Kinder Morgan: Vancouver’s fate in the rush for black gold

Starting in September 2012, Texas-based pipeline giant Kinder Morgan will begin public consultations for an estimated $4 billion expansion of its Trans Mountain pipeline from Alberta’s oil sands in Edmonton to Metro Vancouver. The company plans to more than double the capacity of the pipeline by 2017. The project rivals Enbridge’s Northern Gateway pipeline, which aims to export oil sands crude through the Great Bear Rainforest. With the benefit of an existing right-of-way, could Kinder Morgan succeed in making Vancouver the first major artery of oil sands expansion on the West Coast? Or will the company's record of oil spills tar up its plans?


This is the conclusion of a five part series, Southern Gateway: An American pipeline giant's plans for Vancouver.

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The excavator that hit the pipeline had been working off of digging plans for a new sewer line that had supposedly been vetted by three separate companies: the construction contractor, an engineering firm and the pipeline owner (a Kinder Morgan subsidiary, Trans Mountain L.P.). The saboteur, it turned out, was an imprecise fifty-year-old map.

Kinder Morgan is composed of a family of subsidiaries. The Trans Mountain pipeline is operated by Kinder Morgan Canada and now owned by Kinder Morgan Energy Partners, both subsidiaries within Kinder Morgan's "family of companies." 

A total of 224,000 litres of oil sands crude had escaped into the surrounding environment before Kinder Morgan could shut down the line. A third of it ended up in the Burrard Inlet, clinging to 17 kilometres of coastline and nearly suffocating at least twenty rescued migratory birds.

The cleanup crew had to work tirelessly throughout the night, digging and scraping and mopping up the mess.

Video from YouTube.

After a lengthy recap of the events leading up to the spill, the judge took a moment to express how hard she had thought about what would be an appropriate sentence. 

Lawyers for Kinder Morgan’s subsidiary (Trans Mountain L.P.) sat in waiting. 

A similar scene may have played out in a California courtroom eight years earlier when another one of Kinder Morgan's subsidiaries stood trial for criminal charges involving a pipeline explosion. Only that courtroom must have felt heavier.

When an excavator hit a gas pipeline in Walnut Creek, California in 2004, the accident caused an explosion that killed five people. Kinder Morgan had failed to properly mark the pipeline’s location. The excavator operator had been given an inaccurate map.

The 2007 Burnaby incident wasn't Kinder Morgan's only oil spill in Metro Vancouver.

In 2009, 200,000 litres of crude oil spilled in Burnaby from one of Kinder Morgan’s 13 storage tanks. Residents complained of strong fumes but the company said it was able to prevent the oil from seeping into the surrounding environment. 

In January 2012, 110,000 litres of light crude oil spilled in Abbotsford at another Kinder Morgan oil storage.

The judge did not take these incidents into account when sentencing Kinder Morgan, now the largest pipeline company in North America thanks in part to Goldman Sachs, one of their largest investors.

Instead, the judge stressed that her decisions were made in light of all the companies involved in the spill being “first time offenders.” She also took care to praise the company for its speedy response and investments in the cleanup. 

"Trans Mountain Pipeline L.P. has already, as I have indicated, spent in excess of $15 million addressing the damage caused by this spill and steps have been taken which will almost certainly ensure that such an event will not occur again," Bagnall said.  

"Each company has already experienced extraordinary financial detriment as a result of this event and each will be penalized further by the sentence I hand down today."

Charged with regulatory offences under the provincial Environmental Management Act, the companies faced the possibility of a million dollar fine. Instead, each company was fined $1,000 and ordered to contribute an additional $149,000 to an environmental fund.

The spill, the judge declared, was “an accident.” 

It was caused by a “series of small mistakes.”

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