findings of the US National Transportation Safety Board in its examination of the Enbridge Marshall, Michigan spill but it applies to all pipeline companies, noting:

Integration using procedures is optimal when it is recognized that alarms from the technology are rarely black-and-white or on/off situations. Rather, at a minimum, there is a sequence: leak occurrence; followed by first detection; followed by validation or confirmation of a leak; followed by the initiation of a shutdown sequence. The length of time that this sequence should take depends on the reliability of the first detection and the severity of the consequences of the release. Procedures are critical to define this sequence carefully – with regard to the technology used, the personnel involved and the consequences – and carefully trained Personnel are needed who understand the overall system, including technologies and procedures.

We note that there is perhaps an over-emphasis of technology in LDS. A recurring theme is that of false alarms. The implication is that an LDS is expected to perform as an elementary industrial automation alarm, with an on/off state and six-sigma reliability. Any alarm that does not correspond to an actual leak is, with this thinking, an indicator of a failure of the LDS system.

Instead, multiple technical studies confirm that far more thought is required in dealing with leak alarms. Most technologies infer the potential presence of a leak via a secondary physical effect, for example an abnormal pressure or a material imbalance. These can often be due to multiple other causes apart from a leak.

The report takes a critical look at the culture of all pipeline companies which divides problems into leaks, ruptures and small seeps. Under both pipeline practice and the the way problems are reported to the PHMSA in the US a “rupture is a situation where the pipeline becomes inoperable.” While a rupture means that a greater volume of petroleum liquid or natural gas is released, and is a higher priority than a leak or seep, the use of language may mean that there is a lower priority given to those leaks and seeps than the crisis created by a rupture.

(Environmental groups in British Columbia have voiced concerns about the cumulative affect of small seeps from the Enbridge Northern Gateway that would be undetectable under heavy snow pack either by an internal system or by external observation)

Overall, the report finds serious flaws to the way pipeline companies are conducting leak detection systems at the moment, including:

  • Precisely the same technology, applied to two different pipelines, can have very different results.
  • Leak Detection Systems do not have performance measures that can be used universally across all pipelines. Compounding the problem are different computer systems where software, program configuration and parameter selection all contribute, in unpredictable ways, to overall performance.
  • Many performance measures present conflicting objectives. For example, leak detection systems that are highly sensitive to small amounts of lost hydrocarbons are also prone to generating more false alarms.
  • The performance of a leak detection system depends critically on the quality of the engineering design, care with installation, continuing maintenance and periodic testing.
  • Even though an internal technology may rely upon simple, basic principles, it is in fact, complex system that requires robust metering, robust SCADA and telecommunications, and a robust computer to perform the calculations. Each of these subsystems is individually complex.
  • Near the inlet and the outlet of the pipeline a leak leads to little or no change in pressure. Flow rates and pressures near any form of pumping or compression will generally be insensitive to a downstream leak
  • Differences in any one of these factors can have a dramatic impact on the ultimate value of a leak detection system.

The report goes on to  say:

There is no technical reason why several different leak detection methods can not be implemented at the same time. In fact, a basic engineering robustness principle calls for at least two methods that rely on entirely separate physical principles.

The report strongly recommends that pipeline companies take a closer look at external leak detection systems. Even though the US Environmental Protection Agency began recommending the use of external detection as far back as 1988, the companies have resisted due to the cost of retrofitting the legacy pipeline network. (Of course if the pipeline companies had started retrofitting with external detectors in 1988 they would be now 24 years into the process).

KAI says:

  • External leak detection is both very simple – relying upon routinely installed external sensors that rely upon at most seven physical principles – and also confusing, since there is a wide range of packaging, installation options, and operational choices to be considered.
  • External leak detection sensors depend critically on the engineering design of their deployment and their installation.
  • External sensors have the potential to deliver sensitivity and time to detection far ahead of any internal system.
  • Most technologies can be retrofitted to existing pipelines. In general, the resistance to adopting external technologies is, nevertheless, that fieldwork on a legacy pipeline is relatively expensive.
  • The report goes on to identify major bureaucratic roadblocks within pipeline companies. Like many other big corporations, walls exist that prevent the system from working well
  • A particular organizational difficulty with leak detection is identifying who “owns” the leak detection system on a pipeline. A technical manager or engineer in charge is typically appointed, but is rarely empowered with global budgetary, manpower or strategic responsibilities. Actual ownership of this business area falls variously to metering, instrumentation and control, or IT.

The report calls for better internal standards at pipeline companies since with leak detection “one size does not necessarily fit all”.

It also notes that “flow metering is usually a central part of most internal leak detection systems,” but adds “flow meter calibration is by far the most laborious part of an internal system’s maintenance.

Also, the central computer and software technology usually has maintenance requirements far greater than most industrial automation and need special attention.”

While a company may do a cost benefit analysis of its leak detection system and risk reduction system it will generally emphasize the costs of the performance and engineering design of the leak detection system, the companies usually place less emphasis on the benefits of a robust system, especially the long term benefits.

At present the pipeline companies look at the benefit of leak detection as a reduction in risk exposure, or asset liability, “a hard, economic definition… understood by investors.” But the report adds that leak detection systems have a very long lifetime and over that life cycle, the cost-benefit approaches the reduction in asset liability caused by the system, when divided by annual operational costs. However, since pipeline companies budget on a one to five year system the long term benefit of robust, and possibly expensive spill detection is not immediately apparent.

Enbridge

The consultants studied 11 US oil spills, the top two with the greatest volume were from Enbridge pipelines. The others were from TE Products Pipeline, Dixie Pipeline, Sunoco, ExxonMobil, Shell, Amoco, Enterprise Products, Chevron and Magellan Pipeline. Not all US spills were used in the KAI report, the 11 were chosen for availability of data and documentation.

The largest spill in the KAI study was the pipeline rupture in Michigan at 843,444 gallon (3,158,714 litres) which has been the subject of continuing media, investigative and regulatory scrutiny. The second spill in North Dakota, has up to now received very little attention from the media. That will likely change once the US Congress gets the final report. Even though the Neche, North Dakota spill, has been described as “text book case” of a pipeline shutdown, there was still a large volume of oil released.

Marshall, Michigan spill

On the Marshall, Michigan spill that sent bitumen into the Kalamazoo River the report first goes over the facts of the 843,444 gallon spill and the subsequent release of a highly critical report from the US National Transportation Safety Board. It then looks at the failures of Enbridge’s detection system from the point of view mandated for the report to Congress:

The pipeline was shutting down when the ruptured occurred. Documentation indicates that a SCADA alarm did sound coincident with the most likely time of the rupture. It was dismissed. The line was shut down for around 10 hrs and crude oil would have drained from the line during this time.

On pipeline start up, alarms in the control room for the ruptured pipeline sounded. They were dismissed. This was repeated two more times. The pipeline was shut down when the control room was notified of the discharge of the crude oil by a member of the public. The time to shut down the pipeline is not relevant here because of the 17 hours that elapsed after the rupture occurred.

The review identified issues at Enbridge relevant to this Leak Detection Study:

1. Instrumentation on a pipeline that informs a controller what is happening to the pipeline must be definitive in all situations.
2. However, the instrumentation did provide warnings which went unheeded by controllers.
3. Instrumentation could be used to prevent a pump start up.
4. Operators should not rely on the public to tell them when a pipeline has ruptured.
5. Pipeline controllers need to be fully conversant with instrumentation response to different operations performed on the pipeline.
6. If alarms can be cancelled there is something wrong with the instrumentation feedback loop to the controller. This is akin to the low fuel warning on a car being turned off and ignored. The pipeline controller is part of an LDS and failure by a controller means the LDS has failed even if the instrumentation is providing correct alarms.
7. If the first SCADA alarm had been investigated, up to 10 hours of pipeline drainage to the environment might have been avoided. If the second alarm had been investigated, up to 7 hours of pumping oil at almost full capacity into the environment might have been avoided.
8. CPM systems are often either ignored or run at much higher tolerances during pipeline start ups and shutdowns, so it is probable that the CPM was inoperative or unreliable. SCADA alarms, on the other hand, should apply under most operating conditions.

Neche, North Dakota spill

At approximately 11:37 pm. local time, on January 8, 2010, a rupture occurred on Enbridge’s Line 2, resulting in the release of approximately 3000 barrels or 158,928 gallons of crude oil approximately 1.5 miles northeast of the town of Neche, North Dakota, creating the sixth largest spill in the US during the study period.

As the report notes, in this case, Enbridge’s detection system worked:

At 11:38 pm., a low-suction alarm initiated an emergency station cascade shutdown. At 11:40 pm., the Gretna station valve began closing. At 11:44 pm., the Gretna station was isolated. At 11:49 pm., Line 2 was fully isolated from the Gretna to Donaldson pump stations.

Documentation indicates a rapid shut down on a low suction alarm by the pipeline controller. From rupture to shut down is recorded as taking 4 minutes. The length of pipeline isolated by upstream and downstream remotely controlled valves was 220,862 feet. The inventory for this length of line of 26-inch diameter is 799,497 gallons. The release amount was around 20 per cent of the isolated inventory when the pipeline was shut down.

The orientation of the 50-inch long rupture in the pipe seam is not known. The terrain and elevation of the pipeline is not known. The operator took around 2 hours and 40 minutes to arrive on site. It is surmised that the rupture orientation and local terrain along with the very quick reactions by the pipeline controller may have contributed to the loss of around 20 per cent of the isolated inventory.

The controller was alerted by the SCADA. Although a CPM system was functional the time of the incident it did not play a part in detecting the release event. It did provide confirmation.

But the KAI review identified a number of issues, including the fact in item (7) Enbridge did not plan for for containment and that containment systems were “under-designed.”

1. This release is documented as a text book shut down of a pipeline based on a SCADA alarm.
2. The LDS did not play a part in alerting the pipeline controller according to
documentation. However, leak detection using Flow/Pressure Monitoring via SCADA
worked well.
3. Although a textbook shut down in 4 minutes is recorded, a large release volume still occurred.
4. The release volume of 158,928 gallons of crude oil is the sixth largest hazardous liquid release reported between January 1, 2010 and July 7, 2012.
5. The length of pipeline between upstream and downstream isolation valves is long at 41.8 miles.
6. If not already performed, the operator should review potential release volumes based on ruptures taking place at different locations on the isolated section.
7. The success of a leak detection system includes planning for the entire process: detection through shutdown through containment. In this case, the operator did not plan adequately for containment so that although the SCADA leak detection technology, the controller and the procedures worked well, the containment systems (isolation valves) were under-designed and placed to allow a very large spill.”

 

 

 KAI Draft report on Leak Detection Systems at the Pipeline and Hazardous Materials Safety Administration website

 

A lesson for BC: Michigan 911 system failed during the Kalamazoo spill, NTSB says

The 911 system failed during the 2010 Marshall, Michigan, Enbridge pipeline breach, according to the full report in the incident released by the US National Transportation Safety Board.

The NTSB report says the 911 operators in Michigan dismissed eight calls reporting gas or petroleum odours over a period of 14 hours between the initial report of a bad odour and the actual discovery of diluted bitumen polluting Talmadge Creek.

The report also says the local firefighters were unfamiliar at that point with potential problems from a bitumen pipeline as opposed to a leak of a consumer natural gas pipeline.

Although the NTSB report puts most of the onus on an inadequate Enbridge “Public Awareness Program” (PAP) which failed to familiarize first responders to potential problems, the report raises questions whether British Columbia, especially the north, is properly prepared for all the energy development that is occurring. Whether or not the Enbridge Northern Gateway project proceeds, there are three active and possibly as many as three or four planned liquified natural gas projects for the northwest, ongoing exploration and production in the northeast and the proposed Kinder Morgan expansion in the lower mainland.

The NTSB says that Sunday, July 25, 2010, at 5:58 pm. EDT, a segment of a 30 inch (7.62 cm) diameter pipeline (Line 6B) operated by Enbridge ruptured in a wetland in Marshall, Michigan. The rupture occurred during the last stages of a pipeline shutdown planned by Enbridge. The leak was not discovered or addressed for over 17 hours, largely due to problems in the Enbridge control room in Edmonton.

During the time lapse, the NTSB says, Enbridge twice pumped additional oil (81 percent of the total release) into Line 6B during two pipeline start ups; the total release was estimated to be 843,444 gallons or 3.192 million litres of crude oil. The oil saturated the surrounding wetlands and flowed into the Talmadge Creek and the Kalamazoo River.

According to the NTSB time line, at 8:56 pm., Michigan Gas Utilities dispatched a senior service technician after residents reported a natural gas odour. At 9:25 pm. on July 25, a local resident called the Calhoun County 911 dispatch:

I was just at the airport in Marshall and drove south on Old 27 [17 Mile Road]
and drove back north again and there’s a very, very, very strong odour, either
natural gas or maybe crude oil or something, and because the wind’s coming out
of the north, you can smell it all the way up to the tanks, right across from where
the airport’s at, and then you can’t smell it anymore.

By 9:32 pm., the Marshall City Fire Department had been dispatched in response to the 9:25 pm. call to 911. The 911 dispatcher told the responders there was a report of a bad smell of natural gas near the airport. The responding firefighters were also dispatched. The firefighters checked pipelines and industrial building near the airport. “using a combustible gas indicator” to try to locate the origin of the odour, but did not detect anything.

NTSB map of first responders at Kalamazoo spill
A map from the NTSB report showing where the fire department responded to the reports of a gas smell at Marshall, MIchigan, and the location of the actual pipeline break. (NTSB)

The NTSB says the service technician from Michigan Gas Utilities “crossed paths with some of the fire department personnel” but found no evidence of a gas leak.

The fire department personnel departed the scene at 10:54 pm. to return to the station.

The NTSB report says: “ a combustible gas indicator measures percentage of the lower explosive limit, it likely would not detect the oil unless it was very close to the source.”

At 11:33 pm, the area’s 911 system received the first of the seven additional calls when an employee at a business called to report a natural gas odour.

The 911 dispatcher told the caller that the fire department had already responded
to calls in the area, and no more personnel were dispatched.

A map of the incident response by the NTSB shows that the area near the airport where the firefighters responded was actually some distance from the pipeline rupture.

Over the next 14 hours, the NTSB says, 911 received seven more calls reporting strong natural gas or petroleum odours in the same vicinity. “The 911 dispatcher repeatedly informed the callers that the fire department had been dispatched to investigate the reported odours.”

Enbridge had been working on restarting the pipeline all night. In Edmonton, at 10:16 am, the Enbridge control room spoke to the regional manager based in Chicago to send someone to
walk along the pipeline, upstream and downstream of the Marshall pumping station.

According to the NTSB, the Chicago regional manager replied, “I wouldn’t think so. If it’s right at Marshall—you know, it seems like there’s something else going wrong either with the computer or with the instrumentation. …you lost column and things go haywire, right?” He went on to say, “…I’m not convinced. We haven’t had any phone calls. I mean it’s perfect weather out here—if it’s a rupture someone’s going to notice that, you know and smell it.” The Chicago regional manager told shift lead C1 that he was okay with the control centre starting Line 6B again.

At 11:17 am, a caller from a second gas utility, Consumers Energy, called the Enbridge emergency line telling the control room: “I work for Consumers Energy[30] and I’m in Marshall. There’s oil getting into the creek and I believe it’s from your pipeline. I mean there’s a lot. We’re getting like 20 gas leak calls and everything.”

At 11:18 am Enbridge closed the remote valves sealing off the rupture site within a 2.95-mile section. By 11:20 am., the shift lead had called the Chicago regional manager to tell him about the notification. By 11:37 am., another Consumers Energy employee notified 911 about the crude oil leak in a creek near Division Drive.

The Fredonia Township Fire Department was dispatched by the 911 centre shortly after the call. At 11:41 am., the Edmonton control centre received confirmation from an Enbridge crossing coordinator located at the Marshall pipeline maintenance shop confirming the oil on the ground.

The NTSB says:

The 911 operators repeatedly informed the callers that the fire department had been dispatched to investigate the issue, but the 911 operators did not contact the pipeline operator or advise the public of health and safety risks. The 911 operators never dispatched the fire department in response to the subsequent calls even though these calls occurred over several hours, indicating an ongoing problem. The actions of both the first responders and the 911 operators are consistent with a phenomenon known as confirmation bias,128 in which decision makers search for evidence consistent with their theories or decisions, while discounting contradictory evidence. Although there was evidence available to the first responders that something other than natural gas was causing noticeable odours in the Marshall area, they discounted that evidence, largely because it contradicted their own findings of no natural gas in the area. Similarly, the 911 operators, with the evidence from the first responders of no natural gas in the area, discounted subsequent calls regarding the strong odours in the Marshall area. Those calls were inconsistent with their own views that the problem causing the odours was either nonexistent or had been resolved.

The NTSB report then says:

Although Enbridge had provided training to emergency responders in the Marshall area in February 2010, the firefighters’ actions showed a lack of awareness of the nearby crude oil pipeline: they did not search along the Line 6B right-of-way, and they did not call Enbridge. The NTSB concludes that had the firefighters discovered the ruptured segment of Line 6B and called Enbridge, the two start ups of the pipeline might not have occurred and the additional volume might not have been pumped.

The NTSB reviewed Enbridge’s PAP, which was intended to inform the affected public,
emergency officials, and public officials about pipelines and facilitate their ability to recognize
and respond to a pipeline rupture.

The report says:

Although RP 1162 requires operators to communicate with audiences every 1 to 3 years, Enbridge mailed its public awareness materials to all audiences annually. However, even with more frequent mailings, this accident showed that emergency officials and the public lacked actionable knowledge.

The NTSB goes on to say:

Public knowledge of pipeline locations and the hazards associated with the materials
transported is critical for successful recognition and reporting of releases, as well as the safe response to pipeline ruptures. The transportation of hazardous materials by pipeline is unlike hazardous materials transportation by railroad or highway because a pipeline is a permanent fixture. A pipeline presents a unique challenge to awareness because it is often buried. When pipeline releases occur, a properly educated public can be the first to recognize and report the emergency.

A survey quoted by the NTSB says that of those who responded in the United States. only 23 percent of the affected public and 47 percent of emergency officials responded that they were “very well informed” about pipelines in their community.

The NTSB says Enbridge failed to properly conduct and monitor its public awareness program and management’s “review of its PAP was ineffective in identifying and correcting deficiencies. The NTSB further concludes that had Enbridge operated an effective PAP, local emergency response agencies would have been better prepared to respond to early indications of the rupture and may have been able to locate the crude oil and notify Enbridge before control centre staff tried to start the line.”

In May 2011, Enbridge revised its public awareness plan and created a public awareness
committee, but just months later, in July 2011, the US Pipeline and Hazardous Materials Safety Administration conducted an audit of Enbridge’s plans and identified several
deficiencies in the company’s program evaluation and effectiveness reviews and required that
Enbridge correct the deficiencies.

Overall, the report says:

Although Enbridge and PHMSA have taken these actions, the NTSB is concerned that
pipeline operators do not provide emergency officials with specific information about their pipeline systems. The brochures that Enbridge mailed did not identify its pipeline’s location. Instead, the brochures directed the audiences to pipeline markers and to PHMSA’s National Pipeline Mapping System. In the NTSB’s 2011 report of the natural gas transmission pipeline rupture and fire in San Bruno, California, the NTSB made the following safety recommendation to PHMSA:

Require operators of natural gas transmission and distribution pipelines and
hazardous liquid pipelines to provide system-specific information about their
pipeline systems to the emergency response agencies of the communities and
jurisdictions in which those pipelines are located. This information should include
pipe diameter, operating pressure, product transported, and potential impact
radius.

The report concludes:

The NTSB recommends that the International Association of Fire Chiefs  and the National Emergency Number Association  inform their members about the circumstances of the Marshall, Michigan, pipeline accident and urge their members to aggressively and diligently gather from pipeline operators system-specific information about the pipeline systems in their communities and jurisdictions.

In Canada, the National Energy Board, which is responsible for overseeing pipeline operations did inspect the Enbridge control room after the NTSB report.

The NEB, of course, has nothing to do with the 911 system.

RCMP North District
RCMP map showing the extent of British Columbia’s “North District.” (RCMP)

One question for northern British Columbia is how prepared is the 911 system to handle a major pipeline incident now or in the future. For police and fire, the RCMP communications system must cover all of “North District” from Prince George. (The RCMP did not return a phone call requesting information on 911 training and procedures)

For BC Ambulance the dispatch centre is in Kamloops.

Fire departments in northwest British Columbia, so far, have had minimal training in potential pipeline problems, like the fire department in Michigan, enough to detect and deal with consumer and local industrial natural gas systems. It’s clear that the province of British Columbia, if it is going to promote liquified natural gas as a foundation of a new provincial economy, it must plan and budget for a major upgrade to the 911 system, with a new police, fire and ambulance dispatch centre.

 

 

 

 

 

Geological Survey of Canada identifies tsunami hazard, possible fault line on Douglas Channel

Fault zone map Douglas Chanel
A map from the Geological Survey of Canada showing the line of a possible seismic fault on Douglas Channel (Geological Survey of Canada)

 

Updates with statement from Natural Resources Canada, new filings by Enbridge Northern Gateway and the Attorney General of Canada (in box below)

The Geological Survey of Canada has identified a tsunami hazard and a possible seismic fault in Douglas Channel near Kitimat. A scientific paper by the Geological Survey and the Department of Fisheries and Oceans says there were once two giant landslides on Douglas Channel that triggered major tsunamis and that the landslides were possibly caused by an earthquake on the fault line.

Kitimat is the proposed site of the Enbridge Northern Gateway project and at least three liquified natural gas projects.

If the projects go ahead, hundreds of supertankers with either bitumen or LNG will be sailing in the channel for years to come.

A filing by the Attorney General of Canada with the Northern Gateway Joint Review Panel is asking the JRP for leave to file late written evidence long after the original deadline of December 2011. The Attorney General’s motion was filed on August 17, but went unnoticed until the Kitimat environmental group Douglas Channel Watch brought the matter up with District of Kitimat Council tonight (Sept. 17).

Appended to the Attorney General’s motion is a copy of a scientific paper from the Geological Survey “Submarine slope failures and tsunami hazards in coast British Columbia: Douglas Channel and Kitimat Arm” by Kim W Conway, J.V. Barrie of the Geological Survey and Richard E. Thomson of the Department of Fisheries and Oceans.

The report says the scientists discovered “evidence of large submarine slope failures in southern Douglas Channel.”

It goes on to say: “The failures comprise blocks of bedrock and related materials that appear to have been detached directly from the near shore off Hawkesbury Island.” Hawkesbury Island and many of the other islands in Douglas Channel are built up with material left over from the ice age glaciers and thus are vulnerable to displacement and landslides.

The research identified two slides, one estimated at 32 million cubic metres and a second of 31 million cubic metres. The report goes on to say that the discovery of an “apparently active fault presents the possibility that they may have been triggered by ground motion or surface rupture of the fault during past earthquake events.”

The slope failure landslides are covered with thick layers of mud, and that, the scientists say, could mean that the failures could be ancient, possibly occurring 5.000 to 10,000 years ago. Further research is needed to confirm the date of the giant slides.

What is worrying about the discovery is that fact that there were two recent submarine slope failures on the Kitimat Arm of Douglas Channel. both creating tsunamis. The first slope failure occurred on October 17, 1974, triggering a 2.4 metre tsunami at low tide. Then on April 27, 1975 there was a second slope failure near low tide on the northeast slope of the Kitimat Arm that generated an 8.2 metre tsunami. The 1975 tsunami destroyed the Northland Navigation dock near Kitimat and damaged the Haisla First Nation docks at Kitamaat Village.

The paper says that “Additional geological research is required to better delineate the age of the submarine failures, their triggers, and their mechanisms of emplacement.”

Urgent new research is underway and the filing by the Attorney General says when the Department of Justice requested leave to file late evidence says it anticipates that the further research by DFO is expected to be completed by November 1. The Natural Resources Canada Earth Sciences Sector began a national assessment of submarine slope failures in Canada in late 2011 and completion of the Pacific portion of this assessment is targeted for December of 2012.

The Attorney General’s filing says that DFO is now modelling “potential wave heights and speeds that may have resulted from the two previously unrecognized submarine slope failures in the Douglas Channel.” The model will use high resolution scans of the Douglas Channel seafloor to create the models.

The survey of Douglas Channel in 2010 suggests the possible existence of a fault immediately to the south of the second ancient slide on Hawkesbury Island.

The GSC paper says that evidence for a continuous fault was observed by aligned stream beds and fractures on the south end of Hawkesbury Island, about four kilometers from the site of the second ancient slide. The possible fault then appears to terminate far to the south near Aristazabal Island on the Inside Passage. The Geological Survey says that eleven small earthquakes, all less than magnitude three, have appeared with 20 kilometres of the suspected fault over the past 25 years.

The paper says that the scientists conclude that the slides appear to have left very steep slopes at or near the shoreline that could be susceptible to future failure events.

A large potential slope failure has been identified near one of the ancient slides….

in the absence of additional evidence, the fault must be considered a potential trigger for the submarine failure events….the triggers for the failures have not been defined; however, their proximity to a potentially active fault represents one potential source. The failures probably generated tsunamis during emplacement and conditions exist for similar failures and associated tsunamis to occur along this segment of Douglas Channel in the future.

The scientists say that detailed tsunami modelling is underway to

provide an improved understanding of the generation, propagation, attenuation, and likely coastal inundation of tsunami waves that would have been created by slides… or that could be generated from similar future events. Only through the development and application of this type of tsunami modelling will it be possible to gauge the level of hazard posed by the identified submarine slope failures to shore installations and infrastructure, or to devise ways to effectively mitigate the impacts of future such events.

The filing by the Attorney General offers to bring the scientists to the Joint Review Panel to appear as witnesses sometime during the final hearings.

The filing notes that the current evidence tendered to the JRP by Enbridge, and other parties does demonstrate the potential for marine geohazards and associated tsunami events. Enbridge’s design of the proposed Northern Gateway marine terminal and its operational plans took into consideration the current state of knowledge of geohazards including earthquakes and tsunamis at the time of filing. Enbridge has said it would undertake further geological survey during the detailed design phase for the terminal.

At the time Natural Resources Canada noted that the information provided for the Environmental Review was sufficient at that time, now the Attorney General says:

the geographic scope for potential landslide induced tsunami hazards is now better understood to extend beyond the Kitimat Arm. NRCan and DFO seek by this motion to ensure that this Panel, and the Parties before the Panel, have the most up to date information on geohazards in the Douglas Channel.

 

Updates: DFO report in October will clarify the tsunamis in Douglas Channel.


Statement from Natural Resources Canada

Natural Resources Canada sent this statement to Northwest Coast Energy News on September 20, 2012.

In reference to the opening paragraph of your September 18th editorial entitled Geological Survey of Canada identifies tsunami hazard: Possible fault line on Douglas Channel, we would like to clarify the following. Although the ancient large submarine slope failures which our scientists have identified may have caused tsunamis, this is not a certainty. It is important to note that Fisheries and Oceans Canada is currently studying this information to model potential wave heights and speeds.

As our report states, only through the development and application of this type of tsunami modelling will it be possible to gauge the level of hazard posed by the identified submarine slope failures to shore installations and infrastructure, or to devise ways to effectively mitigate the impacts of future such events.

 Northern Gateway response filed on August 31, 2012

Enbridge Northern Gateway filed this response to the Attorney General’s motion on August 31.

This motion of the Federal Government Participants requests permission to file late evidence consisting of a report entitled “Submarine Slope Failures and
Tsunami Hazard in Coastal British Columbia: Douglas Channel and Kitimat Arm” regarding tsunami hazard and additional modelling work based on that report.

Northern Gateway does not object to the filing of this late intervenor evidence.
It may be relevant and Northern Gateway accepts that theevidence could not be filed earlier. However, Northern Gateway would like the opportunity to conductits own additional modelling work which it would be prepared to provide to DFO for comment prior to the filing of any modelling work by DFO in this proceeding.

Attorney General response to Enbridge on September 10, 2012.

The Attorney General of Canada responded to Enbridge by saying:

Attorney General responds DFo is prepared to await filing its subseqent modelling work in these proceedings until such time as it has received, reviewed and commented upon additional modelling work as proposed by NGP Inc.

DFO nots howeverand wishes to alert the JRP that the NGP INc proposed may occasion a delay in the filing of the DFO moedling work which is now proposed for filing on or about October 31, 2012. Delivery of DFO comments as requested will depend on when DFO received the NGP Inc modelling work, the time and resources required by DFO to study and provide comments on the NGP modelling work and unforeseen factors which may have an impact upon completion the commentary. As such,

DFO is prepared to file its modeling work on or about October 31, 2012, but subject to any further direction or request by the panel.

 

Map of Douglas Channel
Geological Survey of Canada map of Douglas Channel showing the area surveyed which discovered the landslides and possible fault line. (Geological Survey of Canada)

;

;

Map of slides at Kitimat
Map from the Geological Survey of Canada showing the landslides on the Kitimat Arm which triggered tsunamis in 1974 and 1975 (Geological Survey of Canada)

;

;

Slide at Hawkesbury Island
Map from the Geological Survey of Canada showing the giant slide on the southern tip of Hawkesbury Island. (Geological Survey of Canada)

;

Hawkesbury Island slide map
Map from the Geological Survey of Canada showing the second giant slide on the coast of Hawkesbury Island on Douglas Channel (Geological Survey of Canada)

Department_of_Justice Notice of Motion of the Attorney General of Canada Seeking to Tender Supplementary Written Evidence (pdf)

Submarine Slope Failures and Tsunami Hazard in Coastal British Columbia Douglas Channel and Kitimat Arm PDF

Kitimat-Stikine Regional District votes to oppose Enbridge Northern Gateway

Map Regional District Kitimat Stikine
Map showing the Regional District of Kitimat Stikine (RDKS)

The Regional District of Kitimat-Stikine voted on Sept. 14, 2012, to oppose the Enbridge Northern Gateway pipeline. Eight of the twelve Regional District Directors of Kitimat Stikine voted to both to oppose the Northern Gateway project and to support resolutions of the Union of BC Municipalities (UBCM) on the pipeline.

Telegraph Creek director David Brocklebank, who originally proposed the motion, was supported by Dease Lake alternate director Joey Waite, Terrace municipal directors Dave Pernarowski (mayor) and Bruce Bidgood (councillor), Nass director (and regional district chair) Harry Nyce, Hazelton village mayor Alice Maitland, the Hazeltons and  Kispiox/Kitwanga director Linda Pierre and Diana Penner (who was sitting in for the director Doug McLeod) for the rural area around Terrace and Kitimat.

Brocklebank had proposed the motion at the August meeting. It was tabled to allow for the directors who represent the various regions and municipalities time for consultation.
Voting against were Kitimat municipal director Corinne Scott, New Hazelton mayor Gail Lowry, Thornhill’s Ted Ramsey and Stewart municipal director Billie Ann Belcher.

Scott said she was voting against the motion, continuing the Kitimat council’s position that it remain neutral until the report of the Northern Gateway Joint Review panel. Ramsey also said Thornhill wanted to also remain neutral.

Other directors pointed to what they called the politicization of the Joint Review and how they believed it had been influenced by Prime Minister Stephen Harper.

While the District of Kitimat remains neutral, the Skeena Queen Charlotte Regional District, Prince Rupert, Terrace and Smithers have all voted to oppose the Northern Gateway.

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.