Kinder Morgan TransMountain Pipeline fact sheet – April 26, 2015

Timeline

The Kinder Morgan Trans Mountain expansion project (TMEP) was announced in 2012.

On December 16, 2013, the company filed an application for approval by the National Energy Board of the $5.4 billion expansion project to include

• a twinned pipeline to roughly follow the route of the existing 60-year-old line from Edmonton to Burnaby, which would increase flow to 890,000 barrels per day, pretty much all of the increase to be diluted bitumen (dilbit) from the Alberta tar sands;

• a 229% expansion of the tank farm adjacent to the Burnaby Terminal on the south side of Burnaby Mountain, adding more than a dozen enlarged tanks and bringing capacity up to over 5 million barrels.

• Expansion of the Westridge Marine Terminal from one super-tanker berth to three in order to service an anticipated seven-fold increase of tankers (up to 400 per year).

The NEB’s recommendation to the federal cabinet was originally slated for early 2015. However, on May 14, 2014 the company filed new plans changing its preferred route for the last leg of the pipeline from traversing residential neighbourhoods to passing through a pair of tunnels under Burnaby Mountain. The NEB recommendation deadline is now January 25, 2016, with a final decision by cabinet expected within three months afterward.

Jobs

Though many numbers are bandied about, a middle-of-the-road estimate is that the Kinder Morgan Trans Mountain Pipeline Expansion project will create 4,500 jobs during its peak and about 90 permanent, full time jobs after completion. An oil spill in the lower mainland or in Burrard Inlet could put at risk industries that together employ over 200,000 people locally including tourism, film and TV, real estate, high tech, agriculture and coastal industries.

Beyond narrow job headcounts, however, there is much evidence that the export of tar sands bitumen is bad for the Canadian economy as a whole.

Who/What is Kinder Morgan TransMountain?

Kinder Morgan is the largest “energy infrastructure” company (pipelines, pumping stations, storage facilities, etc.) in North America, controlling over 80,000 miles of pipeline and 180 terminals. Claimed “enterprise value” is $130 billion.

CEO Richard Kinder claims to receive $1.00 annual salary and and no stock options or other types of compensation. Forbes Magazine says his personal worth is $11.8 billion and places him at #100 on the March 3, 2015 list of the world’s richest 500 people. In 1996 he resigned as president and COO of Enron Corporation, along with Vice-Chairman William Morgan. The following year, along with other investors, the pair bought some of Enron’s assets for $40 million and founded Kinder Morgan Energy Partners with 175 employees and an enterprise value of about $325 million.

At the end of 2001, the Enron fraud scandal blew up, crashing the company and ruining hundreds of employees and investors. Neither Kinder nor Morgan, despite years in top positions, were charged in the criminal investigation.

Trans Mountain Pipeline System came into being with the 1953-54 laying of pipe from Edmondon to Burnaby. Until recently, it has carried crude oil and refined products to terminals in Kamloops and Burnaby, to U.S. terminals in the Puget Sound area, and, via its one-berth Westridge Marine Terminal in Burnaby, to other foreign markets. Its capacity is roughly 300,000 barrels per day. Since Kinder Morgan acquired the company in 2005, it has carried more and more diluted bitumen, solely for export as there is no local refinery capable of upgrading the dilbit to synthetic crude.

What are Bitumen and Dilbit

Bitumen is a highly viscous form of low-grade petroleum of varying densities. At room temperature it is about the consistency of cold molasses. At 10 degree centigrade it is hard as a hockey puck. It is heavier, thicker and denser than light crude because it is a naturally weathered hydrocarbon that has been heavily degraded by bacteria over millions of years. It also contains a variety of heavy metals (nickel and vanadium) as well as sulfur and nitrogen. Depending on how it was mined (open pit or in situ drilling) it includes varying amounts of sand and clay.

A huge amount of water is involved in extracting bitumen, a lot of it from the Athabasca River. The water and chemicals associated with extraction had, by early 2015, produced 220 square kilometres of tailings ponds around the tar sands operations in Northern Alberta. These are engineered dam and dyke systems that contain salts, suspended solids and other dissolvable chemical compounds such as acids, benzene, hydrocarbons residual bitumen, fine silts. The exact chemical composition of the fluids and other materials used in the mining and in the effluent treatment is a corporate “trade secret,” but there are volumes of evidence that the chemicals are highly toxic, evaporate into the air easily, regularly kill passing waterfowl, and poison downwind lands and waters, the home territories of First Nation peoples.

Also, the tailings ponds seep, leak, and suffer enclosure failures from time to time, flowing into nearby streams and often into the Athabasca River, until recently a major source of food for local residents. In January 2015, Canada blocked an investigation of the tailings ponds by the Commission for Environmental Cooperation, the environmental watchdog organization created by the North American Free Trade Agreement (NAFTA).

Combined air, land, game, and water pollution caused by the tar sands have resulted in an abnormally high rate of cancers among First Nations people living in the area of the tar sands and downwind or downstream.

To get the bitumen to flow through pipelines, it must be heated, diluted, and pushed by higher pressures than is the case with regular crude oil grades. The heating and increased pressure, as well as the more corrosive composition of the product, significantly increase the likelihood of pipe ruptures. This is even more true of pre-1970 pipelines constructed with “old technologies.”

To dilute the bitumen a diluent, made mostly from natural gas condensate is used. This is a gasoline-like product of high volatility that is pipelined to the Alberta oil patch from various places in North America, increasingly from fracking wells in Northeastern British Columbia.

The resulting “dilbit,” despite many ridiculous claims by oil and pipeline companies, does not float indefinitely if it is spilled into water. Studies have shown that, depending on water temperature and winds, the diluent will evaporate, and dilbit will sink in as little as 26 hours in both fresh water and in brackish sea water. At most, it can float for 13-15 days in warm, calm waters.

Climate Impacts

A study ordered by the government of Alberta and conducted in 2012 by Jacobs Engineering Group, concluded that, compared to regular crude, oil sands bitumen produces 9-12% more greenhouse gases during its life cycle (from extraction; through all phases of production, transportation, and use, to final disposal or recycling). The likely climate impact of the Kinder Morgan Pipeline all by itself is considerable.

Opening the floodgates and allowing tar Alberta bitumen free passage to its intended major markets in Asia will threaten humanity’s future. Of course, it’s bad if it gets there via existing pipelines, trains, and even trucks. But this is a trickle. If the full, constantly expanding production of the tar sands connects via multiple pipelines and super-tankers to Asian end-users, pioneering climatologist James Hansen tells us it will be “game over” for human civilization and many of our planet’s species, both plant and animal.

The “Twinned” Pipeline

The Kinder Morgan expansion proposal includes 981 km of new pipe and 193 km of re-activated pipe that has been mothballed for some years. Part of the new pipe is already in place as 158 km were laid in 2008 through Jasper National Park and Mt. Robson Provincial park. The new, twinned pipe will closely parallel existing pipe for only 73 per cent of the entire distance; 17 per cent will be along other, existing right-of-ways, and ten per cent will be in totally new corridors, supposedly attempting to avoid urban concentrations and some First Nation reserves. (In Burnaby, 90% of the new pipe will NOT be along the same corridor as the existing pipe.)

It will still go through a number of cities, seven provincial parks, 13 First Nation reserves (and much other unceded First Nation territory), cross 500 rivers and streams, and follow the Fraser River Valley for most of the way. Approaching the Lower Mainland, it will come along the Coquihalla Highway, parallel Highway 1 in the valley, cross the Fraser near the Port Mann Bridge, go through the Brunette River Conservation Area before reaching the Burnaby Terminal on Burnaby Mountain.

Not widely known or discussed is the fact that the new pipeline will actually have a capacity to move another 240,000 barrels a day. This designed over-capacity, including some extra pumping stations, anticipates a future increase in the flow of product, although this would supposedly require a more horsepower pumping capacity, some new pipeline segments, and a new application for approval to the National Energy Board. If ever activated, this increased flow would obviously entail a increase in tanker traffic in Burrard Inlet.

The final leg of the pipeline, according to the company’s current “preferred” route would be through a pair of parallel tunnels passing through Burnaby Mountain from the Trans Mountain Burnaby Terminal on the south slope to an exit on the slope above the Westridge Marine Terminal. Pre-tunneling borehole testing and associated clearing of trees and bushes in the mountain’s Conservation Area above the tunnel route sparked municipal government opposition and persistent public protest rallies.

Also relevant: this is a seismically active region and there is some evidence that a significant geological fault line runs along the north slope of the mountain.

Kinder Morgan claims that this is the route “preferred” by Burnaby residents after an unknown number of them were contacted in the Fall of 2014 through hand-delivered letters and “town hall” telephone calls. In this survey residents were NOT given the option of having no new pipeline at all through North Burnaby.

Tankers

With 400 Aframax tankers per year coming into and out of the Burrard Inlet (Vancouver Harbour), engineering experts say the danger of spills, collisions, hull ruptures, toxic clouds, etc. will obviously grow hugely. These medium-sized tankers are 245 metres long and carry, on average, 750,000 barrels of oil.

This traffic would pass between two sets of narrows, under a heavily-trafficked inter-urban automobile bridge, a TransCanada Highway bridge, and a railroad bridge. The enlarged Westridge Marine Terminal, with three tanker berths instead of one, will itself constrict the space for tanker maneuvering in the inner harbour. The Sea Bus north-south crossing has sailings in both directions every 15 minutes. Surrounding the Burrard Inlet are several municipalities, the reserve of the Tsleil-Waututh First Nation, large parks, beaches, recreational boating facilities, and many other shoreline businesses. The inlet provides habitat to significant numbers and varieties of fish, sea mammals, and migratory birds.

A significant dilbit spill in the inlet would cause environmental and economic havoc and possibly severe health problems, depending on how fast a spill was contained and how quickly the toxic fumes dissipated. Since the passage through the inlet’s narrows will have to happen at high tide, any spill would be carried by the outgoing tide into Georgia Strait, among the Gulf Islands. A spill in the narrow and tricky Strait of Juan de Fuca could cause immeasurable environmental harm and economic damages.

Tank Farm

The Kinder Morgan tank tarm on the south slope of Burnaby Mountain is located just downhill from the criss-cross intersection of Burnaby Mountain Parkway and Gaglardi Way, the only two roads off the mountaintop SFU campus. On a mid-term weekday there are over 30,000 people living, working, and studying there.

Downslope from the storage facility are residential neighbourhoods, schools, creeks, Burnaby Lake, and the Fraser River.

As it stands, the venting of toxic fumes from the tops of the existing 12 storage tanks, containing a total of 1.6 million barrels of oil, sometimes causes queasiness and headaches among downwind residents or even people in passing vehicles.

The expansion plan call for more than twice the tanks with over three times the storage capacity, which means that the average tank size is going to increase dramatically.

Burnaby’s mayor and fire chief have said that a major fire, or worse, a major breach of the containment berms surrounding the tanks (perhaps the result of an earthquake) could easily cause emergency problems that the city’s resources would be unable to deal with—even with help from neighbouring municipalities.

KM Spills of the Past

Kinder Morgan is on record stating spillage is inevitable. They are also on record stating spillage provides employment opportunities. They would know. As the Wilderness Committee reports

- Abbotsford 2005: A ruptured pipeline dumped a total of 210,000 litres of crude oil into the Abbotsford area and into Kilgard Creek. In a 2007 report from the Transportation Safety Board of Canada, Kinder Morgan was criticized for a delay in response time because the line between Sumas tank farm and the Sumas pump station was not part of a leak detection system.

- Burnaby 2007: A city road crew ruptured a pipeline causing 250,000 litres of crude oil to flow into Burrard Inlet via the Burnaby storm sewer system. Eleven houses were sprayed with oil, many residential properties required restoration and approximately 250 residents evacuated their homes. Cleanup took more than a year. TSB ruled the accident was the fault of Kinder Morgan for providing inaccurate engineering drawings and failing to supervise work as required by NEB.

- Burnaby 2009: 200,000 litres seeped from a storage tank into a surrounding containment bay at the Burnaby Mountain tank farm, causing strong fumes locally.

- Sumas 2012: 110,000 litres of oil leaked from a Sumas Mountain holding tank. The NEB’s investigation found that “the leak was detected later than it should have been,” that the company’s management of procedures was “inadequate” and that the operator “failed to recognize the leak situation” on two occasions. It took three alarms and a shift change before someone was sent out to investigate.

According to Trans Mountain's website, since 1961, Trans Mountain has reported approximately 82 spills to the NEB: 30.5% have occurred along the pipeline, with 21 incidents related to releases of crude oil from the pipeline; 69.5% of Trans Mountain’s past spills have occurred at pump stations or terminals.

Safety Record

Wikipedia reports that in 2009, the U. S. Pipeline and Hazardous Materials Safety Administration (PHMSA) cited Kinder Morgan for violating safety standards regarding the distance between a natural gas pipeline and a “high consequence area” such as a school or hospital; the pipeline was too close for safe operation in case of a leak.

In 2011, PHMSA cited Kinder Morgan for these safety violations:

• failing to maintain update maps showing pipeline locations,

• failing to test pipeline safety devices,

• failing to maintain proper firefighting equipment,

• failing to inspect its pipelines as required, and

• failing to adequately monitor pipes’ corrosion levels.

In 2013, the Wall Street Journal asked, “Is Kinder Morgan Scrimping on its Pipelines?” after an investment analyst charged the company with starving its pipelines of routine maintenance spending in order to return more cash to investors.

In Texas from 2003 to 2014, Kinder Morgan experienced 36 "significant incidents", resulting in fatalities or hospitalization, fires, explosions, or spills. Throughout the U.S. in the same period, Kinder Morgan and its subsidiaries' pipelines were responsible for at least 180 spills, evacuations, explosions, fires, and fatalities in 24 states.

Emergency Response Plan for Expansion Project

Kinder Morgan asserts that it does have an response plan for emergencies related to the construction and operation of the expansion project. The company has even made it available to authorities in the State of Wahington. BUT IT REFUSES TO MAKE THE PLAN PUBLIC OR SHARE IT WITH THE BC GOVERNMENT OR WITH AT-RISK BC MUNICIPALITIES.

And the National Energy Board has decided the company secrecy is okay.

On April 8, 2015, a 2700-litre spill of bunker oil into Burrard Inlet by an anchored freighter went unreported to the City of Vancouver for hours. A very slow containment and clean-up process followed. Surface slicks spread fairly widely around the different parts of the harbour. The Vancouver Aquarium shut off its water intake lines. Globs and smaller bits of the toxic bunker oil washed up on area beaches, as media warned the public not to touch them. Unknown numbers of waterfowl were partially coated with the slime. If the response by the Canadian Coast Guard and “private sector partners” was “world-class,” greater Vancouver is in jeopardy of a catastrophe from a sizable dilbit spill.

Who pays for cleaning up a spill/explosion/fire/other?

On the National Energy Board webpage devoted to frequently asked questions about the project, the answer to who would pay for a spill clean-up says a) the board expects “zero incidents” from regulated companies. But if that expectation is disappointed, the company is “ultimately responsible.”

Robyn Allan, among other economists, has explained that costs of dilbit spills, especially on water, could very quickly become so large that they exceed both the company’s ability to pay AND the top limits on available insurance coverage.

The victims of the incidents would pay immediately. Taxpayers would pay ultimately.

Economic Benefits for Canada.

Beyond narrow job headcounts of specific projects there is much evidence that the export of tar sands bitumen is bad for the Canadian economy as a whole and for a wide range employment possibilities.

Only two per cent of Trans Mountain Pipeline System’s assets are owned by Canadian investors.

Through a convoluted array of ownership interconnections back and forth between U.S. and Canadian jurisdictions and an equally complex system of tax provisions, loopholes, refunds, etc., TransMountain, as of 2013, repatriated an average of $172 million annually to its U.S.-based owners, while paying only an average of $1.5 million in taxes in Canada.

This is despite the fact that it has told the National Energy Board through filings that it expected to be taxed about $100 million per year in Canada. When asked by Robyn Allan through the NEB review process to explain this discrepancy, Kinder Morgan and Trans Mountain declined to answer. The NEB denied Allan’s request to compel an answer.

Income and tax information for other Kinder Morgan Canadian assets is not as easy to acquire as for Trans Mountain, which had to make that information public through the NEB review process.

NEB Review Process

Speaking of which, the NEB review process in the Kinder Morgan Trans Mountain Pipeline Expansion Project has been, itself, a source of much controversy. By a federally legislated rule change the process used in the case of the Enbridge Northern Gateway pipeline application was changed significantly.

Gone was the Joint Review Panel including representatives of both proponents and opponents to the application—there remain only government appointed NEB members, hand-picked largely from among energy industry corporations, law firms, and academic supporters.

Potential intervenors were required to fill out a multi-page, confusing application document. Among other things, they had to prove that they were “directly affected,” very narrowly defined, by the pipeline.

Gone was the ability of opponents to cross-examine testimony. Written questions submitted to the proponent by intervenors, whether individuals or organizations (including city governments), have been evaded or not answered at all. Applications to have the board compel meaningful answers have been ignored.

Dangers of maritime oil spills were mostly excluded from the board’s considerations. And the question the pipeline’s contribution to the onrushing global climate change emergency was likewise placed outside jurisdiction of the review process.

Challenging the very validity of the review process are several lawsuits from the cities of Burnaby and Vancouver, from the Tsleil-Waututh Nation, from a private citizens’ group, and from others. These are wending their ways through the federal courts.

Resolutions strongly disapproving of the NEB review process have been passed by the Union of BC Municipalities (September 2014) and by the Federation of Canadian Municipalities (March 2015).

And on March 31, 2015 a scathing indictment of the review process was jointly issued by the Mayors of Vancouver, Burnaby, North Vancouver, New Westminster, Victoria, Squamish, and Bowen Island. In their “Mayors' Declaration on Kinder Morgan National Energy Process” the city leaders “express concerns” that the process does not constitute a public hearing process, is not credible, and “is neither independent from the oil industry proponents nor ready or able to assess the public interest of British Columbians.”

The NEB also made new law during the fall of 2014 when it decided, after hearing submissions, that it had the authority to rule on the constitutional question of whether board orders (that is, its own orders) over-ruled municipal by-laws. Yes, they decided, and then did over-rule Burnaby’s ordinance forbidding the clearance of trees and other habitat damage in the Burnaby Mountain Conservation Area. An appeal of that decision seems to be stalled between the Provincial and Federal Courts of Appeal.

Public Opposition

The three most visible signs of public opposition to the expansion project are a public opinion poll done in September 2014, the following Burnaby municipal election in mid-November, and the internationally covered Battle of Burnaby Mountain a week later.

In the poll, 68% of those with an opinion were opposed to the project. But the astonishing figure from the poll was that 93% of those polled were aware of the controversy over the project. This was after months of public meetings and rallies held by BROKE (Burnaby Residents Opposing Kinder Morgan Expansion) and by the City of Burnaby, and just a few incidents of conflict on the mountain between Kinder Morgan contactors and the grassroots Burnaby Mountain Caretakers.

In the election, Mayor Derek Corrigan and his Burnaby Citizens Coalition swept all the seats on City Council and the School Board for the third election in a row, receiving majorities of 68-70%. Kinder Morgan’s expansion project was THE election issue.

On the mountain, when contractors showed up to do preparatory work on the borehole sites, active public protest grew in days from a few dozen to hundreds, many of whom showed up day after day through late November. Over 100 were arrested and charged with injunction-defying contempt of court for entering a legal no-go zone. (All charges were dropped when the company admitted that it had given the court the wrong GPS coordinates for the no-go area.)

Meanwhile, Kinder Morgan hit five people involved in the protests with a $5.6 million damages lawsuit, which was later “discontinued,” which means it continues to hang over the heads of the named defendants.

As of this writing, organizational opponents of the expansion project include the Tsleil-Waututh and all of their “cousin” First Nations around the Salish Sea; most lower mainland municipal governments; grassroots citizen groups in Burnaby (BROKE), North Vancouver (North Shore NOPE), and the Fraser Valley (PIPE UP Network); several unions including Unifor; shakily, some parts of the NDP, both federally and provincially (except that North Burnaby MP Kennedy Stewart is definitely and actively opposed); and (sort of) the Green Party, whose reps at the municipal (Vancouver), provincial (BC), and national levels have all called for some version of a more fair review process (Vancouver City Councilor Adriane Carr pushed a 2014 motion for a city plebiscite on the KM project because the NEB was unfair; MLA Andrew Weaver has launched a petition for BC to reassert its surrendered right to do a provincial environmental assessment; and MP Elizabeth May tried unsuccessfully to get the NEB to allow oral cross-examination of company evidence.)