Tag Archives: State Department

Redford argues Keystone XL Controversy Obscuring Truth About Alberta’s Environmental Record

12 Apr

By Darcy Henton, Calgary Herald April 10, 2013

WASHINGTON, D.C. – The polarized debate over the Keystone XL pipeline and global warming overlooks the fact that you can build the pipeline and still reduce greenhouse gas emissions and be good stewards of the land, air and water, Premier Alison Redford told a Washington think tank Tuesday.

Redford told the Brookings Institution that the dialogue over approval of the 1,800-kilometre pipeline between Alberta and the U.S. gulf coast “suffers from some glaring deficiencies, which cause essential truths to be overlooked.”

“The most basic truth is that the stark choice Keystone’s opponents have put at the heart of the debate is an illusion,” the Alberta premier said on the same day the province touted Keystone’s value in the Washington Post. “Too many of the arguments deployed against Keystone are far too far from reality. They proclaim that either you stand against the oilsands, or you write off the environment, along with any hope for a sustainable existence.That is completely wrong.

Redford, who met with Canadian ambassador Gary Doer Tuesday morning on the first day of her two-day visit to D.C., said Albertans want to be responsible stewards of their natural resources.

She said Alberta is home to some of the most environmentally friendly, progressive legislation in the world.

“You wouldn’t know that from the clamor of the debate,” she said. “We have nothing to hide, because the facts are on our side.”

The oilsands contribute 21 per cent of Alberta’s greenhouse gas emissions, seven per cent of Canada’s emissions, and less than 0.15 percent of the global total, Redford told the gathering.

She added the Canadian oilsands, in total, produce less greenhouse gas emissions than the electric power plants in Ohio, in Indiana, and even less than the agricultural state of Iowa.

Redford noted that Alberta became the first jurisdiction in North America to require large industry to curb greenhouse gas emissions in 2008 and is reviewing its climate change policy to make it even stronger.

She said that since 1990, Alberta’s energy industry has reduced greenhouse gas emissions per barrel of oil produced by an average of 29 per cent, with some some facilities achieving reductions as high as 50 per cent.

Alberta’s coal-fired power plants have lowered their emissions by an amount equivalent to taking roughly 240,000 cars off the road, the premier added.

“We will close up to a dozen of our older plants over the next 17 years, so we can replace them with cleaner alternatives,” she said.

She said her government is providing $1.3 billion in funding for two large-scale carbon capture and sequestration projects, but didn’t mention that funding for two other programs has been cancelled due to poor economics.

“Alberta has a strong record to defend, a very persuasive case to make, and an undeniable need to make it,” she said. “The facts need to be on the table during the debate over Keystone.”

“We are a responsible energy producer looking to develop and market our resources in a sustainable and thoughtful way, to the benefit of both buyer and seller. That’s really the story.”

Redford said that while there’s much talk now in the United States about energy independence in the U.S., the only realistic way to see that is in terms of North American energy independence — integration between the two countries.

She pointed out almost 30 per cent of U.S. oil imports now come from Canada.

“Without Canada’s almost two million barrels per day from the oilsands, there is no prospect of North American energy independence,” she said. “It makes economic and environmental sense to get that energy from a trusted partner.”

She said more than 900 American companies supply oilsands firms with equipment, parts and services.

Keystone XL would add an estimated $6.9 billion per year to the U.S. economy over the next 25 years, and create or preserve more than 75,000 American jobs, Redford explained.

“Canadians would like to see a level playing field in the debate over Keystone XL,” she said. “The opponents of Keystone are, in effect, tilting the playing field in favor of Venezuela, which would be the biggest beneficiary in the absence of Keystone.”

Redford said Venezuela’s oil has the same carbon footprint, but the country doesn’t have the environmental policies and commitment that Alberta has.

She said Alberta has other options and that includes selling on the global market.

“We know that the developing world is thirsty for our energy,” Redford said. “I’ve been to China twice, and I’ll be leading another trade delegation there later this year, along with one to India. But it’s Keystone that offers the US the most direct and tangible rewards.”

Republished from the Edmonton Journal: http://www.edmontonjournal.com/business/Alberta+Premier+Alison+Redford+argues+Keystone/8217845/story.html


Did the Exxon Spill in Mayflower Just Sink Keystone XL?

6 Apr

Jamie Henn – April 4, 2013

If President Obama rejects the permit for the Keystone XL pipeline, Big Oil executives are likely to look back at last weekend’s tar sands spill in Mayflower, Arkansas as a key reason for their defeat.

In a rational world, President Obama would have rejected the Keystone XL pipeline long ago. The nation’s top climate scientists have declared it an environmental disaster, over 800,000 Americans have written the Senate and State Department opposing the project, more than 40,000 recently descended on Washington, DC to push for a rejection. Time Magazine has called Keystone XL the “Selma and Stonewall” of the environmental movement for good reason: more people have gone to jail and rallied in the streets over the pipeline than any other environmental issue in the last decade.

But it’s the images of tar sands oil submerging backyards, flowing down driveways, and contaminating entire streets of the Mayflower subdivision that may finally dramatize all the risks that come with Keystone XL. The ExxonMobil Pegasus pipeline that ruptured in Mayflower carried about 90,000 barrels of tar sands a day, about 1/10th of tar sands that would flow through Keystone XL. Take the Mayflower spill, times it by ten, and superimpose it over one of our largest sources of fresh drinking water, the Ogallala Aquifer, and you’ll begin to get an idea of what a spill from Keystone XL would look like: a BP style disaster on land.


It was pictures like those coming out of Mayflower that helped fuel the last great surge of environmental activism in the late 1960s that led to the first Earth Day and the passage of the Clean Water Act and the Clean Air Act and the creation of the Environmental Protection Agency. Then, it was the Cuyahoga River catching on fire, the massive oil spill off of Santa Barbara, and other local disasters that brought the “pollution crisis” to public consciousness. Now, it’s pictures of climate catastrophes like last summer’s massive wildfires in Colorado or the devastation caused by Hurricane Sandy, and videos of fossil fuel disasters like the Mayflower spill or last year’s tar sands spill in Kalamazoo River, that are causing people to connect the dots between the new extreme energy rush and the ever worsening climate crisis.


This April 18, the State Department will host its one public comment hearing in Nebraska on the latest supplemental environmental impact statement for the Keystone XL pipeline, a review that was widely criticized by environmental groups and experts as seriously flawed and inadequate. 350.org is working with our allies to submit over 1,000,000 public comments and our friends at BOLD Nebraska are helping organize hundreds of farmers, ranchers, and landowners who will testify in person. Their words (and yours if you submit a comment) will make a difference – the State Department is required by law to count and review every comment submitted. But perhaps it’s the images out of places like Mayflower that will speak louder than all those words.

We’ve been given just a small glimpse of what our fossil fuel addicted future could look like: more spills, more climate disasters, more communities put at risk for industry profits. It’s a future that we, and President Obama, can and should reject. It doesn’t have to be this way. After all, as our friend Van Jones says, “You know what they call a solar spill? A sunny day.”

Republished from the Huffington Post: http://www.huffingtonpost.com/jamie-henn/mayflower-oil-spill_b_3016242.html

Keystone XL Pipeline: 3 Key Questions

1 Apr

Bob Burnett – March 29, 2013

On March 1, the State Department issued a report raising no objection to the construction of the Canadian-U.S. Keystone XL pipeline. There will be a 45-day period for public comments and then President Obama will decide whether or not to approve the 875-mile pipeline. His decision will hinge on three critical considerations.

1. Would increased exploitation of the Canadian tar-sands oil increase greenhouse gas emissions? There’s no dispute that Keystone XL will accelerate global climate change. The State Department acknowledges that oil derived from the tar sands emits high amounts of greenhouse gases [GHGs]. The Department’s March 1 Draft Supplemental Environmental Impact Statement says:

[Western Canadian Sedimentary Basin] crudes are more GHG-intensive than the other heavy crudes they would replace or displace in U.S. refineries, and emit an estimated 17 percent more GHGs on a life-cycle basis than the average barrel of crude oil refined in the United States in 2005.

Nonetheless, the State Department concludes the greenhouse gas increase is not significant.

2. Is pipeline approval a critical determinant of tar sands exploitation? The State Department report asserts it does not matter whether or not the Keystone XL pipeline is built:

Based on information and analysis about the North American crude transport infrastructure (particularly the proven ability of rail to transport substantial quantities of crude oil profitably under current market conditions, and to add capacity relatively rapidly) and the global crude oil market, the draft Supplemental EIS concludes that approval or denial of the proposed Project is unlikely to have a substantial impact on the rate of development in the oil sands…

This conclusion has drawn three objections. The first is that the State Department is inadequate and has not fully considered the impact of Keystone XL on global climate change. Writing in Alternet, William Boardman reported the State Department report was actually written by consultants,

Friends of the oil industry wrote the environmental impact statement issued by the State Department… And it turns out that at least one of the several oil-friendly corporate authors was apparently paid by Trans-Canada, the corporate applicant for — and the owner of — the Keystone pipeline.

The second objection to the State Department conclusion attacks the logic that blocking Keystone XL will make no difference in the generation of GHGs. In a March 10 editorial, the
New York Times observed:

Saying no to the pipeline will not stop Canada from developing the tar sands, but it will force the construction of new pipelines through Canada itself… At the very least, saying no to the Keystone XL will slow down plans to triple tar sands production from just under two million barrels a day now to six million barrels a day by 2030.

The third objection is that the State Department overstates the ability of the “north American crude transport infrastructure” to add new capacity, if the Keystone XL pipeline is not approved. Currently, the Alberta tar sands region produces 1.8 million barrels of oil per day that are transported primarily in pipelines. Calgary Herald columnist Stephen Ewart observed,

The looming pipeline bottleneck that’s been widely forecast as oil sands production soared in Alberta in recent years is no longer imminent – it’s here. The vast underground network of pipes that move approximately 3.2 million barrels of crude oil a day in Canada is operating at capacity… “It’s more than full,” Brenda Kenny, president of the Canadian Energy Pipeline Association, said in a meeting with the Herald’s editorial board this week. “We’re in a jam … the numbers are stark.”

The Alberta tar-sands region is authorized to produce 5 million barrels of oil per day. The State Department report assumes that, if the Keystone XL pipeline is not approved, most of the new oil would be moved by rail. However, NRDC attorney Anthony Swift observed,

The reason why rail isn’t a feasible alternative to Keystone XL is that it is simply too expensive to support tar sands expansion. State’s conclusions to the contrary are due to their substantially underestimating the cost of rail transport.

If the Keystone XL pipeline is not approved, additional tar-sands oil production will be blocked.

3. How will the Keystone XL pipeline decision impact U.S. energy supplies? The third consideration is the impact of a new source of oil on domestic energy supplies. The World‘s environmental editor, Peter Thomson studied this and concluded:

[Construction of Keystone XL] might increase our energy security somewhat, but nowhere near the extent that supporters are suggesting. But it also is likely that most of the actual hydrocarbons that flow through the refineries at the end of this proposed pipeline will end up being burned elsewhere, at least under current market conditions.

In other words, most of the tar-sands oil would end up being exported.

The State Department’s report is inadequate. President Obama should disregard it and block construction of the Keystone XL pipeline.

Republished from the Huffington Post: http://www.huffingtonpost.com/bob-burnett/keystone-xl-pipeline_b_2978347.html


New York Times Editorial on the Keystone XL Pipeline: When to Say No

22 Mar

March 10th, 2013

The State Department’s latest environmental assessment of the controversial Keystone XL oil pipeline makes no recommendation about whether President Obama should approve it. Here is ours. He should say no, and for one overriding reason: A president who has repeatedly identified climate change as one of humanity’s most pressing dangers cannot in good conscience approve a project that — even by the State Department’s most cautious calculations — can only add to the problem.

The 875-mile pipeline avoids the route of an earlier proposal that traversed the ecologically sensitive Sand Hills of Nebraska and threatened an important aquifer. It would carry 830,000 barrels a day of crude oil from the tar sands of Alberta to pipelines in the United States and then onward to refineries on the Gulf Coast. From there, most of the fuel would be sent abroad.

To its credit, the State Department acknowledges that extracting, refining and burning the oil from the tar-laden sands is a dirtier process than it had previously stated, yielding annual greenhouse gas emissions roughly 17 percent higher than the average crude oil used in the United States. But its dry language understates the environmental damage involved: the destruction of the forests that lie atop the sands and are themselves an important storehouse for carbon, and the streams that flow through them. And by focusing on the annual figure, it fails to consider the cumulative year-after-year effect of steadily increasing production from a deposit that is estimated to hold 170 billion barrels of oil that can be recovered with today’s technology and may hold 10 times that amount altogether.

It is these long-term consequences that Mr. Obama should focus on. Mainstream scientists are virtually unanimous in stating that the one sure way to avert the worst consequences of climate change is to decarbonize the world economy by finding cleaner sources of energy while leaving more fossil fuels in the ground. Given its carbon content, tar sands oil should be among the first fossil fuels we decide to leave alone.

Supporters of the pipeline have argued that this is oil from a friendly country and that Canada will sell it anyway. We hope Mr. Obama will see the flaw in this argument. Saying no to the pipeline will not stop Canada from developing the tar sands, but it will force the construction of new pipelines through Canada itself. And that will require Canadians to play a larger role in deciding whether a massive expansion of tar sands development is prudent. At the very least, saying no to the Keystone XL will slow down plans to triple tar sands production from just under two million barrels a day now to six million barrels a day by 2030.

The State Department will release a fuller review in early summer, and at some point after that the White House will decide. That decision will say a lot about whether Mr. Obama and his secretary of state, John Kerry, are willing to exert global leadership on the climate change issue. Speaking of global warming in his State of the Union address, Mr. Obama pledged that “if Congress won’t act soon to protect future generations, I will.” Mr. Kerry has since spoken of the need to safeguard for coming generations a world that is not ravaged by rising seas, deadly superstorms, devastating droughts and other destructive forces created by a changing climate.

In itself, the Keystone pipeline will not push the world into a climate apocalypse. But it will continue to fuel our appetite for oil and add to the carbon load in the atmosphere. There is no need to accept it.

A version of this editorial appeared in print on March 11, 2013, on page A20 of the New York edition with the headline: When to Say No.

PART THREE: Keystone EIS looks in-depth at the railway to Prince Rupert option for bitumen and crude

22 Mar

Robin Rowland – March 13, 2013

There have always been commentators who believe that if the Northern Gateway Pipeline is rejected by the Joint Review Panel or stopped by other means, that the bitumen from Alberta should be carried by rail to Prince Rupert.

A pipeline to Prince Rupert has already been rejected by Enbridge as impractical given the mountainous terrain and the narrow footprint along the Skeena River from Terrace to Prince Rupert.


That means taking bitumen by rail to Prince Rupert has not been seriously studied—until now.

The State Department Environmental Impact Study (EIS) on the controversial Keystone XL pipeline from Alberta to the US Gulf, does give serious consideration to the rail to Rupert option.

That’s because under its mandate the State Department had to consider alternatives to Keystone. The detailed look at carrying crude to the west coast is contained in the “No Action Alternatives” section of the Keystone report (that is telling President Barack Obama what might happen if he takes no action on Keystone)

The EIS took a brief look at the possibilities of rail to Kitmat, but concentrates mostly on Prince Rupert.

As for sending bitumen to the Gulf,via rail and tanker, the Keystone report concludes, as have most analysts that even if bitumen was shipped by rail to Prince Rupert, it would be cheaper to send it to markets in Asia than through the Panama Canal to the US Gulf Coast.

If pipelines to the Canadian West coast are not expanded or approved, even incurring the additional cost of rail transport to the West Coast ports (Vancouver, Kitimat, or Prince Rupert), estimated at $6 per barrel, results in a total transport cost to Asia that is still 40 percent cheaper than going via the Gulf Coast.

Absent a complete block on crude oil exports from the Canadian West Coast, there would belittle economic incentive to use the proposed project as a pass through. The high costs of onward transport to other potential destinations tend to mitigate against WCSB [Western Canada Sedimentary Basin] heavy/oil sands crudes being exported in volume from the Gulf Coast.

As an alternative to Keystone, the State Department examined a scenario where bitumen and possibly Bakken shale crude oil would be:

• Loaded onto rail in Lloydminster and transported to Prince Rupert, British Columbia;

• Transferred to a new/expanded marine terminal at Prince Rupert; and

• Shipped via Suezmax vessels to the Gulf Coast area (Houston/Port Arthur) through the Panama Canal.

If the tanker cars are hauling bitumen, they would be actually loading “railbit” which the report says is “similar to dilbit but with less diluent added” (Dilbit is the standard diluted bitumen in pipelines) There is also, according to the EIS, a possibility that the tank cars would carry raw bitumen without dilutent (although this requires insulated rail cars with steam coils)

New facilities in Prince Rupert would consist of a large rail terminal complex, most likely on themainland, where off-loaded crude oil would be stored until it could be loaded onto tankers, and an expanded port. The entire facility would cover 4,700 acres (1,900 hectares), including 3,500 acres (1,400 hectares) for storage and off-loading/on-loading facilities at the rail terminal and approximately 1,200 acres (487 hectares) of land at the expanded port.

The new tank terminal construction would consist of the following:

• Fourteen petroleum storage tanks (11 oil and three condensate);

• A security fence to encompass the tank terminal;

• A 180-foot-wide (55 metre) firebreak area around the outside perimeter of the terminal;

• Electrical supply and distribution (this terminal would be serviced by the Texada Island

Reactor substation); and

• Buildings (control center and civil infrastructure including roads).

The scenario calls for adding approximately 13 trains with 100 tanker cars per day on the 1,100 miles (1,770 kilometres) of CN and Canadian Pacific rail lines between Lloydminster and Prince Rupert.

(On the other hand, media mogul David Black who has proposed a refinery at Onion Flats half way between Kitimat and Terrace is considering a rail link to Kitimat if the Northern Gateway pipeline is stopped. Black estimates there would be six trains per day, 120 cars in each direction. While there is usually only one train a day to Kitimat or less, that idea would increase traffic along the Skeena and in his news release Black says 

If BC remains set against a pipeline the oil will come to the refinery by rail. CN and the oil companies are keen on this. A great deal of crude in North America is being moved by rail now. The costs are not that different in this case and no permits are required. Rail tankering is, however, not as safe and it is more disruptive. Small towns along the route with level crossings would rue having 12 more trains running through every day.

The State Department scenario says that if the Prince Rupert option actually happened there would be “one to two additional Suezmax tanker vessels per day (430 tankers per year) would travel between Prince Rupert and the Gulf Coast area refinery ports via the Panama Canal.”

The concept of the Suezmax tankers is critical to the west coast, even if none of the scenarios eventually happen, because the State Department report notes that the Panama Canal is now being expanded, so that larger ships, including tankers, can go through the canal after 2014.

The current size is Panamax (maximum size for the current Panama Canal) to Suezmax (the maximum size for the Suez Canal), and, according to the State Department that means even if the even bigger Very Large Crude Carriers are not calling at west coast ports, the newer, larger Suezmax tankers may  be.

It should be noted, however, that if WCSB crude oil reaches a Pacific port, regardless of whether by rail or by pipeline, the economics for movement via tanker would favor shipping the oil to Asia rather than the Gulf Coast area. The cost of transporting crude oil via tanker from Prince Rupert to Houston and Port Arthur is estimated to be approximately $4.70/bbl, whereas the transport cost via tanker from Prince Rupert to refinery ports in Asia (e.g., Ulsan, South Korea and Dalian, China), is estimated to be only approximately $1.70 and $2.00/bbl, respectively. The lower transport cost to Asia versus the Gulf Coast area is attributable to shorter trip duration (30 to 37 days to Asia versus about 45 days to the Gulf Coast area), avoiding the Panama Canal toll(about $0.70/bbl), and being able to use a larger tanker because it would not be constrained by the Panama Canal (a VLCC tanker to China would have a capacity of almost 2 million bbl versus a Suezmax tanker to the Gulf Coast area with a capacity of about 884,000 bbl).

So what would happen if there was a scheme to truck bitumen and crude to Prince Rupert and ship via the Panama Canal to the Gulf?

The State Department EIS says:

 the transport of the crude oil via tankers from Prince Rupert to the Gulf Coast area refineries would not have any effects on geology, soils, groundwater, wetlands, vegetation, land use, socioeconomics, noise, or cultural resources, other than in the event of a spill.

It goes on to note:

The Gulf Coast area refineries already receive crude oil shipments via tankers from Mexico, Venezuela, and other locations; the Rail/Tanker Scenario is expected to simply displace these sources of crude oil with WCSB crude oil. Therefore, no new construction or new operational impacts are expected to occur as a result of this scenario at the Gulf Coast area refineries or surrounding habitats or communities.

In its study of a possible expanded Prince Rupert terminal that would welcome tankers, the State Department says:

The proposed Northern Gateway terminal at Kitimat, British Columbia was used as a surrogateto estimate the marine facilities needed at Prince Rupert. The Northern Gateway facility isdesigned to handle about 525,000 bpd of crude delivered by pipeline for loading on vessels to theWest Coast and Asia. In addition, it is designed to receive about 193,000 bpd of diluent (a verylight oil obtained from natural gas production) from cargoes arriving by water and discharging into storage at the terminal and moving back to Alberta via a parallel pipeline. The total volumeof about 718,000 bpd approximates the volume of WCSB heavy crude oil that would be loaded at Prince Rupert.


Republished from NorthWest Coast Energy News: http://nwcoastenergynews.com/2013/03/13/4320/part-three-keystone-eis-in-depth-railway-prince-rupert-option-bitumen-crude/



PART TWO: What the State Dept. Keystone EIS says about Kinder Morgan and Vancouver harbour

19 Mar

March 13, 2013 by Robin Rowland

The US State Department report on the controversial Keystone XL pipeline project also looks at the Kinder Morgan Transmountain pipeline (both the existing line and the proposed second line) and, in at least one part of the report, seems to speculate that, once expansion of the Panama Canal is completed in 2014, there could be larger tankers in Vancouver harbour, something that up until now, both Kinder Morgan and Port Metro Vancouver have denied. However, the State Department report does not say how the port of Vancouver could handle larger tankers.

The State Department EIS says if larger tankers were loaded at Vancouver, it could be economic for crude from the Kinder Morgan Transmountain pipeline to be moved to the US Gulf Coast.


Using heavy crude as a basis, a present day movement via Trans Mountain to Vancouver and thence on a Panamax tanker via the Panama Canal to Houston would have a total freight cost (pipeline tariff plus tanker freight and Panama toll) of around $8.50-9.50/barrel (bbl).

Recognizing that Kinder Morgan plans to enable future shipment in larger Suezmax tankers, and that the Panama Canal Authority is expanding the Canal to take tankers of that size, the rate using a Suezmax would be approximately $1/bbl lower. These rates compare to approximately $8/bbl to move heavy crude via pipeline from Hardisty to Houston. Thus, while in normal markets, a tanker movement from Western Canada would be somewhat more costly than via pipeline, in a scenario where ability to move WCSB crudes by pipeline to the U.S. Gulf Coast were constrained, refiners in the U.S. Gulf Coast could opt for tanker transport.

(The Panama Canal expansion program began in 2006 and is scheduled for completion in 2014)

Latest progress report (pdf)

According to the progress report the current Panama Canal has the capacity for ships that are 32.3 metres wide by 304.6 metres long, This will increase to 49 metres wide by 366 metres long.

Later in the report the State Department goes on to say that bitumen and crude could, as an alternative to Keystone, go to Vancouver:

Under this option, WCSB [Western Canada Sedminetary Basin] would be shipped by existing railways or new pipelines from the Hardisty region to Vancouver or Kitimat, British Columbia for shipment by marine transport through the expanded Panama Canal and delivery to Gulf Coast area refiners. This option considers moving up to 730,000 bpd of heavy crude to the Port of Vancouver and then to the marine docks at the Westridge marine terminal in Vancouver or the port in Kitimat. Under this option, crude oil could move either via rail or by a new pipeline from the Hardisty region.

Currently, Kinder Morgan is planning an expansion of the existing Trans Mountain pipeline originating at Edmonton, increasing its capacity from 300,000 bpd (current) to up to 890,000 bpd(planned for operations in 2017).

The Trans Mountain pipeline runs into Vancouver via the existing Burnaby terminal over to the Westridge dock for loading heavy crude onto vessels. The pipeline has sufficient commitment from shippers to proceed with engineering and permitting processes. Kinder Morgan indicates that the project would significantly increase tanker traffic from about 5 to 34 cargoes per month, or up to about 400 cargoes per year . The increased marine traffic is due to increased volume to be shipped, and lack of sufficient channel draft to load larger vessels.

Kinder Morgan on its website says

The proposed expansion at Westridge Terminal is based on the loading of Aframax tankers, the same tankers currently being loaded at Westridge. Larger tankers are not permitted in the Vancouver harbour, and are not under consideration for the expansion. Proposed changes at the dock include new loading facilities, fire protection, vapour recovery, secondary containment, and emergency response equipment.

To connect the Burnaby Terminal with the Westridge Terminal, the proposed expansion includes two new, four-kilometre pipelines each with a diameter of 762 millimeters (30 inches). These two new delivery lines would provide product deliveries to tankers at two new dock berths, and provide the scheduling flexibility required for a marine operation.

Port Metro Vancouver also says on its website:

The role of Port Metro Vancouver is to conduct a rigorous project review to ensure the safe movement of goods through the Port. Kinder Morgan has yet to submit a formal project proposal to Canada’s National Energy Board. If they do, and should approval be granted, the project would then undergo several other permitting processes, one of which is a Port Metro Vancouver Project Permit Review. Vancouver is a very low volume tanker port. Currently, there are about 100 crude oil and chemical tankers calling the port each year. If the Kinder Morgan project receives approval, that number could increase to approximately 400 tankers a year. Other well-run ports such as the Port of Rotterdam handles 8,206 tankers a year, while Singapore handle 22,280 tankers a year.

Will larger tankers be calling at Port Metro Vancouver as a result of the Kinder Morgan Proposal?

There are no plans to exceed the current maximum size of tankers calling at Port Metro Vancouver. Due to depth restrictions in the Burrard Inlet, the largest dimension of tanker that can be handled is the Aframax, a medium-sized tanker with a maximum capacity of 120,000 tonnes. Even then, these vessels can load to only around 80% of capacity due to draft restrictions.


The State Department EIS was cautious about the Kinder Morgan project and did not do the same deailed analysis as it did for Prince Rupert.

The substantial increase in tanker traffic from the proposed Kinder Morgan expansion has raised safety and environmental concerns. Moving additional volumes of crude oil from the proposed Project into the Vancouver market by either a new pipeline or rail would result in 400 or more additional vessels loading at Vancouver each year and would require considerably more storage to be built than the current Kinder Morgan operations. The expansion of storage capacity, potential rail off-loading facilities and logistics, and increased marine traffic may make this option logistically challenging in a relatively compressed and populated geographical area.

Moreover, even if a separate pipeline from Hardisty could be planned, mapped, engineered, designed, and permitted starting today, it would likely not be available as an option until well after the proposed [Keytsone] Project’s planned start date. As a result of the logistical challenges in increasing the amounts of heavy Canadian grades of crude oil coming into the Vancouver/Burnaby region over and above the volumes from the Kinder Morgan expansion, this option was deemed to be less viable than movements from Kitimat and Prince Rupert and was eliminated from detailed analysis.

It’s not clear from the Keystone EIS, if the State Department was simply speculating on larger tankers in Vancouver harbour or if it was made of aware of possible hopes for a deep water tanker port elsewhere in the Vancouver harbour area.


Port Metro Vancouver tanker diagram

Port Metro Vancouver diagram showing the tankers that are permitted and not allowed in Vancouver harbour. (Port Metro Vancouver)


The State Department EIS goes on to note:

While no new additional pipeline capacity has been added from Canada into the United States or to the Canadian West Coast since the Final EIS in 2011, a number of projects are proposed, including this proposed Project. The 300,000 bpd Kinder Morgan Trans Mountain pipeline that runs from Edmonton to the British Columbia coast at Vancouver, with a spur to Washington State refineries, has been over-subscribed for some time. A successful open season led the Kinder Morgan to announce and file for expansion to 750,000 bpd by potentially 2017. After a
second open season, Kinder Morgan has increased the expansion to 890,000 bpd. The bulk of the incremental crude moved on the line would potentially be destined for Asia. The review process for this project is continuing, but there is significant opposition based on concerns over environmental impacts associated with the oil sands and with additional tanker movements in the Port Vancouver harbor.

As noted above, both of these proposed pipeline projects to Canada’s West Coast face significant resistance and uncertainty, but there are strong cost advantages when compared with moving WCSB crude to the Gulf Coast even if rail were used to access the Canadian West Coast… In fact, using rail and tanker to ship crude oil from the WCSB via the West Coast to China is comparable to the pipeline rate to reach the U.S. Gulf Coast. An increase in the transport costs to the Gulf Coast (utilizing alternative transport options such as rail) would have a tendency to increase the economic incentive to utilize any West Coast export options, if they are available.

Republished from NorthWest Coast Energy News: http://nwcoastenergynews.com/2013/03/13/4314/part-two-state-dept-keystone-eis-kinder-morgan-vancouver-harbour/


PART ONE: What the State Department Keystone EIS says about Kitimat

19 Mar

March 13, 2013 – Robin Rowland

The United States Department draft Environmental Impact Statement (EIS) not only had to evaluate the main subject, the controversial Keystone XL pipeline project, but possible alternatives as well.

So that’s why the EIS took a couple of looks at Kitimat, with two possibilities for replacing the Keystone XL with a Kitimat terminal.

The study doesn’t just include various forms of diluted bitumen from the Alberta bitumen sands, but  petroleum products from the Western Canadian Sedimentary Basin (WCSB) and crude oil from the Bakken shale shipped to the refineries on the US Gulf Coast which would be served by the Keystone XL pipeline if it was not approved.

The EIS examined the Northern Gateway project and rejected the Enbridge pipeline as a possibility for Alberta bitumen and crude because of the continuing controversy.

However, a reading of the report shows that there could be pressure in the future for a bitumen or crude export terminal at Kitimat that would be served by the existing CN rail line (even though the State Department report prefers Prince Rupert as the best choice as an alternative to Keystone).

Enbridge is proposing to construct the Northern Gateway pipeline, which would transport up to 525,000 bpd of crude oil 1,177 km from Bruderheim, Alberta, to the Port of Kitimat, British Columbia. The port would be improved with two dedicated ship berths and 14 storage tanks for crude oil and condensate. Enbridge intends for the pipeline to be operational around 2017. A regulatory application was submitted in 2010, which is undergoing an independent review process led by the Canadian National Energy Board and the Canadian Environmental Assessment Agency. The pipeline would traverse First Nation traditional lands and important salmon habitat. The project has been controversial and has encountered opposition from some
First Nation bands and other organizations. Opposition to the project remains strong as evidenced by media reports of the January 2013 public hearings in Vancouver on the permit application. It remains uncertain at this time if the project would receive permits and be constructed, and therefore the option of moving additional crude to Kitimat was eliminated from detailed analysis.

The report goes on to say that Enbridge is moving the target for the Northern Gateway due the controversy and the longer than expected Joint Review Panel hearings

Enbridge is now stating in investor presentations that the Northern Gateway pipeline
(525,000 bpd expandable to 800,000 bpd) may be operational by “2017+”

However the State Department report does seriously consider transportation of WCSB crude by rail to Vancouver, Kitimat and Prince Rupert. The report takes an in-depth look at the railway to Prince Rupert option.

One reason is that even if it is transported by rail, the market in Asia is still more attractive to the energy industry than using Kitimat or Prince Rupert as a possible terminal for export to the US Gulf.

The transportation costs of shipping to Asia via the Canadian or U.S. West Coasts
would be significantly cheaper than trying to export it via the U.S. Gulf Coast.

The total per barrel cost of export to Asia via pipeline to the Canadian West Coast and onward on a tanker is less than just the estimated pipeline tariff to the U.S. Gulf Coast for the proposed Project, and is less than half the cost of the Gulf Coast route to Asia. If pipelines to the Canadian West coast are not expanded or approved, even incurring the additional cost of rail transport to the West Coast ports (Vancouver, Kitimat, or Prince Rupert), estimated at $6 per barrel, results in a total transport cost to Asia that is still 40 percent cheaper than going via the Gulf Coast Absent a complete block on crude oil exports from the Canadian West Coast, there would be little economic incentive to use the proposed project as a pass through. The high costs of onward transport to other potential destinations tend to mitigate against WCSB heavy/oil sands crudes being exported in volume from the Gulf Coast.

The EnSys 2011 study found that the rail systems of the United States and Canada were not at that time running at capacity, that there is significant scope to expand capacity on existing tracks through such measures as advanced signaling, and that adequate cross-border Canada/U.S. capacity exists to accommodate growth in rail traffic that would be associated with movements at the level of 100,000 bpd cross-border increase per year or appreciably higher. In addition, rail lines exist to ports on the British Columbia coasts (notably Prince Rupert, Kitimat, and Vancouver), which could be used for export of Western Canadian crudes.

And later in the report:

both of these proposed pipeline projects to Canada’s West Coast face significant
resistance and uncertainty, but there are strong cost advantages when compared with moving WCSB crude to the Gulf Coast even if rail were used to access the Canadian West Coast In fact, using rail and tanker to ship crude oil from the WCSB via the West Coast to China is comparable to the pipeline rate to reach the U.S. Gulf Coast. An increase in the transport costs to the Gulf Coast (utilizing alternative transport options such as rail) would have a tendency to increase the
economic incentive to utilize any West Coast export options, if they are available.

The report also notes the change in Canadian laws in the omnibus bills pushed through by Stephen Harper’s Conservative government:

Also not examined above, are more speculative political impacts that might occur as a result of a decision on the permit application for the proposed Project. In 2012, the Canadian government enacted new laws changing the way some major infrastructure projects, such as pipelines, are reviewed. Among the changes made were limits on the amount of time for such reviews. A declared intent was to promote alternative routes for the export of WCSB crude oils, especially
ones that would reduce reliance on the United States as, essentially, the sole market option.

In other words, even if Northern Gateway is stopped, there could be considerable pressure to export bitumen and crude oil from Alberta not only through Prince Rupert, the site preferred by the State Department EIS, but though Kitimat as well.

That might just open the door for David Black’s proposed $16 billion refinery at Onion Flats near Kitimat. As noted elsewhere on the site Black has possible investors for construction of a new oil refinery approximately 25 kilometers to the north of Kitimat BC on a 3,000 hectare site.

Black’s Kitimat Clean website says the refinery would process 550,000 barrels per day (87,445 cubic meters per day) of diluted bitumen from the oilsands region of Alberta delivered to the site by pipeline or by rail. The diluent will be extracted at the refinery and returned to Alberta if needed there. If not, it would be processed into gasoline. The bitumen will be converted into fuel products, primarily for export.

Black’s plans call for connecting the Northern Gateway bitumen Pipeline to the site. From the refinery six dedicated product pipelines will run to a marine terminal on the Douglas Channel. The Douglas Channel is a wide and deep fjord. VLCC (Very Large Crude Carrier) tankers will transport the refined fuels to markets around the Pacific Rim.

If the Northern Gateway is stopped, Black’s plans call for 12 additional 120 car trains running through every day. (Six in each direction)

Republished from NorthWest Coast Pipeline: http://nwcoastenergynews.com/2013/03/13/4307/part-one-state-department-keystone-eis-kitimat/