City of Burnaby staff are recommending councillors back Chevron's plea to the National Energy Board for a more steady supply of crude from Kinder Morgan's pipeline to the North Burnaby refinery.
In a report scheduled for presentation at tonight's city council meeting, staff outlined a number of reasons to support Chevron's application for prioritized access to oil coming down Kinder Morgan's pipeline, mainly jobs, tax revenue and a secure supply of fuel for B.C. Each year Chevron pays roughly $4 million in municipal taxes and utility fees, and the company spends about $70 million locally.
Chevron's North Burnaby refinery supplies roughly a third of B.C.'s transportation fuel and is one of two remaining refineries in the province. Kinder Morgan charges customers to run oil products from Alberta to B.C. via the Trans Mountain pipeline, and one of the customers is Burnaby's Chevron refinery. Because demand to use the pipeline has exceeded its maximum capacity, shippers have received less oil than what they would like, including Chevron.
If the National Energy Board approves the application, oil destined to the refinery would get priority access when demand on the pipeline's capacity is high.
According to city staff, Chevron's position is that oversubscription is threatening the long-term operation of the Burnaby refinery.
Council has already taken a stance against Kinder Morgan's proposed pipeline expansion, which would not necessarily solve Chevron's supply problem.
"Chevron supports the safe and efficient, movement of Canadian energy resources to diversified markets but any expansion of the Trans Mountain Pipeline system is at least five or six years in the future," said Chevron's Ray Lord. "Because of the recurrent and ongoing apportionment of the existing pipeline, a long-term commitment on an expanded system at this time is of no use if Burnaby cannot secure its access to crude during the interim period."
City staff also pointed out that having a steady supply of crude from the pipeline to the refinery would mean forgoing potential risks associated with Chevron bringing in crude via other means, such as rail or truck.
Chevron's National Energy Board hearing is set for Jan. 15, 2013 in Calgary, Alta.
Mayor Derek Corrigan was approved as an intervenor for the hearing, but he was not available for immediate comment.