VANCOUVER -- A major oil spill in Burrard Inlet would devastate Vancouver's marine and shore-based economy resulting in losses amounting to $1.2 billion, according to a University of B.C. study commissioned by the city.

The study was completed by UBC's Fisheries Economics Research Unit, which was asked to "quantify the potential economic costs of a major oil spill (16 million litres) into Burrard Inlet," said a press release issued Friday.

The worst-case scenario of $1.2 billion in losses doesn't include the cost of clean up, response and recovery costs or "loss of (the city's Greenest City) brand reputation and property value," said the report.

"The risk is massive. Those numbers are quite substantial," said city councillor Andrea Reimer.

"And that's just if an oil spill occurs. The idea of being a major oil port has economic impact as well. Our economy . . . is very dependent on the image of Vancouver as a liberal city, a green city."

The city plans to present the report to the National Energy Board on May 27.

The board is considering an application by Kinder Morgan Canada for its proposed Trans Mountain Expansion Project, which would twin the existing pipeline bringing oil from Alberta to Burnaby, increasing capacity to 890,000 from 300,000 barrels per day.

Kinder Morgan's proposal would increase oil tanker traffic in Burrard Inlet seven fold from five tankers a month to 34 — something the city opposes as it increases the likelihood of a major spill.

The study said Vancouver's ocean-dependent industries directly employ four per cent of the city's population and have five key components: commercial fishing, port activities (shipping and cruises), inner harbour transportation, tourism (marine recreation, waterfront events, visiting beaches and the seawall), and recreation.

The report found that these activities contribute more than $3 billion in gross domestic product to Vancouver's economy every year.

"Ocean-dependent economic activities in Vancouver encompass only a portion of the local economy that could experience losses from a hydrocarbon spill in the Burrard Inlet. Still, the potential impacts of an oil spill run into hundreds of million dollars," the report said.

The study found that economic loss to the city from a major spill at either the First or Second Narrows Bridges would vary from $380 million, if it happened in October when the tourist season was ending, to $1.2 billion if it occurred in May when the season was about to begin.

It said Vancouver's beaches attract over three million users a year, waterfront parks attract five million users, while 2.7 million persons use the seawall, all of which provides $145 million to $170 million a year to the local economy.

In total, Vancouver's ocean-based activities contribute up to $6.7 billion a year to the city's economy and provide up to 36,680 person years of employment.

The report concludes "that the projected losses from an oil spill in Burrard Inlet would be substantial and cost the city hundreds of millions of dollars in lost economic opportunities."

Trans Mountain spokeswoman Ali Hounsell said it's important to remember that the scenario painted in the city's report would be covered by Canada's Marine Liability Act, which ensures approximately $1.3 billion is available to cover liability.

"Reports such as the one released today are expected and will be reviewing it as we prepare our responses to submit to the NEB," she said in a statement Friday.

The city also released a separate modelling animation showing the movement of oil following a hypothetical 16-million-litre spill near the Second Narrows Bridge on the city's east side.

Time-lapse animation showed multiple black specks, each representing 2,000 litres of oil, spreading toward West Vancouver before flowing back toward Coal Harbour and clinging to the shoreline around Burrard Inlet.

gbellett@vancouversun.com

With a file from The Canadian Press

===

Click here to report a typo or visit vancouversun.com/typo.

Is there more to this story? We'd like to hear from you about this or any other stories you think we should know about. CLICK HERE or go to vancouversun.com/moretothestory