TransMountain Pipeline Proposal leaves Taxpayers Liable for 90% of Spill Response Cost

Kinder Morgan proposal increases risk of major oil spill without adequate insurance, report warns

January 24, 2013

VANCOUVER:  A report released today by four environmental groups warns that Kinder Morgan’s new Trans Mountain Pipeline proposal represents an exponential increase in the risk of a major marine-based oil spill affecting the Salish Sea’s most populous region, including the Cities of Vancouver and Victoria and the Southern Gulf Islands.  The report analyses the insurance available to pay for spill response costs and damages caused by such a spill and concludes that Canadian taxpayers could be on the hook for as much as 90% of the cost.

The report follows closely on an announcement by Kinder Morgan Canada on January 10, 2013 that the company now proposes to enlarge capacity for the Trans Mountain pipeline to 890,000 barrels per day from a previously planned 750,000.

“The proposed escalation from 80 tankers per year to 400 or more into Kinder Morgan’s Westridge Terminal in Burnaby, combined with other plans to expand shipping on the south coast, equals a phenomenal increase in the risk of a serious oil spill,” said Brenda Belak, of West Coast Environmental Law.  “The risk of oil spills is one of the main reasons that the majority of British Columbians on the Kinder Morgan tanker and pipeline route oppose the project.”

The report reviews the insurance structure set up by the International Maritime Organization after the Exxon Valdez disaster, which limits the liability of oil shippers and sets up funds that can be drawn on in the event of a major oil spill.  Canada is signatory to all of these agreements.

“Taken together, all four of the funds that respond to major oil spills would provide only $1.34 billion, or about 1/10th of the estimated cost of a major spill,” said Karen Wristen of Living Oceans Society.  A study by the Washington State Department of Ecology, conducted in 2004, concluded that a major spill would cost 165,000 jobs and 10.8 billion dollars in economic impacts in Washington State alone. This does not include individual claims or environmental impacts.  A study released last month by the University of British Columbia looked at spills on the Enbridge Northern Gateway tanker route and estimated a major spill would cause $9 billion in damage to the North Coast economy.

“The Salish Sea is already recognized as one of Canada’s most at-risk bodies of water,” said Christianne Wilhelmson, with Georgia Strait Alliance.  “When we consider how many aspects of our local economy are driven by a clean, productive and aesthetically attractive ocean, a major oil spill represents the potential for widespread and long-term damages.”

While acknowledging that improvements have been made in the shipping industry since the days of the Exxon Valdez, in both ship design and navigational aids, the report also observes that all of this technology would have made very little difference to the people of Alaska’s Cordova Bay, had it existed in 1989.  “That accident, and an estimated 80% of all shipping accidents, occurred as a result of human error,” said Gwen Barlee, Wilderness Committee.  “You can’t design that factor out of the system, and not acknowledging that in risks assessments is fool-hardy.”

The US Coast Guard has estimated that, had the Exxon Valdez been a double-hulled tanker such as the ones that are proposed to serve the Kinder Morgan terminal, it would still have ruptured.  The spill might have been reduced by 25-40%; but it would still have wiped out the herring fishery and devastated the economy of Cordova Bay.

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Please download the report here

French version available here

For a map of pipeline and tanker routes click here

More information on tankers in the Salish Sea available here

For more information:

Contacts:

Georgia Strait Alliance:   Christianne Wilhelmson, Executive Director o: 604-633-0530/c: 604-862-7579

Living Oceans Society:   Karen Wristen, Executive Director 604-992-6534

Wilderness Committee:  Gwen Barlee, Policy Director o: 604-202-0322

West Coast Environmental Law:   Brenda Belak, Staff Lawyer o: 604-601-2514/c: 604-537-0680

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