Refinery faces challenges after decision

Burnaby’s Chevron refinery will face ongoing challenges in the wake of a National Energy Board decision not to grant the company prioritized access to crude from the Kinder Morgan pipeline, but there are no current plans to increase rail shipments.

On July 11, the board released its decision, rejecting Chevron’s application for priority destination, which was an attempt to secure a more steady and reliable supply of oil. The refinery has been bringing in oil via truck and railcar to make up for supply shortages.

According to Chevron’s Ray Lord, the decision will mean continuing problems for the refinery but no sudden changes in rail shipments of oil.

“The NEB’s decision will result in the refinery facing ongoing challenges in securing a reliable, cost-effective supply of crude oil,” Lord said. “Overall, there won’t be any immediate changes, as we’ve been operating under these apportionment conditions since late 2010. In the meantime, we will continue to compete for space on the Trans Mountain pipeline while our existing crude by truck and new crude by rail facilities are being used to secure the supplemental volumes we’ve been receiving since last year by truck and more recently via rail.”

Recently, Chevron has been receiving an average 33,000 barrels of oil per day from Kinder Morgan’s Trans Mountain pipeline, but that’s short of the minimum run rate of 40,000 daily barrels, especially considering that the refinery can process up to 55,000 barrels. Roughly a year ago, Chevron began bringing approximately 1,000 barrels of oil per day via rail to Langley and then trucking the shipments in the rest of the way to Burnaby.

Chevron also built a new facility at the refinery to receive rail shipments directly, and that went into operation in May, which has helped bring in an additional 6,500 daily barrels.

When asked what would happen if Chevron can’t get enough oil, Lord said that as a general practice, Chevron does not comment on specific operating plans or current run rates, but refineries are designed to operate optimally at a certain capacity.

“Below that capacity, operational adjustments are made to the various inter-related systems and units in order to accommodate the reduced run rate until such time as normal operation is resumed,” he said.

As for safety concerns regarding rail shipments of oil, given the tragic July 6 train derailment and explosion in Lac-Megantic, Que., Lord said the transportation of potentially hazardous commodities has been taking place safely for many years.

“Our economy and quality of life depend on those commodities, and preventing incidents from occurring in the first place has always been our priority,” he said.

Chevron’s new off-loading rail facility has been designed and engineered to current safety standards, and rail cars are regularly inspected and the facility has been equipped with required containment and fire suppression systems, he added.

© Copyright (c) Burnaby Now

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Walk to Cherish Our Coast: Vancouver

Catch the summer breeze along the Seawall. Cherish yourself and our coast, connect with like-minded people and learn about the potential threat of pipeline and tanker traffic proposed by the Kinder Morgan company.

This is the second in a series of walks to “cherish our coast” hosted by Sierra Lower Mainland. Future walks in the series will include :

Vancouver Seawall

Barnet Marine Park in Burnaby
– See more at:


Clayoquot Protests


On a July morning, twenty years ago, MP Svend Robinson, Betty Krawczak, Inessa Ormand, and another “grannie” broke an injunction, and for a few minutes, prevented a busload of loggers from crossing Kennedy Lake Bridge in Clayoquot Sound. They were arrested. Over 900 would follow.

Betty and the other two “grannies” refused to promise that they wouldn’t do it again, so stayed in jail for six months. I remember Inessa, wearing her restrictive electronic ankle bracelet at church one Sunday morning. She was “at church” which was allowed. But she had a table set up in the courtyard, with petitions to “Protect Clayoquot Sound” for all to sign. There was no stopping her.

At 3pm Sat. on Stage 3 at the Vancouver Folk Festival, “Stringband” will be in concert. Mandolin player and environmental activist Bob Bossin might do the following song about the Clayoquot uprising. It’s the best west coast protest song and video I know of. Produced by Nettie Wild.

So what happened?
(from the Wikipedia article: Clayoquot Protests)

“In 2000, the entire Sound was designated as a Biosphere Reserve by UNESCO, further emphasizing its ecological importance; however, this was in no way legally binding in preventing companies from logging in the future.[30] The designation created world recognition of Clayoquot Sound’s biological diversity, and a $12M monetary fund to “support research, education and training in the Biosphere region”.[31]

All the best, Karl

Westridge Rally


westridge rally.jpg


Westridge Park (320 Cliff Ave. Burnaby)

July 24th is the 6th anniversary of the oil spill on Inlet Drive. The Westridge community was severely impacted by the rupture of the Kinder Morgan pipeline.

Now Kinder Morgan is proposing a new pipeline that will likely be constructed alongside Cliff Ave., extending along Hastings St. to Duthie Ave.

Also, three new tanker berths will be built. These will be positioned in the water below Northcliffe Crescent. There may be four additional oil tankers anchored in the Inlet, waiting to fuel up or sail. This could mean a total of seven oil tankers in Burrard Inlet.

Share your concerns about the Kinder Morgan proposed new pipeline and tanker berth expansion.

Organized By: Burnaby Residents Opposing Kinder Morgan Expansion

Rail accidents increase after job cuts, de-regulation: A Perfect Storm


Robyn Benson.

Rail accidents increase after job cuts, de-regulation.

Five people confirmed dead. Forty people missing, some of whom might have been literally vapourized. Shops, a crowded drinking spot, the library, the local archives – the downtown core was ripped away, erased.

It’s obviously too soon to say precisely what caused the horrific rail tragedy still unfolding in the Quebec town of Lac-Megantic. A defective brake? Negligence? Poorly designed oil shipment cars? Lax safety inspections and Transit Canada oversight? A combination of these and other factors? We’ll be able to speak with more confidence after the inevitable inquiry.

But here is what we do know.

Five percent of all rail traffic in Canada involves crude oil shipments. Approximately 20 percent of Canada’s oil is exported on rail.

Derailments may be falling in frequency, but there are still far too many of them – 588 in 2011 alone. The train involved in the Lac-Mégantic disaster was owned by the Montreal Maine & Atlantic rail company. CN has had its share of problems as well, but is expected to double its crude oil traffic this year.

Since this past March, there have been six serious Canadian Pacific derailments:

· March 27: About 114,000 litres of oil spilled near Parkers Prairie, Minnesota, when 14 cars derailed;

· April 3: A derailment of 22 cars west of White River, Ontario, caused the spill of 110,000 litres of light crude oil and 22,500 litres of canola oil. A broken train wheel and broken track were recovered from the scene;

· April 28: Seventeen cars carrying potash derailed near Provost, Alberta;

· May 21: A freight train jumped the tracks near Jansen, Saskatchewan, and spilled 91,000 litres of oil;

· June 2: A car derailed near Wanup, Ontario., struck a rail trestle and collapsed bridge into a stream;

· June 27: A bridge over Bow River in Calgary failed after a serious flood in the city, leaving six cars teetering over the water.

Overall, rail shipments of crude oil have sharply increased. In the past eight months, shipments of Western crude have jumped 150 percent from the previous year, to 150,000 barrels per day. The DOT-111 tanker cars most commonly used for transport are prone to leak their contents.

Railway companies themselves are responsible for carrying out safety inspections. But here, cutbacks may well be having their effects as the companies pursue the bottom line:

Tom Murphy, president of the CAW Local 101, which represents roughly 1,900 CP skilled trade workers, said he believes there is a direct correlation between the derailments and the reduction in CP’s headcount, including hundreds of his members who are tasked with conducting the safety inspections on the trains.

“The difference now is they have longer trains, less people to check them out, and a lot of the repairs, [and] the supervisor says, ‘We don’t need to fix that now. Let it go,’” Mr Murphy said in an interview Tuesday.

Meanwhile, rail officials are wringing their hands:

“That’s what confuses us. How did this happen?” said Joseph R McGonigle, an executive at the Montreal, Maine & Atlantic. “There are many fail-safe modes. How this happened is just beyond us.”

Beyond everyone at this point, it seems. Not good enough. Not for the injured, not for the families of the dead and missing, and not for us.

Robyn Benson became National President of the Public Service Alliance of Canada on May 4th, 2012. Benson has been the Regional Executive Vice-President (REVP) for PSAC’s Prairies region since 2000. As the REVP, Benson has been responsible for a wide range of activities in her region which covers Alberta, Saskatchewan and Manitoba. Benson worked for 20 years with the Winnipeg Taxation Centre of Revenue Canada (now the Canada Revenue Agency) before her election in 2000. Her union involvement dates back to the1980 strike by the Clerical and Regulatory (CR) bargaining unit when she was a term employee.

© Copyright 2013, All rights Reserved.

The best democracy money can buy: How BC’s election was bought

• In the initial news reports about Alberta’s worst flooding in history, a number of government spokespeople noted it was “the worst but not the first” and that “it could have been much worse,” waxing on how resourceful Albertans were. In downtown Calgary, the energy capital was underwater and without power yet no one spoke the unspeakable: “climate change.” It was ironic that the climate change denying spin-doctors couldn’t go downtown because the “weird weather” had drowned their offices. And just what is contributing to the change in the weather? Did anyone mention “Kalgary’s Katrina?” Harper’s PMO immediately stated it would stop collateral damage by reinforcing the PR dikes surrounding the Tar Sands and pipeline plans. As usual, “controlling the message” and organizing “talking points” to stay on message, chanting, “It could have been much worse, it could have been much worse.” Well, if the current path of massively increasing Tar Sands exploitation continues unabated, it will get worse.

Next door in BC, there was a different kind of flood. It contributed to “the best democracy money can buy.”

BC is politically unique in many ways, perhaps because it’s the most westerly province and it was the last to be colonized. And BC has special, lenient campaign financing rules that result in surprisingly undemocratic election results. After the election, the completely mistaken political pundits back-pedalled furiously. They had quoted survey results that showed huge leads by the NDP of 20 to 28%, a lead that some had described as “unbeatable.” Excuses for their blundering projections were tossed out to repair the reputation of media election specialists and of course, these experts deflected blame to the leaders, the voters and the pollsters. Theories then emerged, such as the NDP voters were complacent and didn’t vote because they believed the NDP had a massive lead. Or Adrian Dix’s image lacked the obsequious media charisma of Christy Clark. Or my favourite, “The polls were wrong.” It’s akin to a line spoken in Canada Place at the doomed NDP victory gala where a woman comforted her distraught friend, saying, “Forget it and have a beer.” The election game was a gas over at the Wall Centre where the Liberals hosted their just-dodged-the-bullet celebration. Actually, the polls were right, but the influx of big money changed the numbers really fast.

Well folks, if the election did not work out the way you planned it, it was because you did not plan it. It was planned, financed and executed professionally by those in power and that power was not people power but rather money power: floods of money coupled with brilliant political operatives and massive TV advertising. Millions of dollars came from interests outside of BC and even outside of Canada, from the rich and powerful that wanted it their way. Whether they lived here or not was irrelevant; they could still affect the outcome with their cash.

But before going into the details of “who dun it?” let’s see how it was “legally” possible.

British Columbia is one of the only provinces in Canada that allows election campaign financing from out of province. So if a special interest group of petroleum producers calls a meeting in Alberta with 130 rich corporate buddies invested in oil exploration, extraction, pipelining, refining, selling or financing and these folks are asked to protect their assets and profits by donating to ensure they get a cheerleader premier in BC, well, from their perspective, it’s not a conspiracy; it’s just damn good business. Not really democratic, but they will make the sacrifice to get what they want. It’s like politicians willing to send other parents’ children to war in order to secure access to petroleum resources in other countries. For these financial backers, BC is another land.

And there is also the item of campaign funding coming from out of country. Yes, you heard that right. BC allows election campaign funding from outside of Canada! And in seemingly unbridled, liberal amounts. Money influences election results because money buys votes. For more facts on campaign financing scams and how to make elections more democratic, visit

So money can come from Norway to defend its lice and disease ridden fish farms or from China for coal exports. American and European bankers finance the further debt BC will descend into paying for the infrastructure, which can be later privatized and sold cheap to the inner circle after the public has been taxed. Odd how a former director of BC Rail who was around when it got sold, found a million or more dollars for Dix TV attack ads. You might have seen the one with the weather vane flip-flopping or the nasty piece about forging a signature. Well-planned and well-executed high-profile television ad campaigning. His nice sounding group, Citizens Concerned About BC, seemed to fold after the votes were cast. Do they still care? Or was it just a proxy prop throwing up dirt? Since the deed is done, maybe they are ”moving forward” with other agendas. Is BC Hydro the next in line for privatization?

Then there was Dix’s really unnecessary and unskilful Earth Day pronouncement regarding the expansion of the Kinder Morgan pipeline. Did he know just who he was up against? This pipeline has curious backers. Richard Kinder (the Kinder of the two) came to fame previously with Enron. (Please watch the movie, Enron the Smartest Guys in the Room, for details.) Richard Kinder was also a huge fundraiser for George Bush Jr.’s campaign. Oil finds its own level. Richard was also involved in the purchase with Duke Energy of the then “not-to-be-sold” public BC Gas. After the public was discarded, it seems Richard kept the pipeline part of the deal and eventually the other part of BC Gas morphed into Fortis, a corporation with Caribbean connections (better tax laws maybe?). Fortis also bought up energy assets around North America such as in Newfoundland; maybe Newfoundland has similar campaign funding rules.

Gwyn Morgan, founder of EnCana, headquartered in Calgary (recently under a bit of flood water), now has a natural gas “It’s clean energy” cheerleader with his new premier Christy Clark. Gwyn is well connected through affiliations with Rio Tinto Alcan, Lafarge, HSBC, Fraser Institute and SNC-Lavalin. Prior to the election, Clark visited Calgary for a fundraising dinner and received support from corporate interests there. And the money keeps flooding in. Just after the election, Malaysian energy giant Petronas announced plans to spend $16 billion in new pipeline and processing infrastructure for a Liquefied Natural Gas (LNG) port in Prince Rupert. Boy, that natural gas is so popular. It’s all so international with a few multinational billionaires pleased that their campaign investments funding paid off. Are these expenses tax deductible? Gwyn Morgan wrote about this ‘potential’ in the Globe and Mail on December 16, well before the election. He stated presciently, “The $6 billion acquisition by Petronas comes with plans for a $10 billion liquid natural gas project, raising its total investment in Canada to $16-billion.”

Big bucks for sure and the math matches. Now really, would anyone from outside of BC, outside of Canada, support buying TV ads to discredit the less cooperative NDP?
A small process detail change happened on the actual election day that hampered how the wee people keep track of who actually votes. In prior BC elections, the names of people who had just voted were released in real time in a continuous flow to the parties, which then monitored the names to get their vote out. If a party supporter hadn’t voted yet, they got a call or a ride to the polls. But that was changed for BC’s recent election. Instead of being continuous, data was limited to spurts every few hours as election day sped by. This contributed to making it more difficult to monitor the active voting lists and ultimately harder to follow who had already voted, which needs be known in order to get out the vote effectively.

And then there is the First Past the Post electoral system, great for top-down money and power controlled elections, but lousy for real democracy. This colonial system is an insult in this modern computer internet era. We are still being controlled by the old-fashioned, blunt electoral process of First Past the Post takes all. When you do the math, you see how FPTP kills campaign participation, voter turnout and public democracy. Ever feel that BC is still treated like a colony?

It is a painful irony that we are led to believe that in a democracy the majority rules. But whose rules define which majority it will be? When elections morph into the minority rules, the majority are left unrepresented through FPTP. This electoral process is inherently disproportional. Some eligible voters get no representation while other get far too much. As in Animal Farm, we are all equal but some are more equal than others. It helps if you own an oil company or bank to get the kind of government you want. If 50% of eligible voters cast a ballot and it is a fairly close election, the winning 50% + of the riding gets all the power with only about 25% of the votes. With such an electoral system, in not uncommon for 70 to 80% of the electoral to be unrepresented, or, another way to say it is that they are represented by MLAs (or MPs) who don’t represent their vote or wishes. Hence, an undemocratic reality parading as democracy.

Some rich people believe government is just too useful for it to be left up to we the people. And some industrialists believe constitutional rights and habeas corpus are optional luxuries. And wars are for the poor to fight and the super rich to profit from.

But with the recent election and future floods to come, it’s time to wake up.

“The owners of this country know the truth: It’s called the American (Canadian) dream because you have to be asleep to believe it.” – George Carlin
photo © Stuart Meade

Secrets, Lies, and Missing Data: New Twists in the Keystone XL Pipeline

Even if you haven’t been following the saga of the proposed Keystone XL pipeline, and haven’t decided if it’s a fast track to U.S. energy independence (those in favor) or “game over” for human civilization (those opposed, because of its role in climate change), yesterday’s developments are too rich to ignore. In fact, it may be game over for the Keystone XL—at least until 2016—thanks, once again, to U.S. State Department oversight.

First, a refresher: Because the proposed line crosses the Canada-U.S. border, TransCanada, the Calgary-based company that wants to build and operate the pipeline, needs President Obama’s approval. The president, in turn, is relying on State to assess the viability and safety of the plan, as he indicated in a speech a little over a week ago. “The State Department is going through the final stages of evaluating the proposal,” Obama said, sweating profusely at Georgetown University. ”That’s how it’s always been done.”

Three years ago, the Keystone XL was a lot closer to being OK’d than it is today. As Paul Tullis noted in his 2011 feature, “the XL’s predecessor, which runs from Canada to Oklahoma and branches into Illinois, breezed through the permit process during the Bush Administration with barely a whiff of concern from the public.” By the time the XL came along, however, things had changed. In June 2011, after former NASA climate scientist James Hansen condemned the pipeline, Vermont professor Bill McKibben and a troop of college students answered Hansen’s call, surrounding the White House as part of a committed #NOKXL campaign. A strange-bedfellows coalition of ranchers and environmentalists rose up to protest property easements and to protect the aquifers of the Great Plains. And on July 10, 2011, the Los Angeles Times reported on correspondence released by WikiLeaks revealing that David Goldwyn, an aide to Hillary Clinton, was something of a mole for TransCanada, coaching the company’s executives on how to win favor at State with “better messaging.” After leaving the State Department, Goldwyn testified before Congress in favor of Keystone XL.

Then the real bomb dropped: Cardno Entrix, the Houston (Tex.) company State had contracted with to complete an environmental impact statement (EIS) on Keystone—the substance of the evaluation Obama referred to—turned out to be a preexisting client of TransCanada and, as such, appeared to have a blatant conflict of interest. After several members of Congress requested a review of the process, the inspector general was brought in to investigate and to establish new conflict of interest guidelines. The inspector general “found no evidence that TransCanada had improperly influenced the Department’s selection of Cardno Entrix,” according to a representative from State, who also said the agency’s prior relationship with TransCanada did not “impair the contractor’s objectivity.” Meanwhile, a supplemental environmental assessment was ordered up, this time from a U.K. multinational called ERM.

Well, it happened again. Two environmental groups, Friends of the Earth and the Checks and Balances Project, have revealed that ERM lied about its own ties to TransCanada. Specifically, these environmental watchdogs report (pdf):

• In papers filed with the State Department in June 2012, ERM certified that it had had “no existing contract or working relationship with TransCanada” for at least three years. But public records show that TransCanada, ERM, and an ERM subsidiary, Oasis Environmental, have worked together at least since 2011 on the Alaska pipeline project.

• ERM’s own publicly available documents show that the company has business with more than a dozen companies with operating stakes in the Alberta tar sands.

• ERM staff working on the Alaska Pipeline Project have attempted to cover up ERM’s ties to TransCanada. On May 14, 2013, Mark Jennings’ LinkedIn profile listed him as Socioeconomic Adviser for ERM and listed among his roles “Consultant to ExxonMobil Development Company for the Alaska Pipeline Project.” By June 6, amid mounting calls for an investigation of ERM’s ties to the oil industry, his LinkedIn profile made no mention of ERM.

In other words, ERM appears to have as many conflicts of interest as Cardno Entrix ever did; it’s as if the inspector general never established new protocols for avoiding or, at least, disclosing such conflicts. (ERM did not return this reporter’s call on deadline.) The State Department was supposed to have independently verified any claims made by contractors. How hard would it have been for a State Department official to look on ERM’s website? A call to the State Department elicited some “trust us” boilerplate.

“Our rigorous conflict of interest procedures ensure that no contractors or subcontractors have financial or other interests in the outcome of a project,” says State Department spokesperson Jen Psaki. “The selected contractor works directly with and under the sole direction of the Department of State while the applicant pays for the work. The contractor certifies that it has not had, and does not have, any direct contracts with the applicant. The contractor is not permitted to communicate with the applicant unless specifically directed to do so by Department officials.”

“From the beginning, the State Department’s review of Keystone has been plagued by influence peddling and conflicts of interest,” says Ross Hammond, senior campaigner for Friends of the Earth, who presented his group’s findings in a press conference yesterday. “This is more serious: If ERM lied about its relationship with TransCanada, how can Secretary Kerry, President Obama, or the American people believe anything the company says about the pipeline’s environmental impact?”

Doug Hayes, an attorney with the Sierra Club in its Boulder (Colo.) office, notes that the process has a built-in conflict of interest, because the contractors who do EIS studies for the government are paid for by the applicant—in this case, TransCanada. “The only other option is for taxpayers to pay for these things, and that’s not really reasonable. It makes some sense that the company that wants to build something pay to find out if it’s safe.” But, he says, that’s why it’s so crucial that the government agencies are vigilant about any conflicts. “The thing here is that ERM doesn’t just have ties to TransCanada, but relationships with something like 12 companies that stand to benefit from the Keystone and tar sands development.” Allowing that it may be difficult to find third parties in energy services that don’t have a relationship with a big company like TransCanada, Hayes notes that the issue comes down to disclosure—something sorely lacking, he says, in this process.

Several months ago, Hayes says, the Sierra Club submitted a Freedom of Information Act (FOIA) request to the Army Corps of Engineers, asking for details on the proposed route for the pipeline. TransCanada has kept the exact route a trade secret, citing security issues. The U.S. State Department has issued approximate maps but not precise coordinates. If anyone would have precise details, the Sierra Club figured, it’d be the Army Corps. The Corps denied the request.

Recently, San Francisco photographer Thomas Bachand tried to get the route from the State Department with even more baffling results, as first reported by Steve Horn’s DeSmog blog. As a letter Bachand posted online reveals, the State Department claims not to have any GIS data on the route—or to know who within the federal government does.

Which raises a final question: If no one can share the route, how can anyone approve it?

How to track tankers

Our local MP, Kennedy Stewart, said something rather alarming about tankers at a June 27 meeting hosted by Burnaby Residents Opposing Kinder Morgan Expansion. In Burrard Inlet, Port Metro Vancouver is responsible for overseeing the passage of tankers, which are pulled by tug boats to make the journey safer.

At the meeting, Stewart told the audience that his office has received reports of tankers travelling in the Burrard Inlet with no tug escorts.

I called Port Metro Vancouver to check, and they confirmed that it’s sometimes true – when the tankers are empty.

Tug escorts are only used for tankers after they are filled with crude at Kinder Morgan’s Westridge Marine Terminal in north Burnaby.

I also asked the port how people on shore can tell the difference between a tanker and a ship transporting grain, for example, and I was told unless you have a trained eye and can clearly see the apparatus on the ship, it’s very difficult to tell. That’s when Port Metro Vancouver mentioned this very handy interactive map on their website. The map shows which ships are in the inlet and what they are doing.

You have to download an application to use the map, which doesn’t take long. The map shows blue icons for the various ships in and around the Vancouver harbour, and if you hover over the icons, you can see what kind of vessel it is. To check out the map, go the Port Metro Vancouver website.

Chevron Receives Oil by Rail: Should Residents be Concerned?

While the recent tragedy in Lac-Mégantic, Quebec has put the spotlight on the safety of transporting crude oil by rail, an official at Burnaby’s Chevron refinery stresses there’s little connection with how its own new rail facility operates.

“That’s really not something we feel is reflective of a normal operation at our facility in which the cars are all brought in on a carefully controlled switching operation,” said Ray Lord, spokesperson for Chevron Canada’s Burnaby refinery, “whereas what happened [in Quebec] is a tragic accident involving a runaway train that’s not something in any way related to what we do.”

The Quebec accident involved an unmanned train rolling downhill, eventually derailing and crashing, its crude-filled cars exploding and destroying several buildings. As of Wednesday, the official death toll was 15 with another 60 people reported missing.

Until fairly recently, the North Burnaby refinery has received most of its crude oil supply through Kinder Morgan’s Trans Mountain pipeline. But in recent years it has been receiving less than it needs because of apportionment—the supply for customers is reduced because there is more demand for the pipeline’s capacity than it can meet.

As a result, Chevron opened its new crude-by-rail facility in May to help bring in the balance of what it needs.

Lord said since May, it has received about eight to 10 rail cars a day of crude oil, about 6,500 barrels. That represents just under 12 per cent of the 55,000 barrels the refinery processes each day.

For about a year, Chevron has also been receiving another 1,000 barrels a day by tanker truck, he added. The crude is transported to Langley by rail before completing the trip to Burnaby by road.

“We certainly feel that pipelines represent the safest, most cost-effective way to get crude oil to the refinery,” added Lord, noting there are extra costs associated with transporting crude by rail or truck.

As for its new rail facility, Lord said it’s located adjacent to the CP Rail right-of-way, the mainline that runs along the Burrard Inlet foreshore, down the hill and away from residential areas. Full cars come from the east and are dropped off, then empty cars are taken away to be refilled back in Alberta.

Chevron has crews on site 24/7, as the refinery operates non-stop, he said. And the rail facility, like any other operating area within the refinery, is equipped with modern safety systems, including containment and firefighting systems, foam application systems to deal with petroleum fires and an onsite fire brigade.

“Dangerous goods have been transported safely throughout North America for decades and it’s a matter of the materials being handled safely with all the necessary risk mitigations put in place and emergency response procedures that are also established,” Lord said. “We think it can be done safely.”

Meanwhile, in response to the Quebec incident, Burnaby council has asked city staff to report back on rail tank cars carrying oil and other hazardous goods through the city as well as city hall’s relationship with the railways.

Coun. Nick Volkow noted that city hall generally hits roadblocks when trying to liaise with railway companies who operate in the city, despite many rail lines running close to some residential areas.

Due to the Canadian Railway Act, “railways basically operate like the old feudal kings and we in municipalities are treated like serfs and peasants,” Volkow said. “That’s gotta change.”

In a four-year period there has been a 28,000 per cent increase in the volume of crude oil transported by rail tank cars, he said. Yet, the city doesn’t have any say on the railways’ operations.

During the recent heavy flooding in Calgary, that city’s Mayor Naheed Nenshi pointed out he had no say when a railway decided to move dangerous cargo over a bridge, during which the bridge collapsed, Volkow said.

He asked that the city staff report look into whether Burnaby city hall is notified in advance when dangerous cargo is going through the city because “it would be our fire department that responds, not the CPR fire department.”

Quebec train disaster to raise costs for shipping oil by rail: Moody’s

CALGARY — Credit rating agency Moody’s says it expects the deadly train disaster in Lac-Megantic, Que., to make shipping oil by rail more costly, putting pressure on both major railroads and oil producers.

“The Quebec derailment — likely North America’s worst rail accident since 1918 — will inevitably lead to increased U.S. and Canadian government scrutiny and permitting delays, along with higher costs for shippers,” Moody’s said in a report Thursday, less than a week after an oil-laden train derailed and exploded, killing dozens and incinerating a large portion of the town.

Capital and operating costs for rail companies are expected to rise, as has been the case for past rail accidents and oil spills, Moody’s said. However, it said U.S. railroads have enough liquidity to cope with any new costly regulations.


Death toll in Lac-Megantic train disaster rises to 24; elderly victim ID’d

Crude producers in North Dakota’s Bakken region — the origin point of the derailed train — are expected to take a hit.

About two thirds of North Dakota’s daily Bakken production — at 727,000 barrels in April — moves to market by rail in the absence of sufficient pipeline capacity.
Even though rail tolls are more expensive than those of pipelines, moving crude by train has some advantages, Moody’s said. For instance, crude can move easily to coastal ports by rail, enabling it to be sold in lucrative overseas markets. Contracts to ship on rail also tend to be more flexible than on pipelines.

“But the accident threatens to delay the development of further rail routes, and will prompt a re-evaluation of pipeline transport as an alternative to rail,” Moody’s said.

“Today, refiners on the U.S. East and West Coasts buy Bakken and mid-continent crude at prices that satisfy both parties, but they rely on rail, since most major North American crude pipelines run north to south, not east or west.”

Moody’s also says the Lac-Megantic disaster will put pressure on the Obama administration to approve TransCanada Corp.’s (TSX:TRP) Keystone XL pipeline, which has been stuck in regulatory limbo for years.

If approved, that project will connect oilsands crude — and some Bakken production — to refineries on the U.S. Gulf Coast. With the hold-up in building Keystone XL, more and more oil freight have been moving to that market by rail and even river barge.

TransCanada CEO Russ Girling told reporters earlier this week that he fails to see any upside for Keystone XL as a result of the Lac-Megantic tragedy, saying “there’s no good news here for anybody.”

The CEOs of two major oilsands companies said this week that while pipeline transport is their preference, rail will continue to play a role.

“We know that the safest way of getting crude and petroleum products to market is by pipeline. The American safety statistics clearly, clearly demonstrate that,” Suncor (TSX:SU) CEO Steve Williams told reporters at an energy conference on Wednesday.

Suncor, Canada’s largest oilsands producer, moves very little of its crude by rail.

“In the long run, there will always be a mix of different transportation modes,” he said.

Imperial Oil (TSX:IMO) CEO Rich Kruger said pipelines “provide the safest, most reliable, most cost-effective way to transport crude and petroleum products.”

Like Suncor, Imperial doesn’t ship much of its oil by rail, using it mainly to fill gaps that might exist in the pipeline system.

“We will look to selectively supplement that, bridge capacity with incremental rail, where needed and when needed,” said Kruger.

“Right now it’s a relatively small fraction of crude that’s moved by rail, but over time, it will depend on the pace of pipeline developments.”