This is part one of a three-part series titled "Pipelines, Politics and Pundits: The view from Northwest B.C."
When B.C. Premier Christy Clark outlined her five conditions last month for possibly approving the Enbridge Northern Gateway pipeline, her demand for a "fair share" of Alberta's petro-royalities brought howls and screams of outrage from east of the Rockies.
In B.C., Clark's five conditions also brought howls of outrage, but the anger came from the pipeline opponents accusing Clark of selling out the province.
B.C.'s condition calling for a fair share has been characterized -- largely by conservatives -- as "extortion."
The conditions didn't give the B.C. Liberals traction in the polls because Clark was late for class, and the province knows that. The media depiction o f Clark's conditions as something new is completely inaccurate.
Clark has probably been reading the tea leaves, listening to advisers and perhaps even working from polling data, building on a sentiment that has existed in British Columbia for a long, long time; discussed in public forums, in homes and offices and over drinks in northwestern and coastal B.C. for years.
The demand for payment and safeguards actually comes from those who may favour the project, (hence the accusations from the other side that Clark is a sellout). That is the constituency that Alberta hoped to win over. Instead, the supporters of the Alberta oilpatch created their own political oil spill by calling potential supporters blackmailers.
Clark's five conditions are mild compared to what some other people are asking for. The Haisla Nation at Kitimat is on the record in a filing with the Joint Review Panel that it resolutely opposes the Northern Gateway project. However, acknowledging that the federal government may force the project on B.C., the Haisla also filed a list of 23 conditions with the JRP that would have to be applied if the pipeline and terminal were ever to be constructed by federal fiat on the nation's traditional territory. Speak privately to some business people in northwestern BC who might favour the project with proper safeguards and you will find a list of conditions as long as that from the Haisla Nation.
When the JRP held its preliminary hearing in Kitimat in August 2010, Frank Brown, a leader of the Heilsuk First Nation in Bella Bella and an ecotourism advocate, told protestors outside the hearing that his people "risk everything and gain nothing." Soon the slogan "All of the Risk and None of the Benefits" was widespread across British Columbia.
The date, time and place when B.C.'s demand for a fair share of Alberta's bitumen royalties changed from private chat to a major public issue can be pinpointed (by camera timecode) to Sept. 22, 2010, at 7:36 p.m. PT at Kitimat's Riverlodge Recreation Centre. Clark wasn't even in active politics; she was a radio talk show host at CKNW.
Enbridge Northern Gateway was holding a community information meeting at Kitimat's Riverlodge Recreation Centre. Chris Anderson, one of Enbridge's marine experts, took to the podium to explain how the company proposed to handle the tanker traffic. At one point, he told the crowded room that legally, Enbridge had no responsibility once the diluted bitumen (dilbit) was loaded on a tanker. You could hear an audible gasp. That was the point the political equation changed.
Anderson's statement convinced the opponents that there must never be a pipeline to Kitimat. For those in the room who were quietly in favour or sitting on the fence, that's when they really began thinking about conditions.
In June 2011, again at Riverlodge, the National Energy Board was holding hearings on the proposed Kitimat LNG project. On a hot summer afternoon of dull, almost mind numbing testimony, the hearings were jolted awake when lawyer Robert Janes, representing the Gitxaala First Nation, began a vigorous cross-examination of Roland Priddle, former chair of the NEB and now an energy consultant.
In part of his cross-examination, Janes zeroed in on the issue of responsibility. Although most of Janes' questions were about liquified natural gas, Priddle replied using the oil industry as the standard. According to the NEB's official transcript, he said: "From my many decades long ago commercial experience in the oil industry, the point of exportation was usually taken as the connection flange between the shore-based hoses of the oil export terminal and the manifold on the deck of the ocean-going tanker and the title passed at the flange, we used to say, and the petroleum at that stage became the property and the responsibility for all aspects such as spills, explosions, insurance and so on of the party which was purchasing at the flange."
That means if the Northern Gateway is ever built and if there is a leak in a few centimetres of hose in the Kitimat terminal on the landward side, Enbridge is responsible. If the hose, manifold or pipe on the supertanker leaks and dilbit goes into Kitimat harbour, it would be the tanker owners who would be liable. (Enbridge's contingency plans call for the company to clean up the harbour in either case.)
So when -- not if -- there's a disaster from a tanker spill, who is responsible? Especially with modern safeguards, the accident would probably be caused by human error. Under Canadian and international law it is the "Responsible Party" or "RP" in disaster planning terms.
Exxon owned the Exxon Valdez, Exxon was the RP. In the Deepwater Horizon disaster in the Gulf of Mexico, BP was leasing the rig from TransOcean, so BP and TransOcean are among the responsible parties (with the U.S. courts still sorting out who exactly was responsible for what). Enbridge owns the damaged Michigan and Wisconsin pipelines. In those cases, Enbridge is the RP.
The Deepwater Horizon was registered under a flag of convenience and it is expected that many of the tankers along the B.C. coast will also fly the same flag. How do you find and sue owners of the flag-of-convenience tankers, with one firm listed as manager and another company listed as owner and where the actual managers and owners are hidden by a mysterious web of shell companies.
It could probably take the same level of expensive investigative resources as the Vancouver Police Department devoted to finding the Stanley Cup rioters to track down the actual RP.
Enbridge has filed thousands of pages of evidence with the Joint Review Panel covering its marine safety planning and disaster contingency plans. With the final decision on Northern Gateway in the hands of the Harper government with its deregulation fetish, there is no guarantee that Enbridge's assurances will be enforced by strong regulations. The Transport Canada TERMPOL process on coastal marine traffic is entirely voluntary: voluntary to take part in the studies and voluntary to follow the TERMPOL recommendations.
Enbridge has laid down strict conditions for the tankers that will call at the Kitimat terminal. It appears that current Enbridge management is genuinely committed to this safety regime, there is no guarantee whatsoever that future Enbridge management will be as caring (just look at its current record on pipeline maintenance), especially if it is facing a future financial crunch.
Although there are billion dollar tanker industry contingency funds for use in the case of a major disaster, those funds would be completely insufficient to pay not just for the cleanup but to compensate for the destruction of the pristine and fragile environment, lost jobs at the time of the spill and in the future, damage to the fishery and the tourists who would stay away. British Columbia would be left holding the dilbit and paying the bill.
Demanding that Alberta pay B.C. a fair share of royalties for taking 99 per cent of the risk of the pipeline and tanker traffic and bearing the burden of the risk of an oil spill is completely justified by those few centimetres of hose.