Trans Mountain: Same pipeline, new realities
Pushback to expansion has already begun
CALGARY • In 2008, Kinder Morgan Canada added 75,000 barrels of capacity to its Trans Mountain pipeline from Edmonton to Vancouver at a cost of $750-million, which included 13 new pump stations, twinning the system through Jasper National Park in Alberta and Mount Robson Provincial Park in British Columbia.
It faced little opposition, completed its regulatory hearing within a week, and provided contracting and employment to the Aseniwuche Winewak and Simpcw First Nations and the Alberta Metis Zone IV community.
When the project was completed, the Town of Jasper and the Village of Valemount thanked Kinder Morgan Canada for the opportunity.
Today, the company’s president, Ian Anderson, has cleared his deck and plans to dedicate the next five years of his career to a single goal — win support for and build a $5-billion expansion of the same pipeline, which has been i n operation for 62 years. He is planning a campaign of unprecedented magnitude for his company, a unit of the Houston-based infrastructure giant, Kinder Morgan Energy Partners.
It’s a measure of how the Canadian pipeline business has changed as a result of activists targeting export pipelines to choke oil sands growth and rousing fear in affected communities about risks to the environment.
don’t discount local interests
After watching closely the controversies that engulfed the proposed Keystone XL and Northern Gateway projects, Mr. Anderson, an accountant from Winnipeg who lived for extended periods in British Columbia, said he learned valuable lessons he plans to apply to his project: One is to not underestimate the voice and passion of local interests and to address their concerns first. Another is that each constituency has its own issues that need their own solutions rather than a one size fits all approach.
He also learned that the days of low-profile pipeline planning and operations are over.
“Historically, the pipeline industry has been fairly quiet, but it won’t be any more,” Mr. Anderson said in an interview. “It’s going to be about facts and about trying to dispel the myths.”
Kinder Morgan Canada announced plans two weeks ago to increase the capacity of the Trans Mountain pipeline to 850,000 barrels a day, from today’s 300,000 bpd.
The expansion won overwhelming support from oil sands producers, refiners and overseas customers. It’s a competitor of the delayed Keystone XL from Alberta to the U.S. Gulf Coast, proposed by Transcanada Corp., and Northern Gateway from Edmonton to Kitimat, B.C., proposed by Enbridge Inc., which is in the midst of a federal regulatory review and is bitterly opposed by B.C.’S First Nations and environmental movement.
If Mr. Anderson succeeds, the expansion will be in operation in 2017 and will represent the first building block toward the development of a new market for Canadian oil in Asia.
Bracing for Opposition
But the pushback has already started. Opponents include Vancouver Mayor Gregor Robertson, Burnaby Mayor Derek Corrigan and the Tsleil-waututh Nation near the Burrard Inlet. Vancouver council’s majority party and its park board are expected to formally oppose Kinder Morgan’s plan next week.
The main objection is that an increase in tanker traffic in Vancouver’s harbour increases the chances of an oil spill, threatening the city’s green image and its tourism industry.
But Mr. Anderson is casting his net far and wide to win support and deal with myths already making the rounds, including rumours that the plan involves using supertankers. In fact, the project will use the same tankers it is using today, with a maximum capacity of less than 600,000 barrels, Mr. Anderson said.
His game plan involves building alliances in the Vancouver area and Lower Mainland, among business groups such as the B.C. Business Council and the B.C. Chamber of Commerce, with First Nations and environmental organization across the province, with municipal politicians.
“We know that we can do it, and respond to environmental concerns, and we know that we can involve First Nations prudently, because we have done it before on this pipeline,” Mr. Anderson said. “The real hard part about success in this project is going to be the Lower Mainland of British Columbia.”
That constituency will be the target of a major information campaign to increase understanding of pipelines and tanker safety, how risks are mitigated, the oil sands and climate change. It will involve different channels and many voices.
They will include the marine community, including the port of Vancouver, the pilots and the first responders. Alberta oil sands producers and other pipeline backers will also step up to explain their business and what is being done to reduce impacts.
“Nobody can guarantee that nothing will ever happen,” he said. “But what we can do is be 100% diligent around ensuring the re- sponse capabilities, the integrity and protection programs of operators are meeting and exceeding all standards. We have 60 years of experience in these territories inland. We have been moving tankers through Vancouver for 60 years without incident. There is a wide range of regulations and requirements both with international tanker safety and guidelines and the local interests, the port and the coast guard.”
Kinder Morgan will consider increasing its corporate presence in Vancouver or Burnaby if it means being closer to the community and putting a local face to the project, he said.
Discussions have started with the environmental movement, which the company has split into three factions.
“There are the ones like the Pembina Institute where we think we can have some meaningful conversations around the projects, its effects and environmental responsibility,” Mr. Anderson said. “On the other end of the spectrum there are the more activist types that are about lobbying, campaign and protest, and I am not sure how much progress we will make. And there is a large group in the middle. And we are going to talk to that group about not just if a pipeline should be built, but how and what can we attach to it in terms of environmental legacy to offset some of the perceived risks.”
Discussions have also started with 80 First Nations and other aboriginal groups, even if only a dozen are directly affected by the pipeline plan.
Kinder Morgan has longstanding relationships with the latter group. Some receive property taxes, others work and there are contracting opportunities. Everything is on the table, except for equity participation because it’s an expansion of an existing system on an existing right-ofway, Mr. Anderson said.
The company plans to conduct the campaign over the next two years, before entering the regulatory process. Even if it doesn’t succeed in reducing British Columbia’s angst over Canadian oil exports through its coast, it will have set a new standard on how to navigate pipeline politics in this new anti-oil sands age.