Trudeau and Bitumen Pipe Lines

Jeremy Arney on Bitumen Pipelines.

 After agreeing to the toxification of the Sacred Headwater Aquafer in NE BC  via the LNG fracking process, and a damn  (Site C ) being built on very unstable foundations and based on absolutely false need, Prime Minister Trudeau made three announcements on tar pipe lines and I offer these comments:

 Enbridge Northern Gateway Pipeline never an environmentally sound project either for the First Nations communities along it’s route or for BC’s interior and coast including the Great Bear Rain Forest, Douglas Channel or Hacate Strait, is now dead. Thus we can expect Enbridge to use Chapter 11 of NAFTA to claim perceived lost profits in the billions if not trillions of dollars in the near future.  What I can say is that the previous government would probably have just thrown taxpayers’ money in a large volume at them as they did with Abitibi Bowater. It remains to be seen what the Liberal government will do.

 Kinder Morgan’s twinning Project to Burnaby BC has been approved without the promised new improved revue panel and without the input of all people of BC, particularly those who will be affected by a spill, but with some oversimplified reviews by the same unqualified NEB.

This was supposedly balanced by the ‘promised’ Tanker Ban on the northern coast (way overdue and very welcome), and increased spill response capability from the coast guard.  Just what this later will be is anyone’s guess as at yet no method of cleaning up dilbitumen spills in the ocean is known; all that is known is that the dilutent used is toxic, and the bitumen will form into balls and sink. Oil spill booms will do nothing.  The effect this will have upon the ocean wildlife is completely unknown.

Until this problem is solved there should be no approval of this pipeline.  Yes, this product is already moving but with the 7 fold increase in supertankers the risk of a spill also increases by a factor of 7.

 The Enbridge Line 3 is another dilbit pipeline, with a lesser degree of hard terrain to cover and is supposedly a more up to date line into the USA, but again without the promised new review process. 

Question I am always asking is why are we not refining this tar in Canada?  We constantly ship this raw product south at a low price and buy back the refined products at a high price reflected in our pumps all across Canada.

The price of oil (or tar) has gone from $100 a barrel to $30 a barrel and the price of gasoline at the pumps in Victoria BC has stayed steady at $1.13 per liter with a change upwards in the summer.  Simple economics should show that refining in Canada would be a win win situation.  Our cheap exports would be down but so would our expensive imports. It seems to me that our trade imbalance is partially due to this current practice of sell low and buy high on our major export/import products.

 The simple measure of refining our gunk here would make a vaste difference to our economic situation and we could even export refined product at a price which would benefit us all.

 There is another aspect to this that should be taken into consideration.  The percentage of a product we can export to the USA,

 From NAFTA:

Article 605: Other Export Measures

Subject to Annex 605, a Party may adopt or maintain a restriction otherwise justified under Articles XI:2(a) or XX(g), (i) or (j) of the GATT with respect to the export of an energy or basic petrochemical good to the territory of another Party, only if:

 

  1. the restriction does not reduce the proportion of the total export shipments of the specific energy or basic petrochemical good made available to that other Party relative to the total supply of that good of the Party maintaining the restriction as compared to the proportion prevailing in the most recent 36month period for which data are available prior to the imposition of the measure, or in such other representative period on which the Parties may agree;

 

What this means is that we can not reduce our percentage of total Bitumen extracted from the sands and exported to the US, so in order to supply any bitumen to China, for instance, we will have to supply much more to the USA at a rock bottom price to maintain their percentage of our production

 On the other hand we have no history of supplying  refined product to the US as we buy it all from them,  so we are not tied by that percentage problem.   Win – win situation.

 Surely someone in the Canadian government has thought of this bitumen percentage because you can be sure that the US has it well under control, and are just waiting for us to try to export some of their percentage of our bitumen anywhere other than to them.

 Incidentally this was originally in the FTA as well, and obviously too good for the US to relinquish.

 What a mess!

 Jeremy

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