Trans Mountain Oil Pipeline

From Global Energy Monitor
This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor.
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Trans Mountain Oil Pipeline or the Kinder Morgan Trans Mountain Pipeline System, is a controversial oil pipeline that carries crude and refined oil from Alberta to the west coast of British Columbia, Canada. It is wholly owned by the Canadian division of Kinder Morgan Energy Partners (Kinder Morgan) and has been in use since 1953. It is the only pipeline to run between these two areas.[1]

Location

The pipeline runs from Edmonton, Alberta, to Burnaby, British Colombia.[2]

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Project details

  • Operator: Trans Mountain Corporation[3] (formerly owned by Kinder Morgan)
  • Owner: Trans Mountain Corporation*[3]
  • Parent company: Canada Development Investment Corporation [100%][3]
  • Capacity: 300,000 barrels per day[4]
  • Length: 1,150 kilometers[4]
  • Status: Operating[4]
  • Start year: 1953[4]

Background

On February 13, 1947, large oil deposits around Leduc, Alberta were discovered. The idea for a pipeline from Alberta to British Columbia, (BC), quickly emerged, driven by the growing demand for oil both in Asia and on the west coast of Canada and the West Coast of the United States. The US military was also interested in developing this infrastructure so that oil could be accessed more easily for military use, specifically because of the ongoing Korean War.

On March 21, 1951, the Trans Mountain Pipeline Company was created by a special Act of Parliament. On the same day, the company made a pipeline proposal to the Board of Transport Commissioners. Ownership of the company was split between Canadian Bechtel Ltd. and Standard Oil.

In February 1952 after the Board´s approval, construction began. Canadian Bechtel Ltd. was responsible for engineering, design, and construction of the project. On October 17, 1953, oil began to be pumped through the pipeline, which had cost a total of $93 million.[5][6]

In 2004, Kinder Morgan began the process to add a second pipeline, running parallel to the first, for the portion running between Hinton, Alberta, and Hargreaves, British Columbia. This required two more pumping stations - the Wolf Pump Station, near Niton Junction, Alberta, and the Chappel Pump Station, near Pyramid, British Columbia.

In 2008, the project was completed, increasing capacity by 40,000 barrels per day, (from 260,000 to 300,000 barrels per day).[7]

In August of 2018, the Canadian government became the owner of an active pipeline, a business that generates revenue and expenses, when it acquired the Trans Mountain pipeline from Kinder Morgan.[8]

Environmental Impact and Spills

In the period 1961-2016 there were 82 reported spills along the Trans Mountain pipeline[9] as well as other environmental accidents in the area of the already-existing pipeline, including:

  • Abbotsford 2005: A ruptured pipeline dumped 210 cubic meters of crude oil. The company attributed the accident to activity on a neighboring property.[10]
  • Burnaby 2007: A contractor working on a sewage project for the City of Burnaby ruptured a pipeline, causing spillage of 224-234 cubic meters of crude oil, some of it flowed into Burrard Inlet via the Burnaby storm sewer system, most of it was recovered. Eleven houses were sprayed with oil, and about 225-250 residents were evacuated or left voluntarily. Cleanup took more than a year.[11][12]
  • Burnaby 2009: 305 cubic meters of crude oil were released from a tank at the Trans Mountain Burnaby Terminal, most of it flowed into a containment area.[13]
  • Sumas 2012: 90 cubic metres of light crude oil leaked from a Sumas Mountain holding tank, all of it flowed into a containment area.[14]

The existing and proposed pipelines transport diluted bitumen through the Strait of Juan de Fuca, an extremely sensitive environmental region. The tankers have to pass through a very narrow channel of shallow water to reach the open sea, making the project controversial and strongly opposed by the Council of Canadians.[15]

Members of the Squamish and Tsleil-Waututh First Nations of British Columbia paddled canoes on the waters of Burrard Inlet to the Kinder Morgan Burnaby Terminal for a ceremony to protest the expansion of the Trans Mountain pipeline, in North Vancouver, B.C., on September 1, 2012. Tsleil-Waututh leaders hoped to shut down the project altogether.[16]

Other projects

The pipeline is part of multiple projects to increase the export of Canadian oil to international markets, as well as to Eastern Canada and to refineries around North America. Other projects include the Northern Gateway Pipeline from Alberta to Kitimat, the Keystone XL Pipeline to the Southern US, and Line 9 and Energy East to eastern provinces.

Expansion projects

Trans Mountain Expansion (TMX)

The pipeline expansion runs roughly parallel to the original, from Edmonton, Alberta, Canada to Burnaby (east of Vancouver), British Columbia, Canada.[17][2]

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  • Operator: Trans Mountain Corporation[3]
  • Owner: Trans Mountain Corporation*[3]
  • Parent company: Canada Development Investment Corporation [100%][3]
  • Capacity: 590,000 barrels per day[18]
  • Length: 980 kilometers[17][19]
  • Status: Construction[20][21][22]
  • Cost: CAN$30.9 billion**[23]
  • Financing:
    • US$4.114 billion in debt financing from a consortium of 23 international commercial banks (June 2017)[24]
    • CAN$10 billion from 6 Canadian banks: TD Securities, RBC Capital Markets, Canadian Imperial Bank of Commerce, BMO Capital Markets, Scotiabank, and National Bank of Canada (April 2022)
  • Start year: 2023***[19][20][20]

*formerly owned by Kinder Morgan

**The original cost was estimated at CAN$5.4 billion, then increased to CAN$12.6 billion, and in February 2022 increased to CAN$21.4 billion.[18][25] In March 2023 it was increased again to CAN$30.9 billion.[23][26]

***The original start year was 2022, but in February 2022, Trans Mountain Corp. pushed this to the third quarter of 2023.[18]

Expansion background

In 2013, Kinder Morgan filed an application with the Canadian National Energy Board to build a second pipeline under the Trans Mountain Pipeline Expansion Project.[27] The second pipeline was to run roughly parallel to the existing pipeline, between Edmonton and Burnaby, (east of Vancouver), and to be used to transport diluted bitumen. The additional pipeline requires 12 new pumping stations. The proposed expansion, with 980 km of pipe, would increase the system's capacity from 300,000 to 890,000 barrels per day. An investment of $6.8 billion would complete the connection between Strathcona County, Alberta, and Burnaby, British Columbia.[17]

Kinder Morgan had the support of several large petroleum industry customers for this expansion, including BP Canada Energy Trading Co., Canadian Natural Resources, Canadian Oil Sands Ltd., Cenovus Energy Inc., Devon Canada Corp., Husky Energy Marketing Inc., Imperial Oil Ltd., Nexen Marketing Inc., Statoil Canada Ltd., Suncor Energy Marketing Inc., Suncor Energy Products Partnership, Tesoro Refining & Marketing Co, and Total E&P Canada Ltd.

In 2016, the BC government said that it did not support Trans Mountain, partly because Kinder Morgan had not provided enough information about its proposed spill prevention program.[28]

On November 29, 2016, Canada's federal cabinet approved the expansion project, announcing that the approval was "subject to 157 binding conditions that will address potential Indigenous, socio-economic and environmental impacts, including project engineering, safety and emergency preparedness. This $6.8-billion project will create 15,000 new jobs during construction."[29]

Despite federal government approval, seven Federal Court challenges have been filed by the municipalities of Vancouver and Burnaby, and the Tsleil-Waututh, Suquamish, Kwantlen, and Coldwater First Nations.[30]

In August of 2018, the Canadian government became the owner of an active pipeline a business that generates revenue and expenses when it acquired the Trans Mountain pipeline from Kinder Morgan for US$4.5 billion.[8][18]

In February 2022, Trans Mountain Corp. announced having entered the second half of the expansion project construction, pushing back the completion date from 2022 to 2023 and increasing the cost from CAN$12.6 billion to CAN$21.4 billion. Paraphrasing a statement made by the company on February 18, 2022, Oil & Gas Journal reported the cost changes accounted for "all known project enhancements, changes, delays and financing, including impacts of the Covid-19 pandemic, and the preliminary impacts of the November 2021 British Columbia floods in the Hope, Coquihalla, and Fraser Valley areas."[18]

In June 2022, the Canadian Parliament's parliamentary budget officer (PBO), Yves Giroux, stated the pipeline was no longer profitable, and that it had a net present value of negative CAN$600 million, after balancing its current cash flow and the CAN$4.4 billion purchase price. If the Parliament cancelled the expansion, the government would face an overall debt write-off of CAN$14.4 billion.[31]

In August 2023, Reuters reported that cost overruns and delays were newly plagued by a request of the developer to change the pipeline route, requesting an open trench rather than continuing to micro-tunnel through hard rock formations.

Environmental impact and spills

The existing and proposed pipelines transport diluted bitumen through the Strait of Juan de Fuca, an extremely sensitive environmental region. The tankers have to pass through a very narrow channel of shallow water to reach the open sea, making the project controversial and strongly opposed by the Council of Canadians.[32]

In the period 1961-2016 there were 82 reported spills along the existing Trans Mountain pipeline[9] as well as other environmental accidents in the area of the already-existing pipeline, including:

  • Abbotsford 2005: A ruptured pipeline dumped 210 cubic meters of crude oil. The company attributed the accident to activity on a neighboring property.[33]
  • Burnaby 2007: A contractor working on a sewage project for the City of Burnaby ruptured a pipeline, causing spillage of 224-234 cubic meters of crude oil, some of it flowed into Burrard Inlet via the Burnaby storm sewer system, most of it was recovered. Eleven houses were sprayed with oil, and about 225-250 residents were evacuated or left voluntarily. Cleanup took more than a year.[34][35]
  • Burnaby 2009: 305 cubic meters of crude oil were released from a tank at the Trans Mountain Burnaby Terminal, most of it flowed into a containment area.[36]
  • Sumas 2012: 90 cubic metres of light crude oil leaked from a Sumas Mountain holding tank, all of it flowed into a containment area.[37]

Economic Impact

A study by Simon Fraser University claims that Kinder Morgan has overestimated the economic benefits of the pipeline expansion.[38]

Opposition

Burnaby Mayor Derek Corrigan addresses the crowd, at the STOP KINDER MORGAN protest rally, on Burnaby Mountain Park.
RCMP policemen contain Burnaby citizens protest against oil giant Kinder Morgan on Burnaby Mountain.

The expansion project faced strong opposition from civic governments, First Nations, environmentally concerned citizens, and others. Protests in November 2014 focused on Kinder Morgan's surveying work.

Members of the Squamish and Tsleil-Waututh First Nations of British Columbia paddled canoes on the waters of Burrard Inlet to the Kinder Morgan Burnaby Terminal for a ceremony to protest the expansion of the Trans Mountain pipeline, in North Vancouver, B.C., on September 1, 2012. Tsleil-Waututh leaders hoped to shut down the project altogether.[39]

Filings to the Canadian energy regulator on April 30, 2020 showing that the major insurers Zurich and Chubb increased their insurance cover for the Trans Mountain pipeline over the preceding year were criticised by fossil fuel finance campaigners. “Any company that claims to care about the climate and human rights cannot insure Trans Mountain while it presses ahead with plans to enable a huge expansion of some of the world’s dirtiest oil,” said Elana Sulakshana, Energy Finance Campaigner at Rainforest Action Network. Other insurers to have provided cover for the Trans Mountain project in the last year include AIG, Liberty Mutual and Munich Re's unit Temple.[40]

In June 2020, the Supreme Court of Canada dismissed an appeal from the Squamish Nation, Tsleil-Waututh Nation, the Ts'elxweyeqw Tribes and Coldwater Indian Band that Ottawa's approval of the project in June 2019 was not sound. The court's dismissal is thought to be the last available legal recourse to overturn the project's approval, though the First Nations groups said that they will continue to fight on against the project which threatens drinking water sources in First Nation territory.[41]

Financing

In June 2017, when Kinder Morgan was the project owner, CAN$4.114 billion in debt financing was secured from a consortium of 23 international commercial banks: Royal Bank of Canada, Canadian Imperial Bank of Commerce, Scotiabank, TD Bank, National Bank of Canada, Bank of Montreal, JPMorgan Chase, Bank of America, Mizuho, Barclays, MUFG, China Construction Bank, Sumitomo Mitsui, HSBC, SunTrust Bank, Alberta Investment Management, ATB Financial, Federation des caisses Desjardins du Quebec, Siemens Financial Services, United Overseas Bank, Bank of China, ICBC and Canadian Western Bank.[24]

It was announced in February 2020 that the project's estimated costs had jumped from an initial estimate of CAN$5.5 billion to CAN$7.4 billion and then again to CAN$12.6 billion. Trans Mountain Corporation CEO Ian Anderson said the sharp increase was because of court and regulatory delays, the rising costs of steel, land, labour and security, and compensation for Indigenous groups who had raised concerns about the project's impacts.[25]

In February 2021, Trans Mountain Corp formally requested the Canada Energy Regulator (CER) not to disclose the identities of its insurers. This was due to increasingly effective pressure from environmental campaigners on insurance companies not to provide vital backing for fossil fuel projects. Such pressure on insurers is resulting in a reduced pool of potential insurers and is raising premiums for the pipeline and its shippers. As reported by Reuters, the company wrote to the Canadian regulator to complain that, "Trans Mountain has already observed increasing reluctance from insurance companies to offer insurance coverage for the pipeline and to do so at a reasonable price." The CER was reported to be reviewing the company's request.[42]

In late April 2021, the CER ruled that Trans Mountain would be able to keep its insurers' names confidential. Reacting to the decision, Charlene Aleck, spokesperson for Tsleil-Waututh Nation Sacred Trust Initiative, said: "The Canada Energy Regulator is expanding Trans Mountain's culture of secrecy when it should be doing the opposite, especially for a government owned company during a climate crisis."[43]

In June 2021, Argo Group — an insurer of the Trans Mountain Oil Pipeline — pledged to cut ties with the project when its policy expired on August 31, 2021.[44] As of September 2021, the grassroots environmental group Stand.earth was working to ask other insurers behind the project to do the same, noting that US insurance giants Liberty Mutual, AIG, and Chubb, as well as four other companies, had so far refused to comment on their role in the project, or meet with Indigenous leaders to discuss local concerns.[45]

In February 2022, the Canadian government said it would halt any further public financing of the project.[46]

On 29 April 2022, an analysis by Stand.earth revealed that six of Canada's top banks had together financed CAD$10 billion to support the next phase of the TMX project. The amount contributed by each bank was unclear, but the participants were TD Securities, RBC Capital Markets, Canadian Imperial Bank of Commerce, BMO Capital Markets, Scotiabank, and National Bank of Canada.[47][48]

Articles and resources

References

  1. "Transmountain | About Us". Transmountain. Archived from the original on June 17, 2016. Retrieved May 16, 2016. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  2. 2.0 2.1 National Energy and Petrochemical Map , FracTracker, February 28, 2020
  3. 3.0 3.1 3.2 3.3 3.4 3.5 "Who We Are". Trans Mountain. 2018-08-14. Retrieved 2022-02-23.
  4. 4.0 4.1 4.2 4.3 "Pipeline System". Trans Mountain. Retrieved 2023-02-22.
  5. "APPENDIX A: OIL PIPELINE TIMELINE" (PDF). Archived from the original (PDF) on March 5, 2017. Retrieved December 1, 2016. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  6. TransMountain (2010-06-20). "Oil Across The Rockies -PART 1.wmv". Retrieved 2016-12-01.
  7. "Transmountain | Anchor Loop". Transmountain. Archived from the original on June 16, 2016. Retrieved May 16, 2016. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  8. 8.0 8.1 "Trans Mountain Pipeline Financials: Built on Quicksand and Clear as Mud", IEEFA. accessed April 17, 2019.
  9. 9.0 9.1 "Releases Reported by Trans Mountain - 1961-2016" (PDF). Transmountain. August 31, 2016. Archived from the original (PDF) on December 21, 2016. Retrieved December 8, 2016. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  10. "Abbotsford - Sumas Facility: Ward Road Spill". Transmountain. Archived from the original on December 1, 2016. Retrieved December 1, 2016. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  11. "Westridge 2007 spill". Transmountain. Archived from the original on December 1, 2016. Retrieved December 1, 2016. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  12. "Pipeline Investigation Report P07H0040". Transportation Safety Board of Canada. Archived from the original on June 13, 2017. Retrieved June 1, 2017. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  13. "Burnaby Tank 82 2009 Spill". Transmountain. Archived from the original on December 1, 2016. Retrieved December 1, 2016. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  14. "Abbotsford - Sumas Facility: Tank 121 2012 Spill". Transmountain. Archived from the original on December 1, 2016. Retrieved December 1, 2016. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  15. "No Pipelines! No Tankers!". canadians.org. The Council of Canadians. Archived from the original on August 5, 2017. Retrieved August 5, 2017. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  16. "Canadian Televisions News". Archived from the original on May 8, 2014. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  17. 17.0 17.1 17.2 "Transmountain | Proposed Expansion". Transmountain. Archived from the original on April 23, 2016. Retrieved May 16, 2016. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  18. 18.0 18.1 18.2 18.3 18.4 "Trans Mountain adds $7 billion to expansion project budget, expects late-2023 completion". Oil & Gas Journal. Retrieved 2022-02-23.{{cite web}}: CS1 maint: url-status (link)
  19. 19.0 19.1 "Expansion Project". Trans Mountain. Retrieved 2022-09-21.
  20. 20.0 20.1 20.2 Trans Mountain Re-Starts Construction on Expansion ProjectTrans Mountain, August 21, 2019
  21. Government of Canada, Canada Energy Regulator. "CER – Crude Oil Pipeline Transportation System". www.cer-rec.gc.ca. Retrieved 2023-02-23.
  22. https://vancouversun.com/business/trudeau-sale-trans-mountain-oil-pipeline
  23. 23.0 23.1 "https://globalnews.ca/news/9839473/trans-mountain-pipeline-cost-overrun". {{cite web}}: External link in |title= (help)CS1 maint: url-status (link)
  24. 24.0 24.1 Trans Mountain Pipeline Expansion, IJGlobal, accessed Aug. 5, 2020
  25. 25.0 25.1 Rod Nickel, Trans Mountain pipeline cost jumps by two-thirds to C$12.6 billion, Reuters, Feb. 7, 2020
  26. "https://www.reuters.com/business/energy/canada-looking-sell-trans-mountain-pipeline-stake-indigenous-groups-bloomberg-2023-08-09". {{cite web}}: External link in |title= (help)CS1 maint: url-status (link)
  27. "About Us | Trans Mountain". Transmountain. Archived from the original on September 28, 2015. Retrieved September 27, 2015. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  28. "Trans Mountain pipeline expansion not supported by B.C. government". Transmountain. CBC News. January 11, 2016. Archived from the original on December 7, 2016. Retrieved December 8, 2016. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  29. "Government of Canada announces pipeline plan that will protect the environment and grow the economy". Government of Canada. November 29, 2016. Archived from the original on December 1, 2016. Retrieved December 8, 2016. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  30. Hoekstra, Gordon (November 26, 2016). "Yes could still be no as Kinder Morgan awaits Trudeau's nod on its multibillion-dollar pipeline expansion". The Vancouver Sun. Archived from the original on December 9, 2016. Retrieved December 8, 2016. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  31. "Canada-owned Trans Mountain oil pipeline not profitable -budget officer". Reuters. 2022-06-22. Retrieved 2022-06-24.
  32. "No Pipelines! No Tankers!". canadians.org. The Council of Canadians. Archived from the original on August 5, 2017. Retrieved August 5, 2017. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  33. "Abbotsford - Sumas Facility: Ward Road Spill". Transmountain. Archived from the original on December 1, 2016. Retrieved December 1, 2016. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  34. "Westridge 2007 spill". Transmountain. Archived from the original on December 1, 2016. Retrieved December 1, 2016. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  35. "Pipeline Investigation Report P07H0040". Transportation Safety Board of Canada. Archived from the original on June 13, 2017. Retrieved June 1, 2017. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  36. "Burnaby Tank 82 2009 Spill". Transmountain. Archived from the original on December 1, 2016. Retrieved December 1, 2016. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  37. "Abbotsford - Sumas Facility: Tank 121 2012 Spill". Transmountain. Archived from the original on December 1, 2016. Retrieved December 1, 2016. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  38. "Canadian Broadcasting Corporation". Transmountain. November 10, 2014. Archived from the original on December 4, 2016. Retrieved May 16, 2016. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  39. "Canadian Televisions News". Archived from the original on May 8, 2014. {{cite web}}: Unknown parameter |deadurl= ignored (help)
  40. "Major insurers increase cover for Trans Mountain oil pipeline" Reuters, May 12, 2020.
  41. Mia Robson, "Supreme Court dismisses Indigenous appeal of Trans Mountain pipeline approval" CTV News, Jul. 2, 2020.
  42. Rod Nickel, Canadian oil pipeline Trans Mountain seeks to shield insurers from pressure, Reuters, Feb. 24, 2021
  43. Robert Tuttle, Oil Sands Pipeline Wins Bid to Hide Insurers From Activists, Bloomberg, Apr. 29, 2021
  44. Gabby Brown, Trans Mountain insurer Argo commits to cut ties with the pipeline company, Sierra Club Press Release, Jun. 3, 2021, accessed Sep. 6, 2021.
  45. Un-insuring Trans Mountain, Stand.earth, archived from the original on Sep. 6, 2021.
  46. "Canada govt to stop funding Trans Mountain oil line project as costs soar 70%". Reuters. 2022-02-18. Retrieved 2022-06-02.
  47. "Canada's big banks are secretly supporting Trans Mountain Pipeline expansion". Common Dreams. Retrieved 2022-06-01.{{cite web}}: CS1 maint: url-status (link)
  48. "Royal Bank of Canada, TD, Scotia, CIBC, BMO, National Bank front $10 billion to finance financially risky Trans Mountain pipeline, analysis reveals". Stand.earth. 2022-05-31. Retrieved 2022-06-02.

Related GEM.wiki articles

Trans Mountain Oil Pipeline Expansion

External resources

Wikipedia also has an article on the Kinder Morgan Trans Mountain Pipeline System. This article may use content from the Wikipedia article under the terms of the GFDL.

External articles