A new report released Thursday by the Ontario Energy Board finds the risks of TransCanada’s Energy East pipeline, destined to carry Alberta oilsands crude to eastern refineries and export facilities, outweigh the project’s benefits.

The board’s vice-president, Peter Fraser, said the report, prepared at the request of Ontario Minister of Energy Bob Chiarelli, finds “an imbalance between the economic and environmental risks of the project and the expect benefits for Ontarians.”

The Energy East pipeline, projected to transport 1.1 million barrels of oil per day, is the continent’s largest proposed pipeline, outsizing the company’s controversial Keystone XL pipeline, which has become a political boondoggle in the U.S. in recent years due to growing concerns over oil spills, private property and climate.

The Ontario Energy Board traveled to communities along the pipeline route to gauge public sentiment about the project and, according to the report, found fears over potential water pollution running high throughout the province.

“The top concern expressed was the risk of an oil spill as the pipeline runs new or across many waterways,” Fraser said. “Our advice is that for the existing pipeline, when it is too close to environmentally sensitive areas, it should be rerouted unless it can be justified by TransCanada as necessary.”

The report states concerns over water were “routinely expressed” at community meetings and mentions a First Nations elder who put the question to the board by saying, “Would you put something in your mother’s blood that would poison her? Your mother wouldn’t be able to hold you then.”

The report recommends TransCanada “pay particular attention to protecting Nipigon Lake, Trout Lake, the Ottawa River, the Rideau River, the Oxfard-Marsh Aquifer, the Nepean Aquifer, and other areas where there is elevated public concern.”

The report stated the Crown's "duty to consult" with Canada's First Nations was high on the minds of many community members and said it considers this responsibility "a very important issue" when considering the fate of the pipeline. The final decision-making authority over the pipeline rests with the federal government, as does the duty to consult.

The board also noted Ontario’s own requirement that pipeline projects have the “highest available technical standards” for protection of the public and the environment.

Yet the board did not find TransCanada met those reqirements.

“We cannot state that the project meets the highest available technical standards, as the proponent, TransCanada Pipelines Ltd, has not yet filed a complete application,” Chair and CEO of the board, Rosemarie Leclair, said.

The board said construction of the pipeline, which involves converting and redirecting a pre-existing natural gas pipeline as well as constructing a new extended portion of the line, could create as many as 114,000 full-time equivalent jobs and add $12 to $19 billion to the province’s GDP.

But the report also noted the costs associated with an oil spill “could easily surpass $1 billion.” As a result, TransCanada “needs to demonstrate that, in the event of a spill, the amount of crude oil that could be released will be as low as reasonably possible,” the report’s authors write.

The authors recommend an examination of TransCanada’s safety record during the National Energy Board’s Energy East hearings.

The report also finds the project will take an existing natural gas line out of operation, potentially driving up gas prices. The report states: “We are concerned that, even with the new natural gas pipeline that TransCanada is proposing to build in eastern Ontario, Energy East will reduce the supply and increase the price of natural gas for consumers in that region.”

In February the Ontario Energy Board released a report on Energy East’s climate impacts, prepared by Navius Research, that was widely criticized for downplaying the pipeline’s influence on oilsands expansion and the country’s rising greenhouse gas emissions.

Adam Scott from Environmental Defence said the board’s recent report “raises serious concerns about Energy East.”

Scott said the report makes clear the environmental risks of the pipeline are high, especially for a “risky project” that “does not have the support of communities along the pipeline route in Ontario.”

“Many participants also raised concerns that Energy East would directly facilitate the expansion of the Alberta tar sands, increasing Canada’s greenhouse gas emissions. This would make Canada an irresponsible player in a world where more and more countries are working hard to reduce their impact on the climate.”

He added the board’s analysis of the project’s climate impacts was “disappointing” and “based on outdated and inaccurate information.”

A report by the Pembina Institute, an Alberta-based energy think tank, found the oil needed to fill the Energy East pipeline would account for an additional 30 to 32 million tonnes of carbon emissions release into the atmosphere each year.

Pembina estimated that’s the equivalent of adding more than seven million cars to Canada’s roads and is “higher than the total current provincial emissions of five provinces.”

The board discussed Pembina’s findings in its recent report, saying “climate change was one of the key issues mentioned by people when they discussed the impacts of Energy East,” adding people felt addressing the impacts of the project without discussing climate change was inadequate.

Image Credit: TransCanada via Youtube

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With the May 27 deadline for evidence submission to the National Energy Board’s review of the Kinder Morgan pipeline expansion project fast approaching, the cities of Burnaby and Vancouver are stepping up.

Last Wednesday, the City of Burnaby quietly released a report [PDF] outlining the risks and possible implications of a fire at the Burnaby tanker terminal. The results, to quote Mayor Derek Corrigan, are “comprehensive and jarring.”

“It is remarkable that Kinder Morgan is even asking the citizens of Burnaby to assume such risks, but even moreso that the National Energy Board is willing to consider expanding this storage site in this location — on a hillside near thousands of residents and a busy university, and adjacent to an urban conservation area. This report clearly demonstrates that questions about the safety of this proposed tank farm expansion should be answered prior to any decisions being made by the NEB and that the Board should consider this an essential priority.”

Encompassing 60 pages, the report explores several scenarios where oil could spill and ignite at Kinder Morgan’s tank storage facility off Hastings Street, including a tank fire, explosion and a major earthquake.

Too Many Tanks, Too Little Space

According to the report, the largest potential risk to Burnaby lies in the addition of a large number of new tanks to the existing farm. In order to accommodate the increased output of the twinned pipeline, Kinder Morgan would need to increase the number of tanks at its storage facility from 12 to 26, adding 14 new larger tanks (one of which is a replacement). 

Adding in the proposed new storage tanks on the existing site greatly reduces the buffer zone between the tanks, and moves them significantly closer to the public. 

When a fire occurs at the tank farm — and the report makes it clear that no company can make a 100 per cent guarantee they won't — it will have the potential to be more severe in magnitude, and pose a much greater risk to the public. The closer the tanks are, the more likely it is that nearby storage tanks could to catch fire as well. The report notes that “the distance between storage tanks is a key design and engineering feature provided to allow firefighters to effectively isolate an active tank fire, preventing a multiple tank fire event” and that many of the potential tank fire scenarios within the Trans Mountain Tank Farm facility would be inextinguishable due to lack of safe firefighting positions.

"In order to extinguish a tank fire within the Trans Mountain Tank Farm, emergency responders could be forced to significantly risk their personal safety in order to overcome the design inadequacies of the facility. Specifically, the configuration of the tank farm on a hillside in such a tight footprint would require firefighting personnel to operate in elevated positions above the tank, exposing them to potentially excessive heat and smoke outfalls. In these instances emergency responders would likely be forced to allow the tank fire to burn out while adjacent tanks are protected." – Burnaby Fire Department

A worst case scenario tank farm fire, as set out in the report, is legitimately terrifying: a fire breaks out in one or more of the tanks. It spreads quickly through the close-set tanks, as flames burst across the tops of nearby trees and into the Burnaby Mountain Conservation Area. This cuts off road access to Simon Fraser University, exposing the thousands of people living, studying and working there to noxious burning bitumen fumes, including extremely toxic hydrogen sulfide.

The possible impact of an earthquake dumps even more fuel on the nightmare pyre. According to the report: “The potential liquid product release scenario stemming from an expected regional area seismic event would be catastrophic in nature, and has potential to release the contents of several if not all of the storage tanks simultaneously, overwhelming the facilities' retention provisions and flowing unrestricted to highly populated residential areas and sensitive environmental habitats.”

A Bitumen-coated Shoreline in Less than 72 Hours

On Friday morning, the City of Vancouver released their first new piece of evidence — a 2D computer spill model encompassing four scenarios of how oil might spread if spilled in Burrard Inlet. The City of Vancouver, City of Burnaby and Tsleil-Waututh Nation commissioned the report by spill modelling experts Genwest Systems.

The new report finds two key faults with the oil spill models submitted by Kinder Morgan as part of their application to the National Energy Board. Firstly, that Kinder Morgan’s models do not account for beached oil refloating after an initial spill, and secondly, that the supplied modelling of a spill at the Westridge Marine Terminal was ‘unrealistic’ and relied too much on the assumption that containment booms are always properly placed and always work.

The time-lapse video below shows how bitumen and condensate would spread if one of Kinder Morgan’s Aframax-sized tankers spilled 1/5th of its bitumen cargo into Burrard Inlet near the Lion’s Gate Bridge.

In all of its scenarios, Genwest Systems noted how quickly oil spreads in the confined space of Burrard Inlet. Within 72 hours, spilled oil would spread throughout Burrard Inlet to Indian Arm, the Port Moody Arms and to the outer harbour and beyond, with winds and tides spreading them even further. 

100,000 Seabirds and the Pacific Orca Pod at Risk

An additional study on the impact of a Kinder Morgan bitumen spill on local wildlife was released on Monday. Titled “Fate and Effect of Oil Spills from the Trans Mountain Expansion Project in Burrard Inlet and the Fraser River Estuary,” the report finds that the “extraordinarily high densities and numbers of sea‐ and shorebirds, marine mammals, and fish make them especially vulnerable to potentially devastating mortalities should a major oil spill occur in Burrard Inlet or the Fraser River estuary.” 

With 90 per cent of spilled oil likely to reach shorelines within 48 hours, the intertidal zones of beaches and shorelines become “effective killing zones” for sea and shorebirds. In particular, a large diluted bitumen spill near the Fraser River estuary, could potentially kill more than 100,000 birds, plus other nearby mammals. At the same time, large numbers of marine mammals including Harbour seals and porpoises — plus the southern resident Orca population — could perish. The orca pod, if affected, may risk extinction altogether. 

Kinder Morgan Responds

As media began to cover the release of the reports, Kinder Morgan forwarded an email comment to Burnaby Now. It reads: 

"The terminal in Burnaby has been operating safely for 60 years and through our maintenance, prevention and emergency preparedness programs, we are confident in our ability to prevent and respond to all kinds of incidents,” said Michael Davies, a senior director with the company. “Trans Mountain filed a preliminary risk assessment for Burnaby terminal as part of the National Energy Board review of our proposed expansion. It concludes that through design and good management practices the risk of a fire at the terminal is low. We encourage feedback on our proposed expansion and will be reviewing the report from the Burnaby Fire Department in more detail and would welcome a discussion with them to better understand and address their concerns and questions."

It is worth noting that while Kinder Morgan’s preliminary risk assessment is available online, their accident/spill preparedness plans cannot be compared against the reports from the Burnaby Fire Department or the City of Vancouver as the company has filed legal documents to prevent the public from seeing them.

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Kinder Morgan has significantly overstated the benefits of its controversial Trans Mountain pipeline expansion proposal while vastly understating risks associated with increasing the flow of oil to Metro Vancouver.

That’s the conclusion of a new economic analysis by Simon Fraser University and The Goodman Group Ltd. which also recommended that the proposed expansion be rejected as it is neither in the economic nor public interest of B.C. and Metro Vancouver.

“The jobs created are nowhere near the number claimed by Kinder Morgan and the costs are grossly underestimated when the risks of a major spill, particularly one occurring in the Vancouver area, are factored in,” said Doug McArthur, director of SFU’s Graduate School of Public Policy, which co-authored the report.

“The whole project is highly questionable from a public policy point of view,” McArthur added.

The report — Economic Costs and Benefits of the Trans Mountain Expansion Project (TMX) for BC and Metro Vancouver — said Kinder Morgan maintains building the $5.4 billion expansion project would create 36,000 person-years of short-term employment in B.C.

The analysis, however, shows it would only create 12,000 person-years, or less, of employment.

“We correctly anticipated that the benefits from the pipeline would be small in the context of the overall B.C. economy and mostly short-term,” said Ian Goodman, president of The Goodman Group Ltd. and co-author of the report.

“But we were very surprised that the company has exaggerated the short-term jobs associated with building the pipeline by a factor of three,” Goodman said.

In terms of permanent jobs, the report notes Kinder Morgan says operating the expansion project would create only 50 direct full-time jobs in the province but a wide range of spin-offs could push the total up to almost 2,000 jobs.

“Once again, these claims are exaggerated: even with a wide range of spin-offs [the Trans Mountain expansion] will only create 800 long-term jobs,” the 70-page report, released Monday, said.

It also said that, on the cost side, Kinder Morgan’s miscalculations are even more dramatic with estimations of a worst-case scenario for spill damage in a non-urban, non-sensitive area costing only $100 million to $300 (CDN) million.

The analysis found, however, potential costs for a major rupture in a sensitive but non-urban setting could start at $1 billion (USD). Under a worst-case scenario involving a catastrophic rupture in an urban setting, costs could escalate to as much as $2 billion to $5 billion (USD).

The ruptured Enbridge Line 6B that sent more than three million litres of diluted bitumen into a tributary of the Kalamazoo River in Michigan came with a clean up cost of more than $1 billion after more than three years of remediation work.

Brigid Rowan, senior energy economist at The Goodman Group Ltd., said Kinder Morgan has vastly underestimated the worst-case costs for a catastrophic pipeline rupture.

“Contrary to [Kinder Morgan’s] findings, damage and cleanup costs for major accidents are highly correlated with population density,” Rowan said.

“So a worst-case scenario for [the Trans Mountain expansion] would involve a major accident in a more densely populated area (such as Metro Vancouver) damaging and disrupting key infrastructure, and possibly resulting in a spill to water and losses of human life,” he said.

Costs for that type of catastrophe could escalate to the multi-billion dollar range — more than 10 times higher than the Kinder Morgan estimates, Rowan added.

The existing Trans Mountain pipeline already ruptured in a suburban area in Burnaby in 2007 sending 250,000 litres of crude into the community and 70,000 litres into the Burrard Inlet. Over 250 residents were evacuated and more than $15 million spent on clean up.

The report also outlined a major profit disparity between the province and producers when it comes to the pipeline’s financial benefits. B.C. would receive less than 2 per cent of the increased revenues paid to tar sands producers who will retain 68 per cent of the new revenues.

“The lion’s share of the benefits flows to [Kinder Morgan and Trans Mountain], the Alberta tar sands producers and Alberta, whereas the citizens of B.C., and Metro Vancouver in particular, will bear the lion’s share of the risks and receive very small benefits,” the report said.

The Trans Mountain expansion project proposal, which is hotly contested by local residents and municipal politicians, would increase the capacity of oil flowing from Alberta to Metro Vancouver to 890,000 barrels per day from the current 300,000.

The proposed expansion is currently under a controversial review by the National Energy Board.

Image Credit: Kinder Morgan oil facilities in the Burrard Inlet. Photo by Carol Linnitt.

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By David Suzuki with contributions from David Suzuki Foundation Communications Manager Ian Hanington. This post originally appeared in the Science Matters blog on the DSF website.

When the Deepwater Horizon drilling platform exploded in 2010, killing 11 people and spewing massive amounts of oil into the Gulf of Mexico, it cost more than $40 billion to mop up the mess. In Canada, an oil company would only be liable for only $30 million, leaving taxpayers on the hook for the rest.

That’s just one of a litany of flaws Canada’s environment commissioner identified with the government’s approach to environmental protection. According to environment and sustainable development commissioner Scott Vaughan, who released a final series of audits before stepping down, the federal government’s failure to protect the environment is putting Canadians’ health and economy at risk.

Vaughan says the government has no real plan to reduce greenhouse gas emissions and is not even on track to meet its own modest targets (already watered down from the widely accepted emission-levels baseline of 1990 to 2005). It is unprepared for tanker accidents and oil spills in coastal waters. It lacks regulations governing toxic chemicals used by the oil industry.

He noted the federal government does not even require the oil and gas industry to disclose chemicals it uses in fracking, which means there is no way to assess the risks. And despite the fact that Canada has committed to protecting 20 per cent of its oceans by 2020, we have less than one per cent protected now and are not likely to meet our goal within this century.

“We know that there is a boom in natural resources in this country and I think what we need now – given the gaps, given the problems we found – is a boom in environmental protection in this country as well,” Mr. Vaughan told the Globe and Mail. He added that not dealing with the risks will cause economic losses as well as damage to human health and the environment because it will cost more to clean up problems than prevent them.

Remember, this is not coming from a tree-hugging environmentalist but from the government’s own independent office of the auditor general. It should concern all Canadians. We have a beautiful country, blessed with a spectacular natural environment and a progressive, caring society. But we can’t take it for granted. Beijing was probably a nicer city when you could breathe the air without risking your life.

Often, the justification for failing to care for the environment is that it’s not economically feasible. It’s not a rational argument – after all, we can’t survive and be healthy ourselves if we degrade or destroy the air, water, soil and biodiversity that make it possible for us to live well. But Vaughan shows the folly of this way of thinking on a more basic level. Beyond the high costs of cleaning up after environmental contamination or disasters, he notes the government doesn’t even have a handle on some of the financial implications of its policies.

“The government does not know the actual cost of its support to the fossil fuel sector,” he reports, adding that it has no idea how much its sector-by-sector approach to greenhouse gas emissions will cost either, even though that was a replacement for the Kyoto Protocol, which the government bailed on, arguing it was too expensive.

The government has also steadfastly refused to consider putting a price on carbon, through a carbon tax and/or cap-and-trade, even though economists point to the ever-growing mountain of evidence that those are effective ways to reduce carbon emissions.

With an expected doubling of fracking wells, from 200,000 to 400,000, and tripling of tanker traffic off the West Coast, we can’t afford such a lax approach. Our prime minister has responded mostly with slogans and platitudes, but others in government say the issues will be addressed. For the sake of our country’s future, we must demand that they keep that promise and recognize the crucial role the environment commissioner has in analyzing Canada’s environmental practices and recommending improvements for environmental performance.

Given our government’s current record of ignoring scientific evidence and gutting environmental laws and programs, it will have to do a lot more to convince Canadians that it doesn’t see environmentalists and environmental regulation simply as impediments to fossil fuel development.

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