An oil tanker being loaded at Westridge Terminal at the end of the existing Trans Mountain pipeline in Burnaby.

New Trans Mountain pipeline review flags tough questions

Panel re-floats idea of Kinder Morgan switching to less contentious terminal at Delta or in Washington State

A separate federal review ordered into Kinder Morgan’s proposed Trans Mountain oil pipeline twinning has flagged a series of tough questions for Justin Trudeau’s government as it prepares to render a final decision.

The ministerial review aimed to address gaps in the previous National Energy Board review of the $6.8-billion project.

The Trudeau Liberals had denounced the NEB process as flawed during the federal election but environmental groups have viewed the subsequent review as an exercise aimed at papering over the problems to allow federal approval of the project.

Instead, the new report grimly paints the “enormity” of the decision ahead in stark terms, pointing to “two solitudes” of divergent opinions in risk-averse B.C. and job-hungry Alberta.

That final decision is required by December on the recommendation by the NEB that the project proceed, on the basis that its benefits to the country as a whole outweigh the impacts and risks.

Key questions, the review found, include whether the pipeline expansion can be reconciled with the Liberal government’s new climate change commitments, as well as aboriginal rights, particularly in light of Ottawa’s embrace of a UN declaration of indigenous rights to “free, prior and informed consent” on major projects.

Given the changing economics of the project – the price of oil has plunged since Trans Mountain was proposed – and changing government priorities, it asks, how can Canada be confident that the rewards do outweigh the risks.

Likewise, it questions how policy makers can reconcile loosely defined concepts such as “social licence” and the “national public interest” that might be cited to override fierce local objections.

The panel that reported Thursday to Natural Resources Minister Jim Carr consisted of former Tsawwassen First Nation Chief Kim Baird, former Yukon premier Tony Penikett and former Alberta government official Annette Trimbee.

Defining social licence

Intense protests are expected in B.C. if the Trudeau government proceeds to grant final approval.

On the issue of social licence, the report reminds the prime minister of his words – from 2013 – that “government grant permits, but only communities grant permission.”

The expansion would triple Trans Mountain capacity to 890,000 barrels per day and result in a seven-fold increase in oil tanker traffic through Burrard Inlet to about 35 a month, which opponents say would greatly increase the risk of an impossible-to-clean spill of diluted bitumen.

“It will be for the federal government to interpret whether there is a national public interest and whether it has the capacity to imply or engender a more broadly based social licence, even in instances when local communities stand firmly in opposition.”

The panel did hear support for the pipeline in communities like Kamloops and Clearwater, and broadly in Alberta.

But the report underscored the “depth of concern” heard from public hearings on the B.C. coast on issues such as the increase in tankers, and accompanying risk to the environment, tourism and other industries.

Recent spills from a freighter off Stanley Park in 2015 and a fuel barge that ran aground off Bella Bella last month intensified public concern.

Inland objections included fears that a pipeline rupture into the Fraser could destroy the salmon fishery, or that a spill seeping into aquifers in the Fraser Valley could make ground water undrinkable.

Alternate route eyed

The report also raised for reconsideration the idea of abandoning the Burnaby terminal and the need to run tankers through Vancouver harbour, and instead have the pipeline end at Deltaport or divert south of the border at Abbotsford to Cherry Point in Washington State.

“Government must decide whether the Trans Mountain pipeline is a worthwhile risk – and whether its current route is the right one,” the report says. “If approved, what route would best serve aquifer, municipal, aquatic and marine safety?”

The idea of an alternative terminal came up frequently, with multiple presenters suggesting the 60-year-old pipeline’s current route to Burnaby is a “historical accident” not a first choice.

“They said they doubted that anyone, designing an optimum route today, would choose to thread the pipeline through some of the most densely populated parts of British Columbia and into its busiest waters.”

Kinder Morgan has rejected the idea of a new pipeline terminal at Deltaport as too expensive, the report notes, but it adds the company did not address the scenario of a new terminal just to the south in the U.S.

“This would obviously require a closer engagement with U.S. authorities and likely approval from the Environmental Protection Agency,” the report said of the Cherry Point alternative, but it echoed one engineer’s comments that it would offer clear advantages of being closer to open sea, would use a site that has handled oil tankers for decades, and would avoid dense urban areas.

Alberta wants a new pipeline to tidewater so oil can be sold to the highest international bidder, rather than remain landlocked and limited to lower U.S. prices.

But the report notes it’s unclear when or if oil prices will rise to a level that makes the expanded pipeline competitive.

On the issue of climate change, the report also cites the prime minister’s past comments that while a shift to alternative energy is essential, that will take time and oil will remain a needed fuel in the interim.

Development opponents in B.C. attack pipeline proposals based on varying local objections, but the report noted many of the same groups also oppose the biggest renewable energy project on the horizon – the B.C. government’s Site C hydroelectric project.

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Trans Mountain expansion ministerial review report by Jeff Nagel on Scribd

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