Thank you to all 230+ people who attended the Townhall. Click below to watch the video of Robyn’s presentation, and read on for her speaking notes.
Northern Gateway and Kinder Morgan: Not Wanted — Not Needed
prepared by Robyn Allan for Joyce Murray’s Town Hall Meeting
June 16, 2012
Good morning everyone. Thank-you Joyce for setting the context for today and for that warm introduction. British Columbians are fortunate you’ve been traveling the province talking about Northern Gateway. You should also be congratulated for your around-the-clock attempt to stop Budget Bill, C-38.
I’d also like to thank-you, and your incredible staff, for putting this meeting together. And acknowledge everyone here for coming out on a Saturday morning to discuss the economics of crude oil pipelines.
I grew up at Jericho Beach. My brother and I played war games with our friends based on a tv show called “The Rat Patrol.” We’d sneak along the beach, under the army base wharf, past imaginary enemy lines, make our way to Spanish Banks and up into a field we called the Plains of Abraham.
I never imagined then, I would be fighting now, to stop Supernatural British Columbia from becoming a supertanker terminal for Alberta. Its not just the danger of a spill and what it will do to the beaches that I want to talk about today. It’s the broader issue of Canada’s energy strategy putting all our futures at risk.
Canada has an energy strategy?
Yes we do. It’s just not designed to serve Canadians.
The strategy is decided in the boardrooms of large corporations and National Oil Companies owned by foreign governments. Its delivered to the Federal government behind closed door meetings with lobbyists and over dessert at state dinners in other countries. Companies—like Suncor, Nexen, MEG Energy, Cenovus, and Total, are all investors in the Northern Gateway approval process. We also have National Oil companies owned by the Communist Party of China like Sinopec, PetroChina, and the Chinese National Offshore Oil Company. These companies are all directly or indirectly involved in this project.
These players have decided they need pipelines to the westcoast. They want to ship crude oil, primarily unprocessed oil sands called bitumen, to Asian markets. Both Sinopec and PetroChina have a fleet of oil tankers. They own almost all the refineries in China. That’s where they plan to upgrade and refine the crude oil they produce here into gasoline, diesel, jet fuel and other petroleum products necessary to power Asia’s economic growth. It’s upgrading and refining that creates jobs. It’s upgrading and refining that generates value added— not shipping bitumen down a pipeline.
We’ve been led to believe Northern Gateway means construction jobs. Enbridge—in a new ad campaign developed for British Columbians—pitches the construction jobs as a big plus. Enbridge claims “over 3,000 construction jobs at the peak of construction.” Sounds, you know, okay.
That is until you run it by the truth metre.
That number comes from Volume 6C of their application, page 4-8. The number is 3,029 person years of employment for 3 months in the third quarter of the third year of a 5 year construction project.
Person years of employment are not jobs. If you work for a company for 3 years as a manager, that’s 1 job and 3 person years of employment. Enbridge would call it 3 jobs.
The construction jobs, when we run them through the truth meter, are just a tad over a 1,000, not 3,000.
That doesn’t mean these jobs are for British Columbians—they may go to anyone, even offshore temporary workers.
Enbridge CEO Pat Daniel has told us PetroChina would “love” to build the pipeline. Stephen Harper has made major changes to the Temporary Foreign Worker Program in Budget Bill C-38. These changes allow companies to import workers within 10 days, and pay them 15 percent less than the going domestic rate. These changes will certainly help PetroChina tender a low bid since they have a huge, low paid, labour pool ready to draw on.
There are virtually no long term jobs from Northern Gateway. Enbridge says 78 jobs in BC, and 26 in Alberta.
A total of 104 permanent jobs.
But we do give up a lot of permanent jobs by not upgrading bitumen in Alberta. We ship those jobs down the pipeline along with the crude oil. For the bitumen that can be shipped along Northern Gateway, it’s estimated 4,800 permanent upgrading and refining jobs are lost. Compare 4,800 permanent jobs lost to Enbridge’s 104 permanent jobs gained.
We need to know that when bitumen is exported, so are jobs and value added wealth. None of the lost jobs have been acknowledged by Enbridge in their ads or included in any of their analysis. If the Canadian government was as concerned about jobs in Canada as it pretends to be, bitumen would be upgraded in Alberta.
So what’s stopping us? The multinational companies, and the Chinese government, don’t want it that way. Upgrading and refining in Alberta was the strategy as recently as 2008. The oil industry had 10 new upgraders planned and even some new refineries—but then the financial crisis hit. Since then oil production plans have recovered, while plans for new upgraders and refineries in Canada, have not.
Back in 2008 when Prime Minister Harper was running for re-election he promised bitumen would not be shipped to Asia. His government continued to publicly extol the virtues of processing oil in Canada right up until Enbridge filed its application for Northern Gateway in May 2010.
So when industry proponents say its not economic to upgrade and refine in Canada, you can say, hey wait a second, as recently as 2008 that was the plan, it was economic, and it was endorsed by Harper’s government.
Transporting bitumen not only costs us jobs, it presents serious environmental threats.
Bitumen is dense, heavy, almost a solid, compound. In order to move it through a pipeline it has to be diluted with a higher grade oil called condensate—also highly toxic.
This is why Northern Gateway is a twin pipeline system—one to export crude oil out, and one to import condensate in. We don’t produce enough condensate so oil companies plan to build more and more condensate import pipelines to ship bitumen back out. To get bitumen to flow, you need to add anywhere from 20-50 percent condensate by volume. This turns it into dilbit—diluted bitumen.
When dilbit spills, the condensate evapourates creating respiratory danger. When bitumen flows into water it sinks, causing major environmental damage. So that’s the first thrust of Canada’s energy strategy—export unprocessed raw resources at the expense of value-added jobs and environmental standards while exposing BC to increased oil spill risk. Crowd out viable economic activity, such as tourism and commercial fishing, in the process.
Here’s the next major thrust of Canada’s energy strategy. Raise the price for petroleum products higher for Canadians than they would be without the pipeline. We have been told how important it is to get Canada’s crude oil to Asian markets because they are
willing to pay more. The truth metre says that’s not the whole story.
When oil producers capture a higher price in Asia they say they will charge it on all oil produced in Canada, including oil sold to Canadian refineries, on every barrel, every year, for 30 years. Enbridge confirmed this is the intent of Northern Gateway when I filed my evidence with the National Energy Board in January—higher oil prices in Canada, with Northern Gateway than without it.
Depending upon which industry study you look at, that could mean as much as a 7 percent increase in the price of gas at the pumps because of Northern Gateway.
When higher prices feed through the economy consumer spending is cut, and businesses resort to downsizing. Lower profits and job losses also mean a decline in government revenues.
We are not told about these price increases in Enbridge’s ad campaign. No elected government leader thinks to mention this point during their aggressive support for west coast pipelines.
But—there’s more we’re not being told. There’s another cover up. It’s related to the cost of our dependency on oil imports.
We all know Canada is an oil exporter. But it’s not widely known Canada is also an oil importer. Almost 50 percent is imported from volatile and uncertain markets—many of the same OPEC markets the US and China are trying to protect themselves from by sourcing our crude.
So get this–If western Canada exported its oil to eastern Canada and there was a requirement that bitumen be upgraded prior to export, there would be NO need for Northern Gateway or Kinder Morgan.
But, there’s more we aren’t being told.
We have been told Northern Gateway is intended to transport 525,000 barrels a day of crude oil and 193,000 barrels a day of condensate. This triggers 220 oil tankers a year in the Douglas Channel. What we haven’t been told is that by adding a few pumps—by adding pumping power—Northern Gateway is designed to ship 60 per cent more crude oil and 40 per cent more condensate. There is no environmental hearing when a pipeline company applies for permission from the National Energy Board to expand its pumping power.
Spill risk is not additive, its exponential—if there are 60 percent more oil takers in the Douglas Channel to ship this expanded volume, there is more than a 60 percent increase in the risk of an oil spill. None of that risk is being considered in the current approval process.
What the detailed plans show is 850,000 barrels per day of crude oil and 275,000 barrels a day of condensate flowing along those pipelines. And the tankers needed to transport it? Well, its not 220, but closer to 340—almost a tanker a day in BC’s northern coastal waters. More crude. More condensate. More tankers. More risk. Way more
Until 2005, Kinder Morgan’s TransMountain pipeline capacity was 225,000 barrels a day. In 2005 and 2006 they applied for expanded capacity and now the system transports 300,000 barrels a day.
This expansion triggered a growth in oil tanker traffic in Burrard Inlet from about 22 tankers a year in 2005 to 71 tankers a year by 2010. None of this expanded capacity underwent an environmental assessment—at no time did the increased oil spill risk of a 33 percent increase in volume of crude oil ever get considered.
Once Northern Gateway is built, when Enbridge decides it wants to expand capacity, increase tanker traffic, and expose the land and sea to exponential spill risk, no one will be held accountable to address the environmental threat. If the actual environmental threat of Northern Gateway is going to be assessed, it has to be done as part of the initial application.
This issue becomes important when Kinder Morgan submits its application to the National Energy Board. You need to ensure the full design capacity of the new pipeline and marine expansion is assessed, not the minimum as has happened with Northern Gateway.
Kinder Morgan has presented its new project as a 450,000 barrel per day pipeline. With design features similar to Northern Gateway’s, it could move 850,000 barrels a day—and that means somewhere around 475 oil tankers a year dropping anchor off English Bay.
There’s one final area of misinformation I want to discuss today. That’s Enbridge’s operating risk and safety record. Enbridge tells us in their ad campaign that the company has “World-class safety standards…carefully planned and built to respect the terrain and wildlife. The pipeline will be monitored 24/7”.
But when you run this information through the truth metre—well…
From 1998 – 2010 Enbridge had 770 reportable oil spills; a number of them considered large by National Energy Board standards. When Enbridge submitted their risk analysis to the National Energy Board they only included spill statistics from 2005 to 2009. In the insurance industry we call this kind of selective choice of data, “cherry picking”.
On July 25, 2010—a little over a month after filing their application for Northern Gateway—Enbridge suffered the most significant spill in the company’s history. Enbridge’s Line 6B ruptured in Marshall, Michigan releasing more than 20,000 barrels of dilbit. Toxic condensate evapourated into the air impacting the local population. Bitumen made its way into the Kalamazoo River.
Enbridge’s corporate standard for identifying a spill is 10 minutes with an additional 3 minutes for pipeline shutdown. It took more than 17 hours for the Kalamazoo spill to be detected and the pipeline shut down. This pipeline was monitored by Enbridge “24/7”. Enbridge CEO Pat Daniel testified before the US House of Representatives in September 2010. He said “by the end of September we will have completed the bulk of the clean up.”
Twenty-three months later, with clean-up costs reaching $765 million, only 3 of the 39 miles of the Kalamazoo River have been opened to the public.
Restoration of the affected waterway and surrounding lands has not started. The restoration stage of the
Kalamazoo River will certainly take years, and possibly decades. A few weeks ago the US National Transportation Safety Board released 170 documents, 5000 pages and 58 pictures of the spill. These documents provide an arms length, independent look at Enbridge’s world-class safety standards. They explain operating safety took a back seat to corporate growth.
During an interview with National Transportation Safety Board investigators in November 2011, Enbridge Senior V.P. Operations, Leon Zupan, stated “we had focused on the need and the growth of a new control center…what we had not yet implemented was the resources to get us there…our view of the night of the Marshall incident was that we had people that were really trying hard to do what they thought was the right thing, but they needed more technical support, they needed more management support, they needed more technical training, and they needed to be clear about what our expectations were in terms of following procedure…”
All it will take to ruin the Kitimat watershed system is a spill of—not 20,000 barrels of dilbit into the Kitimat River—but if the spill takes place upstream—somewhere in the neighbourhood of 600 – 650 barrels should do it.
There are more than 700 fresh waterways that Northern Gateway will traverse. The topographical and other geophysical challenges of Northern BC are significantly greater than the relatively flat land traversed by Line 6B in Michigan.
The Kalamazoo spill wasn’t discovered by Enbridge in their state of the art control room—even after 17 hours of pressure problems, repeated alarms in the control room, and three shift changes—no one saw the problem as a spill. Someone in Marshall who saw the oil called the control room.
But here is something truly shocking—Enbridge doesn’t just downplay Kalamazoo—the company behaves as if the spill never happened.
During the past two years Enbridge has not updated any of the risk analyses filed with the National Energy Board to include the Kalamazoo spill.
We need to ask—who is looking after the Canadian public interest? Mr. Harper is not.
Mr. Harper is not behaving as the Prime Minister of Canada. Mr. Harper is behaving as a marketing manager for big oil.
We need to ask who is looking after BC’s public interest? Premier Clark is not. As Premier she has the constitutional power to ensure Northern Gateway undergoes a provincial environmental assessment that includes the environmental threat of the designed capacity of the project—including the tanker traffic it triggers.
She has the power to ensure BC’s public interest is protected, but stands back and allows it to be trampled by the Harper government.
We need to be clear. Premier Clark has been asked to lie down and play dead on Northern Gateway. By agreeing to do so she has given Northern Gateway the go ahead.
Not exercising the right to a provincial environmental assessment means BC agrees to
accept the National Energy Board decision. Prime Minister Harper has told us Northern Gateway will go ahead. The only way to stop this pipeline and the tanker traffic that comes with it is for BC to exercise our right to review the project and decide whether or not we want it to go ahead.
Who is looking after the pubic interest of this riding? Your MLA Christy Clark is not. As Premier she has the power to ensure a provincial environmental assessment of the Kinder Morgan project. Yet, she has not said the Kinder Morgan pipeline proposal will undergo a provincial review. As a result, Premier Clark has agreed to—what has become—a National Energy Board rubber stamp with a big yes on it.
By doing nothing Christy Clark has made a decision for you.
She has decided the oil export strategy designed in the boardrooms of big oil take precedent over your vision of what British Columbia—as a province—and Vancouver—as a coastal city—should be.
Environmental assessment is our right. While you still have the power to keep BC’s economy and environment out of harms way—take action.
Tell Prime Minister Harper you’ve had enough of his support of large oil companies who put at risk our economy and our environment.
Tell Premier Clark to stop playing dead and stand up and protect the rights of all British Columbians.
MP Joyce Murray presents: ENBRIDGE’S NORTHERN GATEWAY PROJECT: ECONOMIC BENEFIT OR LIABILITY?
Hear from guest speaker Robyn Allan, a respected independent economist and former head of ICBC during this environmental Town Hall on Enbridge’s Northern Gateway Pipeline Proposal.
Where:West Point Grey Community Centre Gym | 4397 West 2nd Avenue (map)
When: Saturday June 16, 2012 | 10:00am – 11:30am
Please RSVP to email@example.com or 604-664-9220.