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Disclaimer: I have my own renewable energy website and I contribute renewable energy blog posts to another website — so I’m obviously a proponent of renewable energy.
However, back in the day I was an entrepreneur who learned about dealing with various levels of government, about operating within regulatory frameworks, and needing to budget carefully for future large scale projects.
With the foregoing in mind, I offer the following comment about the Kinder Morgan pipeline project proposal (the TMX expansion) that is planned to run from Edmonton, Alberta through to the Westridge oil refinery (Chevron) in Burnaby, BC:
- Unfortunately, there are still places where renewable energy won’t work in a cost-effective manner. Eventually, renewable energy technology will develop and become feasible everywhere on the planet. But we still need oil & gas in the meantime.
- The past 5 Canadian Prime Ministers and probably a similar number of British Columbia and Alberta Premiers gave tacit approval to the Kinder Morgan pipeline expansion which led the company to believe the twinning of the pipeline would be approved.
For the federal government or any province to pull the rug out from under a company that has been led along for two decades to believe their project would be approved — and which provides a valuable service for people who drive cars and trucks in British Columbia and Alberta — would be unthinkable and two-faced.
The TMX Expansion should be approved based on those points alone as both Conservative and Liberal federal governments have promised the project would be a ‘Go’ and KM proceeded on that basis.
IMPORTANT TO NOTE IF KINDER MORGAN WAS OPERATING IN A TPP COUNTRY: The various levels of government in Canada could be sued for not following through on their tacit approval in recent years — and Kinder Morgan and possibly Chevron would likely win a court judgement worth billions of dollars which Canadian taxpayers would be forced to pay. Not only that, but a TPP court could still order the pipeline built!
However, there is another option which I will cover below.
About the Westridge Refinery in Burnaby, BC
At present, one tanker per week leaves the Westridge refinery (Chevron) in Burnaby BC, sometimes carrying 50,000 or 100,000 barrels of oil, gasoline, diesel, kerosene, or more exotic hydrocarbons like naptha, xylene, toulolene, and other volatile liquids. But once the 2nd pipeline is built, one tanker per day will leave the Westridge refinery.
All of these are explosive liquids and in an accident where fire occurs could easily destroy (yes, entirely destroy) the 2nd Narrows bridge or the Lions Gate bridge, which is why they run under those bridges at 4:00am to enhance their margin of safety. (Thankfully, there are no terrorists in our region)
Proposal to Enhance Shipping Safety in BC by Relocating the Westridge Refinery to Deltaport
I propose relocating the Westridge refinery in Burnaby BC to Deltaport BC, and that the federal government of Canada and the provinces of British Columbia and Alberta offer significant investment, allowing public safety to be dramatically improved.
NOTE 1: I’ve spoken to Ray Lord who is highly respected within the petrochemicals industry and remains the chief spokesman for Chevron’s Westridge refinery and he seemed interested in my idea to move the refinery to Deltaport.
Instead of a 2nd Pipeline – Move the Oil by Rail to Deltaport
It’s magic that Deltaport is the terminus for CN Rail and by using the rail option to move petroleum it means the proposed 2nd pipeline would never be needed.
Public safety would be dramatically improved, Chevron would have two crude oil transportation modes to keep it running, and in the event of a spill it’s well documented that rail spills are orders of magnitude smaller than pipeline spills.
NOTE 2: Pipeline spill incidents average 1.2 million BARRELS of oil, while rail tanker spill incidents average 220,000 US GALLONS. A huge difference!
This option would allow 3 shifts at the relocated refinery instead of 2 as is the case now, and even allow the refinery to continue operations in the event of a failure along the existing pipeline route.
NOTE 3: KM would lose the ability to build the new pipeline but allow it to neatly step out of a public relations nightmare — and it might choose to become an investor in the new Deltaport facility and not lose a cent of profit in the process.
All for less than the cost of a potential legal action brought by Kinder Morgan and possibly Chevron too.
A Fund to Remediate Pipeline Oil Spills
A 6 cents per barrel of oil tax should be applied to all liquids that move through pipelines in Canada which should be held in a trust fund to deal with future pipeline spills. The fund could be invested and the returns would increase the total value of the fund.
NOTE 4: Railways don’t need such a tax as they can’t continue rail operations along that line until the spill is cleaned up, so they’re already highly motivated to clean up rail spills ASAP.
If Canada, British Columbia and Alberta kicked in funding to relocate the refinery:
- No longer any need for the TMX Expansion
- Thousands of jobs would be created to build the new Deltaport refinery
- Public safety would increase by orders of magnitude in British Columbia
- Chevron, environmental protesters, and Kinder Morgan would be happier
And all that government investment would eventually be recovered through taxes.
Even Chevron liked my idea.
An hour wasted is an hour you never get back. And through no fault of their own, Canada’s premiers are wasting thousands of hours per year.
Canada’s premiers are important people. They hold the keys to multibillion dollar economies within Canada, are privy to some of Canada’s most secret security information, and they need to hopscotch around their region to hold meetings with CEO’s, other levels of government, attend events, sometimes need to get an overview of natural or man-made disasters, and to view proposed mega-projects like hydro-electric dams, major highway systems, pipelines, and railways, all over their particular province.
In the province of Alberta, premier Rachel Notley travels around the province in a convoy of Chevrolet Suburbans worth more than many Albertan homes. With weather-related travel issues, and the time it takes to get by car from the provincial capital of Edmonton to Alberta’s far-flung cities and mega-projects, you can be sure those Suburbans are getting ‘miled-out’ and replaced every 2-3 years.
It’s a ton of money invested in vehicles ($384,043.62 worth, plus annual maintenance and daily fuel) and it amounts to a lot of the premier’s time being wasted barrelling up and down highways.
We all know that much of Alberta’s business is conducted in Calgary and that the provincial capital is 281 kilometres away, in Edmonton.
It takes Rachel Notley and her convoy of Suburbans 3-hours to travel to Calgary (in good weather) sometimes 5-hours (in bad weather) And then there’s the trip home after the meetings, which of course, doubles the travel time. (Alberta premiers typically travel to Calgary about 3 times per week)
But not only that. During the Fort MacMurray fires the highways were closed. The roads were closed a few years ago in regards to the Calgary floods, and it occurs many times during the winter months along the Highway 2 corridor between Edmonton and Calgary that it gets closed due to icy conditions. Sometimes, quite suddenly — like when you’re halfway home from Calgary.
During busy months, half of premier Rachel Notley’s working hours (and whichever cabinet members are travelling with her) might be wasted sitting in the back of an SUV waiting to get to their destination.
It’s a colossal waste of time for every premier in Confederation. Time that could be better spent. Meaning more actual productivity per hour for all of Canada’s premiers. I’m pretty sure that Alberta’s premier spends 900 hours per year being transported by SUV, which is about average for Alberta premiers.
Imagine the wasted time for an Ontario premier — a province with a much higher population than Canada’s four Western provinces combined.
And I’m not ‘fobbed-off’ by claims that the time spent riding around in the back of a Suburban is productive time. If that were true, then why are premiers bothering to personally attend meetings in the first place? If phone calls and emails work so well, why leave the provincial capital? Ever?
“If I had asked people what they wanted, they would’ve said faster horses.” — Henry Ford
A Better and Faster way to Travel
Canada’s Griffon helicopters, which are underutilized by the Canadian Army are the perfect answer to efficiently move Canada’s premiers around their home provinces, while saving thousands of hours of time and improving the security of premiers and their staff.
It’s a light helicopter that can carry 10 people and their gear, and it can travel long distances (for a helicopter) at 250 kilometres per hour. There isn’t anywhere in Alberta that the Griffon CH-146 couldn’t fly on one tank of fuel.
But with all of that going for it, it’s still a ‘boy among men’ when compared to other military helicopters, which is the only reason why it’s seen limited military use.
Let’s face it, it was built for Army commanders to tour the battlefield in the interests of creating a better battle plan for the following day, and to quickly zip in and out of combat zones with ammo and food for soldiers. A Black Hawk S-70A or Sea Stallion CH-53E battlewagon it’s not.
But for ferrying premiers and other government officials travelling with the premier, it could very easily handle that role. And, as an added bonus for the Army, the Canadian Army crews that fly them would be better able to meet their (required) number of flight hours per month. That’s reason enough right there to detail one of them to each Canadian premier.
Note: Out of the original order of 100 Griffons, the Canadian military has 20 Griffon helicopters that are parked — and not for safety reasons. They just don’t have missions. The helicopters were already paid-for, years ago. They sit unused because they have no missions to fly. And pilot skills deteriorate without a minimum of 30-hours of flight time per month.
Would Alberta taxpayers be getting better productivity out of their premier with 2-hours of travel time per day vs. the present 6-10 hours per day, on average? The answer seems blatantly obvious.
In short; Is it better for the premier of Alberta to sit in the back seat of a multi-vehicle motorcade of Suburbans for 900 hours per year, or to fly in helicopters for 300 hours per year? Thereby saving 600 hours per year for more productive use.
When Canada’s premiers are conducting business on behalf of the people where one deal could conceivably cost or save billions of dollars, isn’t it better to have premiers that arrive refreshed and ready to negotiate — rather than arriving frazzled, after a harrowing 5-hour drive on icy roads?
This is one case where the federal government should divert from its typical overly-cautious Canadian tendencies and actually make the arrangements to dramatically increase the productivity of every Canadian premier.
In this day and age, it’s great to ‘work hard’ but it’s more important to ‘work smart’. And working smart means adding 600-hours of productive time to each premier’s schedule annually.
Prime Minister Justin Trudeau, I urge you to direct the Canadian Army to park one Griffon helicopter and crew beside each provincial legislature for the official use of Canada’s premiers (and whichever officials are required to accompany them on provincial business) in the interests of increasing the productivity and personal security of all of Canada’s premiers.
This would be the low-hanging fruit, Mr. Prime Minister, on the path to making Canada all that it can and should be.
by John Brian Shannon | April 9, 2016
The Energy East pipeline only makes sense if global oil prices rise past $80 per barrel and there’s no guarantee we’ll see anything like that before 2020.
Meanwhile, Iran is set to add 3.5 million barrels per day by 2020 to the global oil markets which will easily meet (practically) flat demand, keeping oil prices below $80/bbl.
Not only that, Iranian crude oil is either #2 (sweet) or #3 (sweet) while Alberta’s oil ranges from #4 (sour) to off-the-scale sour. Alberta’s crude is so sour that it must be blended with #3 (sweet) or better before refineries will accept it.
Why would any refinery want to buy Canadian sour crude when they can buy Saudi #3 (sweet) or Iran #3 (sweet) for the same, or lower price? Alberta’s crude sits at an average of #4.75 (sour) with two other negatives attached — much higher extraction costs (the average Alberta extraction cost is $56.20 per barrel) along with higher refining costs.
What would capture the interest of voters, would be the Alberta government guaranteeing the financing of oil refineries located within and sized to accommodate the needs of each Canadian province.
Each province could have it’s own refining capacity sufficient to meet 100% of annual provincial demand — plus 30% (for export) to bordering U.S. states.
Existing rail links can already get the crude oil to existing refineries and to the future refineries proposed in this blog post. For those worried about oil spills when shipping by rail, they are usually limited to a few rail tanker cars and are microscopic when compared to pipeline spills.
Instead of being ‘hewers of wood and drawers of water’ how about some value-added contributions to our economy by building our Canadian refining capacity, and doing some much needed value-adding to our petroleum exports?
It’s the next logical step for the Alberta government.
Bonus Graphic courtesy of MACLEAN’S