Enbridge’s pipeline spills, PR headaches and corporate history

Published in The Vancouver Observer | February 5, 2013 | Circulation: 125,000 unique monthly visitors

You’ve heard the names. You’ve seen the headlines. But what, exactly, is Enbridge – the key player behind Canada’s most controversial industrial proposal?

The Enbridge story

When crude suddenly gushed from an oil well in Leduc, Alberta on February 13, 1947, the dramatic story of the province’s ‘black gold’ rush kicked into high gear – a story, it turns out, that is deeply enmeshed with Enbridge itself.

In light of today’s political debate around the Northern Gateway project, it’s a surprising historical coincidence that the first pipeline to transport crude out of Alberta was built by Enbridge’s predecessor – and its valve cranked open by the one-day leader of the federal New Democratic Party (NDP), Tommy Douglas.

“An historic occasion,” Douglas, then-Premier of Saskatchewan, proclaimed breathlessly at the pipeline’s 1950 inauguration. “A modern miracle.

“The pipeline presents a steady, sure supply of oil with regular delivery at lowest possible transportation cost… Ten years ago, if anyone had dared suggest the possibility of completing a project of this size in less than six months, he would have been called a dreamer and a visionary.”

Decades before the company changed its name to Enbridge, Interprovincial Pipe Line Co. heralded its $100 million project in national terms remarkably prescient of today’s national energy controversies – and inaugurated by its one-day political nemesis.

“The full effect of the benefits to the Canadian economy will not be felt until the line is completed,” predicted Loren Kahle, the company’s executive vice-president.

Those alleged economic benefits are the very ones being lobbed back-and-forth today between federal Conservatives and the New Democrat opposition in the escalating fight over Enbridge’s Northern Gateway Pipeline.

What is Enbridge?

Sixty-six years after the Leduc discovery, Enbridge Inc. has become a leading Calgary-based company with a sprawling reach extending across the continent. Best known for its work in oil and natural gas transport, it’s also branched out to greener alternatives, operating seven wind farms in Canada and the U.S., a geothermal project, and, until last year, the world’s largest solar power plant. Although environmentalists disagree, the Enbridge website claims the company is one of Canada’s “Greenest Employers.”

Established in 1949 as the Interprovincial Pipe Line (IPL) Co., the company’s original pipeline ran from oil fields in Alberta to refineries in the east – on the shores of the Great Lakes and down to Wisconsin in the U.S.

Today, Enbridge operates the longest crude oil transportation network on the planet, moving over two billion barrels per day and transporting 65 per cent of all western Canada’s oil exports. It controls more than 24,000 kilometres of pipeline across North America.

And though it would form only a small part of its operations, one of Enbridge’s most high-profile projects is the proposed Northern Gateway pipeline. Planned to run from northern Alberta to the coastal community of Kitimat, B.C. – where oil would be loaded on tankers for shipment overseas – the proposal has drawn the fire of many First Nations and environmentalists alike.

The proposal has become the company’s most controversial project – and the focus of growing political storm whose resolution is uncertain.

Northern Gateway: a Public Relations Headache

Imagine yourself dropping through a layer of clouds over central Alberta, floating as smoothly as a dandelion seed, until you approach a cluster of trees and houses: the 1,155-resident town of Bruderheim, just one hour northeast of Edmonton. It’s a farming community best known as the site of a famous meteorite crash in 1960 – but today it has become synonymous with a pipeline.

It’s here that the proposed Northern Gateway begins, a pipeline whose journey is depicted in a computer animation of the planned route released by Enbridge. The animated fly-over is useful not only in helping understand the proposed project’s route from Alberta to the B.C. coast – but also offers a window into some of the controversies the company has faced.

From Bruderheim, the animation then swoops over the countryside as more small towns scroll by: Bon Accord, Mayerthorpe, White Court, Fox Creek. Its first river crossing, followed by what – if approved – would be an engineering feat: traversing the majestic Rockies. The crossing seems but a gentle undulation as the Northern Gateway traverses the mountain range. Several more rivers. The Coastal Mountains, again effortlessly ascended, conclude the Northern Gateway’s journey as it finally arrives in the 12,000-strong seaside community of Kitimat.

The stylized fly-over may have, understandably, glossed over the nearly 1,000 streams and rivers along the pipeline’s route – the animators also granted trees and skyscrapers the same scale.

But it’s at the coastal port in Kitimat where this simple, one-minute illustration became one of Enbridge’s greatest public relations headaches yet.

Replete with oil sands crude bound for Asia, the animated tanker ships set out westward from port, hitting the open seas toward the horizon. The video ends with the rippling, serene waves of the wide Kitimat Inlet. Problem is: there is no such inlet – Kitimat is sheltered from the high seas by more than 1,000 km of scattered islands.

Critics immediately seized upon the Enbridge animation, accusing the firm of deliberately erasing the labyrinth of tightly nestled islands through which supertankers would have to navigate, creating what they see as a massive risk for oil spills and accidents. The company replied that the video was “for illustrative purposes only” and “broadly representational, not to scale” – a disclaimer it later added to the video itself.

For opponents, however, the bell had been rung, the damage done, galvanizing already weakening public opinion of the project which had taken a hit after the U.S. published a scathing report on the company’s oil spill record.

In some ways, the controversy over the animation perfectly symbolizes the fight over Northern Gateway – both Enbridge’s enormous public relations efforts, its perceived missteps and challenges, and the strident opposition of its critics.

While much has been reported about the proposed pipeline – which will take bitumen from northern Alberta’s oil sands 1,172 km from Bruderheim to Kitimat – the project is, in fact, two pipelines.

One of the tubes would carry oil for export, primarily to China; the other would bring back condensate, a chemical liquid used to thin heavier oil products.

The company says its system could export up to 525,000 barrels of oil every day, and bring back roughly 193,000 barrels of condensate. At the end of the line, the proposed Kitimat Marine Terminal would include two ship berths and 14 tankers.

With a price tag of $5.5 billion, the project’s proponents hope to open Asian markets to Canadian tar sands oil. The pipelines’ destination in Kitimat would put the oil sector in an ideal position along the shipping route – but it also raises environmental concerns about the possibility of oil tanker spills.

Indeed, the importance of China’s booming economy was underscored in November 2011, when Prime Minister Stephen Harper told the Asia-Pacific Economic Cooperation forum that selling Canada’s oil to China was becoming an “important priority.”

One obstacle to this dream was the dozens of First Nations communities across whose territories such a pipeline system would have to be built. Conscious of the high-stakes of their proposal, and B.C.’s history of Native blockades, lawsuits and protests, Enbridge has offered an equity stake in the project to each of the First Nations bands affected. This would add up to roughly 50 communities, all situated within 80 km on either side of the proposed route.

While several of these nations have agreed to support the project and accept the equity stake, most others have spoken out against it. Foremost amongst these is the Yinka Dene Alliance, a coalition of First Nations vociferously opposed to the project in any form crossing their land.

On the national scale, in 2011 a group of 150 organizations, businesses and prominent Canadians came together to run a full-page advertisement in the Globe and Mail. Signatories included renowned environmental broadcaster David Suzuki, iconic Canadian novelist Margaret Atwood and rocker Randy Bachman.

The text of the advertisement spoke clearly of the burgeoning alliance between environmentalists and Indigenous groups opposing Enbridge’s plans:

“Enbridge’s pipeline isn’t happening, period. It doesn’t matter who they get a deal with. They plan to come through our territories and we’ve already said no, and we’ll use every legal means we have to stop them. Their proposed pipeline is against our laws because we refuse to put our communities at the risk of oil spills.” — Chief Larry Nooski of Nadleh Whut’en First Nation; member of the Yinka Dene Alliance

“The project is not in the public interest from a climate perspective, from a jobs perspective, and from a First Nations title perspective. There’s too much at stake. Why would we risk thousands of jobs in fishing and tourism for a few hundred jobs in construction of the pipeline, and the possibility of some jobs in oil spill cleanup?” — Caitlin Vernon; Sierra Club of BC

“It will be a very, very, very nasty process [and] I’ll be the first one to lie down before a tractor.” — Rafe Mair; Former MLA and BC political commentator

Of course, the Northern Gateway has its cheerleaders, and Enbridge is quick to point out potential benefits of the project: employment opportunities, skills development, and “contributions to the community and the province through a secure tax base at local, provincial and federal levels.”

Despite resistance from many community and Aboriginal groups on the Northern Coast, the project claims it will provide up to 1,150 long-term jobs, with about 165 new jobs in Kitimat alone to operate the terminal.

Informational materials say the project will “raise the bar” when it comes to marine safety, using only double-hulled ships and adding navigational aids to the area to avoid collisions.

The government and industry have been adamant that transporting oil to Asian countries – China foremost among them – should be a priority, particularly if access to the American market is limited by the failure or delay of TransCanada company’s Keystone XL pipeline.

“The success of a project on the scale of Northern Gateway depends on the support of the communities it impacts. We know that this support will depend on our ability to prove to communities that our project is safe, that it has been planned responsibly and that environmental protection will always be front-of-mind throughout both construction and the operational life of the project.” — John Carruthers; President, Enbridge Northern Gateway Pipelines

“If the environmental review process confirms that no harm will be done, these are the kind of direct community benefits that I would like to see happen in Kitimat and along the shipping route.” — Joanne Monaghan; Mayor of Kitimat

Supertankers in the Tank?

The furor which erupted after the release of Enbridge’s pipeline route animation saw the company and environmentalists battle over whether oil ships could safely set out to sea. Such concerns for the cornerstone of both criticisms from opponents and promises from the company itself.

Enbridge has promised 16 key safety measures to ensure the bitumen’s safe passage to the Pacific – from double-hulled supertankers to tugboat escorts loaded with emergency supplies.

To the lay person, the safety guarantees sound impressive. But discussions with some professionals in the marine sector suggest there may be more than meets the eye here, a fact Enbridge disputes. According to critics, seven of the sixteen promises, for example, merely reiterate existing laws Enbridge would have to follow regardless:

  • Tankers must be insured and provide proof of insurance.
  • Tankers must be double-hulled.
  • The tanker must have at least one inspection report in the Ship Inspection Report Program (SIRE) database in the previous two years.
  • The tanker must have English-speaking officers and crew.
  • The tankers will not have any expired or temporary certificates onboard.
  • A tanker must certify that it meets all Flag and Port State requirements.

Other promises are simply standard practice:

  • A tanker’s owner must agree to meet all the marine terminal regulations (such as the use of tethered escort and berthing tugs) – in standard contracts.
  • The tankers owner must agree to allow Northern Gateway or its agent access to the tanker for inspection – in standard contracts, but not obligation placed on Enbridge to make inspections.
  • A tanker’s classification society must be a member of the International Association of Classification Societies – This is true for 90% of all tankers.
  • Others promises are the legal responsibility of the Canadian Coast Guard, which is losing front line staff due to federal budget cuts. Enbridge doesn’t suggest who else would be responsible for payment of the measures.
  • Installing and monitoring a radar system to cover critical route sections and a monitoring station in Kitimat for all marine traffic to provide guidance to pilots and other vessels in the area.
  • Emergency response equipment and training staff at locations along the marine route.

Other promises require ship access by Enbridge personnel but do not require Enbridge to use those visits for safety testing or practice:

  • A tanker’s crew must agree to allow Northern Gateway to place representatives onboard the tanker as required during ballast discharge and loading operations to observe for safety and pollution prevention.

Another guarantee was researched by maritime experts, who concluded that Enbridge’s tugboat proposal is both vague and inadequate:

  • The most powerful escort tugs on the West Coast, which will carry emergency response and firefighting equipment.

Escort tugs routinely carry emergency response and firefighting gear, so Enbridge’s promise in this regard is, in fact, customary procedure. Otherwise, critics allege that the tugboat escort plan is too vague to ensure Coastal safety. Enbridge’s proposal of one escort tug towing the tankers out to sea, and one untethered escort tug for inbound condensate shipments, are simply not enough, according to a report by maritime risk assessor, DNV. Two tugs with a 120-170 Bollard Pull strength would be a more appropriate safety measure, the report suggested, given the hazardous north coast conditions and the disastrous ecological consequences of a spill.

  • Tankers must be a maximum of 20 years old and classified by a suitable classification society.
  • Tankers go through several classes of ownership in their lifetime. The first tier of owners generally aren’t in the bitumen trade. The second tier of owners often buys tankers that are about ten years old. As the tanker approaches twenty, the more likely it is to end up in ownership by the third tier of owners that accept higher risks in terms of boats and crews. This safety measure addresses the nightmare that lurks in the shadows of tanker discussions: an old tanker with an unwary crew in storm force gales along an unfamiliar coastline rife with rocky hazards. A twenty year maximum guarantees that older, more vulnerable ships operated in a manner that accepts higher risks will ply the waters of BC. A ten year maximum would present a significant reduction of risk.

The following regulation speaks to the problem of shifting ownership as well:

  • Tankers must not have changes in ownership, classification or insurance underwriters more than once in two years.

However, it does not provide a fool-safe solution.

  • Establishing a first response team in Kitimat that will significantly decrease the federal standard of responding to an incident.

A response team in Kitimat could not reach the outer coast in a time frame that would prevent disaster, and a first response team should be stationed in Prince Rupert as well.

Pipeline Risks and Corporate (Ir)responsibility

Enbridge already had a tough task ahead in the summer of 2012.

With opinion polls showing rising concern with its Northern Gateway proposal, and many First Nations rejecting offers of revenue-sharing and involvement, the company had its work cut out for it to convince the public.

On July 10, a proverbial bombshell struck. South of the border, the National Transportation Safety Board (NTSB) released its long-anticipated report on Enbridge’s catastrophic pipeline rupture on Michigan’s Kalamazoo River.

The spill, almost exactly two years before, had unleashed 25,000 barrels of bitumen – an estimated 3.2 million litres – into the river eco-system, coating Canada geese and fish alike in a black, slick coat and affecting at least 320 local residents with crude oil exposure symptoms.

Most scathingly, the U.S. government investigation concluded that Enbridge had acted like the bumbling television duo Keystone Kops, failing to detect or adequately respond to a rupture of their major pipeline.

According to company rules, any operator finding pressure or flow abnormalities must shut down the affected pipeline within a 10-minute period. Enbridge operators did not detect the rupture or shut down the pipeline for a full 17 hours despite repeated alarms and low pressure readings.

“Enbridge believes that at the time of the accident it met or exceeded all applicable regulatory and industry standards in its operations,” the company insisted following the NTSB report.

The Kalamazoo River still suffers from the 2010 pipeline breach. But that accident is not the only failure along Enbridge’s extensive network of pipelines. In fact, ruptures are, apparently, regular occurrences for the company. And the firm’s opponents argue that the so-called “Keystone Kops” can simply not be trusted.

Setting out by canoe along the banks of the Kalamazoo two years later, Pat Daniel hoped to convey confidence as he prepared to inspect his firm’s clean-up efforts. The 65-year old chemical engineer-turned-Enbridge CEO insisted his firm had learned its lesson.

“To cast doubt on the operational capability of a company that’s considered to be best in the world does create additional challenges for us,” he lamented.” We just have to ensure that we explain fully to (British Columbia) residents that that was not representative of the culture and outline … the changes that we have made.”

Pipeline Safety?

Pipeline proponents assert that pipelines are the safest way to transport bitumen and oil, as compared to trucks and rail. According to the Canadian Energy Pipeline Association (CEPA), transmission pipelines in Canada carry about three million barrels of crude each day to markets across the continent. To transport the same volume of crude each day would require an additional 1,500 rail cars or 15,000 tanker truck loads each day.

CEPA president Brenda Kenny says this kind of rail or tanker transportation would increase environmental emissions, congestion on roads and risk of accidents. She notes that 0.0002% of product from liquid pipelines gets spilled each year.

Using CEPA’s figure of 1.2 billion barrels of crude oil moved by Canadian pipelines each year, this would mean a yearly spill of 240 barrels of oil. Yet Enbridge’s self reported spills from 2003-2007 average 7,725 barrels per year. The Enbridge pipeline spill into the Kalamazoo River in July 2011 released 25,000 barrels of bitumen. However, the spill occurred in the US rather than Canada.

Opponents of the Northern Gateway don’t view riskier forms of bitumen transport as the viable alternative to the pipeline. They ask whether it makes sense to pursue risky and polluting forms of energy production at all when alternatives offer less risk and a higher likelihood of long term prosperity for Canada as a whole.

According to a report by the NRDC and Sierra Club, pipelines carrying bitumen diluted with volatile natural gas condensate are sixteen times more likely to leak than lines carrying ordinary crude. Diluted bitumen’s high acidity, sand content, chloride salts and sulfur content all contribute to a combination of physical and chemical corrosion. Sediments can settle in the pipeline, wearing through in a particular area as happened to the BP pipeline on Alaska’s North Slope which spilled 800,000 litres.

Diluted bitumen is forty to seventy times more viscous than conventional crudes, and so pipelines must operate at much higher heat and pressure to move it through. An industry rule of thumb is that the rate of corrosion doubles with every 10 degrees Celsius increase in temperature. At high temperatures, the natural gas condensate can form gas bubbles that cause sudden bursts of high pressure strong enough to deform pipeline metal.

Pipelines are monitored from far away stations that have leak detection systems and control over cut off valves. It took 12 hours for pipeline operators to stop the oil spilling out of the Enbridge pipeline into the Kalamazoo River in Michigan in 2010.

The Enbridge Norman Wells pipeline in the Northwest Territories spilled over 250,000 litres from a pin hole size leak that escaped detection. Detecting a leak of bitumen is more difficult than detecting a conventional oil leak due because gas bubbles send faulty signals to the detection system. Actual leaks are more likely to be disregarded as normal pipeline “noise.”

Canada’s minimum standards for oil pipelines, and its spill and response standards, do not distinguish between bitumen and crude oil. Safety standards periodic line balance measurements and the minimum requirements allow loss of two percent of the pipeline’s capacity in a week. For the proposed Northern Gateway pipeline, this would allow over 11 million litres a week to remain undetected.

This is the first piece in a three month series of reports on Canada’s pipeline decisions and the proposed Northern Gateway pipeline. For more, read “Extract: The Pipeline Wars”

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