Contributed by Robert Lyman © June 1, 2017
If today’s headlines are to be believed, a newly-elected British Columbia provincial government composed of the New Democratic Party and a sliver group of Green Party MLA’s, is about to go to war against Canada. They oppose the construction of the Trans Mountain Expansion project, a proposal by Kinder Morgan Canada. This is a $7.4 billion construction project that involves the addition of facilities along the existing Trans Mountain Pipeline system, which was built in 1953 and has thus operated for almost 65 years, to increase the pipeline’s crude oil carrying capacity from 300,000 to 890,000 barrel per day. The project will also include expansion of the Westridge marine terminal so that it can handle an increase in the number of oil tankers needed to transport the crude oil to Pacific markets.
On December 16, 2013 Trans Mountain Pipeline applied to the National Energy Board for approval to build this project. After two and a half years of extensive hearings, consultations and studies, the National Energy Board recommended that the project be approved, subject to 157 conditions, most of which were instigated by environmental groups that intervened in the process. The federal Cabinet approved the NEB’s recommendation and ordered the Board to issue a certificate of public convenience and necessity for the project.
Two points about this project deserve to be underlined at the outset.
- The Trans Mountain Pipeline is the only link for Alberta oil to west coast markets and therefore the single most important route by which Canada can diversify its current exclusive reliance on United States markets for oil export sales.
- The authority to approve the certification and construction of interprovincial pipelines falls exclusively within the jurisdiction of the Government of Canada.
The claim by British Columbia politicians that they will block the construction of this project represents a significant threat not only to the Alberta oil industry and the economic opportunities of the British Columbia pipeline industry but also the principle of unrestricted and non-discriminatory transportation of goods among Canadian provinces, a fundamental principle of Confederation.
Why are British Columbia politicians taking this position? Publicly, they claim that the Trans Mountain Expansion Project will result in an unacceptable risk of oil spills off the Canadian west coast due to the increase in vessel traffic. The purpose of this note is to examine the truthfulness of this claim, based upon the best available evidence.
The Results of Regulatory Review – the TERMPOL Process
While it receives very little media attention, Canada has one of the most extensive and demanding systems for regulating the safety of marine shipping, and especially of oil tanker movement, in the world. This system governs every aspect of oil spill prevention, preparedness, response, and remediation, fully aligned with the most demanding international standards as established by the International Maritime Organization. While the public’s vision of such matters seems stuck in the era of the 1970’s Exxon Valdez disaster, when single hulled tankers were dominant, today all oil tankers operating in Canada are double-hulled and are subject to a host of regulatory requirements and industry standards that have drastically reduced the number of oil spills, the volumes of oil spilled, and the adverse after-effects. For a thorough discussion of the wide range of programs and measures in place to avoid and, if necessary, deal with any spills, see the following article.
One of the key features of the current Canadian regime is the TERMPOL review process. TERMPOL (Technical Review of Marine Terminal Systems and Transhipment Sites) has operated since the late 1970’s. It entails the study by a number of federal government departments and agencies that are expert in marine safety issues of the risks associated with placing and operating marine terminals for large oil tankers. In the case of the Trans Mountain Expansion project, Transport Canada led a TERMPOL review, along with Fisheries and Oceans Canada, the Canadian Coast Guard, Environment Canada, the Canadian Hydrographic Service, the Pacific Pilotage Authority, the British Columbia Coast Pilots, and Port Metro Vancouver. The panel reviewed and analyzed Trans Mountain’s proposal from the perspective of their respective mandates, regulatory authorities, responsibilities and expertise. They then completed a report. While the TERMPOL process is a voluntary one, the recommendations became the basis upon which the National Energy Board subsequently assessed all the merits of the project.
A key element in the TERMPOL review was its assessment of the risks posed by the marine portion of the project. Det Norske Veritas (DNV), an independent firm and one of the foremost consulting and licencing authorities in this field in the world did that assessment. The findings of the DNV report are critical to an objective evaluation of the project.
The expansion of the Trans Mountain Pipeline would lead to increased pipeline throughput that in turn would result in increased tankers calling on the Westridge Terminal to load crude oil cargo. Currently, about 600 tankers enter the Juan de Fuca Straights with destinations to Canada and the United States, of which 60 go to the Westridge Terminal. As a result of the Trans Mountain project, it is expected that tanker traffic to the Westridge Terminal will increase to around 408 per year. There will be no increase in the current size of tankers. On average, slightly more than one tanker per day would be entering or leaving Burrard Inlet. The tankers are only a small portion of the total large commercial ships entering the Salish Sea area. While Westridge-bound tankers constitute about 1.1 % of large ships entering the Salish Sea today, in the future it is estimated that would increase to 6.6% of all such large vessels in the area.
Here are some key quotations from the DET assessment.
“The sailing route from the Westridge terminal to the high seas outside the Juan de Fuca Strait is a relatively uncomplicated route…The transit of laden oil tankers is strictly regulated with requirement of two pilots until the Juan de Fuca Strait and use of tethered tug escort in the harbor area and through the Boundary Pass and Haro Straight. The whole sailing route has a traffic separation scheme (TSS) and is monitored and guided by the Canadian Coast Guard MCTS and U.S Coast Guard VTS. Thus it can be concluded that the entire sailing route is well managed and has a high level of risk control in place.”
“Oil tankers that call at Trans Mountain’s Westridge terminal are and will be modern double-hull vessels of Aframax size (80,000-120,000 DWT) and, in the majority of these vessels, the bunker oil tanks will be protected by a double hull. So only the most severe impacts from an incident like a high-energy collision or grounding is expected to cause an oil spill. ITOPF [International Tanker Owners Pollution Federation] data on accidental oil spills show a clear decrease in both the number and volume of oil spills in recent decades. The average total oil spill volume per year has decreased with a factor of 18 from the 1970’s to the present decade.”
“The assessment considers the effect on incident risk of traffic growth from Trans Mountain tanker traffic as well as from overall traffic growth in the study area. The increase in traffic resulting from the Project (going from 60 to 408 tankers per year) is found to have a negligible effect on the total incident frequency for the region. With or without the Project, tanker traffic remains a small part of total traffic in the region.”
Without the Project, the frequency of accidents resulting in oil cargo spill of any size is estimated to be 1 in every 309 years. Post implementation of the Project, if no additional risk reducing measures are implemented, the frequency will be 1 in every 46 years. If all the risk reducing measures discussed in this report are implemented, the frequency will be 1 in every 237 years.”
“Without the Project, the risk of a credible worst case oil spill is estimated to be 1 in every 3093 years. Once the Project is implemented, if no additional risk reducing measures are implemented, the frequency will be 1 in every 456 years. If all the risk reducing measures discussed in this report are implemented, the frequency will be 1 in every 2366 years.”
“DNV concludes that the regional increase in oil spill risk caused by the expected increase in oil tanker traffic to Trans Mountain Westridge Marine Terminal is low, and that the region is capable of safely accommodating the additional one laden crude oil tanker per day that will result from the Project.”
National Energy Board Review
In May 2016 the National Energy Board issued its report based on a two-and-a-half-year review of every aspect of the Trans Mountain Expansion project. A significant portion of the Board’s environmental assessment of the project focused on oil spill prevention in both the land and marine environments.
Much of the debate among intervenors before the Board concerned the potential magnitude of a worst case oil spill, regardless of how likely or unlikely such a spill might be.
The Board decided that all of the risk reduction measures identified in the DNV report should be implemented, and included these as conditions in its proposed certification requirements.
In stating the “Views of the Board”, the NEB report on the Trans Mountain Expansion Project includes the following statements.
“As previously noted, the evidence before the Board indicates that there are competent authorities responsible for the marine oil spill preparedness and response regime and that the regime is functioning appropriately. Any changes to the existing regime would be the responsibility of those competent authorities. The evidence indicates that the regime is reviewed periodically and there is currently a review of the regulatory regime occurring.”
“The Board heard concerns that sufficient resources should be in place to respond to the complete loss of a ship’s cargo. The evidence presented in section 14.4 indicates that complete loss is not a likely scenario. However, should such an unlikely event occur, evidence filed by Trans Mountain and the Canadian Coast Guard indicates that WCMRC [Western Canada Marine Response Corporation] and the Canadian Coast Guard have the ability to mobilize resources to respond to a spill that is larger than the credible worst-case scenario.”
The Board found the overall project to be in the Canadian interest. In doing so, it imposed 157 conditions that will apply during various stages of the project lifecycle, including before construction, during construction and during operation of the pipeline system, and are designed to reduce possible risks identified during the application process. The project-specific conditions are in addition to the large body of existing regulations, codes and standards and Trans Mountain Pipeline’s commitments to ensure that the entire project is planned, built and operated safely.
The marine conditions imposed by the NEB cover a variety of aspects, including:
- Emergency preparedness and response
- Marine air and greenhouse gas emissions
- Protection of marine mammals
- Project-related marine shipping safety measures
During the Board’s evidence stage and the public hearings, environmental and aboriginal groups raised almost every conceivable issue with respect to the potential impact of the marine portion of the project on the environment and marine mammals. The NEB panel considered the evidence presented by both sides at length. The issues involved were often highly technical ones.
There is some irony that the resolution of these issues by highly qualified technical regulatory bodies like the TERMPOL committee and the National Energy Board is now being repeated in the media in terms that the general public cannot hope to assess in an informed way. By focusing heavily on worst cases, project opponents attempt to create the impression that the worst cases envisioned for emergency planning purposes are in fact the most likely cases, the opposite of the truth.
Underlying some of the opponents’ submissions and much of the public criticism of the project seems to be the thesis that society should accept zero risk of any kind of adverse environmental effects from a major project, and that every instance of potential pollution will have a permanent species-destroying effect. In no other sector of the Canadian economy are proposed economic development projects subjected to such unrealistic standards of acceptability. To their credit, TERMPOL and the NEB did not accept them either.
The opposition to the Trans Mountain Expansion project on the grounds of alleged environmental risks, both onshore and offshore, seems to ignore or belittle the economic benefits of the project. According to testimony filed by Trans Mountain and studies conducted by the Conference Board of Canada, those economic benefits will include:
- $7.4 billion in investment in Canada
- More than 800,000 person-years of employment during construction and the 20-year operation of the project
- $46.7 billion in federal and provincial government tax revenues to fund a wide range of public programs
- $23.2 million per year in increased municipal property taxes in British Columbia
- $3.7 billion more for Canadian oil producers as a result of increased export sales
The claims by politicians in British Columbia that the Trans Mountain Expansion project represents unacceptable environmental risks, especially in the marine portion, stand in direct contrast to the evidence that was received and reviewed by the TERMPOL Committee and the National Energy Board. These are the most authoritative bodies in Canada, appointed and responsible to serve the Canadian public interest. The Government of Canada’s approval of the project provides further confirmation that, according to the standards established by Canada’s democratic institutions, this project is in Canada’s interests.
In this context, the threat by British Columbia politicians to do all in their power and “to use every tool in the toolbox” to block the Trans Mountain Expansion project from proceeding is an unacceptable challenge to the integrity of the democratic decision-making process in Canada. The Government of Canada, in turn, must take every step possible within its jurisdiction to uphold the rule of law and to respect the rules of fair trade among the provinces in our federation.