A bi-weekly publication in support of informed public discourse. Our inspiration is I.F. Stone’s weekly, a digest published from1953 to 1971 that made sense of the news coming out of Washington. 

Like I F Stone’s weekly, our goal is to tell the story that lies behind the news. It is to put ourselves, ordinary people that we are, in a position to read/watch the news with an informed eye. To do this, we gather and digest information from many sources on topics selected for their importance.

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Muckrakers Bulletin is published by Plainspeak.ca, a non-profit, non-partisan group.  Plainspeak is dedicated to turning complicated public issues into plain language and graphics so that they become intelligible to ever-wider audiences. Although any reader can identify a point of view in each Bulletin, people with different views should find them useful.

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Vol 1, No 2  April 12, 2017

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PIPELINES


Which one is which?

As we see it:

  • We are mainly concerned here with pipelines that carry oil produced in the tar sands and routed to refineries.  It is the production and refining of oil, not the pipelines per se, that constitute the major sources of carbon emissions. In and of themselves, pipelines are not major carbon emitters.  

  • Problems with pipelines in their own right arise instead from leakage and spills (which are all but inevitable) especially when they traverse permeable landscapes.

  • Problems also arise from the fact that new or expanded pipelines often traverse First Nation territories.  Some First Nations have agreed to proposals/investments that make them participants not opponents, while other First Nations have gone so far as to launch court cases and are active opponents.

  • Both Canada and the US are crisscrossed with existing pipelines.  There are 2½ million miles of existing oil pipelines in the US, with 72,000 miles of those pipelines carrying crude oil.  Canada has 100,000 kms of large-diameter pipelines carrying oil and gas, and all together 825,000 km of pipelines.

  • For the sake of argument, assume that oil and gas have to be delivered somehow (thus putting aside for the moment the question about dependence on the oil economy and carbon emissions). The choices for transmission are rail, ship (often supertanker), truck or pipeline.  

  • Only the pipelines that cross provincial boundaries (except for a few in northern territories and with the exception of Energy Mainline (see below) have to be approved by the NEB (in several stages from the initial proposal to the final go-ahead for construction and thence operation). This is at best 10% of the total. 

  • Note that the NEB process until now has not involved mandatory consultation and accommodation with First Nations (the NEB says this is the proponent company’s responsibility) but this issue is central to the case now heard but not yet decided by the Supreme Court (see below).

  • All other pipelines are regulated provincially.  Only “major projects” in these provinces are subject to an environmental assessment and assessments vary in depth and procedures. (see new Federal expert report, to be discussed later).

  • Rail transport of oil is commonplace but more expensive than pipelines (once pipelines are built).  Rail is used extensively especially if pipelines are near capacity and if expansion of the network is blocked.

  • Regulation of crude oil delivered by rail is done through Transport Canada, which after Lac Megantic (the disaster in Quebec) seems to be paying more attention to the transportation of dangerous goods.  Transport Canada has no special expertise in oil or its transport.  It has enacted new regulations about “dangerous goods” and has conducted “consultations”, but because of the nature of rail transport, Transport Canada has no equivalent of the NEB’s environmental assessment process (such as it is). 

  • Some work has been done in the USA and Canada to ensure that tankers are double hulled, but this is not the case everywhere.  In Canada, double-hull-or-reasonable alternative regulations apply to vessels delivered after 1996. They do not exhaust all safety concerns.

  • It is worth noting that a pipeline built for one purpose, say natural gas, can be converted to work for another, say oil.   

NORTH


MacKenzie Gas Project:

  • This is the historically famous MacKenzie Valley gas pipeline of the Berger report.  The Berger report argued, among other things, that the pipeline construction could not proceed without first settling Aboriginal land claims.  The environmental issues raised at the time concerned building through discontinuous permafrost.    (Note: the Alaska pipeline is build above ground.)

  • Today, the MacKenzie Valley pipeline remains a possibility. It would be built by a consortium including Imperial Oil, ConocoPhillips, Shell and Exxon Mobil and an Aboriginal Pipeline Group(33% ownership of the project).  The oil company partners own the oil and gas fields in question and the oil is currently “stranded” though it is not clear that it is viable to move it out.

  • This pipeline would deliver gas from the MacKenzie Delta to northern Alberta, where it would be fed into existing pipelines.

  • In June 2016, the NEB gave Imperial Oil until 2022 to start building, a delay Imperial Oil welcomed as it wanted to assess the economics and viability of the project and alternatives.

Northern Gateway

  • Northern Gateway was to be a twin-pipeline (oil sent out and gas in brought in to power the oil sands).  It was proposed in 2000 and included a marine terminal (not refinery)  in Kitimat. The crude oil would have gone via supertanker to Asia (There was a cooperation agreement with PetroChina).

  • This was an Enbridge project.  Enbridge is a giant US company, based in Texas.

  • Northern Gateway was first approved in 2014, and then approval was overturned by the Federal Court of Appeal because of “woeful consultation with First Nations “.   Trudeau initially imposed a ban on oil tanker traffic on the north coast of BC (the environmentally very sensitive inland passage) and, then, in 2 016, officially rejected the Northern Gateway pipeline proposal.   Enbridge has a history of incidents with spills, would have traversed much First Nation territory, including territories where no Treaty yet exists.
     
  • Among other issues when this proposal was being considered was a conflict over revenue-sharing between Alberta and BC.

 

EAST


  • The NEB (now with a new panel) is considering both Energy East and Eastern Mainland pipelines proposals in the same hearing process. This is because TransCanada (the company involved) says it will not proceed with Eastern Mainline unless Energy East is approved.  The governments of Quebec and Ontario saw little benefit from Energy East, but said they needed the natural gas that would be delivered by Eastern Mainline. Thus, these provinces argued, if Energy Mainline was approved, they would withdraw their opposition to Energy East.

 

Energy East: 

  • About 70% of the Energy East pipeline already exists (and uses older technology), but it will be converted from carrying natural gas to crude oil (used by refineries) and expanded.  It will increase pipeline capacity in the prairies.   
      
  • If completed, Energy East will transport oil (and diluted tar sands bitumen)-from the Tar Sands to a new refinery and export facility in New Brunswick, this being lobbied for extensively by NB.  

  • This pipeline proposal is seen by the companies involved as an alternative to the western pipelines that have not been approved inasmuch as it will provide an exit platform for exports. The oil is mainly destined for markets in India, China, EU and the US.

  • TransCanada Corp, the owner, is a Canadian company with 46% institutional shareholders. It owns or is affiliated with thirteen different pipelines and Keystone.  TransCanada has pipelines in US and Mexico.  It is competing with Dallas based company in transporting natural gas to Toronto.
     
  • The Energy East pipeline traverses First Nation lands, and cuts close to major urban areas.

  • Opposition to Energy East is mainly about the threat (especially from the bitumen) to drinking water (the proposed extensions cross many streams and rivers) from potential leakage.

  • The Eastern Mainline pipeline is a new gas pipeline, cutting through Ontario from Markham to the Quebec border, just north of the Lake and partly adjacent to existing pipelines.

Line 9: 

  • Line 9 originally pumped imported crude oil from Montreal to Sarnia (refineries) but Enbridge, the owner, got permission in 2014 to reverse the flow and increase capacity to send oil sands crude east to refineries in Quebec.  This is an older pipeline and there were lots of conditions on the 2014 approval.  There was much opposition based on fears about leakage and spills.  One First Nation is currently awaiting a decision from the Supreme Court (see above).

 

SOUTH


Keystone:

  • Keystone has been operating since 2010.   Keystone pipelines deliver crude oil from the Tar Sands to refineries in the USA.  About 327 miles of Keystone is in Canada. 
     
  • Keystone is not one pipeline but four.  Phase 1: (built) takes the oil through Saskatchewan and Manitoba through Nebraska to Illinois.  Phase 2 (built) transports oil from Nebraska to Oklahoma.  Phase 3 (all but complete now) takes oil from Oklahoma to the Gulf coast.  All deliver oil to refineries.

  • Phase 4 was proposed in 2008.  It involves new pipeline in Alberta to Montana, and thence a new line that shortcuts the older Phase 1 by cutting into Montana (picking up US oil in Montana) through to Nebraska.   Alternative routes  for Phase 4 have been proposed to mitigate some of the environmental impacts of this phase.  The Trump approval of phase 4 is for the amended route.
     
  • Keystone is owned by TransCanada.  To the extent that Koch Bros are involved and benefit from Keystone Phase 4 (they do), it is because Koch is heavily invested in the Tar Sands and in some of the refineries.

  • Interestingly, the original opposition in Canada to Keystone (phase 1) came from the unions. They argued that Keystone would serve US markets exclusively, reduce Canadian energy security and not lead to job creation. 

  • The controversial Dakota pipeline is not about Keystone. Keystone simply traverses Dakotas.

Line 3

  • Line 3 is a replacement line for a pipeline that goes through Saskatchewan and Manitoba on route to the USA.   It was approved when Transmountain/Kinder Morgan was approved.  It is scheduled to go on line in 2019.

 

WEST


TransMountain/Kinder Morgan:

  • The original Transmountain/Kinder Morgan pipeline (1951) took both crude and refined oil from Leduc (conventional oil fields) to Burnaby BC.  Today, Transmountain/ Kinder Morgan delivers oil destined for the US and Asia, the latter shipped out by tanker through the Straits of Juan de Fuca. 

  • The controversial Transmountain/“Kinder Morgan” is a second pipeline, running roughly parallel to the original one and tripling capacity.  It is intended to carry diluted bitumen from the Tar Sands.

  • The extension of Transmountain/Kinder Morgan was approved by the Canadian Government in 2016 but with conditions and with opposition at the time from BC government.

  • Several court challenges have since been filed and are currently in process. They may well tie up or alter the proposal significantly.

  • However, Transmountain/Kinder Morgan.is proceeding with its planning.   Reports say it will make its final decision re investment  by June 30 of this year, based in part on a deal it reached with the government of BC about hiring local workers.

  • Opposition in the case of Transmountain/Kinder Morgan is about the large number of spills that had been documented (Kinder Morgan, mainly in the US) and about the environmentally very sensitive areas of water through which the tankers (from the Burnaby port) must pass.

  • Kinder Morgan is a Texas-based company and is the largest energy infrastructure company in North America (including owning tankers).  It operates TransMountain Oil Pipeline, which would build the new pipeline.  Investors in the Canadian pipeline project may yet include CPP, Caisse (Quebec) and Ontario Teachers Pension Plan.   Kinder Morgan is looking for joint venture partners.

 


Sources include  (file of articles available): 

Financial Post, Globe and Mail, Environmental Defence/Council of Canadians, Government of Canada websites, National Energy Board website, National Observer, Fraser Institute (American Enterprise Foundation) publication, Reuters, CBC News website, Osler (law firm) Enbridge website, Global News, Chippewas of the Thames, TransCanada Corporation.


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