Contributed by Robert Lyman © 2017
Robert Lyman is an Ottawa energy policy consultant and former public servant of 27 years, former diplomat for 10 years.
Last week, British Columbia Minister of Environment and Climate Change George Heyman announced proposed new regulations to limit “the increase of diluted bitumen transportation until the behavior of spilled bitumen can be better understood and there is certainty regarding the ability to adequately mitigate spills”. To that end, B.C will establish an independent scientific advisory panel to make recommendations on if and how heavy oils can be safely transported and, if spilled, cleaned up.
The only people who could cheer this action are those who know little or nothing about the major reviews that have already been conducted by the Canadian federal government of precisely these subjects, or those whose goal is to limit the market access of Canadian oil production. The purpose of this note is to examine what the previous reviews have done, in order to determine whether the proposed British Columbia regulation is justified based on the evidence.
B.C.’s actions must be seen in the context of the federal government’s approval of a certificate of public convenience and necessity for the Trans Mountain Expansion Project. Trans Mountain Pipeline submitted an application to the National Energy Board (NEB) for approval of this project in December 2013. This project would entail the twinning of the existing Trans Mountain Pipeline that has operated in British Columbia for over 60 years, the addition of new pump stations and tanks for the onshore pipeline, and the expansion of the Westridge Terminal in Burnaby. The result of this expansion is that crude oil flow in the pipeline would increase from 300,000 to 890,000 barrels per day and the number of tankers departing the Westridge Terminal would increase from 60 to 400 per year (a bit more than one per day). After almost three and a half years of regulatory review and public hearings, in May 2016 the NEB panel that examined the application issued a report recommending conditional approval.
The NEB is an independent, expert regulatory tribunal that since 1959 has served Canada well in performing reviews of proposed projects in terms of their engineering, safety, financial, economic, social and environmental considerations and how these may be appropriately balanced in the Canadian public interest. The marine portion of the transportation system was reviewed under the federal government’s TERMPOL Review process, which brings together experts from six different federal departments and authorities to examine the marine safety and environmental issues associated with the port and tanker operations.
Opponents of this project have done everything possible to undermine the credibility and legitimacy of the longstanding federal government regulatory process. They have challenged the NEB’s objectivity and integrity, used public hearings as a stalling mechanism rather than an opportunity for provision of advice and views, and tried every means available to move the decisions out of the hands of the professional regulators and into those of politicians whom they could more easily influence. One of their effective tactics has been to focus in on technical issues about the project that are subject to legitimate and vigorous discussion among experts and to present these to the public as simple issues for which the merits rest only on one side – the side that opposes the project.
Some of the most high profile, but poorly-understood, sets of issues concerns the potential effects of an oil spill from the marine, or tanker, portion of the transportation system. There are several related questions:
- How likely is it that there would be an oil spill from the Westridge terminal or a tanker?
- Would the effects of a spill involving diluted bitumen (from the oil sands) be worse than that of other types of oil spills and is that manageable?
- How probable is a worst case spill?
- How good are present and future governmental systems for avoiding, responding to and cleaning up oil spills in Canada? and
- Where the scientific evidence is not yet complete, what is the best way to proceed?
Every single one of these questions was considered and thoroughly addressed by the federal government regulatory processes. In a November 2016 article, I described the current regime for the prevention of and response to marine oil spills in Canada. It can be read here:
Opponents, it appears, decided that what they really needed was an issue so arcane and unfamiliar to the public that fewer than one in ten thousand people would understand what it was about. The one that the B.C government chose to focus on in announcing its new rules is the effect of a possible spill involving diluted bitumen.
What Is This Really About?
The oil sands yield bitumen, a highly viscous (i.e. resistant to flow) form of petroleum. After extraction, bitumen must be modified for transport. Commonly, it is combined with lower-density hydrocarbon mixtures (condensates, synthetic crude oil, or a mixture of both) to obtain a product that will flow more easily and has a density suitable for transport to refineries by pipeline. This “engineered” fluid is referred to as diluted bitumen.
Diluted bitumen has been transported by pipeline in Canada and the United States for more than 40 years. In other words, this is not a new issue – transport of bitumen by pipeline across bodies of water has been going on for a long time already.
Bitumen, however, has important differences from certain other types of oil products. In comparison to other commonly transported crude oils, many of the chemical and physical properties of diluted bitumen, especially relevant to environmental impacts, differ substantially from those of other crude oils. The key differences are in the exceptionally high density (i.e. low proportion of lighter petroleum products like gasoline or kerosene), viscosity (resistance to flow) and adhesion (tendency to cling to other substances) properties of the bitumen component of the blended bitumen that are increased when the diluted bitumen is subjected to weathering (a term that refers to the physical and chemical changes of spilled oil). Immediately after a spill into water, the behavior of diluted bitumen is similar to that of most other crude oils. Prolonged exposure to the environment, however, can cause the diluted product to revert toward the properties of the original bitumen. In some cases, the spilled bitumen may adhere to the surfaces it contacts as a residue; in others, the residues may submerge or sink to the bottom of the water body. These factors are important to consider for spill response planning and implementation. Spill response is most effective when it is fast – ideally within two days, but certainly within ten. Mechanical means of cleanup, like the use of booms and skimming, remain effective, but the period of time in which other techniques like the use of dispersants and in situ burning can be used are shorter than in the case of other crude oil spills.
Chapter 8.0 of the National Energy Board’s May 2016 report on the Trans Mountain Expansion Project contains a lengthy summary of the evidence submitted concerning the environmental behavior of spilled oil and of the Board panel’s conclusions based on what it heard. To properly understand the issues, one should read both that chapter and the verbatim transcript of the verbal testimony and cross-examination that followed it. Trans Mountain’s testimony included some key points that are rarely, if ever, included in press accounts.
- Diluted bitumen and other crude oils and fuel oils with similar physical properties (like heavy crude oil and products like Bunker C fuel oil) are transported throughout the world. The general behavior of these oils is similar with respect to weathering and to spill counter-measures.
- The Joint Review Panel for the Northern Gateway Project found that, although there is some uncertainty regarding the behavior of diluted bitumen spilled in water, the weight of evidence indicated that it is no more likely to sink to the bottom than any other heavier oils with similar physical and chemical properties. “The Panel found that diluted bitumen is unlikely to sink due to natural weathering processes alone, within the timeframe in which initial, on-water response may occur, or in the absence of sediment or other particulate matter interactions.”
- As determined through the “Gainford Study” conducted by Trans Mountain and the Western Canada Marine Response Corporation (the main regional response organization for dealing with spills on the west coast), emergency response procedures and cleanup techniques for diluted bitumen would be similar to other heavy crude oil products for which emergency responders have developed procedures and techniques to respond to accidental spills.
- The results of the Gainford study are similar to a study conducted by the government of Canada (Environment and Climate Change Canada, Fisheries and Oceans, Canada, and Natural Resources Canada). The Government of Canada study concluded that more research is needed and will be conducted.
- The Canadian Coast Guard said that, as part of the package of World Class Tanker Safety Initiatives, the federal government is examining the characteristics of how various blends of oil react in the marine environment. Scientists from DFO, ECCC and NRCan are conducting this research on how it may affect the sensitivities of the environment, including marine habitats and the fisheries resources they support.
The Views of the Board
The views of the NEB, as stated in the May 2016 report, address the same issues as the British Columbia regulation now wishes to address.
“The Board is satisfied that sufficient evidence has been placed on the record regarding the fate and behavior of an oil spill to support assessment of potential spill-related effects and spill-response planning.”
“Evidence filed by parties, such as Trans Mountain and the Government of Canada, and past spill examples indicated that bitumen will not typically sink in large quantities, or as a continuous mat in both freshwater and marine environments. Included in this evidence were the results of research conducted by Trans Mountain, the Government of Canada, and Alberta innovates. Trans Mountain also referred to the findings of the Joint Review Panel for the Enbridge Northern Gateway Project with regard to the potential for diluted bitumen to sink in an aquatic environment.
The weight of the evidence indicates that any sinking would likely be in limited quantities and only after sufficient weathering over a period of days or interaction with sediment or other organic matter under the right environmental conditions”
“The Board is of the view that depending on weathering state and environmental conditions, spilled diluted bitumen could be prone to submergence in an aquatic environment. A number of parties filed evidence confirming this view. The potential for submergence must be considered in response planning.”
“The Board is of the view that weathered diluted bitumen could pose particular challenges in response and cleanup due to its potential for submergence and emulsion formation, persistent chemical and physical properties and potential for shoreline stranding. Environmental conditions and spill-specific factors would influence the use of such response tactics. The Board is of the view that these response challenges are not unique to diluted bitumen spills, but can be associated with heavier oil products in general.”
“Parties such as Trans Mountain and ECCC noted the need for additional research on the fate and behavior of spilled oils. The Board acknowledges that there is ongoing research on the fate and behavior of spilled oils, including diluted bitumen products. This research is being conducted by the Royal Society of Canada, the United States Hazardous Materials and Safety Administration, and the Government of Canada. The Board is of the view that the results of this research could continue to inform the potential fate and behavior of spilled oils and assist companies and oil spill response agencies in spill response planning.”
Heavy Oils in the Context of the Global Oil Market
So the challenge of safely transporting diluted bitumen is not significantly different from that of transporting heavy crude oil and heavy fuel oil. Plenty is known, based on over 40 years of experience, but there is more to learn through research and planning, and those efforts are underway in Canada and other countries. None of this, and none of the evidence presented over years to the NEB, makes a compelling case for seeking to block all pipeline or marine transport of diluted bitumen.
How important are heavy oils generally? According to several sources, including the International Energy Agency and the U.S. Energy Information Administration, global crude oil demand has been increasing at the rate of over 1.2 million barrels per day since 2012. Global oil resources are variously estimated at 9-13 trillion barrels. Of this, 70% is present in the form of heavy oil, extra-heavy oil, and oil sands or bitumen. The global crude oil reserve (supply available to be produced under current economic and technological conditions) at the end of 2015 was about 1.7 trillion barrels; more than 50% of this is heavy oil and bitumen.
For reasons of cost, today conventional crude oils constitute over 85% of global crude oil production. Still, in 2015, 9.6 million barrels per day of production was heavy crude oil (including bitumen). The following graphs from the BP Statistical Review of World Energy, 2015 show the past and projected trends.
As you will note from the bar chart, in 2015 British Petroleum (one of the foremost analysts of global energy supply and demand conditions) projected heavy crude oil production to increase steadily to about 10.1 million barrels per day by 2035. Since then, projections of total crude oil production and consumption have increased considerably and are now in the range of 100 million to 120 million barrels per day by 2035. Heavy oil will constitute a large, and possibly growing share, of that total, and much of it will move to markets by tanker.
Heavy fuel oil has been used as the main source of fuel in large marine vessels for many decades, especially since the 1960’s. According to the BP Statistical Review of World Energy 2017, world consumption of fuel oil, mainly for shipping, declined from 9.7 million barrels per day in 2006 to 8.0 million barrels per day in 2016. In other words, it is a large and well known aspect of marine vessel transport.
To fully understand all the issues that might be raised about the Trans Mountain Expansion Project’ pipeline and marine transportation components, one would need to have significant expertise in engineering, economics, physics, chemistry, biology, and finances, not to mention public policy and regulation. The average person, even with above-average knowledge, cannot possibly hope to form a sound judgment on the merits of such projects based on press reports, politicians’ comments, or social media debates. This is true not only in general but also on specific topics like the chemical properties of diluted bitumen, the risks that oil might spill, and the adequacy of spill response measures. The opponents of the Trans Mountain Project depend upon people not knowing, and yet believing that those who oppose all oil development are more credible than the longstanding Government of Canada departments and regulatory bodies with enormous expertise (and a commitment to the public interest) that have already spent years studying these issues.
The British Columbia use of a new regulatory process to examine the implications of transporting diluted bitumen by tankers is not justified based on the evidence already received and reviewed by the competent governmental authorities.
The Government of Canada has the constitutional authority to review and decide on inter-provincial pipeline projects and their related effects and public interest considerations, and it has spent many years and millions of dollars exercising due diligence. No additional review of ground already well tread is needed. The obstruction must end.