The west coast of Canada is a thriving region known for its natural beauty, quality of life and, increasingly, its spirit of innovation. The region is also currently charting the course of its economic future. In this context, projects like Kinder Morgan’s proposed oil pipeline expansion should not be ignored or underestimated, as they will inevitably and significantly influence the direction we take.

This is our original report that highlights some of the proposal’s main risks, in particular the potential costs and benefits to our local economy. It also aims to generate more questions that need to be answered before a final decision is made. Read the digital version below or download the full report as a PDF

Route: There is significant uncertainty over the exact pipeline route and whether it will be routed around densely populated areas in the Fraser Valley. Spills: In 15 years of operations, Kinder Morgan has accrued a significant number of spills, largely the result of human error. This includes four along the Trans Mountain route since 2005. Jobs: The proposal would create 50 permanent jobs. And oil spill would put at risk industries that together employ over 200,000 people locally including tourism, film and TV, real estate, high tech, agriculture and coastal industries. Tax revenues: The expansion would not make a significant contribution to provincial tax revenues. Liability: In the case of a major spill, taxpayers would likely be responsible for the burden of costs, as a company’s liability is limited to $1.3 billion and a major spill could easily cost ten times this amount. Local fuel needs: This proposal is designed to export oil sands products to foreign markets. As a result, the pipelines is not required to meet domestic fuel needs. Spill response: Canada does not currently have the ability to respond effectively to a major spill in our waters. Health risks: There is a lack of consensus about the properties of diluted bitumen – the main substance that would travel through the pipeline – including its health impacts and how to effectively respond to a bitumen spill. Public opinion: A recent survey found that 50% of BC residents oppose the proposal and 22% support it. Amongst those very familiar with the proposal’s details, 70.9% are opposed. Based on our findings so far, we question whether there would be significant enough benefits for British Columbians to offset the risks. This report, however, is only a starting point. We look forward to an engaging conversation over the coming months about what the proposal means for responsible economic development on Canada’s west coast.

Need to know facts – pipeline history and proposal details

History and background The Trans Mountain pipeline was originally built in 1952 to ship Alberta light crude oil to refineries in the Vancouver area and Washington state. It was designed to meet the Pacific Northwest’s energy needs. Until 2005, the pipeline was owned by the BC Gas Company and it transported natural gas, jet fuel and oil. In 2005 Kinder Morgan purchased the public BC Gas Company. In addition to other oil products, they now use the pipeline to ship diluted bitumen from Alberta’s oil sands. Kinder Morgan has elected to treat diluted bitumen the same as other heavy oils – opting not to conduct any studies on its health impacts, how it reacts in a marine environment, or any other research specific to diluted bitumen. They have also relied on existing spill prevention and response plans and risk assessments for its transportation and storage. Increasingly, the bitumen transported on the Trans Mountain pipeline is being reallocated from BC and Washington refineries to offshore markets, where it is exported by tanker. Over the past number of years, there has been incremental pipeline expansion activity, including new pump stations added in 2007 and the Anchor Loop Expansion through Jasper National Park and Mount Robson Provincial Park completed in 2008. The current capacity of the pipeline is 300,000 barrels per day. Expansion plans Kinder Morgan Canada is now proposing a to build a new pipeline alongside its existing 1,150-kilometre Trans Mountain pipeline system between Edmonton, Alberta and Burnaby, British Columbia. The $5.4-billion project would increase the capacity of the system to at least 890,000 barrels per day. Details of construction The expansion would create a dual-line pipeline. According to Kinder Morgan, the existing line would be used to carry refined products, synthetic crude oil and light crude oils, and the new 36-inch line would exclusively carry heavier oils such as diluted bitumen. The project would also necessitate nine new pump stations, 18 additional storage tanks and the expansion of existing pump stations along the route. Finally, the project will require the expansion of the Westridge Marine Terminal in Burnaby. If the application to the NEB is successful, construction would start in 2016 and the pipeline would be in operation by 2017. (All details from the Trans Mountain website.) What is diluted bitumen? Bitumen has very different properties than conventional oil. It is a heavy and viscous oil that occurs mixed with sand, clay and water and is found underneath Canada’s boreal forest. Rather than liquid like conventional oil, it has a sludgy consistency similar to sand mixed with molasses. As a result, it needs to be heated and diluted with powerful chemical solvents to be transportable. This mixture of bitumen and up to 30% diluents is called diluted bitumen, or dilbit. Although the exact components of the diluents are a trade secret that companies are not required to reveal, they are widely understood to contain highly volatile substances such as benzene, a known carcinogen. There is debate over how diluted bitumen reacts in water – most industry officials claim that it floats on the top of water, similar to conventional oil, while many environmental groups claim that once the lighter oils in the dilbit evaporate, the remaining weathered heavy oil can submerge or sink. What would the exact route be? Current route: The existing Trans Mountain pipeline runs through the communities of Rearguard, Albreda, Chappel, Blue River, Finn, McMurphy, Blackpool, Darfield, Kamloops, Stump, Kingsvale, Hope, Wahleach, Sumas, Port Kells, and Burnaby. In addition, the pipeline traverses 15 First Nations communities and dozens of other towns. What it runs underneath: It runs directly under several schools, including Stoney Creek Community School and Lyndhurst Elementary in Burnaby, and Watson Elementary in Chilliwack. Dozens of additional schools are within a couple kilometres of the pipe, including Forest Grove Elementary in Burnaby and twelve schools in Chilliwack. In addition, the pipeline runs underneath golf courses, shopping centres, residential neighbourhoods and the aquifers that supply drinking water to Abbotsford and Chilliwack. New route: As Kinder Morgan has not put forward its proposal yet, there is significant uncertainty about the exact planned route. In some high population areas, like Burnaby, Langley and Chilliwack, communities have grown so much since the original pipeline was built in the 1950s that Kinder Morgan might propose diverting the expansion along a new route. Why is it called a twinning? The project is a twinning in the sense that it would create two pipelines where there is currently only one. However, the twinning project would actually triple pipeline capacity because the new 36-inch line would have more than double the volume of the existing 24-inch line. The two combined lines would have the potential volume of over 3 times the current line and, as noted earlier, they would result in a fivefold increase in tanker traffic. Tanker traffic Increased traffic: Kinder Morgan has indicated that the required tanker traffic for an increased volume of exports is roughly 444 vessels per year transiting Burrard Inlet, more than a fourfold increase from current levels. (Note: Here ‘vessels’ refers to both Aframax tankers and slightly smaller oil barges. Kinder Morgan does not include barges in their tanker statistics.) Kinder Morgan plans for each Aframax tanker, which is 245 metres long and 42 metres wide (longer than Vancouver’s tallest building, the Shangri-La), to carry approximately 575,000 barrels of oil. Dredging: There is a risk that future plans will include dredging the channel under the Second Narrows Bridge to be able to accommodate the larger Suezmax tankers, which can hold up to 1 million barrels of oil. Although Kinder Morgan’s expansion plans do not depend on dredging the bottom of Burrard Inlet, the company has not ruled it out either. In 2008, Kinder Morgan dredged the waters around its Burnaby terminal to allow passage for Aframax vessels. The bigger picture: other proposed pipelines The Trans Mountain Expansion Project is part of a larger oil sands expansion strategy. The proposed Enbridge Northern Gateway project is the other main proposal on the table in British Columbia. Both pipelines would allow oil sands products to reach the coast for export to foreign markets, and both would involve significant risk to local communities and BC’s coastal waters. There are also pipelines proposed along routes through the US (Keystone XL) and to the east coast via Montreal (Line 9).

Who is Kinder Morgan and what is their safety and environmental track record?

What are the economic risks of the project? What are the economic benefits?

Would the new pipeline serve local energy needs?

Energy versus fuel When assessing local energy needs, it is important to note that crude oil and diluted bitumen travelling from the oil sands cannot contribute towards BC’s electricity or heating needs (with the exception of remote rural or northern communities that may use diesel for heating). Oil sands products that are refined locally serve fuel needs for transportation, particularly cars, trucks and aviation. Meeting local fuel demand The original purpose of Trans Mountain pipeline was to supply oil for Lower Mainland use. Today, the pipeline supplies approximately 90% of BC’s gasoline and diesel. Some of this arrives through the pipeline as refined products, and the rest arrived as crude product and is processed by the region’s one refinery, operated by Chevron and located in Burnaby, which produces approximately 50,000-55,000 barrels of gasoline and other fuels per day. Where the fuel goes: As the pipeline’s capacity has increased incrementally under the ownership of Kinder Morgan, the proportion that is refined and used to meet domestic energy needs in BC has shrunk significantly, and today the majority of pipeline crude oil is exported for profit. According to Kinder Morgan’s data, in 2010: 25% of pipeline products were refined for use in the Lower Mainland

4% stayed in Kamloops

44% percent travelled via pipeline to Washington state

27% percent was loaded onto tankers for shipment Oil for export Between 2005 and 2012 marine traffic exporting Trans Mountain crude oil rose from 22 to over 60 tankers per year, reflecting a growing demand from overseas markets beyond the US. If the expansion is approved, Kinder Morgan intends to increase marine exports to at least 408 tankers per year – a full 78.6% of total pipeline capacity (assuming each vessel holds on average 575,000 barrels of oil, as Kinder Morgan has indicated). Some of these exports would likely go to California and the rest would be for new markets. When exports to Washington are added into consideration, there is a high risk that Chevron’s Burnaby refinery will be forced to continue to import crude oil using other transportation methods to meet local fuel demand. Kinder Morgan executives have confirmed that the Trans Mountain Expansion Project is an export strategy and is not focused on local energy security.

If this project goes ahead, how likely is a leak or a spill?

What would the spill response process be?

What are the health and environmental risks of a spill?

Health risks Uncertainties and conflicting opinions: Because the large-scale transportation of diluted bitumen is relatively new, many of the health and environmental impacts of a spill are uncertain. There is conflicting information on the health impacts of exposure to crude oil and bitumen – while some studies claim that all oil exposure is toxic, other sources refute this, claiming instead that while refined light oils (i.e. gasoline and jet fuel) are indeed highly toxic, heavy crude oils do not pose a threat to human health. There is also debate over whether diluted bitumen is more abrasive, corrosive and acidic than conventional crude. Airborne contamination: What is certain is that diluted bitumen has added solvents that evaporate into the air in the case of a spill. Many of the solvent’s components are a trade secret that companies are not required to divulge; however, benzene (a known carcinogen that is highly toxic through either short or long-term exposure) and other neuro-toxins with proven health risks are widely understood to be included. In the case of a major spill, airborne contamination and resulting evacuation would be likely. Health impacts in Kalamazoo, Michigan In the case of the Kalamazoo River spill, the only major diluted bitumen spill to date, local residents and EPA responders discovered bitumen and diluent do not stay together once released into the environment. As the diluent separated from the bitumen, toxic fumes of benzene and toluene began spreading through the air. In total, almost 60 per cent of the local community experienced adverse symptoms including nausea, dizziness, headaches, coughing and fatigue. Health officials recommended evacuation of those living close to the spill and clean-up crews were given respirators to protect them from toxic fumes. Sections of river were closed immediately and only began reopening almost two years after the spill. Environmental risks Impacts of a land-based spill: The environmental impacts of an oil spill on land are generally localized, and therefore carry less risk than water-based spills. However, there would still be local impacts to habitats, wildlife and recreational areas. In addition, studies have shown that land-based spills can contaminate groundwater for many years and at distances up to thousands of meters from the spill source. Impacts of a marine spill: Diluted bitumen is toxic to marine life, difficult to clean up and likely to persist for decades in water, beaches, sediment, and entire marine environments. Put simply, the environmental impacts of a large oil spill in Burrard Inlet or anywhere in the Salish Sea would be catastrophic, far-reaching and long-lasting. The BC Government’s technical analysis noted that: “The legacy of a spill and cleanup can last for decades. Indeed, the impacts from the Exxon Valdez spill have still not been completely addressed.” It goes on to note that ongoing chronic impacts have been noted in many species, and some were still continuing to decline as of 2004. The west coast’s vulnerable ecosystem: The Burrard Inlet is one of Canada’s most productive marine and terrestrial ecosystems. A spill of any size would impact many different species of ﬁsh and wildlife at various life stages. A spill would also put one of the west coast’s most iconic mammals at risk: orcas are shown to be impacted by oil exposure and are unlikely to be able to detect and avoid spills. Persistence: Scientists have just started studying the impacts of oil spills over time, painting a more complex portrait of what happens. On land, it appears that although the bulk of the damage happens quickly, the oil then moves underground and continues to do low-level damage to wildlife over many years. A study of marshlands affected by a 1969 oil spill in West Falmouth, Massachusetts discovered similar concentrations of soil contamination 30 years later. At sea, the persistence of impacts is similar: some scientists have even suggested that impacts of the Exxon Valdez spill may persist for centuries.

What is the global significance of this project?

For a full picture of the project’s risks, it is important to understand the connections between the Trans Mountain pipeline, the Canadian oil sands and global climate change. Trans Mountain and the Alberta oil sands Building the Trans Mountain pipeline will only make economic sense if the oil sands undergo significant expansion. Therefore, the risks of oil sands expansion should also be considered when making an informed choice about this particular pipeline. In 2011, the Alberta oil sands exported approximately 1.74 million barrel of crude or modified crude oil per day, mostly through existing pipelines, demonstrating that this level of export capacity already exists. However, companies operating in the oil sands have approvals to produce over 5.2 million barrels of oil per day, with another four million barrels per day of permits in progress. The main justification for expansion of the Trans Mountain route (as well as other proposed pipelines from the oil sands to the coast) is to accommodate this expanded production. Risks of oil sands expansion Building the pipeline not only commits BC’s west coast to a specific economic development path, but it will also set us on a global path where we need to prepare for a warming world. A recent PWC report demonstrates that in order to maintain a likelihood of keeping climate change within 2 degrees Celsius of warming (widely understood to be a ‘safe’ threshold beyond which serious climate tipping points will happen) the global rate of decarbonization needs to increase sixfold every single year for the next 39 years, a feat never before achieved. The oil sands are the fastest growing source of emissions in Canada. Many studies show that if fully developed, they will likely release enough carbon to send the world over some significant climate tipping points. NASA climate scientist James Hansen has estimated that there are 250 gigatons of carbon locked in the tar sands – almost half of the entire global emissions budget. Canada in a warming world A recent National Round Table on the Economy and Environment (NRTEE) report warns that by failing to develop a low-carbon economy, Canada might be risking its competitiveness as carbon-intensive products become subject to trade restrictions, harming its international reputation and losing out on a first-mover advantage in the rapidly growing international market for low-carbon goods and services. The report concludes that Canada is well placed to build upon existing strengths and innovate in other areas, from low-emission mining to electric car manufacturing, but in order to build these industries we need to act fast. Past NRTEE reports in addition to the 2006 Stern Review make a strong business case for addressing climate change on the basis of cost-benefit analysis. Simply put, it will cost far more to deal with the impacts of climate change than it will cost to build a low-carbon economy. In addition, Canada will be impacted by a warming world. The 2012 Degrees of Change report maps out the most likely impacts Canadians will face at different levels of warming, including different agricultural patterns, altered rainfall, reduced winter seasons, a rapidly melting arctic and change in sea levels. There is a direct link between building the infrastructure for significant oil sands expansion and global climate impacts. Which begs the question: are we prepared to be a major contributor to global climate change? What risks and impacts does that role carry?

Who else is concerned about a spill?

First Nations Many First Nations governments in BC are concerned about new oil pipelines and the resulting increase in coastal tanker traffic. To date, 133 nations have signed the Save the Fraser Declaration, which opposes all tar sands projects in the Fraser River watershed and migrating salmon routes, and asserts their title and rights under Indigenous Peoples’ laws. The declaration expresses concern about the significant risk to watersheds and the plants, animals, fish and people who depend on them. Any oil spill would impact their ability to practice their way of life, including the ability to hunt, fish and practice cultural and spiritual traditions. The Tsleil-Waututh and Squamish Nations have also formally declared opposition to Trans Mountain expansion in a Save the Salish Sea declaration. Municipal governments The Cities of Burnaby, Vancouver and West Vancouver have all passed resolutions against the Kinder Morgan pipeline. The UBC University Neighbourhoods Association has expressed serious concerns and in September 2012 the Union of BC Municipalities passed a resolution opposing any pipeline projects that would result in an increase in tanker traffic in coastal waters. They are particularly concerned that BC communities will bear most of the project’s risks without accruing many of the benefits. BC residents Local communities: In Burnaby and the Fraser Valley, local residents concerned about the risk of pipeline spills in their communities have formed groups to oppose Kinder Morgan. Wider opposition: There has also been more widespread citizen opposition to the project. In September 2012, thousands of people came together in Victoria and in communities across BC to protest pipeline expansion as part of the Defend Our Coast campaign. Public opinion: Surveys show that the majority of general public sentiment is opposed to the project. A Stratcom poll carried out for the Living Oceans Society in August 2012 showed that 50% of all BC residents and 52% of those living along the pipeline route oppose the project, compared to only 22% who support it. In addition, the more people were informed about the proposal, the more likely they were to strongly oppose it. Amongst residents who had heard a great deal about expanding oil pipelines and tanker traffic in BC, 70.9% were opposed to expanding the Trans Mountain pipeline. In a recent poll of British Columbians 50% of respondents oppose the proposed new Trans Mountain pipeline

22% support the proposal

70.9% of respondents who know a great deal about the proposal oppose it

People living along the pipeline route rank pipelines and tankers as a top issue facing BC, just slightly behind the economy / financial crisis Environmental organizations Many environmental organizations actively campaign against oil sands expansion because of concerns about climate change, environmental degradation, water contamination, and the detrimental impact on communities living in northern Alberta who have been negatively impacted by oil and gas development, in particular First Nations. A few organizations are also actively campaigning against the Kinder Morgan pipeline, including the Wilderness Committee, the Council of Canadians, Tanker Free BC, the Living Oceans Society, the Georgia Straight Alliance, West Coast Environmental Law and Forest Ethics Advocacy.

What happens next?