BC Business
Kamloops and Burnaby | BCBusiness
There’s no sign on the door of Kinder Morgan Canada’s project office in a Burnaby industrial park, and visitors have to be buzzed in. It’s just a project office, of course, so maybe it’s understandable that the park’s business directory should list the tenants as that old apartment building standby, “Occupied.” Then again, maybe it’s just as well that the place is going plain-clothes, considering what some people around here have been saying about the company.
People like, for example, Burnaby’s popular longtime mayor, Derek Corrigan. In late September, the city released a poll showing that 68 per cent of its residents were opposed to the company’s proposed expansion of its existing Trans Mountain pipeline, accompanied by comments from Corrigan that included “Burnaby residents don’t want this pipeline to go anywhere in this city—not through back yards and not through the conservation area we passed laws to protect—and the city will continue to fully support its citizens’ opposition.”
A week earlier, when the occasion was B.C. Supreme Court’s refusal to grant an injunction forcing Kinder Morgan to stop survey work through that conservation area, known as Burnaby Mountain, he’d been even less diplomatic. “It’s not the end of anything,” Corrigan said in an official media release plastered across the homepage of the city’s website. “It’s another step in what we’ve always known will be a long fight to protect our conservation lands—and all of our land in the city—from further destruction by Kinder Morgan.”
Kinder Morgan’s proposed expansion of its Trans Mountain pipeline, which runs from Edmonton to the B.C. coast, would boost volumes from 300,000 barrels per day to 890,000. For most of the route, the impact of the expansion could be relatively minor, but in Burnaby it would require a much larger terminal and storage complex, and a routing that will have it either beside the original pipeline in a heavily built-up area or tunnelling under that nature reserve. Polls show that public attitudes toward pipeline projects of any kind have hardened throughout British Columbia, so Burnaby and its mayor are not alone in their opposition. And, of course, there are pipeline supporters too—especially in Interior centres like Kamloops, which stand to grab a chunk of the estimated $5.4 billion that will be spent on the Trans Mountain expansion while experiencing little inconvenience and dangers that aren’t appreciably greater than the ones they’ve lived with, mostly without issue, for six decades.
Beginning early next year, the expansion’s proponents, opponents and other interveners (who fall somewhere in the middle or who have their own specific concerns) will appear before a National Energy Board panel. Because pipelines are federally regulated, the panel’s decision, slated for early 2016, will trump any further obstacles that jurisdictions like Burnaby can put in the way. So in the months leading up to that decision, the rhetoric, already heated, can only be expected to get hotter.
Inside the Burnaby project office sits Kinder Morgan president Ian Anderson, Corrigan’s rival in this battle for Burnaby’s hearts and minds. Although based at the firm’s Calgary head office, Anderson has found himself spending about half of his time here in the Vancouver suburb where the pipeline terminates. That’s been tricky, considering that, beyond the expansion, he still has a company to run—and not a tiny one at that. Kinder Morgan Canada has its roots in the 2005 acquisition of Terasen Inc. by a division of Kinder Morgan Inc., the third largest energy company on the continent and itself a relatively new entity that emerged out of the Enron debacle. Anderson’s Canadian unit currently has annual revenues of almost $400 million, an estimated 85 per cent of which stem from the Trans Mountain system, which also includes terminals and a spur line to Washington State.
A native Manitoban, with the easy-going demeanour that his provenance suggests, Anderson has nevertheless developed some strong opinions about the reception the expansion project has received in Burnaby, especially when it comes to public figures like Corrigan. “The mayor has concluded that the expansion of our system, and to some extent the existing system, isn’t consistent with his views about what kind of a community Burnaby should be,” he says. “From that there’s been created a heightened emotion based on fear.”
For his part, Corrigan doesn’t dispute the gist of this. He does have a different vision for Burnaby, and he does harbour pipeline-related fears that he hasn’t been shy to express. “I think that the major thing concerning the Lower Mainland and coastal B.C. in general is the potential tanker traffic and the idea of an accident,” he says. “We also have a more parochial issue in that this is a tripling of the capacity for storage at the tank farm. We think that the location was very poorly chosen and that now it is hanging like the sword of Damocles over residential neighbourhoods and schools.” Oh, and then there are the memories, still fresh, of a significant pipeline rupture in 2007 that bathed eight homes in crude and sent oil gushing into Burrard Inlet. Kinder Morgan was later found to have provided inadequate supervision to a contractor working for the city and additionally failed at first to turn off the correct taps. “That does not instill confidence in a municipality or in the residents,” Corrigan says.
Left unsaid, but certainly on the minds of many pipeline opponents, is the expansion’s role as a route to export markets for oil sands bitumen compared to the current line’s primary use as a supplier for local needs. In fact, tanker traffic would increase from about one a week to about one a day. There’s also the whole carbon footprint argument in a region that takes the idea as seriously as anywhere on the continent. (On the flip side, the current lack of pipeline capacity has forced a lot of oil onto the rail system, which is costlier, more dangerous and far more energy intensive.)
So, yes, Corrigan and the City of Burnaby have been actively attempting to sway opinion against the pipeline expansion, and their efforts seem to be working. “We’ve done our own polls,” says Anderson, “and materially it’s not different from theirs.”
The landscape is a lot different in Kamloops, and not just because it receives less than 300 mm of precipitation annually compared to the 2,000 mm in soggy Burnaby. Still, the two cities have more in common than meets the eye. Burnaby, incorporated in 1892, was long the second largest city in Metro Vancouver, surpassed in recent years by Surrey; Kamloops, incorporated in 1893, once vied to be B.C.’s second largest city outside of Metro Vancouver but in recent years has been left in the dust by up-and-comers like Kelowna. As well, both have a history of electing their share of New Democrats. The difference is that after former B.C. NDP leader Adrian Dix came out against all pipelines on the eve of the disastrous 2013 provincial election, Burnaby elected NDPers in three of four constituencies (among them Kathy Corrigan, Derek’s wife), while Kamloops voted strongly for the B.C. Liberals. In both cases some felt that the pipeline stance contributed to the outcome.
Kamloops Chamber of Commerce President Aleece Laird isn’t so sure that was the case, but she believes there is support for the pipeline project within the community and can vouch for enthusiasm on the part of chamber members. Several of those are in tourism and accommodations, where recent investments have totalled almost $100 million in anticipation of the pipeline and other major projects, she says. Mayor Peter Milobar says there are two conversations that people should be having. “One is about how much oil we consume, and that’s a very valid conversation. But the other is about transporting that oil in the safest possible way.” Oil is currently passing through Kamloops on both railcars and trucks, he points out, and beyond the safety concerns, it’s becoming difficult to find rail space for non-petroleum products—including even people, with, for example, the Rocky Mountaineer tourist train having to vie for a share of the tracks. Still, he says, “the discussion is generally low-key here.”
There are issues, of course. Among them is a routing debate that echoes the situation in Burnaby: the company wants to avoid the original right-of-way in favour of a nature preserve, due to urban development that’s taken place in the six decades since the pipeline first went in. While homeowners don’t want pipeline construction in their back yards, and Kinder Morgan doesn’t want to have to buy a lot of land or spend a lot on compensation, there is opposition as well to running the line through the Lac du Bois Grasslands Protected Area.
Generally, though, Kinder Morgan’s plans for pipeline expansion face significantly less opposition in Kamloops than in the Lower Mainland. Ian Anderson thinks he knows some of the reasons why: “We’ve been there for a long time,” he says. “We have a strong presence in the community; we have an employee base; we’re well-known, not just our company and our business but the companies that contract with us; we’ve got a great safety record there.” And too, people are a little different in the Interior than on the coast, where mayors like Corrigan, as well as many business and community leaders, see their cities’ futures linked more closely to advanced technology, cultural creativity and the global appeal of pristine natural environments. “They know that it’s a resource-based province,” Anderson says of Kamloops residents. “They know that commodities have to get to market.”
A few kilometres north of Kamloops there’s yet another aspect of the same phenomenon, Anderson thinks. Earlier this year the tiny Whispering Pines government became the first of what may end up being a majority of First Nations to come to an agreement with Kinder Morgan and the federal government; if the expansion comes to pass, the band will collect taxes that would have otherwise accrued to Ottawa. “What we had is a relationship,” says Anderson of the process that led to the agreement. “I knew Michael. I’d been there many times. I knew what the history was.”
Michael, in this case, is Chief Michael LeBourdais, who frames an agreement that will bring Whispering Pines’s 100-odd members a reported $5 million to $10 million annually as, primarily, an opportunity to assert sovereignty. He allows that some other bands have been critical of the move. “Oh sure, that’s what they say in public,” he says. “Then, over coffee, they’re asking, ‘How did you do it?’” LeBourdais believes that behind the scenes most bands along the route are in negotiations and almost all will come on board with similar agreements. Ian Anderson confirms this. “We’re essentially in discussions with all the bands between Edmonton and Sooke.”
So it’s possible that Kinder Morgan will find its way around the First Nations objections that currently seem so formidable. The National Energy Board panel has already been listening to First Nations submissions, but potentially some of the issues that have cropped up will seem less significant to bands after they’ve come to agreements. Given municipalities’ very limited jurisdiction over an approved project, for both Kinder Morgan and avowed foes like the City of Burnaby these NEB hearings loom as the end game—a game that Derek Corrigan believes is rigged.
“I don’t want to sound paranoid,” the former trial lawyer says after running through a list of a few of the things that he feels are stacked against his side. There’s the generous salting of National Energy Board panels with oilpatch veterans, he says, and the situation that has had governments reducing their own scientific and monitoring capabilities and shifting most aspects of environmental assessment onto the pipeline builder: “You can’t even hire an expert in this country in regard to any of these issues because they’ve all been conflicted out,” says Corrigan. Then there’s the surcharge that the National Energy Board allows Kinder Morgan to bill its existing customers in order to fund its expansion efforts. “To surcharge people who are moving oil through those pipelines in order to have an application made—in many ways you are well down the road of commitment to ensuring that the project goes ahead.”
Meanwhile, the mayor doesn’t buy into the idea that the NEB should be cut some slack because it has to weigh local and individual considerations against the national interest. “If you ask the NEB, they’ll tell you that the only thing that’s being considered is the invisible hand of the marketplace,” he says. “They’re cloaked in what is called the national interest, but it’s impossible for me to identify the national interest as making money for multinational oil companies.”
Anderson, on the other hand, thinks the decision will be anything but a commercially based one with addenda covering a few technical and environmental concerns. “It includes local impacts; it includes how responsive a company is,” he says. “It’s not just a pipeline story; it’s the full story. I don’t think the public appreciates the safety net that the panel provides them.” One thing he wonders about, though, is whether the panel might put a greater weight than in times past on public opinion, and in particular the very strong public opposition currently evident in Burnaby. “It’s a question I ask myself every day,” he says.
If the NEB does rule in favour of the expansion, there will be another issue arising out of the current animus between Kinder Morgan and the City of Burnaby. Burnaby, after all, is the site of its terminal, the most complicated aspect of the project, not to mention the proposed drill through Burnaby Mountain, a significant engineering challenge. And yet there has been absolutely no contact between Burnaby and Kinder Morgan. No sharing of information, no technical consultation—a situation that Anderson says exists nowhere else on the line.
Corrigan doesn’t apologize for this. “Anything we did to work with them, to help them select routes, would have given them, in effect, a tool to use as leverage in NEB hearings, and they would have no hesitation in doing that,” he says. “If in fact approval is given, then we’re going to have to work to minimize whatever damage we can.”
Meanwhile, Anderson lists all the things that should be happening now but instead will be delayed until after a decision: “To finalize routing decisions. To understand what the impacts of those are going to be. To understand the timing of workforce presence, the methods of construction and the impact that they will have on traffic. The discussion around seasonalities.”
Under Corrigan—who was running this fall for his fourth term as mayor—Burnaby has been out to prove that it’s no longer the sleepy suburb it once was. In 2016, if Anderson’s Kinder Morgan expansion receives a go-ahead, it will be a lively place indeed.