Canadian oil closer to getting out of North America

A federal regulator lets Kinder Morgan bypass some city laws in preparation for construction of the Trans Mountain oil pipeline expansion project.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  Dec. 8, 2017 at 6:10 AM
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Dec. 8 (UPI) -- A Canadian city at the center of the debate over the overhaul of the Trans Mountain oil pipeline said a construction permit was an example of federal overreach.

The National Energy Board, an independent federal regulator, ruled that pipeline company Kinder Morgan doesn't have to comply with bylaws in the city of Burnaby, located in British Columbia, as it starts preparations to overhaul its Trans Mountain oil pipeline. The NEB said it would explain its decision at a later date.

Burnaby late last year filed an appeal in federal court against the approval of Kinder Morgan's plans to expand the pipeline network, tripling its design capacity to 890,000 barrels per day. The city said it and its residents are "extremely concerned" about the risks from "dangerous" tar sands oil, the 13 new "high-risk" storage tanks in its community and the increase in oil tanker traffic along the western Canadian shore.

"We believe that this is an abuse of federal powers, and city staff are shocked by the NEB's decision, as city staff have been reviewing Kinder Morgan's construction applications in good faith, focusing both on citizen safety and mitigation of environmental damage," Mayor Derek Corrigan said in a statement.

Trans Mountain planners in September withdrew a request for relief from measures that prohibit spawning deterrents along the pipeline's path. According to advocacy group WaterWealth, pipeline developer Kinder Morgan was caught putting fences into waterways that prevented trout and salmon from spawning, in violation of NEB conditions.

The project is part of a national effort to tap into markets outside North America as nearly all of Canada's oil exports go to the United States. Rachel Notley, the premier for the oil-rich province of Alberta, said the NEB ruling put the project one step closer to the construction phase.

"We need to stop selling our resources at a discount and start getting full value," she said in a statement. "We are going to continue to make sure that the moderate, progressive majority of Canadians knows why this pipeline matters."

Data from Notley's government said Western Canada Select, the nation's benchmark for the price of oil, averaged $39.87 per barrel in October, the last full month for which it published data. West Texas Intermediate, the U.S. benchmark, averaged $51.58 per barrel that same month.

Existing pipeline infrastructure means Canada is relatively landlocked to North America.

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