Chevron is one step closer to learning whether the Burnaby refinery will have priority access to oil coming down Kinder Morgan's pipeline.
Chevron filed an application with the National Energy Board in July, in an attempt to secure a more steady supply of oil from the pipeline amidst rising demand, and the board announced last Friday that the application will be heard in January.
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.
"Since late 2010, recurrent and ongoing apportionment on the pipeline has repeatedly reduced and continues to threaten the supply of crude required by the Burnaby refinery," said Chevron's Ray Lord in a July company statement.
At times, Chevron has received up to 70 per cent less than requested, prompting the company to apply for priority access.
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.
To be eligible for the designation, the company has to show that it's already connected to the pipeline, which it is, and that it's not economically feasible
to bring in oil using other methods, (by ship, rail, or truck, for example), which is also the case for the refinery. Even if Kinder Morgan gets approval to more than double the pipeline's capacity, that would not necessarily solve Chevron's supply issue, because demand for Canadian crude is so high right now, according to Lord. The board hearing is scheduled for Jan. 15 in Calgary, Alta. Members of the public can participate by applying for intervenor status or filing a "letter of comment." Burnaby-Douglas MP Kennedy Stewart has asked to be an intervenor in Chevron's hearing.
"What we can do is present evidence, and we can also ask questions of witnesses, and we have a sum-mary statement. It's almost like Matlock," Stewart said. "At this point, I would be supporting the application but also asking questions on how Chevron is improving operations here in Burnaby. - I think that's the balanced approach the community wants."
The refinery is in Stewart's riding, and Kinder Morgan's pipeline expansion plan and the refinery are top issues with his constituents.
"I have people calling my office every day, - asking questions about this," Stewart said.
As the last large refinery left in B.C., Chevron employs roughly 250 people and processes 50,000 to 55,000 barrels of petroleum products every day. The refinery supplies 25 to 30 per cent of the province's gasoline, 25 per cent of the commercial diesel and 40 per cent of the jet fuel used at the Vancouver International Airport. Stewart wants to intervene to "save the refinery" and make sure it gets the supply of oil needed to keep functioning
"We would have no local capacity to produce gas if it closes and gas prices could very well increase," he said.
The other reason Stewart wants to intervene is because he can ask questions of Chevron at the hearing, and the company is obliged to answer.
"You don't get a lot of opportunities to ask questions of multinationals to get a detailed response, and I want to take this opportunity to do that," he said.
"There are a lot of concerns in the neighbourhood about pollution, upgrading to reduce emissions as much as possible, and to try and reduce the leak," Stewart said, referring to the contaminated groundwater that's been seeping from the refinery for more than two years. "I think that's a fairly balanced approach, to try and ensure their survival but make sure they become a better refinery. - Chevron's asking to have a very long-(term) supply of oil. They are really asking the energy board for a special kind of request. In order to have a special request, we should make sure the refinery is operating to community standards."
The deadline to apply for intervenor status is Aug. 24, while the letter of comment deadline is Oct. 30. For more on the process, go to www. neb-one.gc.ca.
