Burnaby NOW reporter Jennifer Moreau sat down with Ian Anderson, president of Kinder Morgan Canada, to talk about the pipeline, protests, oil prices and climate change. Here's the abridged version of that conversation.
Jennifer Moreau: Can we start with just a brief review of the project, where it's at now and what the next steps are?
Ian Anderson: We're about halfway through the NEB process. We're in the midst of responding to our second round of information requests. Those get filed next Wednesday. We have about 5,600 of those to respond to by next Wednesday. After that, there will be a couple of other small rounds of information requests related to Transport Canada's TERMPOL report for some late intervenors participating and the NEB has another round, but really the next major, I would say milestone will be intervenors and their evidence will be presented to the board early this summer.
JM: With the last round of information requests, there was some criticism from the City of Burnaby, Vancouver, the provincial government and some intervenors that the questions weren't answered fully. Can participants in the hearing expect more fulsome response in the second round?
IA: The short answer is yes. The longer answer is that the process itself is defined by the board. So the board defines the scope of the issues that are relevant to their consideration. We then have to work within that. ... So the second round, what we found is there are still questions that are being asked that, in our view, aren't relevant to the scope before the board. Having said that, we're doing I think a more fulsome job of responding to as much as we possibly can within that scope, and I think intervenors will find that as they see the answers. ...
JM: I wanted to bring up something the City of Burnaby has been quite critical of lately, it's the firm service fees being used to fund the development costs of the project, and the city has concerns that money is being used to pay for the advertising costs for the pipeline and that the firm service fees are going to drive up crude costs, which will eventually get passed to the consumer, so it's almost like a consumer fee to help pay for the advertising. What do you think about that?
IA: There will be no correlation between what our shippers have agreed to pay for service on our pipeline, to access the dock facilities, to export crude, and local prices and local gasoline prices. Those are globally set, based on global markets and local taxes. ... We're spending more in development than we're collecting in firm service fees. So we're at risk for that, but there's no correlation between firm service fees that shippers are paying and the price of gasoline at the pump.
JM: Are you confident the pipeline project will get approval from the NEB?
IA: I am. I fully expect that approval to come with conditions, as did Northern Gateway. We're very attuned to what we expect those conditions to be and are working hard to reduce the number of them. ...
JM: Briefly, what are the conditions you're expecting?
IA: For example, there will be some final routing decision to be determined in some areas that will need conditions. There will likely be more work on natural habitat and species impact of the project. For example, the south coast resident whale population and efforts we are going to make to work collectively with the port and the aquarium and others, to understand their habitat and health better. There will be conditions around the development of the next version of the development of our emergency response plan that has local input that has stakeholder consultation built into it. There will likely be conditions around how we are going to cross some rivers or highways and so forth, which methods of construction we use in some places, where valving might be located. There's a whole range of things we expect. I think there will be conditions around completion of detailed engineering and design, which is right now in its initial stages.
JM: Do you think the project has met the five conditions (that B.C. said must be met for the province to support any heavy oil projects)?
IA: We haven't yet. We're still working on it.
JM: What's left on the to-do list?
IA: All of them. ... We're working on that. So my objective is later this year, we'll be in a position with the province to publicly be able to say we've satisfied them, but we're still working.
JM: In November, we saw quite a bit of unrest and protesting on Burnaby Mountain, and that was only for survey work. If you are confident this project will get approval from the NEB, what do you expect will happen when you actually start building the pipeline?
IA: I think there will be pockets where there will be opposition stronger than elsewhere. I think we are confident that we can have a construction and operational plan to ensure that everything happens safely and in accordance with what cities and municipalities would want us to do in terms of local construction impacts, the impact on residents and businesses and so forth, to minimize those impacts. I have no doubt that there's going to be pockets where opposing voices are going to be louder than elsewhere, and we'll deal with those on a local basis. ... Obviously, we'd very much like to be talking directly to the City of Burnaby more about the city's concerns and observations so we can plan accordingly.
JM: Do you think there's any hope in winning over the City of Burnaby or some of the residents, because Burnaby seems to be ground zero for this project and a hotbed of anti-pipeline activity.
IA: It's hard to equate what happened on Burnaby Mountain and the protest activity with the views of Burnaby. The Burnaby Mountain protest was an aggregation of multiple voices, everything from climate change activists, to large multinational environmental organizations, to local opposition groups, to mothers and children who were interested and concerned. There's a wide spectrum of voices there that I don't think we take as representative of Burnaby's views.
JM: Oil prices have dropped considerably in recent weeks, and I'm wondering if that affects the project at all.
IA: Not at all. We still have the full support of our shippers, we still have long-term contracts in place, oil sands production is still increasing, ... but these are long-term investments. The producing community knows there's going to be short-term increases and decreases in volatility in price. And they look past that, and they have with our project.
JM: For many of the opponents to the project I've interviewed, climate change is a front-of-mind concern for them. We have the Intergovernmental Panel on Climate Change saying we need to leave fossil fuels in the ground to prevent a two-degree warming of the planet's atmosphere. What are your thoughts on that, given you're proposing to nearly triple capacity on the Trans Mountain line?
IA: The Trans Mountain pipeline is a small component of the overall Canadian production, the overall global demand for fossil fuels, of which oil is a part. And the demands that we're looking to satisfy are real and present today, markets looking to be accessed, countries looking to have access to Canadian production. And over the next two to three decades, that's not going to change. The globe's reliance on fossil fuels is not going to change so dramatically as to make any current pipeline project redundant. And as far as the climate change aspirations of those who use it as a reason to oppose, we're not of different mind. We acknowledge that as a planet, we need to understand better the impacts of fossil fuel development and use on climate change, establish policies in order to minimize those impacts and improve environmental footprints, etc. and I think there's no better way to develop the technologies that are going to get us there from here than off the riches of the resource development we have. Nobody invests more in clean technology solutions than the oil and gas sector does. And that's where the prosperity lies that's going to create that next generation of energy, and I think we as a country - with high environmental standards, rigorous regulations and legislation - there's no better place in the world to encourage that kind of technology development off of resources of today than Canada.
JM: Do you have kids at all or grandkids?
IA: I do.
JM: Do you ever worry at all about what kind of planet they may inherit?
IA: I think that my son will inherit a planet that continues to progress and continues to change, and continues to evolve and hopefully continues to improve, and I hope that geo-political and government actions don't get in the way of that. And in fact, they help harvest that, and I think he will have a bright future ahead, because I think the future, everybody in our industry respects is necessary, and like I say, that the prosperity necessary to create those technologies comes from somewhere, and in this country, we are a natural-resource rich country.
For the full interview with Anderson, see Jennifer Moreau's blog.
