Shipper commitments have convinced the oil giant to expand capacity to 890,000 barrels from 750,000.
January 11, 2013
by The Canadian Press
CALGARY—Kinder Morgan Energy Partners is increasing the scope of its Trans Mountain Pipeline expansion in Western Canada by almost three times the current capacity, much to the dismay and outrage from critics.
Subsidiary Kinder Morgan Canada said increased long-term commitments from shippers have convinced it to ramp up the proposed expansion capacity to 890,000 barrels per day from a previously planned 750,000.
The expansion represents a capital investment of $5.4 billion and will complete the twinning of the existing pipeline from Strathcona County, Alta., to Burnaby, BC.
The expansion to 750,000 barrels per day from the existing 300,000 was already controversial.
Aboriginal groups have decried it, and officials with the City of Vancouver are working on a bylaw to ensure Kinder Morgan has the liability insurance necessary to cover a potential spill after the expansion.
City councillors have voted to oppose the expansion.
Although the existing pipeline has been in place for almost 60 years, the proposed expansion has been caught up in the controversy surrounding Enbridge’s proposed Northern Gateway pipeline through parts of pristine Northern BC.
Kinder Morgan held open houses in Lower Mainland and Vancouver Island communities last month on the expansion proposal and the company acknowledged that where once pipelines drew little public interest, things have changed.
In a news release after Kinder Morgan’s announcement Thursday, Chief Justin George, of the Tsleil-Waututh Nation, said the latest expansion proposal shows “there’s no limit to what Kinder Morgan will push for.”
“Once this infrastructure is put in place, where will it end?” said George who represents the 500-member First Nation living along the shores of Burrard Inlet. “How many more tankers will this mean for Burrard Inlet? Will Kinder Morgan push the Port (of Vancouver) to dredge under the Second Narrows to allow for supertankers? Will they push for more than one million barrels per day? Two million? Citizens need to ask some serious questions of their leaders before this pipeline is approved.”
Kinder Morgan said 13 customers in the Canadian-producing and oil-marketing business have now signed binding, long-term contracts “which demonstrates the need for this proposed expansion that will serve both existing and new markets.”
“Trans Mountain has an existing footprint, established relationships and a superb safety record,” Kinder Morgan Canada president Ian Anderson said in making the announcement.
He pledged the company would continue “our open and inclusive engagement program already underway with landowners, communities and aboriginal groups.”
Trans Mountain applied to the National Energy Board in 2012 for approval of the toll methodology that would govern an expanded Trans Mountain pipeline and expects a decision by mid-2013.
The almost 60-year-old, 1,150-kilometre Trans Mountain pipeline system provides the only West Coast access for Canadian oil products, including the majority of the gasoline supplied to the Interior and south coast of British Columbia.
Ken Stewart, NDP MP for Burnaby-Douglas, said his constituents are worried about more oil tankers in Burrard Inlet and a decrease in property values.
“It’s a fairly gutsy move by Kinder Morgan to do this. I think they’re really going to have a lot of opponents against this as they move through the next couple of years.”
BC Environment Minister Terry Lake said Kinder Morgan will have to meet the provincial government’s conditions for pipeline projects. Those five conditions were laid out last summer and prompted an inter-provincial spat with Alberta because they appeared aimed at hampering Enbridge’s Northern Gateway plans.
The province has always said the five conditions apply to any pipeline expansion, including that of Trans Mountain.
“Regardless of the capacity they’ll have to meet the five conditions that the premier has set down,” Lake said. “Three of those are all about the environment, and we need to make sure, and British Columbians expect us to protect the environment.”
But Lake also noted Kinder Morgan has been a good corporate citizen.
“They’ve worked with communities, both First Nations and local communities throughout our region for a long time. That pipeline’s been there and it’s had very, very few incidents, so they’ll have to continue to do that outreach to communities.”
©The Canadian Press