THEFUTUREOFCANADA’STRANSMOUNTAINPIPELINEDominiquevanderByl,July8th2018

IntroductionThispaperhighlightsthehistoryoftheTransMountainpipelineanddiscussesthepositiveandnegativeimpactsoftheexpansionthatiscurrentlyplanned.ThepurposeofthepipelineexpansionistotransportahighervolumeofCanadianproducedoiltothewestcoastinordertoshipittointernationalmarkets(mostlikelyAsia).Giventherecentcontroversiessurroundingthesocialacceptanceofpipelines,andanalysisofthealternativemethodsofcrudetransportationwillbeexplored.Additionally,TransMountain’scurrentstatusandpotentialoftheexpansionprojectisdiscussed,particularlyfocusingontimelines.OppositiontotheTransMountainexpansionwillbeintroduced,aswellastheconsequencesofthisoppositiontothefutureoftheproject.Majorconflictsareoutlinedincluding:environmentalrisks,FirstNationsagreements,andpoliticalopposition.Finally,anopinionsectionwillprovideadiscourseonthemeritsoftheTransMountainpipelineexpansionandthenextstepsthatshouldbetaken.BackgroundCanadahasanimpressivenetworkofover840,000kilometres(km)ofpipelineinfrastructure(PipelinesacrossCanada,2016).Figure1highlightsCanada’smajorpipelines.NotonlydoespipelinenetworkconsistsofmajortrunklinessuchasthosedisplayedinFigure1,hundredsofthousandsofkilometersofsmallergatheringandlocaldistributionlinescriss-crossthecountry.

Figure1:NetworkofmajorCanadianpipelines(https://www.nrcan.gc.ca/energy/facts/crude-oil/20064)

TheTransMountainpipelinerunsfromEdmonton,Alberta(AB),toBurnaby,BritishColumbia(B.C.)(Figure2).Thispipelinewasbuiltin1953withinitialspecificationsthatwouldtransportof150,000barrelsofoilperday(bpd).TransportcapacitybeenincreasednumeroustimesthroughoutTransMountain’shistory,andtoday,thepipelinetransportsroughlydoubletheoriginalamountonadailybasis(TransMountainExpansionProjectMediaRelations[TMEPMR],2018).Therearecurrently23pumpstationsalongthepipelinethathelpstotomaintainits~300,000bpdcapacityataflowrateof8kilometresperhour(TMEPMR,2018).TransMountainalsopossessesfourterminalswithstorageandloadingfacilitiesinEdmonton,AB;Kamloops,B.C.;Abbotsford,B.C.;and,Burnaby,B.C.Additionally,theAbbotsfordterminalisconnectedtoapipelinethatsendscrudeoiltoWashingtonState.TransMountainterminatesattheWestridgeMarineTerminalwhereoilisshippedfromtheBurnabytointernationalmarketsviatanker.

Figure2:ProposedrouteoftheTransMountainpipelineexpansion(http://www.neb-one.gc.ca/pplctnflng/mjrpp/trnsmntnxpnsn/mp/ppbrsgmnt-eng.png)InFebruary2012,KinderMorganCanadaLtd.(KM)announcedplanstoexpandtheTransMountainpipeline.ThepurposeoftheexpansionistomeetincreasingworldoildemandsandhelpCanadianoilreachnewmarkets.Thelatteristhemainforcefortheproposedprojectasoilcompaniesrequestedandcommittedtousetheaddedcapacitytoreachthesemarkets.CurrentlythemajorityofCanadianoilexportsareshippeddirectlytotheUnitedStates(U.S.)bypipeline.WiththeincreasedpipelinecapacitytotheB.C.coast,moreoiltankerswillberequiredtocarryproducttoAsianmarkets.KMarguesthatthiswillhelptobroadentheconsumerbaseforCanadianoilandhelptostrengthenCanada’senergyfuture.

InDecember2013,KMsubmittedanapplicationtotheNationalEnergyBoard(NEB)tobuildanewpipelinebesidetheexistingTransMountainline(i.e.,“twinning”theexistingpipeline).Theestimatedcostforthe980kmpipelineisapproximately7.4billionCanadiandollars(CAD)(Clancy&Graney,2018).InMay2016,theNEBapprovedKM’sproposalwithconditions.KMfacedmanychallengesafterthisapproval(describedbelow)inordertogainsupportandthenecessarypermitsthatwouldallowforconstructiontoproceed.Thesechallengesresultedinthesuspensionoftheproject,asKMdidnotfulfillrequirementsbytheirinternallysetdeadlineofMay31,2018.OnMay29,2018,justpriortotheKMdeadline,theGovernmentofCanadaintervened,announcingthepurchaseofthepipelinefor4.5billionCAD.Atthetimeofpurchase,theGovernmentofCanadaindicatedtheirintenttofindabuyerforthepipeline“attherighttimeandfortherightprice.”ThenationalizationofTransMountainresultedincontroversyinmanypartsofthecountry.CurrentStatusAtotal157conditionsneedtobemetbeforetheTransMountainExpansionProject(TMEP)canbeallowedtoproceedwithconstruction.UpdatesanddocumentationiscontinuouslybeingsubmittedtoNEBforapproval,andtodate,48conditionshavebeenaccepted,43areunderreview,50havenofilings/documents,sixdonotrequireanyfiling,andtenareunderrecurringfiling(NEB,2018).Additionally,theNEBhasapproved66%ofthedetailedrouteplan(Stevenson,2018).Currentlytherearehearingsbeingheldregardingthedetailedroutepersegment.Thesehearingsaremeanttosettledisputeswithlandownersandotheraffectedstakeholders.ConstructionisscheduledtostartinEdmontoninAugust2018.TransMountainhassubmittedasix-monthconstructionplantoNEBwithanaggressivetargetofcompletionin2020.Thesix-monthplanincludesexpandingtheterminalinBurnaby,B.C.,anddevelopingatunnelportalattheWestridgeMarineTerminal.Thecompanyplanstostartstakingandflagginga290kmstretchbetweenEdmontonandJasperNationalParkinAugust.InSeptember,thesameprogresswillstartover120kminB.C.betweenMountRobsonProvincialParkandBlueRiver.SomeprotestinghasoccurredinB.C.;however,lawenforcementhasmadeitknownthattheywillgetinvolvedifprotestorsactivelyrestrictprogressfrombeingmadeontheproject.BenefitsandDrawbacksAccordingtotheTransMountainwebsite,manynationalbenefitscanberealizedifthisprojectweretobeconstructed.Aspreviouslymentioned,onemajorbenefitisincreasedaccesstoglobalmarkets.Anotherbenefitistheestimated46.7billionCADintaxrevenuethatisestimatedoverthefirst20yearsforalllevelsofgovernment.Albertawouldreceivemostoftherevenueatapproximately19.4billionCADfollowedbyBritishColumbiawith5.7billionCADandtherestofCanadawith21.6billionCAD.Municipaltaxpaymentsareanestimated922millionCADtoB.C.,and124millionCADtoAlberta.Thesetaxrevenueswouldhelptosupportpublicservicesinthesejurisdictionsandothersacrossthecountry.Theconstructionandoperationofthepipelinewillalsoprovidemanyjobs.Itisestimatedthat15,000jobswillbecreatedeachyearduringtheconstructionphase,and37,000directandindirectjobsperyearduringtheoperationsphase.Overthe20-yearprojectanestimated800,000jobswillbecreated. TransMountainhasagreementswith43FirstNations.Thesebenefitsassociatedwiththeseagreementsincludejobandtrainingopportunitiesaswellasfundingforcommunityinitiatives.SomeoftheFirstNationsarealsointerestedinpartialownershipthatwouldprovidethemwithaddedrevenues.TransMountainintendstoprovideresourcesandfundingtoothercommunitiesthatmaybeimpactedby

construction.Theseincludeimprovementstoemergencymanagement,maintenancetotrailsandparks,upgradestoinfrastructure,andfundingtolocaleducationandtrainingprograms.

TransMountainhasidentifiedatotalof140FirstNationsorIndigenousGroupsthatcouldbeaffectedbyitspipelineexpansionplans.Fourteenofthesegroupsarecurrentlyinlegalbattleswiththeproject,and85haveyettoreachanagreementwithTransMountain(Owen,2018).Ofthe85,someprefernottoengage,someareopposed,andsomeareworkingonemploymentagreements.The14groupschallengingtheprojectaredoingsocitingtheCrown'sdutytoconsultandalackofaccommodatingIndigenouscommunities'constitutionalrights.IftheFederalCourtofAppealfindsthatconsultationbetweenthegovernment,NEB,TransMountainandFirstNationsandIndigenouscommunitieswasinsufficientitcouldhalttheproject.ThisdissentcouldharmrelationshipsbetweensomeFirstNationsandIndigenousgroups,thegovernmentandoilandgasindustryduringatimeofprioritizedreconciliationefforts.

Potentialdrawbacksincludeprotestsandpoliticalrisk.BeforethefederalgovernmentsteppedintherewasabattlebetweenAlbertaandB.C.overtheproject.TheAlbertagovernmentwantedtopushtheprojectaheadwhileB.C.resisted.AlbertaPremierRachelNotleyhitB.C.withawineembargoinanattempttopromoteconstructivedialoguebetweenthetwoprovinces.ShewasalsoonthevergeofhaltingoilandgasflowintoB.C.andlookedintootherretaliatorymethodsthatwouldgettheB.C.governmenttobackdown.B.C.PremierJohnHorganisnowpursuinganorderthatwouldallowthemtocontrolshipmentsofoilthroughtheprovinceunderenvironmentalgrounds.Thebattlebetweentheprovinceswasharsh,anditmayhavecreatedadivideamongtherespectiveresidentsofeachprovince.SomeindividualsmayfeellikeAlbertaandthefederalgovernmenthavebulliedthem.Thiscouldleadtopoliticalandcivilunrest,anditcoulddissuadepotentialinvestorsiftheyseethisastoogreatarisktotheexpansionproject.Furthermore,internationalperceptionsoftheprojectandtheCanadianoilandgasindustrycouldbenegativelyimpacted.

ProtestshavebeenoccurringsinceplanstoexpandTransMountainwereannounced.Aramp-upofdemonstrationsoccurredoncethefederalgovernmentpurchasedthepipeline,resultinginsomearrests.EnvironmentalFactsOfthe157NEBconditionsofapproval,43pertaintoenvironmentalconcernsrelatedtoairqualityandgreenhousegases,waterquality,fishandfishhabitat,wildlifeandwildlifehabitat,soils,vegetationandwetlands,andothergeneraltopicsdealingwithenvironmentalassessmentsandplans(NEB,2018).TheNEBiscommittedtoensuringtheenvironmentisprotectedduringandafterthepipelineisconstructedandinoperation.Themainrisktohealthandtheenvironmentarepipelineleaksandspills.Thesecanoccurinanypartofthetransportationprocessorfromtheholdingtanks.ThetransportationmethodsposingariskwiththeTMEParepipelineleaksortankerincidentsresultinginfluidreleaseintotheocean.Theserisksarediscussedinthesectionbelow.AlternativeTransportationMethodsOilisalsotransportsbyrailcar.AsshowninFigure3,in2016itwasestimatedthat1millionbarrelsperdayweremovedoutofwesternCanadabyrail.However,thismethodoftransportationhasbeenshown

tobedangerous.InJune2018,atraincarryingoilfromAlbertaderailedinIowacausingaspill.Ofthe32railcarscarryingcrude,14ofthemleakedanestimated871,000litres(approximately5500barrels).Thisderailmentwastheresultoffloodedtracks.Anotherrailincludesincludesthe2013tragedythatoccurredinLac-Mégantic,Quebec,where47peoplewerekilledafter6millionlitresofoilignitedinthetownaftertrainderailment.Althoughderailmentisnotacommonoccurrence,theconsequencescanbehazardoustohumans,wildlife,andaquaticlife.Eventhoughcrudebyrailtransportationpossessesrisks,thebenefitofexistinginfrastructureisappealingtooilproducerswithlimitedoptionsatgettingtheirproductstomarket.

Figure3:Canadiancrudeoilexportsviarail(https://www.nrcan.gc.ca/energy/facts/crude-oil/20064)Withacarryingcapacityoflessthanonethirdofarailcar,transporttruckslackthecarryingcapacityfortransportingsignificantvolumesofoil.Increasingtransportationbytruckwillincreasetrafficandgreenhousegasemissions.Vehicularaccidentsarealsothemostcommontypeoftransportationaccidentwhencomparedtorail,air,andsea.However,theenvironmentalandhealthriskislowerastheamountatruckcancarryissmall;andtherefore,theimpactofaspillwouldbesignificantlylessthanthatassociatedwitharailcaroroiltanker.ThecompletionoftheTMEPwouldresultinelevatedtankertrafficonthewestcoast.Tankershavecontributedtomanylargeoilspillsthroughouthistory,withhalfofthetop10largestoilspillsassociatedwithtankers.Humanerrorhasbeendeterminedtoplayasignificantpartintheseincidents,andnewtechnologieshavehelpedtoreducehumanerrorinducedincidents.Inordertohelppreventthereleaseoffluidasaresultofatankerincident,theuseofdoublehullshasbecomearequirementinCanadianwaters.Thisrequirementhelpstoreducetheriskofleaks,asthereisalowerchanceofpuncturingthroughbothhullsduringanimpact. AccordingtotheTransportationSafetyBoardofCanada(TSB),federallyregulatedpipelineshaveagoodsafetyrecord.In2015and2016,therewerenopipelineaccidents.Asshowninfigure4,in2017there

wasajumptofiveaccidents,fourofwhichreleasedproduct.TSBstatesthatnofatalitieshaveoccurredduetoanyaccidentssinceitsinceptionin1990.

Figure4:Pipelineaccidentsandaccidentrates,2007–2017(http://www.bst-tsb.gc.ca/eng/stats/pipeline/2017/ssep-sspo-2017.asp)Incomparison,theU.S.had25majoraccidents,and297incidentsin2017thatresultedineightfatalities(PipelineIncident20YearTrends,2017).Pipelinesarebecomingsaferwithconstantmonitoringandnewtechnologyisallowingforbetterdetectionleaks.Pipelinesareaneasy,quick,andrelativelyaffordablemethodoftransportation.Ingeneraltheyarethesafestmethodwhencomparedtoothertransportationalternatives.OpinionCanadiansaredividedonthesocialacceptanceofpipelineinfrastructure.OnereasonforalackofsupportmaybeduetothefactthatmanydonotrecognizethebenefitsandtheopportunitiesthatwillarisefromsupplyinganenergyhungryAsianmarketwithCanadiancrude.Thisgrowingoildemandwillbemetonewayoranother,soitonlymakessensethatCanada’sethicallyproducedoilfillasmuchofthismarketaspossible.Aswell,internationalperceptionsofCanada’sinvestmentriskcouldbenegativelyimpactediftheTransMountainexpansionprojectisnotapproved.Failuretodeliverwouldhurtmanyindustrystakeholdersandalllevelsofgovernment,whichinturnisdetrimentaltoCanadians.OnewaytobuildsupportfortheTransMountainprojectistoeducatecitizensonthefulldetailsofthispipeline,includingallofitsassociatedcostsandbenefits.

Canadaworksethically,responsiblyandsafelytoproduceandtransportitsoil,makingitoneofthebestoptionsforsupplyinginternationalmarkets.Furthermore,evaluationsofotheroilproducingregionsindicatethattheyarenotasethicalorenvironmentallyresponsibleasCanada.TheCanadiangovernment,citizens,oilcompaniesandlocalFirstNationcommunitieswanttoseethisprojectsucceed.Thesocio-economicbenefitsappeartooutweightherisksespeciallyconsideringtheadditionaltaxandroyaltyrevenues,andthejobsthattheprojectwillcreateduringitsconstructionandoperationperiods.Sinceitbecameoperational(circa1953),TransMountainhasyettorecordatanker-relatedspill.TransMountainshouldbeexpanded,butthefederalgovernmentshouldsellitasthislargepurchasewasnotbudgeted,willresultinasubstantialincreasetothenationaldeficit.

ConclusionConstructionoftheTransMountainexpansionwillcommenceshortly,andholdingcapacityandstoragefacilitiesarealreadybeingincreased.With66%oftheprojectapproved,andplansbeingmadeforacquiringfinalpermits,itappearsthattheprojectwillgoahead.Manyindividualsseethisprojectasagreatbenefittothecountry,myselfincluded,andacarefulevaluationofthefullscopeofthisexpansionprojectmakesitclearthatthebenefitsassociatedwithpipelineconstructionandoperationvastlyoutweighsocialandenvironmentalrisks.However,atthismomentwemustpatientlyawaitresultsfromthelegalbattlesthatarecurrentlyunderwaybetweenFirstNationsandIndigenousgroups,environmentalspecialinterestgroups,thefederalgovernment,provincialgovernmentsandTransMountainCorporation.IfthecourtsrulesinfavouroftheFirstNationsandenvironmentalgroupsthatopposetheprojectitmayneverbeexpanded.

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