The economics of moving oil by rail are already proven viable

On Monday (June 3rd) I wrote a post entitled, "Could this in fact be the real reason, for the BC Liberal government, to be declaring they will not agree to the Northern Gateway Pipeline proceeding"  



Journalist John Twigg

The post led to a number of people making comment about it on Facebook -- and to me personally by email.  One of the responses I received came from John Twigg, who has a long history in BC's political arena, as a commentator, and a journalist.

I asked if I could share his response and he agreed.  This is what He had to say:

Thank you for sending me a copy of your opinion piece below on the Northern Gateway pipeline situation, which was about the first thing I opened and read when I downloaded my email tonight because of the teaser reference to a railway outcome.

I could quibble in a few places but generally it's a thoughtful piece and something that was a pleasure to see coming from the perspective of an Interior conservative citizen. But there's always a but and it has to do with this line:

"I for one have to think that moving the oil through a pipeline would be far safer than it would be by rail car"

Did you do any research on that? Did you read any of my blog posts in the last year or so about the great potential for using rail cars to move Alberta bitumen - but to Prince Rupert rather than Terrace? Did you read any of the handful of other op-ed and news pieces about this concept? Do you recall seeing any tweets with links to industry and MSM articles on oil shipments by rail, such as happening now from southern Saskatchewan to Texas?

In other words, the economics of moving oil by rail are already proven viable and in the Alberta bitumen case they have the added huge advantage of infrastructure being mostly already in place! Namely that the CN Rail mainline to Prince Rupert is already at world-class standards and its running rights are in place and not subject to Indian Land Claims or Environmental Reviews - the only items needed are loading and unloading terminals and spaces for those are already readily available.

Safety? Perhaps you were influenced by the latest news of a Canadian Pacific Railway freight train plunging through a bridge near Sudbury, but did you hear any reports of dire effects? No, because rail car spills tend to not have catastrophic events like say the Kalamazoo spill, though of course accidents can still happen with rail cars carrying flammable materials.
But again one of the advantages of rail-car movements of Alberta bitumen is that they would need less diluent or perhaps even no diluent whereas the Northern Gateway would need so much diluent that they are (or were?) planning to build a small twin pipeline to carry diluent only from Kitimat back to Fort McMurray because it is so costly and scarce that it has to be extracted and re-used.

Now imagine if that diluent line was to have a bad break along with the bitumen line and they were to catch fire, which could happen in a variety of scenarios, and imagine it was near a major river or salmon-spawning-stream crossing - you and we would be talking about something far worse than Kalamazoo!  But a rail car or two carrying only bitumen going off the rails might not even break open let alone flow into a cold river....

I've recently learned that there's also a whole bunch of modern technology to prevent derailments, notably sensors that detect "hot boxes" when trains pass by, i.e. wheels that for some reason are over-heating.

Anyway, I think you should reconsider your assumptions about the northern oil pipeline, and furthermore your BC Conservative Party probably needs to review its blanket pro-pipeline policy too because it's obvious to most B.C.ers in almost all parties that the Enbridge pipeline proposal has numerous flaws (the worst feature IMO would be the use of Douglas Channel for large oil tanker ships because the navigation is hazardous and the environment pristine, but I also worry about the diluent pipeline crossings being too hazardous too, i.e. not worth the risks).

I can understand why you and many other people would assume that pipelines are better than railcars because they are safer and more efficient, because for one reason that is also the industry propaganda line, but actually with bitumen the railway would actually be a faster mover than the pipeline and maybe even more energy-efficient than would be a pipeline too, as well as safer. And if you consider the huge costs and risks and delays of building a new pipeline you can see that the railway solution begins to make a lot of sense. (It may be more labour-intensive too, which in these days of high unemployment would be a good thing.) 

Could this in fact be the real reason, for the BC Liberal government, to be declaring they will not agree to the Northern Gateway Pipeline proceeding

Let me begin today's Conservative Thoughts blog post with the following:

"Under our feet lies as much energy as Alberta has in its oil patch. It is in the form of natural gas, a cleaner alternative to oil or coal, in the Northeast corner of British Columbia ... our goal is to have a Liquefied Natural Gas industry that will add value to our abundant natural gas resource by shipping it by sea to Asia ..." ~~~ 2013 BC Liberal Election Platform

 

I'll come back to this shortly.

 

With the Final Hearings and Questioning Phase yet to be held, by the Enbridge Northern Gateway Project Joint Review Panel, the BC Liberal government Environment Minister, Terry Lake, has already announced "Our questions were not satisfactorily answered during these hearings." 

 

For those unaware ... there are still twelve days of hearings yet to be held in Terrace from June 17th and 28th.  Would it not seem to be in BC's best interests to wait for them (the hearings) to conclude before coming to that decision? 

 

BC needs a provincial government that is prepared to work with and for British Columbians, to implement policies that take full advantage of our natural resources, our geographic position, and our hard-working residents.  

 

Yet despite that, and just two short weeks after the provincial election, both Premier Christy Clark, and Environment Minister Terry Lake, are both showing the Liberals are going to be a failure in that area.  

 

Our province has suffered ongoing interprovincial population loses since Christy Clark first became Premier two and a half years ago.  With Environment Minister Terry Lake's announcement Friday, the people of BC can except that trend, officially documented and recorded by BC Stats, will continue. 

 

Once again, this government, led by Premier Christy Clark, is about to betray the hard working men and women of the Peace River and Northern BC, by rejecting the Northern Gateway development, before the Review Panel completes its duties. 

 

It's one thing to criticize, but what are your expectations; what will satisfy your government?  Both Terry Lake and Christy Clark can't simply say they are opposed.  What is the government's real position; and what outcomes do you need to have met, so that they can be realistically addressed. 

 

In a story on Saturday (June 1st), in the Kamloops Daily News, they state:
Alberta Environment and Sustainable Resource Development Minister Diana McQueen issued a statement saying the two provinces have a shared commitment to both protecting the environment and economic growth. 

SO ... just which political party actually DOES support the hard working men and women that pack a lunch bucket to the job site?



I'm wondering ... does Adrian Dix and the BC NDP support the 'leadership' of the unions which make large campaign contributions --- or the actual men and women that pack a lunch bucket to the job site?

I'm wondering this because it seems ONLY the BC Conservative Party actually supports development of new high paying, family raising, union jobs in the resource industry (ie: mines and Northern Gateway)

From the Globe and Mail ... with regards to Adrian Dix and the NDP:
"With a regulatory review for the contentious Northern Gateway project still under way – and a provincial election on the horizon – British Columbia’s New Democratic Party is already looking at ways to stop the $5.5-billion project should it be approved."

That includes a legal team considering strategies to prevent it from being built, NDP Leader Adrian Dix says.

“You can do a whole pile of stuff on the regulatory front that will increase the price to where it makes it economically prohibitive,” said one former bureaucrat, who did not want to be identified because of current contracts with industry. “The smartest thing to do from a political perspective would be to fight the thing in court because the delays will kill the project.”

And in the National Post with regards to, Christy Clark Yes today and NO tomorrow??
"Clark’s real weapon is political: the opposition of much of the B.C. public to the project, and the price the federal Tories would likely pay at the polls were they seen to be overriding the government of B.C. on the matter — her own, or her likely NDP successor’s.

The list of demands she has suddenly produced, are
an obvious attempt to inoculate herself on the
Gateway issue, without actually coming out against it."

The list of demands she has suddenly produced, far behind in the polls with less than a year to go before the provincial election, are an obvious attempt to inoculate herself on the Gateway issue, without actually coming out against it."

Now let's look at the comments of BC Conservative Party leader John Cummins, spoken just a week ago:
"The BC Conservatives, alone among our province's four major political parties, support the economic development and high-wage job opportunities that will come with construction of the Northern Gateway pipelines," said Cummins.

"Of course, the project must adhere to our nation's stringent environmental laws and regulations. A fair and objective analysis will conclude that the economic benefits to Canada and British Columbia are real and tangible."

The reasons behind the support for the pipeline centers on job-creation and resource management.  “If we don’t do something with these resources,” he said, “someone else will”.

Meantime, if anyone thinks the BC Conservative Party position has changed in any way, I invite you to check out this link to a video which was done by Integrity BC.  It features BC Conservative Party leader John Cummins, and confirms our position has remained the same.

Do BC Conservatives support development at any cost -- NO of course not ... although we have, and will again be alleged, to have that policy.  Here however are the facts of BC Conservative Party policy regarding jobs, the environment, and resource development:

"There is no shortage of low-paid jobs. It's the well-paying sectors like natural resources, agricultural products, and manufacturing that are declining"

I hope you won't mind the change, in fact I am sure you won't.  In the coming months leading up to the provincial general election next May, I am opening up the Conservative Thoughts blog to my friends who like me are small 'c' conservatives with a social conscience.

 

Scott Anderson, BC Conservative
candidate for Vernon - Monashee

Today I am delighted to present the talk given by Vernon - Monashee BC Conservative candidate Scott Anderson -- this was to party members in Kamloops at a function they held a week and a half ago.

Will Rogers once said that if even 10% of what politicians promised came true, none of us would want to go to Heaven because it would be too much fun here.  What he meant of course is that politicians have a reputation for telling people what they want to hear instead of telling them the truth.

Looking at British Columbian politics today we can see why politicians have such a bad reputations. 

I'm going to use the Northern Gateway pipeline as an example, but I'd like each of you to think of it as representative of something much bigger - the way we do business in this province. 

Christy Clark has been blowing hot and cold about the pipeline depending on which group is making the most noise, and Liberal MLAs have been running around like headless chickens trying to figure out what direction Clark is going in each day.  The latest news is that Clark is refusing to even meet with pipeline officials, but tomorrow she may be having tea with them! 

The NDP, for its part, is against the pipeline but won't come out and say it - instead they are going to bury it in red tape with yet another redundant  "environmental review." As you know, the federal government is conducting a months-long, multimillion dollar environmental review.  But the NDP's second review will ask the same questions, get the same answers, cost millions of our dollars, and it's all just for show because they've already said they're against the pipeline.

What the two parties have in common is that neither one is being upfront with us. 

The BC Conservatives aim to change that way of doing business.  We WILL tell you where we stand.  If everything we know so far holds true, we ARE for the pipeline.  If there truly are 4,100 person-years of direct on-site work, and a total of 35,000 person-years of work throughout the province, then - with the proper environmental controls in place - we would be fools NOT to go ahead with the pipeline. 

Let's talk about economic realities in Canada for a moment.  The Canadian Energy Research Institute estimates that there the oil sands will generate $2.1 trillion in economic benefits over the next 25 years and about 905,000 jobs by 2035.

Here's what Marc Joiner, a partner at Deloitte has to say about the oil sands:

 “The oil sands are going to be the economic engine for the country for the foreseeable future, for the next 25 to 30 years, and it is akin to the impact of building the national railway in the 1880s."

What does this have to do with BC?  Well, there's a catch.  The International Energy Agency recently estimated that the United States would be the world's biggest oil producer by 2017.  Even right now there's an oil supply glut in the US, which is one reason Canadian oil is getting almost $30 less per barrel than world prices for its oil in the US.

That means we need new markets for our oil.  Those new markets are in Asia.  That's reality. 

So let's not kid ourselves - after all is said and done, there will be a pipeline.  If it's not in BC, it'll be in the Yukon, where the Premier has already said he'll support it, or in the northern US.  We can either say yes to the economic benefits or we can let someone else benefit.

I want those benefits to come to BC.

We have to stop saying no to economic growth and start saying yes to carefully managed projects that will bring highly paid, highly skilled jobs back to BC. 

Now what about environmental concerns?  To hear some people talk about it, the Northern Gateway Pipeline is like a giant garden hose just waiting to spew bitumen all over the landscape. 

There are over 700,000 thousand kilometers of pipeline in Canada today, and of them all, the Northern Gateway pipeline has the distinction of being the most modern, most scrutinized, most environmentally regulated pipeline in the history of this nation. 

It has layers of fail-safes built in, including pressure monitoring, isolation valves that shut automatically, and even permanent human monitoring.  The initial application to the National Energy Board is 20,000 pages long and involves over a decade of detailed and exhaustive study covering engineering, and environmental assessments.  There is nothing slipshod or unstudied about this pipeline. 

But as a party that holds the environment as one of its top priorities, even that's not enough.  We will insist on extremely stringent environmental guidelines, and strictly enforce them.

So will the pipeline destroy northern BC?  Is it a disaster just waiting to happen?  Of course not.  If I had a wall map of BC here on the wall, and I took a human hair and stretched it across the map from left to right, that's the physical footprint we're talking about.  That doesn't mean we can thread it between the trees and leave no footprint of any kind, but with careful stewardship we can minimize the damage we cause.

And it's important to understand something else.  All talk of so-called "green jobs" aside, Asia is going to get its oil from somewhere.  If not from here, it will get it from Africa or the Middle East where there are no environmental controls at all.  So people who are concerned about the earth's environment should thank their lucky stars that Canada - with our strict environmental controls - is destined to become one of the world's leading producers of energy.

But just because the Northern Gateway pipeline isn't going to destroy the north, does that mean it's a good idea?

After all, the pipeline is not going to solve all of BC's economic problems by itself.  While it will bring hundreds of jobs to BC, by itself it's no cure for our jobs problem.

But it is a start.  It's a start to the kind of economic develop we need in this province. 

A recent report - Hungercount 2012 by Food Banks Canada, points out that food bank use in BC is up over 23% since 2008.  Much more worrying is the fact that most of that increase is by middle class families - not just the homeless and drug users.

That's not just a jobs problem - that's a social problem.

I was talking to a restaurant owner in Vernon a few days ago and he told me that many of his regular customers would live here and work in Alberta.  He said that started changing about 6 months ago when they began to pick up and move to Alberta. Now he says that about one family a week is moving away.  They're gone and they won't be back.

That was in Vernon, but I know you have the same issues here.  How many here know of people who have moved to Alberta or are planning to in the near future?  And this is not just an abstract to me either.  My own 25 year old son is moving to Alberta after seven years of trying desperately to find a decent paying job here. 

Take a walk around the downtown core and count the empty storefronts.  We have a serious problem here in the Interior.  This province is being hollowed out.  When Premier Clark announced her Jobs Plan last fall unemployment was at 6.7%, but in May it hit 7.4%, and now it's worse.  The lion's share of that unemployment is right here in the Interior.

Food Banks Canada identified the problem:

"There is no shortage of low-paid jobs. It's the well-paying sectors like natural resources, agricultural products, and manufacturing that are declining."

Now, what are the other parties solutions?  Vague references to green jobs and more skills training.  Recently Carol James of the NDP said in an editorial that the NDP's poverty reduction plan involves affordable housing, education, and skills training.  Skills training is important, of course, but it's only part of the answer.

My local Liberal MLA pointed at increasing the minimum wage as a step toward solving the problem. 

Those solutions are not poverty reduction at all - They simply make poverty slightly more bearable. 

That's not the answer.

What's missing from these plans?  Actual high paying jobs.  You can have all the training in the world, but without a job, what good is it?  My daughter wants to be an astronaut.  She's got the grades and the drive and the ambition to do it too.  But she can go to school for 400 years and earn 50 doctorates, but without an astronaut job available, it won't do her a whit of good.

Yes we need education.  Yes we need skills training.  Yes we need to help the poor.  But let's not build our vision around poverty. 

Let's build it around a strong economy and high paying jobs.

The Northern Gateway Project won't save our economy single-handedly, but represent a change in the way we've been looking at our economy.

We have the potential of a great economic future for our kids.  The Organization for Economic Co-operation and Development recently pegged Canada among the world’s leading economic lights over the next 50 years - in large part because of our natural resources.

I believe we have to stop looking at resource development as a bad thing and start looking at it as a necessary thing.  Yes there are challenges, but we should start looking at them as challenges to be solved rather than reasons not to try.    That's something we always tell our kids when they say "I can't."  There's a difference between something that's hard to do and something that's impossible.  Let's start to adopt that

It's time to stop saying no to economic growth and start saying yes to carefully managed projects that will bring highly paid, highly skilled jobs back to BC.

We have to stop dreaming of magical jobs conjured up by tax-and-spend parties because they sound great at election time but never seem to appear.  We have to stop strangling development in red tape and alarmist rhetoric.  We have to start thinking outside the box and start moving forward into the 21st century. 

The British Columbia Conservatives are the party of realistic change.  We'll bring integrity back into politics, we'll bring common sense back into politics, and we'll bring economic growth back to BC so our kids don't have to leave the province to find work.  We need to move forward, not backwards, we need to embrace change, not hide from it.

With your help, that's exactly what we're going to do.

Again ... the words of Vernon - Monashee BC Conservative party candidate Scott Anderson.  As always now, the floor is open to you.

BC Conservatives have clearly articulated positions that don't change depending on what loud vocal minority group is shouting

Everyone knows, and it is perfectly clear, that I do not support Christy Clark and the BC Liberals.

My lack of support has only been re-enforced in the recent days and weeks, as it seems that Christy blows one way or the other, in the breezes of voter discontent.

Shall we start with Enbridge and the Northern Gateway Pipeline? Clark herself has never really made a firm decision on the Northern Gateway … in fact the 5 principles she placed as crucial to having government support can NEVER be met – and she knew it at the time.

Ms. Clark simply wanted to try and make herself look good to anyone with an opinion on the project, whether they support it or not. By taking no stand however, she has pleased NO ONE.

She wants those who don't support the pipeline to think she is on-board with them … and she wants those who do support the project to think they just might have a chance to see it come about.

Meantime, she knows full well that the five principles she has put forward can never be met, and therefore the project will never get off the drawing board.

Contrast that however, to the statements of John Cummins, and the BC Conservative Party.

As CFTK TV News in Terrace stated today, “At least one political leader in BC is willing to express support for Enbridge's controversial Northern Gateway Project” --- that ONE leader would be John Cummins of the BC Conservative Party.

In a media release today, John Cummins said that unlike Premier Clark AND Environment Minister Terry Lake, he WAS willing to meet with Enbridge officials to see what their plans look like for building and maintaining the safest pipeline possible, and to see in person what monitoring systems they have in place at other locations.

Cummins stated that the proposed Northern Gateway Pipeline Project had economic benefits far outweigh environmental concerns.

"Given all of the information made public to date, I strongly believe that the Northern Gateway Pipeline should proceed as quickly as possible. British Columbia desperately needs new capital investment, and new high-wage jobs. The Northern Gateway Project delivers both”.

And little wonder … this project alone would provide as many as 4,100 person-years of direct on-site work, and a total of 35,000 person-years employment throughout the province.

Environment Minister Terry Lake on the other hand, in a TV news interview which I saw, refuses to meet with officials from Enbridge, who have offered to show him what the technology they will be working with. 

AND YET ... he has the audacity to claim and state (which I have also seen and heard) in the media, that Enbridge will not provide the government with the environmental and safety information they wish to have on the project.

Why is there is no refinery being built directly at the source?

On Monday I wrote about the proposed Northern Gateway Pipeline, and the review process which is now finally underway.  My opinion piece began by saying;

"The Northern Gateway oil pipeline, proposed to run from the oil sands of Alberta, to Kitimat in British Columbia, has many opponents – and champions. 

On one hand, we have thousands of jobs on the line, and millions in much needed tax revenues are in limbo, waiting approval.  On the other, are the environmental concerns that are also very much on the minds of Western Canadians. 

Some though, from outside of Canada, are trying to disrupt and stall the review of this project for their own self-interests, and personal glorification in the media..."

It didn’t take long for a comment to come in on it.  One person asked:

Here’s a stupid question, but why don’t the governments of British Columbia, Alberta, Saskatchewan and Canada each throw in $500B to take a 50% interest in a refinery at Bruderheim.  That way, we could ship middle and light distillates to both the USA and Asia via rail, forgoing the need (and opposition) for a pipeline altogether? 

Allowing that to happen is indeed insane … it is wrong and it distorts the whole process

Route of the Northern Gateway pipeline

The Northern Gateway oil pipeline, proposed to run from the oil sands of Alberta, to Kitimat in British Columbia, has many opponents – and champions.  

On one hand, thousands of jobs, along with millions in much needed tax revenues, are in limbo waiting approval. On the other hand however are environmental concerns that are also very much on the minds of Western Canadians.  

Some though, from outside of Canada, are trying to disrupt and stall the review of this project for their own self-interests, and personal glorification in the media.

Today’s edition of the Globe and Mail has a story entitled, “‘Radical groups’ spur Tories to speed pipeline review process”.  Here is the beginning of this news story;

The Conservative government will bring forward new rules to greatly shorten environmental reviews of pipelines and other major projects, arguing that “radical groups” are exploiting the reviews to block proposals vital to Canada’s economic future.