Kinder Morgan's pipeline expansion plan could lead to higher gas prices, land expropriation and the demise of the Chevron refinery, according to Burnaby MP Kennedy Stewart.
Kinder Morgan recently filed a commercial tolling application with the National Energy Board, which will decide what the company can charge its customers for using the pipeline. The documents are available on the National Energy Board website.
"This really begins to outline route details to some extent (and) how much Kinder Morgan is going to charge per barrel coming down the pipeline," Stewart said. "It's going to change the structure of both pipelines. Eighty per cent of the oil coming down the pipeline is going to be sold to foreign buyers."
Kinder Morgan does not own or sell the oil products; it simply charges customers to use the pipeline to transport it to B.C. The pipeline can transport different types of oil, but the diluted bitumen will be going to foreign markets, including refineries in Washington, which send petroleum products back to Lower Mainland.
"We really give up a lot of refining jobs here in Canada by doing that," Stewart said.
The remaining 20 per cent of oil reserved for domestic use will be charged a 10 per cent shipping premium over the foreign buyers, he added. Stewart said domestic uses will pay up to 27.5 per cent more in shipping than foreign buyers.
"Really what's a concern for some people is this will be the final nail in the coffin for the Chevron refinery in Burnaby," Stewart said. "If this goes through, and Chevron has to pay these higher prices for (access to) this oil, - they'll simply close, and gas prices will increase in the Lower Mainland."
Chevron spokesperson Ray Lord said the refinery is a longstanding pipeline customer and that reliable, cost-effective access to the pipeline system is critical to the ongoing operations of the Burnaby refinery.
"The issue for us is not about the price of crude, it's about economic access to capacity in the pipeline to secure the crude we need. We have always been a customer for Canadian crude and will pay whatever the market price is for that supply," Lord said.
Chevron made its own application to the National Energy Board for priority access to the pipeline's oil.
"Priority destination designation for the Burnaby refinery is the essential element to ensuring cost-effective access to the crude supply we need, whether on the existing or an expanded Trans Mountain pipeline system," Lord said.
Kinder Morgan's Trans Mountain pipeline, which was built in 1953, ships oil from Alberta to Burnaby. The line crosses the south side of Burnaby Mountain and can transport up to 300,000 barrels of oil per day. Kinder Morgan wants to increase capacity to 750,000 barrels by adding a twin line.
The exact route is not yet known, but the company will stay within the existing right of-way where possible. In areas where density has increased since the early 1950s, the company may consider alternative routes.
"We will work with municipalities and utility companies to route the pipeline on previously-developed land and in transportation corridors, avoiding construction in new areas, where possible," said Kinder Morgan's Lexa Hobenshield.
But it's possible the company will need to expropriate land, Stewart said.
"This pipeline winds through a number of residential properties," Stewart said. "If they couldn't make a deal with a landowner to remove the house, they would have to expropriate."
According to Stewart, the National Energy Board gives Kinder Morgan the right to expropriate if need be, so Stewart is encouraging concerned residents to participate in the public consultation process, which should start this fall.
"If a bulldozer shows up outside of your house, it's too late to do anything. That's why it's so important to get involved early on," he said.
Stewart is scheduled to speak at a public forum on the pipeline this weekend.
The Stoney Creek Environment Committee is hosting the talk on Saturday, July 7 at 3 p.m. at 2730 Beaverbrook Cres.
