The City of Burnaby is taking aim at Kinder Morgan's pro-pipeline advertising campaign and questioning whether consumers will end up paying for the publicity.
The city filed a motion Thursday with the National Energy Board asking for several things, including details on how Kinder Morgan is funding its ad campaign, and whether the money is coming from extra "firm service" shipping fees approved by the National Energy Board.
"It's a bad policy, regardless of what aspect of the project proposal the fees are paying for. But if these federal government-sanctioned shipping fees are funding Kinder Morgan's current multimillion-dollar ad campaign, it would be particularly inappropriate," Burnaby Mayor Derek Corrigan said in a media release. "We want to know whether or not some of these ‘firm service fees’ are being used to pay for the cost of Kinder Morgan’s advertising that is clearly nothing more than an attempt to improve their tainted corporate image."
A couple years ago, the National Energy Board gave Kinder Morgan permission to charge some of its Westridge Marine Terminal customers firm service fees averaging an extra $1.45 per barrel of oil. Those fees total roughly $29 million annually, according to Ian Anderson, president of Kinder Morgan Canada. The money is used to offset the pipeline expansion's development costs, so if the project is rejected, there is no risk to investors.
Robyn Allan, former CEO of ICBC, cried foul and suggested those costs would ultimately be passed onto consumers. Anderson refuted her argument in a letter to the Burnaby NOW last July, saying the oil will sell at a higher prices overseas.
Allan maintains that will drive up crude costs in Canada, and refineries will pass those costs onto consumers.
The city is asking the NEB to step in and issue orders to obtain Kinder Morgan's projected advertising costs and details on how they are funded, as well as an order to make sure Kinder Morgan's firm service fees aren't used for advertising costs. The city also wants the NEB to order Kinder Morgan to inform the public on the extent of the pipeline expansion and its potential risks and impacts.
In the motion, the city's lawyer, Greg McDade, notes that some of the advertising has appeared in Burnaby newspapers and had been targeting Burnaby residents.
Scott Stoness, a vice-president with Kinder Morgan Canada, said the company's advertising campaign is part of Kinder Morgan's efforts to engage with and provide information to as many British Columbians as possible.
"The information highlights Trans Mountain's company history, culture, and commitment to safety," he said in an emailed statement to the NOW. "Consumers are not paying for our advertising, as (the) price of gasoline in the Lower Mainland is mostly dependent on world market prices. Prices paid by local consumers at the pumps are driven by world oil prices, not Alberta oil prices, so any increase in price per-barrel as a result of Alberta producers accessing world markets due to expanded pipelines does not mean higher gasoline prices for locals."
Stoness explained that many factors affect gas prices, including taxes, refining costs, seasonal fluctuations and general rules of supply and demand.
"The cost of crude oil makes up less than 50 per cent of the ultimate price you pay at the pump," he said.
