Pipelines shipping raw bitumen to shorelines

While much of this issue falls under Federal regulations, I expect the Kinder Morgan pipeline discussion to be a large part of the 2017 provincial campaign. On Sep 25, 2016, I had the opportunity to tour Syncrude and Conoco Phillips operations in Fort McMurray hosted by Canadian Association of Petroleum Producers (CAPP). It validated my reasons why we must not allow any pipelines to ship raw bitumen to our Coastlines. I was able to have a well received conversation with Syncrude President & CEO, Mark Ward and CAPP President and CEO, Tim McMillan. Compared to other oil producing countries such as Venezuela and Russia, the efforts to mitigate pollution in the Canadian oil and gas industry were evident. We were told this is an area where the industry, jointly, continues to invest in research and technology to improve environmental protection. I suggested that the Canadian oil and gas industry needs to press all levels of government to pressure the World Trade Organization and/or UN to set minimum global environmental protection standards in an effort to mitigate Climate Change and to level the playing field for industry trading partners. If we ship our raw bitumen to Asia and other markets where minimal or no environmental regulations and no protections for workers exist, we are simply enabling these countries to pollute and commit human right infractions. With the information we now know about global Climate Change, it does not matter WHERE polluting takes place, the effects are global. I also suggested that instead of shipping raw bitumen to other countries, we need to determine what products need to be made from this finite resource. We need to stop making things like clothes from plastic when there are so many other renewable resources in which we can make clothes. We need to use this finite resource to produce highly valued products, like medical grade plastic, right here in Canada. We were told it would cost $10B to construct the infrastructure required to enable us to separate the raw bitumen in order to produce products. So, I added up the costs of a number of proposed Canadian projects that this industry was/is prepared to spend to export our raw resource: • $6.8B Kinder Morgan/Trans Mountain Pipeline; • $15.7B Energy East Pipeline; • $7.9B Northern Gateway pipeline; • $9.24B Keystone XL pipeline. That works out to $39.64B – more than enough to build a "Separator" which will enable the manufacture of finished, high grade products for export. By doing this, we can maintain permanent jobs in Canada, providing solid economic benefits. We can also continue to expand industry environmental performance and, as perfected, export environmental protection technologies to world markets. In the meantime, when necessary, we can continue to use rail transport. I have two main reasons for supporting rail transport: 1) If a spill occurs, the volume of product is greatly limited, compared to pipeline spills; 2) as we phase out our use of fossil fuels, rail infrastructure can be used to transport many other products in comparison to pipelines that serve only one purpose, resulting in stranded assets. Most importantly, we need an elected government who will truly commit to foster and grow replacement clean, renewable, energy industries that will replace fossil fuel energy as we effect the managed decline of fossil fuel production.

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  • Reena Meijer Drees
    commented 2016-12-06 11:49:56 -0800
    Refining is a low-margin business, which is why no new refineries have been built in Alberta or BC for years. Getting a refinery built requires a huge upfront cost – the equivalent of 3 pipelines, as you point out – and hence would require a lot of government “sweeteners” and guarantees, along the lines of what Premier Clark has done for Petronas in the LNG sector, to get investors/banks to pony up the cash required to get shovels in the ground. The idea is you lower the taxes and royalties your government gets, in exchange for getting the thing built (which generates jobs and worker’s tax returns). If you get it right, it becomes an income generator for the province.

    But I don’t think this is a good idea for tar sands product. Why? Plastics are not typically made using bitumen or its upgraded version, heavy sour crude. Plastics like PP, PE, PET and POM (“medical grade” plastic) are typically made using short-chain hydrocarbons like ethylene, which don’t come from refining bitumen. Most of what one gets from processing bitumen is bunker crude burned in ships, heavy truck diesel, and asphalt. So the question becomes: do we want to encourage bitumen refineries so that we make more engine fuel and road building materials? Speaking as the Energy Policy lead, I’m not sure the Green Party can get behind this. The idea, after all, is to get away from burning fossil fuels…

    That said, I think your suggestion is a good one for a BC product : natural gas. Right now, we ship about 90% of the gas mined in the upper right hand corner of BC out of province (mostly to AB, and from there to the US). We do not refine any of it. Natural gas (or methane) is an excellent feedstock for many chemical processes, including making plastics and fertilizer. So, instead of compressing the natural gas to make LNG (“liquified natural gas”) to ship to Asia – where it’ll be used to burn in thermal plants for electricity, if it’s sold at all – we could instead promote (read: subsidize) these types of refineries. In fact, it would make more sense from an environmental perspective than pushing LNG. The Energy Policy team has not looked into the economics of this to see if we might get close to generating any income, but we certainly could. Thanks for the excellent suggestion!
  • Kim Darwin
    posted about this on Facebook 2016-10-26 14:02:35 -0700
    Make a suggestion: Pipelines shipping raw bitumen to shorelines
  • Kim Darwin
    @Kim4MLA tweeted link to this page. 2016-10-26 14:02:31 -0700
  • Kim Darwin
    published this page in Make a suggestion 2016-10-26 14:02:15 -0700
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