Is it possible that killer whales could cut into the long-term growth of Canada’s oil sands?
Environmental groups are suing the Canadian government over its recent approval of Kinder Morgan’s Trans Mountain Pipeline expansion, a crucial project that could allow for the growth of oil sands production. The Trans Mountain Pipeline already runs from Alberta to the coast of British Columbia. Kinder Morgan wants to build a twin line that runs parallel to the existing one, which would triple the system’s capacity to nearly 900,000 barrels per day.
Prime Minister Justin Trudeau gave the greenlight to the Trans Mountain expansion late last month, knowing that doing so would rile up opposition from First Nations and environmental groups. In the same announcement, he rejected the Northern Gateway Pipeline, a more controversial project that would have run through sensitive rain forest.
But the Trans Mountain expansion, even with the support at the highest levels of the Canadian government, still faces obstacles. Ecojustice, an environmental outfit, is suing because the federal government’s decision will impact killer whales in the shipping lanes where oil tankers will dock to load up on oil coming through the pipeline. “The ones that we are concerned about are the Southern Resident killer whales,” Dyna Tuytel, a lawyer with Ecojustice, told Bloomberg. The Trans Mountain expansion will result in “seven times more tankers, which contribute to noise and interferes with hunting and communication.” The tankers would also threaten salmon populations, which the whales feed on.
A spokesperson for the pipeline, however, says that the extra tanker traffic represents just 7 percent of the volume of commercial vessels moving through the area, so will have a minimal impact on the whales.
In addition to the lawsuit, environmental groups and First Nations have vowed to protest the project, hoping to turn it into a national flashpoint in the style of the Keystone XL and Dakota Access protests. Prime Minister Justin Trudeau acknowledged that his decision to support the project would spark protest, but he sounded undeterred in a recent visit to British Columbia. “That’s fine,” he said. “People are more than willing to express their opinions, to campaign against me, and to support politicians who will agree with them, and not agree with me. That’s fine. This is all part of our democratic process.”
The Trans Mountain Expansion will be a crucial conduit for Alberta’s oil sands producers, an industry that is having trouble building long distance pipelines to get their product to export markets. A shortage of pipeline forces Canadian oil to trade at a discount to WTI (as does its quality), which means pipeline problems are cutting into upstream revenue. Ultimately, the lack of pipeline capacity could cut into long-term production targets. According to the Canadian Association of Petroleum Producers, Canada’s pipeline system can handle 4 million barrels of oil per day (mb/d), but in 2015, the system was nearly full, running 3.981 mb/d.
That highlights the importance of the Trans Mountain expansion not just to Kinder Morgan, but also to Canada’s entire oil sands industry.
By Charles Kennedy of Oilprice.com
