By Roger Annis, May 6, 2012
Kinder Morgan company has issued a proposal to triple the volume of tar sands oil that it brings to the Port of Vancouver for refining or export via its existing pipeline route.
The proposal has stirred significant protest, including from local mayors in Vancouver and Burnaby (Vancouver region has multiple municipalities, each with their own municipal councils). While the opposition is welcome, its terms are far too narrow. Below is a statement of the mayor of Vancouver. He does not mention a word of the global climate consequences of tar sands oil. Rather, his opposition to the pipeline is limited to concerns over the chances (likelihood) of major spills of tar sands bitumen from the pipelines or ships that will transport the dirty product.
The mayor’s statement also laments that the tar sands oil is being shipped in crude form instead of first being refined in the Vancouver region! (That would require construction of oil refineries; there is only one in the Vancouver region.) This is a tip of the hat to the Canadian Energy and Paperworkers union, which holds just such a position.
A cruder version of the mayor’s views was published in an op-ed in the Vancouver Sun on May 17, 2012 titled ‘Keep the oil sands wealth at home.’ The opinion article was written by a former CEO of the Insurance Corporation of BC and is reproduced further below.
Mayor Robertson boasts that Vancouver is leading the world in converting to environmental concern and sustainability. He and his real estate-industry supported political machine are backed by many trade unions and the NDP. And yet:
- Vancouver dumps its untreated sewage into the Straight of Georgia. It does not collect and compost its organic waste. Its recycling programs for other waste have serious gaps.
- The region of Vancouver is undergoing a significant expansion of its road network, including the building of a new Port Mann bridge to serve suburban commuters into and out of the City of Vancouver and new highways to serve truck traffic in and out of the Port of Vancouver.
- A significant expansion of the Port of Vancouver in taking place in order to service increased imports and exports of consumer commodities and export of coal from the coalfields in southeast British Columbia and the U.S. midwest.
- The Vancouver airport has undergone significant expansion in the past decade, costing hundreds of millions of dollars of public funds. A vast expansion of construction has taken place in the city, notably to serve a flourishing and growing tourism trade.
- The region of Vancouver is having to limit or even reduce needed bus and other transit services in order to pay for the most expensive rapid transit technology that money can buy for its three, existing overhead (Sky Train) transit service.
The road and port expansions in Vancouver are largely funded by federal and provincial governments. The City of Vancouver is only one voice in the overall transit planning of the region. But if Mayor Robertson disagrees with the overall course of the city’s anti-environmental expansion, he’s keeping it a secret. ‘Green Vancouver’, indeed!
OP-ED: Pipeline risks are too great for Vancouver
By Gregor Robertson, Op-Ed, Vancouver Sun, April 24, 2012
Around lunchtime on July 24, 2007, a construction crew working near the Barnet Highway in Burnaby accidentally punctured an oil pipeline operated by Kinder Morgan. A geyser of thick crude oil shot into the air spraying houses, trees, cars and people – and sending 70,000 litres of oil spilling through the storm sewers into the waters of Burrard Inlet. That oil affected 17 kilometres of shoreline; animals from migratory birds to sea stars and barnacles were heavily fouled.
As oil spills go, that’s considered minor. Today, Kinder Morgan wants to nearly triple its pipeline’s capacity. Its $5-billion proposal will see a tanker passing in and out of Burrard Inlet almost every day – a four-to-fivefold increase in oil-tanker traffic through Vancouver’s narrow harbour.
For Kinder Morgan, the benefits are obvious: a dramatic increase in the amount of oil they can move to market from the Alberta oilsands project. But for Vancouver, it’s hard to find any upside. And in a city where our reputation as a beautiful, clean destination is a huge competitive advantage, it’s far too easy to find enormous danger. A single accident with one oil tanker could cause irreversible devastation — to our ecosystem, to our economy and to our international reputation.
Our city is bounded on many sides – and in many ways defined – by shoreline: from the working harbour, to Stanley Park and our world-famous beaches, to the world’s largest salmon-bearing river — the Fraser. That helps to make our city beautiful for its residents, and irresistible to tourists. It’s part of what brands us around the world as a green and livable city. And our shoreline supports a rich web of life. Now drop 10,000 deadweight tons of oil — a modest-sized tanker’s cargo — into that web.
Critics might call this fearmongering — but given what’s at stake with even a minor spill, it’s irresponsible to not consider this scenario. Think of images beamed worldwide, showing oil-fouled seals, herons and Canada geese on the crude-blackened sand at English Bay and Kits Beach. The damage to Vancouver tourism and our destination brand would be exceeded only by the toll on our local marine habitat.
As Vancouver’s mayor, how could I ever support allowing a single, polluting industry — especially one with nearly no jobs in this city — to put Vancouver’s thriving economy and global reputation at such serious risk?
I can’t imagine doing that — creating enormous risk to tens of thousands of local jobs in tourism, hospitality, development and clean technology, and undermining our success in the world’s fastest-growing industries in the green economy.
Yes we already have oil tankers, but they are focused on local markets. Unfortunately that oil is shipped to California to be refined, and then shipped back to B.C. — minus the jobs our local refineries once had. This activity wiped out B.C. refinery jobs and continues to put our environment at risk with every oil tanker.
But Kinder Morgan is proposing massive crude oil exports that bypass local refineries, magnify the risk to our economy and environment, and ignore Canada’s long-term domestic oil needs.
This is all happening against the backdrop of an abrupt weakening of the federal environmental review process. Which means Kinder Morgan’s proposal will face far less scrutiny, and our communities will have much less time to give it the hard looking-over it deserves.
That’s why we’ve been advocating a broad, intense consultation by the National Energy Board. And it’s why we’ve called on Ottawa to bring local governments to the table, along with firm guarantees that industry must bear 100 per cent of the risks and costs of a spill.
We’ve seen what oil disasters look like, at a small scale in Burnaby and a large scale with the Exxon Valdez spill in Alaska. If we don’t want to see history repeated on Vancouver’s shores, we need to speak out now.
Gregor Robertson is the mayor of Vancouver.
Keep the oilsands’ wealth at home
Foreign countries are gearing up to reap the benefits of importing Canadian bitumen
By Robyn Allan, Vancouver Sun, May 17, 2012
Earlier this year, federal Natural Resources Minister Joe Oliver branded Northern Gateway pipe-line opponents “foreign-funded radicals.” According to Environment Minister Peter Kent, they’re also “money launderers.”
Recently Ontario Premier Dalton McGuinty raised a yellow flag on Canada’s appreciating dollar. He was quickly admonished by Alberta Premier Alison Redford as being “simplistic.”
Last Saturday, B.C. Premier Christy Clark called federal NDP leader Thomas Mulcair’s caution against unbridled exploitation and export of oil resources “goofy.”
Name-calling has replaced meaningful debate about legitimate concerns and clouds important issues.
Resource development is necessary for economic growth – Mulcair said he supports it. But what hasn’t adequately been addressed is how the benefits and risks are to be managed and shared.
This dialogue is an important one for Canadians. Over the past few years, multinational oil companies and companies owned by countries – such as China – have introduced a new natural resource strategy for Canada.
Their strategy could turn B.C. into an oil tanker terminal for Alberta and crowd out viable activity in tourism and commercial fishing. It puts pres-sure on the Canadian dollar, under-mining the viability of those industries and others.
Canada may be an oil exporter, but it’s also an oil importer. Almost 50 per cent is imported from volatile and uncertain markets, including many of the same markets the U.S. and China are trying to protect themselves from by sourcing our crude.
Putting the energy security needs of other countries ahead of Canada’s threatens our standard of living. To understand how requires a little history. To make sure it doesn’t happen – while developing our resources – requires resolve.
In 2008, Alberta’s oil producers announced a wide range of upgrading and refining conversion projects to process crude oil at home. These projects would have taken the province’s already strong downstream activity up a notch and securely established a domestic value-added supply chain.
Upgrading oil before refining is necessary to enhance the quality of oilsands crude, called bitumen. Upgrading and refining are where the jobs and economic wealth come from – not ripping it and shipping it to foreign countries so they reap the gain from turning Canada’s raw resources into end-user products.
Planned projects would have seen upgrading capacity in Alberta grow from 1 million barrels per day to 3.5 million barrels per day by 2015. Then came the financial crisis and the projects were scraped – in Canada.
South of the border – facilitated in part by favourable investment terms offered to taxpayers through the Energy Policy Act of 2005 – U.S. oil producers continued to expand plant and equipment, enabling increased throughput of Canada’s bitumen.
New oilsands production – whether destined for the U.S. or Asia – will be shipped as bitumen along with the jobs, labour income and government revenues that go with it. Alberta’s new energy strategy is actually hollowing the downstream capabilities of the oil industry.
It’s not that value-added is not done in Alberta. Alberta has five upgraders and in 2010 about 58 per cent of oil-sands production was processed into synthetic crude. The province has three refineries capable of processing more than 430,000 barrels a day. But while current crude oil production volumes exceed pre-recession levels, investment in downstream activity has not recovered. Alberta’s upgrading capacity will be 1.4 million barrels a day by 2015 – 60 per cent less than the pre-crisis plan.
Chopping local downstream expansion projects breaks the value-added chain. Canada’s oil resources increasingly become a pool of raw crude waiting to be siphoned off along pipelines serving economic development and energy security needs of other nations. These nations are smart. They know controlling the supply chain mitigates the pain of rising oil prices.
The oil sector is mum. Companies that own Canadian exploration and production rights own refineries in the U.S. and China. They don’t like our higher labour and environmental standards.
Value-added capital hasn’t just gone on strike in Canada – it has moved elsewhere.
If more bitumen upgrading was undertaken where it comes out of the ground we wouldn’t need as many new pipelines – about 30 per cent less capacity is required to move upgraded bitumen. Fewer pipelines, fewer tankers, and less environmental spill risk. The industry still grows and still earns healthy profits, more of which stay in Canada.
If Canadian energy security was a higher priority than meeting the energy security needs of other nations, western crude would flow to Eastern Canada – along with the benefits energy independence affords.
Paying Canadian-based producers for oil, instead of foreign producers, keeps the money, jobs, value-added production and wealth at home. Every other major country seems to under-stand this radically simplistic, goofy idea – it’s time Canada did too.
Robyn Allan is a consulting economist and former CEO of the Insurance Corp. of British Columbia.