Why aren't we asking what's in our pipelines?

BY ELIZABETH MAY | AUGUST 20, 2013

Elizabeth May is the Leader of the Green Party of Canada and one of our country's most respected environmentalists. She is a prominent lawyer, an author, an Officer of the Order of Canada, and a loving mother and grandmother.

Canadians now have a dizzying array of pipeline proposals dominating news coverage. They are presented as though they are alternative options.

Problems getting pipelines to the U.S. approved? Show Uncle Sam we have other markets and get pipelines to the Pacific coast.

Trouble getting pipelines to the Pacific coast? Head east to the Atlantic.

There is also the major irritant with the Obama administration -- what will the President decide about the Keystone XL pipeline?

Then there are the two major threats to B.C.'s supertanker-free coast, maintained since the imposition of the tanker moratorium in 1972: Enbridge Northern Gateway and Kinder-Morgan's TransMountain expansion to Burnaby.

The reality is all these proposals are not necessarily alternatives for one another. The Masters of the Fossil Fuel Universe would like to have all of them. The mainstream media dutifully repeats whatever Stephen Harper says about them -- even our once great public broadcaster, the CBC.

How is it no one asks, "What will be in the pipeline?"

With the advent of unconventional sources of oil and gas, the answer to the question isn't obvious. While media use the terms "oil" and "crude" interchangeably, most of these pipelines will contain neither. North American known reserves of oil have recently expanded with the development first of unconventional oil sands bitumen-based fuels and the innovations that allow fracking in shale deposits for more unconventional oil.

As the disaster in Lac Mégantic made clear, that crude oil in the railcars did not behave like crude oil at all. Crude doesn't blow up. It burns, but it doesn't create explosive fireballs. As Ed Belkaloul, the Quebec head of the Transportation Safety Board, put it, the oil behaved in a way 'that was abnormal'.

What was in that crude? Turns out, no one knows. The nice folks who produced the stuff in North Dakota's Bakken fields sold it to shipper World Fuel Services (WFS). WFS was not forthcoming about what might be different about the unconventional oil they were shipping. The Montreal, Maine and Atlantic Rail company (MMA) that got permission from Transport Canada to have the unmanned train left poised above Lac Mégantic on a main line with 72 railways cars of hazardous product also says they didn't know it was more dangerous than your average crude.

Since production in North Dakota's shale has tripled in the last two years, with most of it moving by rail, no regulator or shipper seems to have noticed this might not be crude after all. As the stuff flowed into adjacent streams and rivers, environment officials tried to figure out what was in there. It seems there was a lot of the cancer-causing chemical benzene, which would not ordinarily be found in crude. And likely a lot of polycyclic aromatic hydrocarbons (PAHs) were mixed in with the unconventional oil from the fracking fluids. Until laboratory analysis is completed, it's just guess work.

The same can be said of the bitumen moving from Alberta. Whether heading west, south or east, before passing judgment on the pipeline proposals, we should be demanding to know what product is in the pipeline.

We can be sure of one thing: it won't be bitumen alone, because bitumen doesn't flow. Bitumen needs to be made more fluid/less solid to be shipped by pipeline. There are a few ways to do this.

One is by upgrading, converting the bitumen to synthetic crude. Or, you could do one better and then further refine the synthetic crude so that you are shipping gasoline or other refined petroleum product. The quick and dirty approach is to mix the bitumen with other fossil fuel by-products to make it flowable. The non-scientific word for the solution to make it flow is "diluent" and the mix of bitumen and diluents is "dilbit." The diluent can be any number of chemicals, including natural gas byproduct, Naptha, or, as in the case of the Dilbit Arkansas spill, with added benzene.

One thing about pipelines I have learned in the last few years, since paying a lot of attention to them, is that shippers sending dilbit by pipeline do not have to be overly concerned about contamination with rust or dirt along the shipping route. Bitumen is still such low-grade material that any crud that gets into the mix will be removed in subsequent upgrading and refining. So if you want an internal industry motivation for clean and well-maintained pipelines, pushing for only finished product to be shipped is a good one. It is also the case that no-one, for environmental reasons, should support any pipeline involving dilbit.

For one thing, the transport of diluents to northern Alberta is an environmental risk only created by the industry preference, and governmental negligence, in wanting to export the raw bitumen without value-adding. The train cars that nearly plunged into the Bow River during the Calgary floods in July were loaded with diluents and headed to northern Alberta. Enbridge has already stated in its application to the NEB that it plans to purchase diluents from the Middle East, bring it in tankers to Kitimat to move through the west to east portion of the twinned pipeline. We have ignored an aspect of the environmental cost of shipping dilbit -- shipping the diluents.

Then there is the reality that dilbit is far harder (impossible?) to clean up after a spill. The Enbridge Kalamazoo River spill in 2010 is still not cleaned up. Dilbit does not behave like crude in the environment, yet all of Enbridge's evidence in the NEB hearings is based on behaviour of crude.

Insisting on further processing before leaving northern Alberta is the sensible policy. And it has another advantage: investing in ancillary infrastructure for the upgraders and refineries will not be possible so long as the oil sands are in constant expansion mode. The hyper-inflationary conditions created by an ever-growing number of oil sands mines, driving up daily production, trying to triple it to six-million barrels per day (Stephen Harper's goal) is inconsistent with sound management of the enterprise; creating tens of thousands more jobs in processing, before shipping.

So, let's keep asking: what is in those pipelines? How crude is that crude?

Originally printed in the Island Tides Regional Newspaper.

Photo: wikipedia commons

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From CBC.ca

First Nations chiefs worried about west-east pipeline terminal

Express 'serious concerns' about possible environmental impact of marine terminal in Saint John

Aug 15, 2013

The proposed Canaport Energy East Marine Terminal would connect TransCanada's Energy East Pipeline to an ice-free, deep water port.

The proposed Canaport Energy East Marine Terminal would connect TransCanada's Energy East Pipeline to an ice-free, deep water port. (CBC)

The Assembly of First Nation Chiefs in New Brunswick is speaking out against plans to build a deep water marine terminal in Saint John for the proposed west-east oil pipeline.

TransCanada Corp. and Irving Oil Ltd. have formed a joint venture to build and operate a new $300-million terminal at Canaport if the EnergyEast pipeline project proceeds.

The chiefs "have serious concerns over negative environmental impacts" the terminal could have on on the aboriginal fishery in the Bay of Fundy, including endangered salmon, according to a statement issued on Thursday.

They are also worried about the possible impact on their ability to exercise constitutionally protected aboriginal and treaty rights to generate a "moderate livelihood" from fishing, it states.

"But this isn't just a First Nations issue, nor is it limited to just the salmon," said Chief George Ginnish, the assembly's Mi'kmaq co-chair.

"There are a lot of people in non-aboriginal fishing villages along the Fundy coast who could suffer if the protection of the environment is not at the forefront of this Canaport expansion," he said.

Premier promised consultations

Chief Joanna Bernard, the assembly's Maliseet-Wolastoqiyik co-chair, said Premier David Alward vowed during the EnergyEast pipeline announcement to work with First Nations to ensure environmental and safety standards are followed.

"The expansion of the Canaport Marine terminal which is expected to be completed by 2018 will require First Nations consultation, and we take the premier at his word that he will deliver on his promise," she said.

TransCanada Corp. officials have also promised to engage with First Nations and other communities as its $12-billion west-east pipeline project moves through the regulatory approval process.

Chief executive officer Russ Girling has said talks with First Nations communities are "absolutely critical."

The pipeline proposal, which still needs regulatory approval, would send 1.1 million barrels of oil per day from Western Canada to refineries and export terminals in Eastern Canada.

TransCanada is proposing to convert roughly 3,000 kilometres of natural gas pipeline on its existing Canadian Mainline route so it can carry crude oil.

The company would also construct 1,400 kilometres of new pipeline to carry crude oil into Saint John, where it will end at the Canaport LNG terminal.

The Irving Oil Ltd. refinery in Saint John is the largest in Canada and can process 300,000 barrels of oil per day. Saint John also has a deep-water port and a liquefied natural gas facility.

TransCanada is expected to file its regulatory application with the National Energy Board by the end of the year.

The proposed Canaport Energy East Marine Terminal would connect TransCanada's Energy East Pipeline to an ice-free, deep water port.

Design work on the terminal, which would be located next to Irving Oil's existing import terminal, is expected to begin in 2015.

Energy East Pipeline A Nation-Builder? Historians Dubious Of Railway Comparisons

CP | By Lauren Krugel, The Canadian Press Posted: 08/18/2013

Energy East Pipeline

CALGARY - To hear some proponents of the Energy East project tell it, when the taps open on the $12-billion oil pipeline the moment will be as significant as when the last spike was driven into the Canadian Pacific Railway almost 128 years ago.

Linking western crude to eastern markets would be a huge undertaking - it's the most expensive project in TransCanada Corp.'s (TSX:TRP) more than 60-year history - but some observers are dubious Energy East will one day be worthy of its own Heritage Minute.

Tugging at Canadians' patriotic heartstrings is a "smart and usable PR strategy" to get the public onside with the project, said Claire Campbell, a historian at Dalhousie University in Halifax.

"But I don't think it is going to be written about as the new national dream by historians 100 years from now."

Sean Kheraj, a historian at York University in Toronto, said it's far from the first time Canadian business leaders and politicians have used nationalistic rhetoric to drum up support for controversial proposals.

For instance, Canada's first prime minister, John A. Macdonald, used lofty language to entice Parliament to spend huge amounts of public funds on the railway in the late 1800s.

"It seems very clear that there's an express political purpose behind this to try and use nationalism as a way to motivate consent from Canadians for permission to construct the project," Kheraj said.

Earlier this month, TransCanada announced with great fanfare that it had enough commercial support to go ahead with Energy East, which would send 1.1 million barrels of crude a day across six provinces.

It was an important milestone, but just one of many hurdles Energy East needs to clear before shovels can hit the ground, not the least of which would be obtaining regulatory approval. Environmentalists have vowed to fight the project and it's not clear whether Quebec is behind it.

At a news conference, company CEO Russ Girling likened Energy East to "bold ventures" like the Canadian Pacific Railway, the Trans-Canada Highway and the company's own cross-country natural gas mainline.

"Each of these enterprises demanded innovative thinking and a strong belief that building critical infrastructure ties our country together, making us stronger and more in control of our own destiny," he said.

TransCanada referred to the thousands of jobs that would be created during construction and their associated economic spinoffs, as well as the "energy security" it would provide eastern Canadians - a 700,000 barrel-per-day market whose fuel mostly originates from abroad.

Building the pipeline will require droves of tradespeople, such as pipefitters and welders, generating benefits to the stores and restaurants that serve them and the hotels that house them, TransCanada executives said. However, once pipelines are up and running, they require relatively little manpower to operate, so those effects will likely be temporary.

Provincial politicians, albeit the two that stand most to gain from the project, were also vocal in their support. Alberta Premier Alison Redford called it "truly a nation-building project" and her New Brunswick counterpart, David Alward, called it a "game changer and historic opportunity" for the country as well as his province, home to the country's largest oil refinery.

But, according to Campbell, the historian, it was the railway's championing by the federal government that made it the "quintessential example" of a nation-building project.

In the case of Energy East, Ottawa' benefits would be in the form of increased tax revenues, with Alberta oil no longer landlocked and flowing to more lucrative markets.

Both Prime Minister Stephen Harper and Natural Resources Minister Joe Oliver expressed support for the project, but Alberta and New Brunswick played a much more active role in promoting it.

"That's where I think the analogy of a pipeline with a railway in 1885 is a little disingenuous," said Campbell.

Warren Mabee, an energy expert at Queen's University, said the railway was more of a national project than a pipeline because of its flexibility. It helped grow industries ranging from agriculture to tourism.

A pipeline is "not the sort of thing that keeps giving back the way that the railways did," he said.

"With a pipeline, it's a sunk cost, it goes in and that's all it can do. It locks us into an economic path that a lot of people are not totally comfortable with."

Mabee says he sees the flag-waving rhetoric as a way for pipeline backers to get in front of the kind of environmental backlash that has stymied many projects.

"I think that by invoking the nation-building idea, they're hoping to sidestep that whole issue; that you'll have Canadians buying into it out of patriotism," he said. "Whether that works, I'm not sure."

Kheraj, the York historian, said Macdonald used similar nation-building language in reference to the railway.

Decades later, politicians would appeal to Canadians' patriotism in relation to oil pipelines, such as the Interprovincial Pipe Line - the forerunner of Enbridge - connecting Edmonton and Superior, Wisc.

"When the Interprovincial Pipe Line crossed through Saskatchewan and the first gasket was pulled, it was almost like driving the last spike in the railway," said Kheraj.

"This was done by (then-premier) Tommy Douglas in 1950 and he declared that this was a major milestone in Saskatchewan's economic history because it was going to connect Saskatchewan to the energy resources of Alberta."

Those pipelines helped industrialize huge parts of the country after the Second World War by supplying them with energy, Kheraj said.

Most of today's pipelines, by contrast, are geared toward exporting Canadian oil to lucrative markets, such as Asia.

Energy East would supply crude to refineries in Quebec and New Brunswick, displacing imports from overseas. But a big part of its raison-d'etre is also to export crude from Saint John, N.B., to markets as far afield as India.

As a whole, Canada is a net exporter of both crude oil and refined products, said Roger McKnight, senior petroleum adviser at En-Pro International in Oshawa, Ont.

He said the main beneficiaries of Energy East would be Alberta oil producers, eastern refineries and TransCanada itself. He doesn't see Energy East lowering prices at the pump.

If TransCanada had an easier time getting its controversial Keystone XL pipeline - connecting Alberta crude to the U.S. Gulf Coast - approved, McKnight said Energy East would be nothing more than an "afterthought."

"Energy East, in my opinion, is a last gasp to get this product to a market."

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