B.C. officials worry oil spill would ‘overwhelm’ resources

VANCOUVER – Officials in British Columbia privately warned the province lacks the ability to manage oil spills from existing and future oil traffic, and even a moderate spill would overwhelm their ability to respond, documents show.

Ottawa’s decision to deal with coastal oil spills from a base in Quebec would make it much harder to contain spills, and Transport Canada and the Coast Guard lack the needed “environmental expertise” to manage them, officials said the documents obtained by The Canadian Press under freedom of information laws.

The notes were written by B.C. environment ministry bureaucrats for the incoming minister’s briefing book in June, and other concerns were detailed by emergency response officials in memos from last year.

B.C. environment ministry bureaucrats voiced a range of misgivings for minister Mary Polak.

“The Ministry of Environment, as the ministry responsible for preparedness, prevention, response and recovery for spills, is not adequately staffed and resourced to meet the existing and emerging expectations to address spills,” they wrote in the briefing book.

“Even a moderately-sized spill would overwhelm the province’s ability to respond and could result in a significant liability for government . . . The industry requirements, established by Transport Canada, are perceived as being insufficient in both scope and scale. For example, in both Washington State and Alaska industry requirements are far in excess of what is required in B.C.”

The B.C. government has said the Enbridge (TSX:ENB) proposed Northern Gateway pipeline — which would deliver Alberta oilsands products to a tanker port in Kitimat, B.C., for export to Asian markets — and Kinder Morgan’s proposed expansion of its existing TransMountain pipeline into the Port of Metro Vancouver could increase tanker traffic by more than 1,000 trips annually off the Pacific coast.

Enbridge is seeking approval for its project from the National Energy Board’s joint review panel, which finished its hearings in June and is expected to make a recommendation on whether the pipeline can go ahead by the end of the year. For the TransMountain project, Kinder Morgan has yet to formally submit its proposal for its required federal environmental review.

The briefing book notes many risks of a spill from a tanker negotiating B.C.’s coastal waters.

“Weather conditions and the remoteness of the pipeline’s route in B.C. could cause cleanup delays, leading to broader water, land and wildlife contamination. Sensitive habitats, local economies (fisheries and tourism, for example) and First Nations along the route could be affected.”

The briefing book estimates that at a rate of 500,000 barrels of crude oil a day, a pipeline spill lasting an hour could lead to 21,000 barrels spilling into B.C.’s wilderness.

When spills occur, under Canada’s polluter-pay principle, the polluter must start the response and pay for damages and clean-up costs. The lead government agency — the Coast Guard for water spills and the National Energy Board for land spills —doesn’t physically manage the incident itself but guides the polluter’s actions. Environment Canada’s task is to be always on call to provide scientific-based expert advice. The B.C. environment ministry has several mandates such as overseeing provincially regulated species and all B.C. Crown lands, and it has final authority over the final disposal of waste materials from a spill.

Mark Johnson, a spokesman for Environment Canada, said in an interview Ottawa agreed last March to create a tanker safety expert panel, due to report this November, and to fund eight new steps to ensure a “world-class” tanker safety system for shipping oil and chemicals “before major new energy infrastructure becomes operational.” These steps include more tanker inspections and monitoring, research, and the creation of a Canadian Coast Guard incident command system.

But last year, B.C. emergency response officials wrote that money was not the only problem: “Coast Guard and Transport Canada are to receive increased funding to respond,” stated one memo. “However, these agencies do not have the required environmental expertise.”

As well, cuts in the 2012 federal budget prompted Environment Canada to close its regional spill response offices in Vancouver and other cities and consolidated these in Quebec.

In May 2012, documents show officials in the B.C. Environmental Emergency Program in Victoria privately wrote this relocation would hinder efforts to contain an oil spill on the west coast. Those warnings were written about then-existing oil traffic, without factoring in future pipelines and tankers.

Wrote Program manager Graham Knox in an internal memo: “As a result, Environment Canada will have little or no surge capacity in the event of a major spill to bring in responders from across the country. . . Trying to provide the current level of service from Montreal is not realistic. Current EC staff have found it challenging to respond to spills outside of their base in Vancouver, and a move to Montreal will certainly increase these challenges many-fold.”

The document show local program officers agreed: “Not a good day,” wrote one. “Looks like heavier dependence on the province. Response activities cannot be managed remotely. Preparation and accumulation of local knowledge are vital to a cohesive and coordinated response to emergencies.”

Johnson declined to comment on the concerns outlined by Knox.

Stuart Bertrand, a spokesman for the B.C. environment ministry, confirmed in an interview the province now has “some additional workload” due to the relocation “and the reduced capacity of EC emergencies staff that now work out of Quebec.”

Bertrand added that the B.C. government is now exploring the concept of a new provincially-regulated but industry-led and funded “terrestrial spill response cooperative,” and “while we are pleased with the steps Ottawa is taking, we are also pressing forward with our own review to help define our world-class marine spill system.”

Federally, the shipping industry is responsible for funding the Western Canada Marine Response Corp., which responds to about 20 marine spills a year at a cost of about $5.3 million.

But Polak’s briefing book indicates a concern about the lack of commercial vessels that could be used to help in the event of an oil spill: “The level of (industry) resources, including spill response assets and trained personnel, provided to the Canadian Coast Guard for spill response appears to be inadequate and may be even more challenged with the anticipated increase in large vessel traffic on the B.C. coast.”

Johnson pledged new federal research on marine pollution risks and how to reduce oil-spill effects on marine life and habitats. In February, Transport Canada, working with the Coast Guard and Environment Canada, sought proposals for a Canadian-wide risk assessment study on ship-source oil spills, and awarded the contract to Genivar Inc.

Yet last year, Knox regretted the loss of at least one existing resource, notably Ottawa’s firing of the internationally respected Canadian oil spill expert Kenneth Lee and the elimination of his research centre in Dartmouth, N.S.

“This will limit resource managers’ access to critical scientific expertise when making response decisions in the future,” he wrote. “Oil spill expertise is eroding.”

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Sierra Club Sues U.S. Over Rubber Stamp of Flanagan South Pipeline

[Washington, DC] Today the Sierra Club and National Wildlife Federation filed a lawsuit in federal district court in Washington D.C. challenging the approval of Enbridge’s Flanagan South tar sands pipeline by the U.S. Army Corps of Engineers and other federal agencies. According to the groups, federal agencies approved the pipeline without any environmental review or public notice required by federal law.

Flanagan South would transport 600,000 barrels of tar sands crude from Illinois to Oklahoma through thousands of waterways, communities, drinking water sources, and sensitive areas like wildlife refuges.

“The proposed pipeline would cut through some of America’s most iconic waters, including the Mississippi and Missouri Rivers,” said Jim Murphy, Senior Counsel for the National Wildlife Federation. “A spill would be devastating to wildlife like waterfowl and sturgeon that use these rivers. The extremes dangers tar sands poses need to be thoroughly examined before any decision about this pipeline is made.”

Enbridge is the company responsible for the largest ever oil spill on U.S. soil in 2010, when another of its pipelines spilled 840,000 gallons of heavy tar sands crude into the Kalamazoo River. Three years and one billion dollars in clean-up costs later, Enbridge has still not successfully removed all remaining tar sands from the river.

“This pipeline was rubber-stamped behind closed doors with no public involvement whatsoever,” said Doug Hayes, Sierra Club staff attorney. “Neither the Corps nor any other federal agency analyzed the risks of tar sands spills or the dismal safety record of Enbridge, as required by the National Environmental Policy Act.”

Despite Sierra Club’s repeated efforts to review even the most basic information about the proposed pipeline project, including Enbridge’s application materials, the Corps has refused to share them with the public. The Corps denied the Sierra Club’s multiple document requests under the Freedom of Information Act. Those denials are also challenged in this lawsuit.

“The Corps of Engineers is not above the law when it comes to approving tar sands pipelines,” says Hayes. “The federal government must evaluate the risk of spills, the threat to clean air and water, and the massive climate pollution, and it must let the public participate in decisions about this dangerous tar sands pipeline proposal.”

The purpose of this lawsuit is to force the Corps to consider the many environmental risks of this tar sands pipeline, which is nearly as big as the proposed Keystone XL pipeline, before it is allowed to be built.

Opponents of open-pit coal mine in northern B.C. take a stand in downtown Vancouver

Holding homemade signs carrying simple messages, a small group of First Nations and environmental advocates gathered Wednesday in front of the Vancouver Art Gallery in solidarity of the Tahltan Nation’s escalating conflict with Fortune Minerals Ltd.

Tension between the groups remains high despite a weekend meeting with representatives from both camps where it was concluded that Fortune would alter but ultimately continue exploratory work for its proposed Arctos Anthracite coal project in the Klappan area, also known as the Sacred Headwaters.

The Tahltan leadership says the proposed open-pit mine, located in an area about 600 km northeast of Terrace, would impact an estimated 4,000 hectares of pristine wilderness and threaten the salmon-bearing Stikine, Nass and Skeena rivers.

Last week, Tahltan Elders served Fortune surveyors with an eviction notice and threatened future blockades. A protest camp of about 40 people remained active Wednesday with a group of elders and youth drumming and singing outside the Fortune camp.

In Vancouver, the message broadcast by the small crowd of about 40 protest supporters was a straightforward one: the Sacred Headwaters need to be protected.

“This is just not acceptable,” said Laurin Sutherland, a Tahltan community liaison worker, over the din of passing lunchtime foot traffic. “The Elders have given their eviction notice and Future Minerals needs to leave … We will do whatever it takes to make sure this open mine does not happen.”

Fortune has responded to the week’s worth of escalating tension by noting that the survey work is part of the ongoing environmental assessment process for the proposed project, which is a joint venture with POSCO Canada. Ltd.

Fortune has also provided clarity on the project, noting that the proposed mine site falls only in the Stikine River watershed — but far from the river itself — and would have “zero impact” on the Nass River. Meantime, only a proposed railway extension along an existing railbed falls within the Skeena River’s watershed, Fortune said in a statement.

“The process is in place to assess the merits and impacts of our project from a balanced perspective that addresses environmental, social and economic considerations,” said Julian Kemp, vice-president finance and CFO of Fortune Minerals Ltd. in a statement.

“We will continue to work with all Aboriginal groups and stakeholders throughout the environmental assessment process, and we are confident their concerns can be addressed through the regulatory process.”

Annita McPhee, president of the Tahltan Central Council, said she doesn’t feel that any kind of resolution was reached during the weekend meeting. And she noted that the Tahltan people are united in their effort to protect the Sacred Headwaters.

“We’ve been pretty reasonable when it comes to development — we have agreements with some of the biggest mining companies,” she said. “But there are some things that we want to protect and we draw the lines at the Sacred Headwaters.”


Trans Mountain pipeline old and “rickety” say native leaders

They gathered near the old toll booth site on the Coquihalla highway and later examined nearby spill sites along the pipeline. There was unanimity of opposition to Kinder Morgan’s plans to continue shipments of this dangerous and toxic substance.

“It was an honour to stand with the dedicated individuals who took the time to participate in the Coquihalla Summit strategy session” said Grand Chief Stewart Phillip of the Union of BC Indian Chiefs. “The diversity of participants is an undeniable reflection of the growing opposition to the Harper government’s efforts to increase the production and transport of tar sands heavy crude,” said Phillip.

The event was organized by David Ellis, a former commercial fisherman and fisheries planner, whose current work takes him to First Nations communities throughout the Fraser watershed crisscrossed by the pipeline. From his travels and research, Ellis has become alarmed about the effects of bitumen spills on the environment and local communities.

I would like to thank David Ellis for his tenacity and diligent efforts to expose the reality of the ‘leaky garden hose’ known as Kinder Morgan’s 60 year old Trans Mountain Pipeline,” said Phillip. Kinder Morgan’s plans to increase their TransMountain pipeline to increase the carrying capacity to 890,000 barrels a day.

“It is time for the Prime Minister of Canada, the National Energy Board and the Province of BC to act now,” said Ellis. “They must close down the aging Trans Mountain Pipeline and forbid all future heavy oil through the Fraser watershed. If such action is not taken immediately, I predict a major leak will occur this winter, and bring economic catastrophe, to the western Canadian economy.”

“Insanity! Absolute insanity,” declared Grand Chief Stewart Phillip. “Clearly, Kinder Morgan’s Trans Mountain pipeline is the oldest, most rickety and subsequently the most dangerous pipeline in the Province.” “In light of ongoing reports and evidence of leaks, this pipeline needs to be shut down and subjected to a thorough inspection.”

“This pipeline has changed hands many times and millions have been made each time, with government backing,” said Chief Art Adolph, Xaxli’p (Fountain) and Chair of the Lillooet Tribal Council. “Proper management is needed to protect the ecosystems we depend on. Currently we have organized crime at the highest level between government and industry advancing their own agenda—counter to court rulings. In our ancient stories regarding proper management, sometimes Coyote dies when not adhering to teachings and is brought back to life. Not so, if the Fraser River dies after an oil spill.

“I’m here because the state of our waters and our way of life is being compromised, said Chief Shelly Leech, T’it’q’et Tribal Chief (Lillooet). “The fish keep our culture alive. We need to pull together and take a stand against things like these pipelines that threaten our way of life—the way of life for everyone.”

Area cleaned up after a pipeline leakage two months ago.

Chief Archie Patrick, Stellat’en First Nation, Nadleh Bun (Fraser Lake) said: “Nadleh means ‘where salmon returns’ but we can’t even drink from that lake any more. We lived in harmony with it for many years. We have to act on this pipeline issue.

Chief Garry John, Tsal’alh (Seton Lake) and Chair of the St’át’imc Chiefs Council added: “Kinder Morgan just can’t maintain their own pipe! We need the wild foods, but will soon lose them if this continues.

“This area is vulnerable to leaks and spills and can cause irreversible harm to the watersheds and wild salmon, a keystone species that unites us all,” said Eddie Gardner, a member of the Skwah First Nation (Stolo). “Having this pipeline continue to flow bitumen is already a risk too high, let alone plans to double the pipeline through the existing ‘right of way.’ We need a ‘right of way’ of clean water, land and air and protection of renewable resources like our wild salmon for the benefit of future generations.”

Bitumen does sink, and it can lead to long term leaching of toxins that will threaten salmon and the long-term ecology of our waterways,” said Stan Proboszcz, Fisheries Biologist with Watershed Watch. “We must give greater economic value to ecosystems and the services they provide.”

David Luggi, Band Manager, Stellat’en First Nation, former Chief, Carrier Sekani Tribal Council: “We spent 8 years fighting off Gateway, it is time governments began to hear the people.”

David Ellis provides information at kiosk set-up alongside the highway during the Chiefs tour.

“The Exxon Valdez oil spill taught us a harsh lesson of the devastating affect to the ocean environment and on the daily lives and livelihood of people, whose tattered lives are still uncertain today,” said Roy Sakata, a former commercial salmon fisherman and resident of Ladner. “That was 20 years ago. Increasing pipeline oil transportation with a 60-year-old system with its associated pipeline leaks and breakages and increasing oil tanker traffic with the imminent potential of collisions and groundings are not acceptable.”

“There is no net economic benefit for BC,” said Michael Hale, a Chilliwack resident and member of the PIPE UP Network. “The tar sands bitumen is all for export, not for BC’s needs. There are better alternatives in green jobs, renewable energy and electric transportation. We have to conserve our natural wealth for future generations,” said Hale.

Mr. Rod Mariner, retired manager, B.C. government streamside management program and a founder of Greenpeace, spoke of environmental campaigns that have changed the world. “Do not forget their have been many huge victories, after our Greenpeace cruse to Amchitka, the U.S.Government shut down all nuclear testing. We will shut down this pipeline!

Hope resident and member of the PIPE UP Network, Sharlene Harrison-Hinds said: “Many Hope residents are concerned about protecting their water these days.” She recalled the Viet Nam war protests. “Just like then, it is ‘united we stand,’” Harrison-Hinds concluded.

For more information, visit Pipe Up Network at www.pipe-up.net

Editor’s Note

David Ellis sent us two photos as examples of shoddy maintenance on the pipeline.

“Why “coffee can maintenance” shows Kinder maintenance of Cathodic Protection is now failing, leading to the many pin hole leaks, and soon, a major break,” said Ellis.

The photos are of on the pipeline, “without coffee can, and with plastic spin-on head still intact, but broken off probably by snowmobiles, it also has never been properly replaced and maintained,” he said.

See the photos below.

Keystone XL: TransCanada admits bitumen sinks, contradicting Enbridge’s claims

TransCanada Corp. acknowledged that heavy oil sands crude could sink in water, in comments released to the U.S. State Department on its controversial Keystone XL pipeline.

The acknowledgement appears to directly contradict some claims made by Enbridge earlier this year, in which the company was promoting a page on its website claiming that “crude oils, including diluted bitumen,” float in water.

The note came as part of a 51-page document with proposed changes to State’s March draft environmental review of the Keystone XL pipeline.

“If oil does remain on the water surface for a sufficient time, without being cleaned up, there is the potential for some oil to sink,” TransCanada wrote to State in its comments on the department’s thousand-page analysis of the pipeline.

Enbridge, meanwhile, had said during the proposed Northern Gateway pipeline hearings that critics who claimed that tar sands bitumen could sink were falsely informed.

Former Exxon Mobil scientist Alan Maki stated that “it is an immutable fact of physics that they will float” in his February testimony before Canada’s National Energy Board (NEB). It referenced an industry-backed study which claimed that in a controlled lab environment, bitumen floats when placed in water.

Tweets from @NorthernGateway in February

The company since backed away from its initial claim, noting that various factors could be involved, but updated its site and tweeted to a group of scientists a group of conservationists and scientists:

“We’ve not claimed bitumen floats. We’ve described the conditions necessary for oil to sink and given evidence that dilbit floats.”

Inside Climate reported that although the lab study found that bitumen floats, the oil sunk when a million gallons of the diluted bitumen was spilled in Michigan’s Kalamazoo River in 2010.

Hupacasath First Nation rallies in Ottawa against China-Canada FIPA deal

BC’s Hupacasath First Nation protested in Ottawa on Sunday to rally public support for its legal challenge against the ratification of FIPA, a controversial China-Canada investment deal.

Hupacasath First Nation files affidavits in case against China-Canada FIPA

Chinese companies can sue BC for changing course on Northern Gateway pipeline, says policy expert

China-Canada agreement may be unconstitutional, treaty law expert says

The Hupacasath, a 300-person First Nation based in Alberni Valley, stands between the 31-year Foreign Investment Protection and Promotion Act with China, which Prime Minister Stephen Harper signed while he was visiting Vladivostok in Russia last September.

The deal is of particular relevance to British Columbians, as it could allow Chinese state-owned companies to sue Canada in the event that projects such as the Enbridge Northern Gateway pipeline fell through. It would also give Chinese investors control over major assets such as coal on its traditional territory.

“The fight isn’t with China – it’s with the federal government, which failed to consult with First Nations on the Canada-China FIPA as it should have according to section 35 of the Constitution,” said Hupacasath First Nations councillor Brenda Sayers said in an interview with Massoud Hayoun with the Vancouver Observer.

The Hupacasath argued in federal court in June that federal government failed to consult with Aboriginal groups prior to signing the agreement. The federal government lawyers, however, argue that consultation wasn’t necessary for the agreement, as FIPA would preserve “flexibility” on certain issues such as aboriginal rights.

Last October, citizens advocacy groups LeadNow and SumofUs delivered a 60,000-signature petition from Canadians opposing the deal, as well as the Chinese state-owned company CNOOC from buying Canadian energy giant Nexen.

Tahltan First Nation serves Fortune Minerals with eviction notice

Members of the Tahltan First Nation have served Fortune Minerals Limited with an eviction notice to pack-up a controversial exploration camp situated near ancestral burial grounds.

The nation and its allies are calling on supporters to travel to the Sacred Headwaters to make a stand against the coal company.

“We didn’t fight Shell for ten years so a coal company could come along and build an open pit mine in the heart of the Sacred Headwaters,” said Mary Dennis, a Tahltan elder. “We’ve stopped bigger industrial projects before and we’ll do it again with help from our supporters and allies.”

Last month, the Tahltan Central Council (TCC) passed a unanimous resolution to protect the Sacred Headwaters from industrial development. The TCC are the elected representatives of the Tahltan Nation, which governs 5000 members and 93,500 square kilometers of unceded traditional Tahltan territory.

“We are calling on those people who have stood with us before, and who have a connection to the Sacred Headwaters, to stand with us again to protect this area once and for all,” said Rhoda Quock, spokesperson for the Klabona Keepers, a group of Tahltan elders focused on protecting the Sacred Headwaters for future generations.

Fortune Minerals has been conducting exploratory work for the company’s controversial Arctos Anthracite Coal Project, a plan to remove most of Mount Klappan and replace it with a 4,000 hectare open-pit coal mine. The area is adjacent to the Spatsizi wilderness area and is sacred to the Tahltan, who hunt and fish at a camp that has been used for several generations at the foot of the mountain.

“Fortune Minerals couldn’t have picked a worse place to try and build an open-pit coal mine,” said Shannon McPhail, Executive Director of the Skeena Watershed Conservation Coalition. “This project is in the wrong place at the wrong time, and the company should withdraw, rather than angering local communities over a project that will never be built.”

The Skeena Watershed Conservation Coalition is assisting the public with travel logistics to get to the Sacred Headwaters.

Taxpayers on the hook for Lac Mégantic damage: expect the same for pipelines, says economist

Economist and former ICBC CEO Robyn Allan says the situation of Lac-Mégantic, in which the rail company responsible for the crash was unable to pay for damage costs, is sadly all too common.

Montreal, Maine & Atlantic lost its license to operate in Canada on Tuesday after the Lac-Mégantic, Québec explosion that killed 47 people and left the Canadian government to pay $60 million since the rail company itself didn’t have enough to pay.

While Democratic Rep. Mike Michaud (who is running for governor in Maine) told Railway Age that he finds Canada’s decision “concerning” for the future of his state’s businesses, it opened up many questions around oil transportation and liability in the event of a disaster.

In total, the damage caused by the Lac-Mégantic crude train explosion is expected to cost a minimum of $200 million. MM&A’s Canadian subsidiary had nowhere even close to that amount: it carries $25 million in insurance, and just $18 million in assets. By default, the federal government, Quebec’s provincial government (and now, possibly Canadian Pacific Railway) are left to cover whatever MM&A can’t afford.

Public “left on the hook”

“Lac Mégantic shows that companies are making money doing things that cause huge risks, and when they cause an accident, they don’t have the money to pay for the damages, so the public is left on the hook,” said Allan, commenting on liability regimes.

“That’s a reprehensible situation, and it’s the standard — it certainly has been with pipeline companies.”

Allan drew public attention to Enbridge’s “limited liability partnership” structure during the Northern Gateway joint review panel hearings earlier this year. Among the many points covered in her study, she noted that Enbridge set up Northern Gateway so that revenues from the pipeline would go to Enbridge shareholders, but the liability responsibility stopped with Northern Gateway, leaving the parent company protected.

The National Energy Board acknowledged Allan’s concerns, and included in its 199 “potential conditions for Enbridge” that the company must set aside a total of $950 million to cover damage costs in the event of an pipeline accident, if the pipeline were approved (condition 147).

It was a major breakthrough, as such a condition was never required before — companies tended to have the same kind of umbrella insurance policies for pipelines. So if Enbridge were to have a leak in both Northern Gateway and 9B, and the company’s insurance couldn’t cover both, then it would have been unclear which pipeline Enbridge would pay for damages.

“Clearly, the NEB sees now that Northern Gateway would have to have its own protection,” Allan said. She noted that Canadians should be examining not just Enbridge, but every energy company’s liability structure, to see whether the public is adequately protected.

As for a pipeline expansion like Kinder Morgan’s Trans Mountain, Vancouver is pushing for liability to be expanded beyond the current maximum of $1.3 billion for marine spills. Even though $1 billion has become something of a benchmark for insurance, larger incidents such as the BP spill can reach $20 billion just for direct cleanup. Allan’s study submitted to the Tanker Safety Expert Panel proposes that under the current regime, the funds available for major spills have proven “woefully insufficient”.

Some losses never accounted for

Even that, Allan notes, is only limited to terrestrial spills (the liability regime is completely different for a marine spill, in which case the tanker company is held liable). Regardless of how much a company like Enbridge or MM&A can afford to pay in damages, Allan says, there are some losses that will simply “never be paid” after an accident.

“For example, a picnic on the beach with your kids on a Sunday afternoon: that’s not a compensable loss, but it fundamentally affects our well-being,” she said.

“This is why, for First Nations, it’s such as huge issue, because a lot of their activities are traditional food and ceremonial use. These aren’t commercial or market-related at all. These things will never be compensated by a company, no matter how much money is available, because they’ll never be considered ‘losses,'” she said.

She also said that ecological damage gets compensated in a piecemeal way: commercial fishers, for instance, may be paid for the value of fish lost, but the damage done to the rest of the ecosystem will go largely unaccounted for.

“It’s like when there’s automobile insurance: someone gets killed in a car accident,” she said. “A lot of money is paid if someone’s at fault, but you’re never going to make up for that loss of life.”

In her view, new pipelines and pipeline expansion carrying oil through aren’t capable of adequately paying for potential damages caused by an onland or marine oil spill.

“There’s a huge disconnect between what these pipeline companies want and what British Columbians feel they’re being asked to do,” she explained.

Allan believes that British Columbians are right to be wary of pipeline deals in which a company doesn’t have enough reserve funds to pay for damages caused by a disaster, or is structured to leave a company off the hook. And even if it did have the means to pay, she says, there are many permanent losses that can never be adequately paid back. The Exxon Valdez spill, where communities are still struggling to recover over 25 years later, is an example of this, she said.

U.S. firm questions legality of Quebec’s Lac-Megantic cleanup order



MONTREAL – A U.S. company says it has serious objections to a legal request that it help pay for the cleanup of the Lac-Megantic rail disaster.

World Fuel Services Corp. is one of three companies that received a Quebec government legal notice Monday demanding that they pick up the tab for the devastating July 6 derailment, which released millions of litres of crude oil into the surrounding environment.

The petroleum-logistics firm was named in the order alongside its subsidiary, Western Petroleum Company, and the Montreal, Maine & Atlantic Railway, which operated the train that slammed into the community, killing an estimated 47 people.

“We have serious objections to the legality of the order,” World Fuel Services said in a statement Tuesday.

“We intend to promptly discuss these issues with the relevant authorities.”

For full coverage of the Lac-Megantic disaster, click here

World Fuel Services, which is based in Miami, said it did not expect to be named in the legal notice, or in any similar government action related to the crash involving a crude-oil-filled train. The company added it has sent its own environmental experts to monitor the progress of the cleanup efforts as much as possible, but says the site remains under control of MMA and local officials.

It said Monday’s order is the first time the Quebec government has stated that World Fuel Services has any responsibility to pay for or supervise cleanup activities by crews it maintains are under control of MMA and local authorities.

“World Fuel Services will continue to meet any and all obligations it may have with respect to the accident,” the statement said.

“We realize this has been a great tragedy for the local community, and we want to again express our deepest sympathies and condolences to the victims, the families, and all those who have been affected by this tragic accident.”

The Quebec legal order is one element on the growing stack of legal problems for companies connected to the derailment.

Read more: Quebec issues legal threat over rail cleanup

World Fuel Services, Western Petroleum Company and MMA are among 10 defendants listed in several wrongful-death lawsuits filed last week in an Illinois court. Both World Fuel Services and MMA have also been named in a proposed class-action suit in Quebec.

The railway declined to comment Tuesday on the Quebec government’s legal order or any other legal questions.

The Maine-based company was expected to respond Tuesday to a lawyer’s letter it received last week from the municipality of Lac-Megantic.

The municipality’s legal notice calls on MMA to reimburse the municipality $4 million after the railway allegedly failed to pay cleanup crews. The town and the province assumed the cost when workers hired by the railway threatened to walk off the job if they weren’t paid.

Amid MMA’s intensifying financial headaches, its chairman recently told a Maine newspaper that he was considering whether the railway could survive.

On Tuesday, MMA was said to have laid off five more employees.

Read more: MMA Railway lays off nearly one-third of Quebec workforce in wake of Lac-Megantic

The United Steelworkers, which represents MMA workers in Quebec, indicated the company has now cut nearly one-third of its workforce in the province since the derailment. It said Tuesday’s layoffs of five Farnham-based MMA employees means 24 of the railway’s 75 workers in Quebec have lost their jobs.

The railway let go 19 Quebec workers earlier this month, citing the disaster’s impact on the business.

– With a file from Melanie Marquis

“Pigs” not always smart enough to spot pipeline cracks

The “number one asset,” a torpedo-like robot called a “smart pig,” can’t always spot the fissures, or the data collected can take months to analyze.

A case in point came when Exxon Mobil (XOM) inspected a pipeline in Arkansas in February using a smart pig, only for the line to split open a month later and spill 5,000 barrels of crude. The device didn’t find the minute cracks along the seam of the pipe that caused the burst.

The boom in U.S. oil output is straining the country’s 184,000 miles of pipeline, with the volume of spillages jumping by 77% so far this year to 93,000 barrels.

Companies affected include EEQ, EEP, BKEP, MWE, KMR, KMP, SXE, EPD, PAA MMP, HEP and PSXP.

Posted on http://seekingalpha.com/currents/post/1228762 For a way to view the original Wall Street Journal article, see http://www.democraticunderground.com/112751903.