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Energy

Indigenous communities await Trans Mountain pipeline share

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Tanker Dubai Angel at the Trans Mountain terminal, Burnaby
(Photo: Radio-Canada / Georgie Smyth / CBC)

From Resource Works

Ottawa’s Commitment to 30 percent Indigenous Stake in Trans Mountain Pipeline Still Awaiting Confirmation.

Indigenous leaders in Western Canada have been waiting for months for confirmation that the federal government will indeed enable Indigenous Peoples to get a 30 percent share in the Trans Mountain oil pipeline system.

That Ottawa has such a share in mind has been confirmed by Alberta Premier Danielle Smith. She says Ottawa is looking at possibly offering a loan guarantee to First Nations.

“They wanted to get the Indigenous partners to own 30 per cent. . . . It’s going to be a great source of income for the Indigenous partners.”

With the pipeline system’s capacity set to almost triple through the expansion project known as TMX, the federal government first announced in 2019, its intention to explore the possibility of the economic participation of 129 affected Indigenous Peoples.

Finance Minister Chrystia Freeland sent Indigenous leaders a letter last August outlining a plan to sell a stake in the pipeline system to eligible communities through a special-purpose vehicle. It said they would not have to risk any of their own money to participate.

But since then Indigenous groups have been awaiting further word from federal authorities on how and when the equity promise will be kept.

All Ottawa has said publicly is this on May 1: “The federal government will launch a divestment process in due course.”

Two key groups have aired proposals for acquiring equity in the oil pipeline:

  • The Western Indigenous Pipeline Group was formed in 2018 “ to acquire a major stake in Trans Mountain for the benefit of Indigenous communities who live along the pipeline.” It’s been working behind the scenes, and, with Pembina Pipelines Corporation, developed in 2021 the Chinook Pathways operating partnership.

“Chinook Pathways is finance ready. There are no capital contributions required for Indigenous communities. We will structure the transaction so that participating communities will make zero financial contribution.”

  • Project Reconciliation, also founded in 2018, proposed a ”framework” that would give ownership of the pipeline system to 129 Indigenous Peoples.
    “We are poised to facilitate Indigenous ownership of up to 100 percent, fostering economic autonomy and environmental responsibility.”

And: “A portion of revenue generated (portion directed by each Indigenous community) will be used to establish the Indigenous Sovereign Wealth Fund, supporting investment in infrastructure, clean energy projects and renewable technologies.”

In Alberta, the pipeline system spans the territories of Treaty 6, Treaty 8, and the Métis Nation of Alberta (Zone 4). In British Columbia, the system crosses numerous traditional territories and 15 First Nation reserves.

Commentator Joseph Quesnel writes: “According to Trans Mountain, there have been 73,000 points of contact with Indigenous communities throughout Alberta and British Columbia as the expansion was developed and constructed. . . .

“Beyond formal Indigenous engagement, the project proponent conducted numerous environmental and engineering field studies. These included studies drawing on deep Indigenous input, such as traditional ecological knowledge studies, traditional land use studies, and traditional marine land use studies.”

And Alberta’s Canadian Energy Centre reported: “In addition to $4.9 billion in contracts with Indigenous businesses during construction, the project leaves behind more than $650 million in benefit agreements and $1.2 billion in skills training with Indigenous communities.”

Not all First Nations have been happy with the expansion project.

In 2018, the federal appeal court ruled that Ottawa had failed to consider the concerns of several nations that challenged the project. In 2019, the project was re-approved by Ottawa, and again several nations (including the Squamish and Tsleil-Waututh) appealed. That appeal was dismissed in 2020. The nations then went to the Supreme Court of Canada, but it declined to hear the case.

Private company Kinder Morgan originally proposed the expansion project, but when it threatened to back out in 2018, the federal government stepped in and bought the existing pipeline, and the expansion project, for $4.5-billion. Ottawa said it was “a necessary and serious investment in the national interest.”

Ottawa at that time estimated that the total cost of the expansion project would come in around $7.4 billion. But cost overruns have since driven the final price to some $34 billion.

On the other hand, Ernst & Young found that between 2024 and 2043, the expanded Trans Mountain system will pay $3.7 billion in wages, generate $9.2 billion in GDP, and pay $2.8 billion in government taxes.

The TMX expansion twinned the 1953 Trans Mountain pipeline from near Edmonton to Burnaby (1,150 km) and increased the system’s capacity to 890,000 barrels a day from 300,000 barrels a day.

The original pipeline will carry refined products, synthetic crude oils, and light crude oils with the capability for heavy crude oils. The new pipeline will primarily carry heavier oils but can also transport lighter oils.

And the Alberta Energy Regulator says it expects oilsands production to grow by more than 17 per cent by 2033 (increasing to four million barrels a day from 3.4 million in 2023). And it expects global oil prices will continue to rise.

The TMX expansion finally opened and began to fill on May 1 this year.

And, as our CEO Stewart Muir noted, there was a quick reduction of eight cents a litre in gasoline prices for Vancouver due to completion of the project.

From Trans Mountain’s Westridge Marine Terminal at Burnaby, around three million barrels of oil have been shipped to China or India since the TMX expansion opened.

But because the port of Vancouver can handle only smaller Aframax tankers, more than half the oil has first been shipped to California, where it is then transferred to much larger VLCC (Very Large Crude Carrier) tankers. That makes for a longer but potentially cheaper journey.

At Westridge, because of limited tanker size, cargoes are limited to about 600,000 barrels per Aframax vessel. The largest VLCCs can carry two million barrels of oil. Westridge now can handle 34 Aframax tankers per month.

Some 20 tankers loaded oil there in June, a couple fewer than TMX had hoped for.

“This first month is just shy of the 350,000-400,000 bpd (barrels a day) we expected ahead of the startup,” said shipping analyst Matt Smith. “We are still in the discovery phase, with kinks being ironed out . . .  but in the grand scheme of things, this has been a solid start.”

The Dubai Angel became the first Aframax tanker to load at Westridge. It took on 550,000 barrels of Alberta crude in the last week of May, and headed for the port of Zhoushan, China.

Now the Dubai Angel is headed to Burnaby for another load, and is expected to arrive there on July 8.

Business

The world is no longer buying a transition to “something else” without defining what that is

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From Resource Works

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Even Bill Gates has shifted his stance, acknowledging that renewables alone can’t sustain a modern energy system — a reality still driving decisions in Canada.

You know the world has shifted when the New York Times, long a pulpit for hydrocarbon shame,  starts publishing passages like this:

“Changes in policy matter, but the shift is also guided by the practical lessons that companies, governments and societies have learned about the difficulties in shifting from a world that runs on fossil fuels to something else.”

For years, the Times and much of the English-language press clung to a comfortable catechism: 100 per cent renewables were just around the corner, the end of hydrocarbons was preordained, and anyone who pointed to physics or economics was treated as some combination of backward, compromised or dangerous. But now the evidence has grown too big to ignore.

Across Europe, the retreat to energy realism is unmistakable. TotalEnergies is spending €5.1 billion on gas-fired plants in Britain, Italy, France, Ireland and the Netherlands because wind and solar can’t meet demand on their own. Shell is walking away from marquee offshore wind projects because the economics do not work. Italy and Greece are fast-tracking new gas development after years of prohibitions. Europe is rediscovering what modern economies require: firm, dispatchable power and secure domestic supply.

Meanwhile, Canada continues to tell itself a different story — and British Columbia most of all.

A new Fraser Institute study from Jock Finlayson and Karen Graham uses Statistics Canada’s own environmental goods and services and clean-tech accounts to quantify what Canada’s “clean economy” actually is, not what political speeches claim it could be.

The numbers are clear:

  • The clean economy is 3.0–3.6 per cent of GDP.
  • It accounts for about 2 per cent of employment.
  • It has grown, but not faster than the economy overall.
  • And its two largest components are hydroelectricity and waste management — mature legacy sectors, not shiny new clean-tech champions.

Despite $158 billion in federal “green” spending since 2014, Canada’s clean economy has not become the unstoppable engine of prosperity that policymakers have promised. Finlayson and Graham’s analysis casts serious doubt on the explosive-growth scenarios embraced by many politicians and commentators.

What’s striking is how mainstream this realism has become. Even Bill Gates, whose philanthropic footprint helped popularize much of the early clean-tech optimism, now says bluntly that the world had “no chance” of hitting its climate targets on the backs of renewables alone. His message is simple: the system is too big, the physics too hard, and the intermittency problem too unforgiving. Wind and solar will grow, but without firm power — nuclear, natural gas with carbon management, next-generation grid technologies — the transition collapses under its own weight. When the world’s most influential climate philanthropist says the story we’ve been sold isn’t technically possible, it should give policymakers pause.

And this is where the British Columbia story becomes astonishing.

It would be one thing if the result was dramatic reductions in emissions. The provincial government remains locked into the CleanBC architecture despite a record of consistently missed targets.

Since the staunchest defenders of CleanBC are not much bothered by the lack of meaningful GHG reductions, a reasonable person is left wondering whether there is some other motivation. Meanwhile, Victoria’s own numbers a couple of years ago projected an annual GDP hit of courtesy CleanBC of roughly $11 billion.

But here is the part that would make any objective analyst blink: when I recently flagged my interest in presenting my research to the CleanBC review panel, I discovered that the “reviewers” were, in fact, two of the key architects of the very program being reviewed. They were effectively asked to judge their own work.

You can imagine what they told us.

What I saw in that room was not an evidence-driven assessment of performance. It was a high-handed, fact-light defence of an ideological commitment. When we presented data showing that doctrinaire renewables-only thinking was failing both the economy and the environment, the reception was dismissive and incurious. It was the opposite of what a serious policy review looks like.

Meanwhile our hydro-based electricity system is facing historic challenges: long term droughts, soaring demand, unanswered questions about how growth will be powered especially in the crucial Northwest BC region, and continuing insistence that providers of reliable and relatively clean natural gas are to be frustrated at every turn.

Elsewhere, the price of change increasingly includes being able to explain how you were going to accomplish the things that you promise.

And yes — in some places it will take time for the tide of energy unreality to recede. But that doesn’t mean we shouldn’t be improving our systems, reducing emissions, and investing in technologies that genuinely work. It simply means we must stop pretending politics can overrule physics.

Europe has learned this lesson the hard way. Global energy companies are reorganizing around a 50-50 world of firm natural gas and renewables — the model many experts have been signalling for years. Even the New York Times now describes this shift with a note of astonishment.

British Columbia, meanwhile, remains committed to its own storyline even as the ground shifts beneath it. This isn’t about who wins the argument — it’s about government staying locked on its most basic duty: safeguarding the incomes and stability of the families who depend on a functioning energy system.

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Energy

Tanker ban politics leading to a reckoning for B.C.

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From Resource Works

That a new oil pipeline from Alberta to BC is being aired by Ottawa and pushed by Alberta has, in turn, critics eagerly pushing carefully crafted scare stories.

Take the Green Party’s Elizabeth May, for one: She insists that oil tankers leaving Prince Rupert would be sailing through “Canada’s most dangerous waters and the fourth most dangerous waters in the world.”

First, this “dangerous waters” claim is unsubstantiated, unproven, and hyperbolic. It is apparently based on a line in a 1992 federal guide to marine-weather hazards on the west coast, but it is not credited or supported there.

Second, who says a new oil pipeline would go to Prince Rupert? No destination is specified in the memorandum of understanding published by Ottawa and Alberta.

It speaks of a commitment to “enable the export of bitumen from a strategic deep-water port to Asian markets.”

Energy Minister Tim Hodgson: “There is no route today. Under the MoU, what (Alberta) would need to do is work with the affected jurisdiction, British Columbia, and work with affected First Nations for that project to move forward. That’s what the work plan in the MoU calls for.”

First Nations concerned

Now, the MoU does say that this could include “if necessary” a change to the federal ban on oil tankers in northwest BC waters.

Some First Nations are strongly fighting the idea of oil tankers in northern BC waters citing fears of a catastrophic spill. The Assembly of First Nations (AFN), for example, is calling for the Canada-Alberta pipeline MoU to be scrapped.

“A pipeline to B.C.’s coast is nothing but a pipe dream,” said Chief Donald Edgars of Old Massett Village Council in Haida Gwaii.

And AFN National Chief Cindy Woodhouse Nepinak said: “Canada can create all the MOUs, project offices, advisory groups that they want: the chiefs are united. . . When it comes to approving large national projects on First Nations lands, there will not be getting around rights holders.”

Alberta group interested

But the Metis Settlements of Alberta say they’re interested in purchasing a stake in the proposed pipeline and want to “work with First Nations in British Columbia who oppose the project.”

The Alberta government’s Indigenous loan agency says a new oil pipeline to the BC  coast could deliver “significant” returns for Indigenous Peoples.

Alberta Premier Danielle Smith has suggested the pipeline could bring in $2 billion a year in revenue, and that it could be as much as 50 per cent owned by Indigenous groups — who would thus earn $1 billion a year,

“Can you imagine the impact that would have on those communities in British Columbia and in Alberta? It’s extraordinary.”

And we note that in 2019 the First Nations-proposed Eagle Spirit Energy Corridor, which aimed to connect Alberta’s oilpatch to Kitimat, garnered serious interest among Indigenous groups. It had buy-in from 35 First Nations groups along the proposed corridor, with equity-sharing agreements floated with 400 others. (The project died with passage of the tanker ban.)

Vancouver more likely

More recent chatter, including remarks by BC Premier David Eby, would suggest oil from a new pipeline would more likely be through Vancouver, rather than via Prince Rupert or Kitimat BC. And tankers have been carrying oil from the Trans Mountain Pipeline System’s Burnaby terminal since 1956 — with no spills.

Oft cited by northern-port opponents is the major spill of 258,000 barrels of crude oil (more than 40 million litres) from the tanker Exxon Valdez, which ran aground in Alaska’s Prince William Sound in 1989.

The resulting spill killed native and marine wildlife over 2,100 km of coastline.  The U.S. National Transportation Safety Board found that the spill occurred due to human error. It cited a tired third mate on watch, and noted the captain had an alcohol problem.

But the Exxon Valdez was a single-hull tanker. Its spill led to the phasing out of single-hull tankers, replaced in the ensuing 36 years by new generations of double-hull vessels (with an inner and outer hull separated to contain spills if the outer hull ruptures), new tanker safety rules — and new ways of dealing with the far-fewer spills.

Among those new ways is the Western Canada Marine Response Corporation: “Our mandate is to ensure there is a state of preparedness in place when a marine spill occurs and to mitigate the impacts on B.C.’s coast. This includes the protection of wildlife, economic and environmental sensitivities, and the safety of both responders and the public.”

What about LNG carriers?

At the same time, fear-mongers are actively flogging scare stories on social media.

One opposition group sees future LNG carrier traffic along the southern BC coast as potentially numbering “in the realm of 800+ transits a year.”

Eight hundred a year? BC Ferries runs more than 185,000 a year. And the ferries don’t have tethered tugs helping them to get safely from LNG terminals. And they don’t have BC Coast Pilots on the bridge to keep progress safe. Oil tankers leaving the Port of Vancouver have both.

As marine captain Duncan MacFarlane of LNG Canada in Kitimat says: “LNG carriers are some of the most sophisticated ships in the world…Once loading operations are complete (at LNG Canada), three BC Pilots will join the ship and start navigating up the Douglas Channel, which is approximately 159 nautical miles out to the Prince Rupert pilot station.”

LNG Canada has partnered with HaiSea Marine, which is a company formed between the Haisla Nation and Vancouver-based SeaSpan, to provide two escort tugs and three harbour-assist tugs to safely move the vessel out of the Douglas Channel…once the vessel drops the pilots at Prince Rupert, it starts a seven- to ten-day voyage to its discharge port. To assist with this, they’ll use satellite navigation, weather routing, and a variety of other technologies to get to their port the safest and most efficient way.”

The same would apply to oil tankers from any northern port in BC.

BC’s tanker-safety record

As the small-c conservative Fraser Institute points out: “Pipelines are 2.5 times safer than rail for oil transportation, and oil tankers have [the] safest record of all.”

And it adds: “The history of oil transport off of Canada’s coasts is one of incredible safety, whether of Canadian or foreign origin, long predating federal Bill C-48’s tanker ban. . . .new pipelines and additional transport of oil from (and along) B.C. coastal waters is likely very low environmental risk. In the meantime, a regular stream of oil tankers and large fuel-capacity ships have been cruising up and down the B.C. coast between Alaska and U.S. west coast ports for decades with great safety records.”

This last refers to the 200-230 tankers a year that now carry crude oil from Alaska through Canadian waters south of Haida Gwaii and then down BC’s Inside Passage or outer coastal waters to Juan de Fuca Strait and Washington refineries.

While these tankers do not transit Hecate Strait (the north end of which is the area of concern about spills from tankers from Prince Rupert or Kitimat) all these US tankers are double-hulled, must report positions, speeds and routes in real-time, must carry certified pilots, must use traffic-separation routes (like traffic lanes), and must slow to 11 knots in sensitive areas.

And as Pipeline Action says: “Canada is not inferior — If Norway can move tankers safely through fjords, if Japan can operate in some of the busiest waterways on Earth, if Alaska balances ecological protection with responsible shipping and if Eastern Canadian ports manage tankers every day, then Canada’s West Coast, with its governance standards, technical capacity and Indigenous partnership potential, can certainly do so.”

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