A B.C. pipeline spill would be inevitable. But who would pay?

The only certainty is that the ecosystem hit by a large spill would pay the environmental price

Vancouver’s Second Narrows Bridge offers spectacular views of the city skyline and Pacific Ocean on one side and Burrard Inlet on the other. The latter is a near pristine fjord covered in hemlock, Douglas fir and spruce in the shadow of Burnaby and Seymour mountains. Its cold, deep waters are inhabited by chinook and coho salmon, pods of majestic orca whales and Kinder Morgan’s Westridge Marine Terminal.

If the Texas company’s plan for expanding its Trans Mountain pipeline linking Edmonton to Burnaby, B.C., is completed, the risk of irreparable damage to Burrard Inlet and Vancouver’s entire marine ecosystem would rise to a high level.

That’s because the proposed expansion will allow for the equivalent of 890,000 barrels of diluted bitumen per day from Alberta’s oil sands to be loaded onto supertankers for export to international markets, mainly in Asia. This would result in a fourfold increase in tanker traffic through Burrard Inlet to 444 vessels per year.

But questions about the role of liability insurance, and who pays for cleaning up an oil spill in a worst case scenario, have been conveniently ignored by Ottawa, Kinder Morgan, regulators and the oil industry. They are in other words a kind of flight recorder waiting to be opened in the event that Trans Mountain crashes in spectacular fashion.

Amidst the controversy swirling around Trans Mountain, Kinder Morgan has asked the National Energy Board (NEB) to convene public hearings this month into allegations that the City of Burnaby is attempting to block the pipeline’s construction by deliberately delaying permits.

If that’s true, can Burnaby be blamed? What city in its right mind would welcome a gargantuan oil terminus and its associated environmental risks? If there is a spill on land or water, what assurances do Burnaby and the Lower Mainland of B.C. have that its ecosystem can ever be fully restored? Or that taxpayers will not get stuck footing a majority of the bill if a really bad marine spill threatens to bankrupt Kinder Morgan? The Wall Street bank bailouts of 2008 should serve as a reminder of how horribly wrong things can go for even enormous well-capitalized corporations who have the public’s trust.

The Trans Mountain project, embraced by Prime Minister Justin Trudeau, is expected to create 50 permanent jobs in B.C. and make a moderate contribution to the provincial tax base. On the other side of the ledger, an oil spill in Burrard Inlet would put at risk industries, including tourism, real estate and agriculture, that together employ over 200,000 people, according to Vancouver-based CRED (Conversations for Responsible Economic Development), a non-profit research and advocacy group.

B.C.’s new NDP government is trying to block expansion of the Trans Mountain in court by arguing that Ottawa failed to evaluate the project’s risks to the marine environment, which B.C. says is a breach of its obligation to consider the national interest.

It remains to be seen whether this tack will be successful. In the end environmental reviews and indigenous protests may not be the most effective legal strategy to take in blocking pipeline projects. Requiring Kinder Morgan and others to provide proof that they have adequate resources at their immediate disposal to clean up a bad oil spill might be the legal approach with better odds.

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by Erik Heinrich / Nov 22, 2017