By Elizabeth May, for The Guardian
The twists and turns in the saga of the Kinder Morgan pipeline just took a turn for the seriously weird today, but the path has never been clear.
The Alberta oil sands lie under thousands of square kilometers of boreal forest, wetland and muskeg. Bitumen is a viscous substance found in small concentrations amid the rock and soil. It is either mined out from huge open pits, or pumped out through in situ production, injecting hot water deep into the ground to loosen it. Either way, the resulting product highly polluting, very expensive to produce and of low value. Bitumen is a solid. To be refined, bitumen must undergo costly upgrading. Bitumen, being both low value and expensive to produce, would never have been developed without government subsidies, with the lowest royalty rates in the world at 1% and massive federal subsidies of several billion/year.
Before the 2008 global financial crisis, there were upgraders and refineries being planned. But when the recession hit, those investments, along with any new oil sands mines, retreated. When the economy recovered, oil sands expansion came back. But not the upgraders and refineries. Instead, for the first time, industry began to promote pipelines. Keystone was the first pipeline proposed to run north-south to take Canadian bitumen to other countries for processing.
Since bitumen is a solid, there is nothing logical about proposing to move it through a pipeline. Stirring in fossil fuel condensate (essentially naptha) creates a mixture sufficiently liquid to flow through a pipeline, without the expense of upgrading it to synthetic crude. The resulting mix of condensate (called diluent) and bitumen is called dilbit. And it is very challenging to clean up. The 2010 dilbit spill in Kalamazoo, Michigan was the first time regulators realized dilbit behaved very differently than conventional crude. The diluent is highly toxic and volatile. Diluent separated from bitumen and bitumen sank to the river bottom.
By the 2011 election, pipelines had become a political issue. Former prime minister, Conservative Stephen Harper, an Albertan who stood four-square for fossil fuel development, opposed any pipelines heading to the British Columbia coastline. Harper’s position was that Canada should not export bitumen to countries with lower environmental standards for refineries than Canada.
Within months of that election, difficulties in gaining US permits for Keystone led to an entirely new position. With Harper’s support, Enbridge proposed a pipeline to Kitimat on the BC coast. In 2013, Texas-based Kinder Morgan asked to build a second pipeline more or less along the lines of the Transmountain pipeline purchased from a Canadian company from Alberta to Burnaby, not far from Vancouver BC. Kinder Morgan’s pipeline expansion would be 100% dilbit for export. It would increase tanker traffic, loaded with dilbit, seven-fold.
To grease the gears for pipeline approval, Harper gutted environmental laws. The resulting environmental review of the Kinder Morgan expansion was the worst in Canadian history. No longer reviewed by our environmental assessment agency, the pipeline was before the National Energy Board. Intervenor rights, such as cross examination of industry witnesses, were eliminated. Many intervenors withdrew alleging the process was “rigged.”
In the 2015 election campaign, Justin Trudeau pledged that no project could be approved based on such an inadequate process. Trudeau promised evidence-based decisions, respect for indigenous rights, the end to fossil fuel subsidies and an aggressive climate plan.
In 2016, the Liberals turned down the Enbridge pipeline due to the court ruling the previous government violated indigenous rights. Simultaneously, Trudeau announced support for the Kinder Morgan pipeline. In doing so, he violated election promises to respect indigenous rights, to base decisions on evidence, and to pursue real climate action. Having approved Kinder Morgan, he and his ministers became increasingly pro-pipeline.
Meanwhile fifteen different court cases were working through the Federal Court of Appeal. The new BC government raised its concerns about the threat of a dilbit spill and to survival of the endangered southern Resident Killer Whales. In March, I was one of the several hundred people arrested protesting the Kinder Morgan pipeline. As opposition built in British Columbia, Trudeau insisted the pipeline was in the national interest and must be built. On April 8th, Kinder Morgan upped the ante and demanded the federal government remove the uncertainty created by all the court challenges to the project by May 31st.
Astonishingly, the government announced on May 29th that the Government of Canada will buy the existing Transmountain pipeline. Canada will pay $4.5 billion for those existing assets, valued by Kinder Morgan in 2007 at $550 million. As well, the Trudeau administration says it will get the controversial expansion pipeline built. Kinder Morgan had pegged those costs at $7.4 billion, and that is just the beginning of federal liabilities. With this, Trudeau’s election promise to end fossil fuel subsidies is violated in spectacular fashion.
We await the court decisions. This battle is a long way from over.