Contributed by Robert Lyman © 2018
Robert Lyman is an Ottawa energy policy consultant and former public servant of 27 years, prior to that he was a diplomat for 10 years. He is a frequent contributor to the Friends of Science blog.
The purpose of this document is to set out verifiable facts concerning the Trans Mountain Expansion Project, the proposed oil pipeline expansion in British Columbia that has given rise to so much controversy.
Because we live in an age of media deception, so-called “fake news”, and attacks on the integrity of people rather than on the coherence and credibility of the arguments they make, I will declare at the outset that I have no connection whatsoever with the sponsors of the Trans Mountain Expansion Project or of any firm in the petroleum industry whose products will be transported by the pipeline. Further, I am receiving and will receive not one penny of financial or other material benefit from the project proceeding. I am a resident of Ontario, not of either of the two provinces most directly affected by the pipeline. My interest is in good public policy, and in decisions that will benefit the Canadian public interest.
What does this project entail?
The project involves the expansion of an existing oil pipeline system that runs from Edmonton, Alberta to Burnaby, British Columbia, at which point some of the crude oil would be loaded onto tankers at the Westridge Marine Terminal where it would be delivered to markets throughout the west coast of North America and the Pacific Rim. This pipeline system has operated for 65 years, since 1953.
The project would result in the looping (or twinning) of the existing 1,147 km Trans Mountain Pipeline (TMPL) system with about 987 km of new buried pipeline. The older pipeline would be designated Line 1. The proposed new pipeline segments, along with two currently active segments, would become Line 2.
The existing pipeline now transports both crude oil and refined petroleum products to British Columbia and export markets in the Puget Sound area as well as California. Today, British Columbia receives over half of its motor gasoline supplies from Alberta via TMPL; the dedication of Line 1 exclusively to refined oil products would increase the security and flexibility of refined oil product supply to British Columbia consumers. In total, the project would increase the capacity of the TMPL system from 300,000 barrels per day to 890,000 barrels per day of crude oil and refined products.
Currently, the Westridge Terminal loads about five oil tankers per month with crude oil delivered by TMPL; this has been occurring for decades. The proposed expanded system would increase the number of tanker loads to about 34 per month, or just over one per day.
Which organizations reviewed the proposal?
The project has been reviewed and approved by the National Energy Board (NEB) and the marine portion has been reviewed and approved by the Transport Canada-led TERMPOL Review Process. Based on the recommendation by the NEB, the federal Cabinet approved the project, and on May 19 2016 the NEB issued a certificate of public convenience and necessity, confirming the project is in Canada’s national interest and is authorized to proceed to construction. The NEB reasons for decision can be read here:
The British Columbia Environmental Assessment Office on January 11 2017 issued an Environmental Assessment Certificate for the project, subject to an additional 37 conditions. The B.C. announcement of this can be read here:
What did the National Energy Board do?
The National Energy Board conducted an extensive review of every aspect of the project in accordance with its requirements under the National Energy Board Act, which requires it to conduct a review based on the Canadian public interest. These subjects included an evaluation of the potential benefits and burdens of the project throughout its entire life cycle, from pre-construction through construction and operation to eventual decommissioning. The topics covered included the need for the pipeline, the safety and engineering integrity of the facilities, the approach to be taken to land acquisition and construction, the economic and financial issues, the impacts on communities and on aboriginal people, and the effects of shipping, among others. The National Energy Board was also responsible to evaluate the project under the Canadian Environment Assessment Act and so it examined the effects of the pipeline on a host of environmental aspects, including air, land and water as well as wildlife; it also reviewed the TMPL plans to avoid accidents that might cause spills and to take rapid action to clean up and remediate any spills that do occur.
How was the public engaged in this process?
Before applying to the National Energy Board, TMPL held many meetings with communities, landowners and aboriginal people who lived along the route and who might be affected by the project. After the application was filed, the NEB then took many steps to ensure that those who could be potentially affected by the project were aware of it and knew how they could get involved in the review. Over the course of its three and a half years of proceedings, the Board provided over $3 million in participant funding to eligible interveners; 79% of this funding was offered to Aboriginal groups.
There were 400 interveners in the review process. In addition, over 1,600 people participated in hearings and 1,250 submitted comments. The Board held public hearing sessions in Edmonton, Calgary, Chilliwack, Kamloops and Victoria.
From 2012 to the end of the review process, TMPL had tens of thousands of exchanges with stakeholders through face-to-face meetings, presentations, public forums, technical meetings, community meetings, social media and other means. It held 159 open houses along the pipeline and marine corridors, more than 1,700 meetings with stakeholder groups, and responded to 1,500 emails, 950 media inquiries and 430 media interviews.
How many conditions did the NEB attach?
The NEB approved the certificate subject to 157 conditions covering the environment, people and lands, engineering and safety, marine traffic, emergency preparedness and regulatory oversight. These conditions are intended to ensure that TMPL’s commitments, plans and programs discussed during the regulatory review are in place so that the Board can assure compliance in future.
What are the economic benefits of the project?
The capital cost of the project when originally proposed was $5.5 billion (2012 dollars), but due to delays in beginning construction that cost is estimated to have increased to about $7.4 billion. The bulk of the spending is expected to take place over a seven-year construction period. The Conference Board of Canada prepared a report quantifying four economic effects of the project, including direct, indirect, induced and fiscal effects.
According to these studies, the construction phase would support 58,000 person-years of direct and indirect employment across Canada, with approximately 36,000 person years in B.C. and 15,000 in Alberta. During construction, the equivalent of 15,000 people will be working on the pipeline expansion. Over the operations phase of its life, which could easily exceed 30 years, the project would directly support 443 jobs, 313 of which would be in B.C.
The combined impact of government revenue for construction and the first 20 years of expanded operations is $46.7 billion. That includes the increased revenues to government from taxation of the oil producers that will supply the line.
The current shortage of pipeline capacity to move western Canadian crude oil to export markets has resulted in significant discounts from the benchmark price of West Texas Intermediate crude oil. In a study published in February 2018 Scotiabank economists calculated that the discounts could cost the Canadian economy $10.8 billion in 2018 and another $7 billion in 2019. Construction of the Expansion would go a long distance to reduce this discount. See the article about the Scotiabank study here:
What are the Burdens of the Project?
The NEB identified three areas in which the burdens associated with he project could be “significant’. One was the effect of project-related marine vessels on the Southern resident killer whale population. This entails an increase in the cumulative effects of the relatively high vessel traffic in the region, of which the added tanker traffic would be a small part. The second was the derived effect on “Aboriginal cultural use” associated with the killer whale population. The third was the greenhouse gas emissions from project-related marine vessels, which the NEB found would be “significant”, although they constitute a very small percentage relative to total Canadian greenhouse gas emissions (0.06 %, or six ten thousandths).
What will be the Effect of the Project on Shipping Traffic?
The project would result in in an increase in tanker traffic from 60 per year to about 408 per year (720 additional movements including in and out). Opponents have presented this as an enormous increase, but it needs to be viewed in context.
The tanker traffic associated with the project would use the Westridge Terminal, which is near the port of Vancouver. The port of Vancouver now has about 23,000 ship movements a year, and is engaged in public consultations about plans to significantly increase its size. The increase would add more than 5,000 ship movements per year if all the future upgrades were included. This dwarfs the 720 additional ship movements associated with the project.
For the TERMPOL Review, the international consulting firm Det Norske Veritas (DNV) performed a thorough review of all the factors that might affect the likelihood of a shipping incident, the possibility and volume of an oil spill, and the likely effects of a spill given all the precautionary and response measures in place. DNR analyzed the risks associated with tanker traffic under three scenarios, one in 2018 without the project, one in 2018 with the project (i.e. assuming it was completed by then), and one in 2028 with the project. Measured in terms of sailed nautical miles, in the first case Trans Mountain tankers would constitute 0.5% of the total 3.8 million miles by all vessels in the Salish Sea and Juan de Fuca Straight. Under the third scenario, in 2018, Trans Mountain tankers would constitute 3.0% of the 4.3 million miles by all vessels in the area. The DNV report concluded that the increase in vessel traffic resulting from the project would have “a negligible effect on the total incident frequency for the region.”
The Det Norske Veritas report can be read here:
What would be the effects on the risks of a marine oil spill?
The TERMPOL Panel found that “the increase in large vessel transits is unlikely to pose a significant safety issue.” It further found that, if all the risk-reducing measures recommended were taken (they were subsequently made mandatory conditions of the NEB certificate), the risk of a worst-case oil spill (estimated to be 16,500 cubic metres) would be one in every 2,366 years.
Today, oil transported as cargo in Canadian waters annually totals 192 million tonnes (MT) to the Atlantic coast, 67 MT to the Gulf of St. Lawrence, 24 MT to the Great Lakes and St. Lawrence Seaway and 6 MT to the Pacific coast. So, only 2% of the oil shipped as cargo in Canadian waters goes to the Pacific coast.
The largest oil spill off Canada’s east coast was in 1970. The M/V Arrow spilled over 10,000 tonnes off the coast of Nova Scotia, before the era when tankers were required to be double-hulled. The largest oil spill off the British Columbia coast resulted from the sinking of the ferry M/V Queen of the North in 2006; that was only 240 tonnes, 2% of the size of the largest spill off the east coast. Yet the industry and government resources held by the Western Canada Marine Response Corporation and the Canadian Coast Guard on the B.C. coast are already more than 30% larger than what would be needed to deal with a spill of the Arrow size.
Does Canada have a world-class regime for avoiding and, if necessary, cleaning up oil spills?
In a single word, yes. That applies both in the case of potential spills from onshore oil pipelines and offshore tanker movements.
I provided a comprehensive factual description of the pipeline safety regime here:
Then, I provided a comprehensive factual description of the tanker safety regime here:
That’s not all. Transport Canada provided an even more comprehensive and updated response to the issues raised by British Columbia after the province claimed that an expanded marine spill response regime was required. The Transport Canada response refutes almost every claim made by the provincial government and TMPL expansion opponents. You can read it here:
What about greenhouse gas emissions and climate change?
Those who are faced with the facts about the benefits of the Trans Mountain Expansion Project and the minimal risks that it poses to the land and marine environment often fall back onto the position that nothing that increases greenhouse gas emissions should be approved.
It is usually useless to challenge the scientific basis of the belief that human carbon dioxide emissions will cause catastrophic global warming a century hence. It has become an article of non-debatable faith for many. Instead, let us examine the position that Canada should not build the TMPL expansion because of its GHG emissions.
The harm that greenhouse gas emissions are alleged to cause is not due to the emissions per se, but rather to the accumulated concentrations of carbon dioxide and equivalent gases in the atmosphere. Those accumulations are due to global emissions that have occurred since the beginning of the Industrial Revolution over 150 years ago. It is virtually impossible to attribute any single incremental emission to the changes in cumulative emissions over time, as the cumulative emissions growth is immense and world wide in nature.
The total greenhouse gas emissions generated by the expansion project in British Columbia and Alberta were reported to the NEB as just over one million tonnes during the construction phase and 407,000 tonnes per year during the operating phase. The National Energy Board imposed a condition that Trans Mountain develop a plan to offset the entire one million tonnes of construction-period emissions by reductions elsewhere, so that there are no net emissions increases from the construction. This is an unprecedented and onerous condition to place on a pipeline sponsor, but Trans Mountain agreed. The 407,000 tonnes of emissions per year during the operating phase are the equivalent of 0.058% of Canada’s annual emissions, as mentioned previously, barely a rounding error.
Is it really credible that Canada should forego tens of thousands of person years of employment and almost $47 billion in revenues for governments that could be spent on public services in order to reduce annual emissions by next to nothing?