B.C. announces oil transportation restrictions that could affect Kinder Morgan

The B.C. government has introduced new oil spill regulations that include restrictions on transportation until "the behaviour of spilled bitumen can be better understood."

The measures announced Tuesday could complicate Texas-based energy giant Kinder Morgan's plan to expand its Trans Mountain oil pipeline from Alberta to the B.C. coast.

Heyman said the government would announce a scientific advisory panel to make recommendations about how heavy oil could be safely transported and cleaned up in the event of a spill. 

He said the panel would work with the B.C. government to determine how much oil is currently being transported, and how it should be restricted for the time being as it researches ways to mitigate and respond to bitumen spills in the future.

"British Columbians expect our government to defend the environment, as well as our coastline, interests, and economy," he said.

The $7.9 billion Trans Mountain project proposal would add 980 kilometres of infrastructure to an existing pipeline system, tripling its capacity to pump 890,000 barrels of oil daily from Alberta to a marine terminal in Burnaby. From the company’s Burnaby site, the oil would be shipped to Asian markets in tankers through Vancouver Harbour and then through the waters of the Juan de Fuca Strait shared by British Columbia and Washington State.

"Kinder Morgan is aware of the Government’s announcement today and will actively participate in their engagement and feedback process," Kinder Morgan Canada senior strategic advisor Ali Hounsell said. "The Expansion Project’s approval by the Government of Canada followed a rigorous and lengthy regulatory process that included a thorough examination of the pipeline and products being shipped and there are conditions on the Project from both the National Energy Board and the BC Environmental Assessment Office related to diluted bitumen."

Supporters of the pipeline expansion, which was approved by Prime Minister Justin Trudeau's government in November 2016, argue that it is needed to create jobs, bring Albertan oil to tidewater, and boost provincial economies that have struggled with slumping oil prices. Opponents of the project include the City of Burnaby and the City of Vancouver, which launched a legal challenge last October with six B.C. First Nations to overturn Trudeau's approval in court.

Map of Kinder Morgan Trans Mountain pipeline route from Trans Mountain website. The expanded pipeline would carry bitumen from oil sands in Alberta to a marine terminal in Burnaby, B.C.

Notley slams B.C. for ‘political game-playing’

Alberta’s NDP government immediately slammed B.C.’s announcement, describing it as illegal.

“Having run out of tools in the toolbox, the Government of British Columbia is now grasping at straws,” said Alberta Premier Rachel Notley in a statement. “The B.C. government has every right to consult on whatever it pleases with its citizens. It does not have the right to rewrite our Constitution and assume powers for itself that it does not have. If it did, our Confederation would be meaningless. Therefore, the action announced today by the B.C. government can only be seen for what it is: political game-playing.”

Notley also warned that these political maneuvers could have serious consequences for jobs across the country.

“When I talk about investor confidence, I’m not only speaking about oil and gas development. I’m also talking about all cases where investors engage with lawmakers,” she said. “Job creators need to be able to trust lawmakers. Today’s announcement suggests that in B.C. they cannot. British Columbians — indeed all Canadians — deserve better.”

The Canadian Energy Pipeline Association released a statement opposing the new measures announced by B.C.'s government.

"CEPA is extremely concerned about the sudden introduction of restrictions that would halt the increased flow of diluted bitumen through the province until further studies are completed. These restrictions have never been part of the five-year consultation process and come as a surprise to industry," the Calgary-based association said.

"Extensive research has already been conducted into the behaviour of diluted bitumen and the nature of the product is well-understood. Everything – from its properties, to how it’s transported and cleaned up in the case of a spill – has been thoroughly studied and the information is known and available to the government of British Columbia."

Bitumen spill cleanup

Some of the project's detractors, including scientists, have raised questions about how diluted bitumen would be cleaned up in the event of a major spill.

In the U.S., Washington state officials have expressed frustration in memos from January 2017 about the lack of transparency around information — vital for an oil spill response — on the ingredients of the diluent used to help Alberta bitumen flow through Kinder Morgan’s Trans Mountain oil pipeline.

From the company’s Burnaby site, the oil would be shipped to Asian markets in tankers through Vancouver Harbour and then through the waters of the Juan de Fuca Strait shared by British Columbia and Washington State. The pipeline company previously suggested in responses to National Observer that it has been transparent, publishing a list of 52 products that Transport Canada has approved for the pipeline, as well as components listed on crudemonitor.ca for various types of oil.

Trans Mountain has told Canada’s National Energy Board (NEB) it would quickly disclose ingredients in the event of a spill.

"To the best of my knowledge, B.C. still does not have a clear and definitive idea of all the components (in bitumen transported by the Trans Mountain pipeline)," Heyman said. "Washington State has different laws than we do, but part of the purpose of establishing a scientific panel is to look at every aspect of the transportation of diluted bitumen and other crude oil that could affect B.C.'s coastline, land and our interior waterways."

Hounsell responded Kinder Morgan has already makes this information public on its website. The page includes information about diluted bitumen and links to crudemonitor.ca.

"It's another roadblock for a project that has faced a lot of uncertainty and a lot of risk," said Jessica Clogg, executive director for West Coast Environmental Law. "There are some significant regulatory barriers that may prevent the pipeline from ever being constructed."

“Today’s announcement is a major blow to Kinder Morgan," said Greenpeace climate and energy campaigner Mike Hudema. "A tanker spill on the ocean, like the Paris-sized spill caused by the Sanchi tanker earlier this month, would be virtually impossible to clean up and the impacts could last decades."

This story was updated at 12:10 a.m. PT with comments from Kinder Morgan and provincial environment minister George Heyman and at 1:53 PT with comments from Alberta Premier Rachel Notley. The story was updated at 4:03 p.m. PT with a comment from the Canadian Energy Pipeline Association. 

With files from Mike De Souza