Chevron position on pipeline expansion has changed: Lord

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Wanda Chow

While Chevron Canada initially said it hadn’t changed its position on Kinder Morgan’s proposed pipeline expansion, on further investigation it actually has, says Ray Lord, spokesperson for Chevron’s Burnaby refinery.

Lord contacted the NewsLeader Thursday wanting to acknowledge and clarify the discrepancy.

As reported in the NewsLeader, the change, from a neutral to a supportive stance, is significant because it’s the reason cited by both Burnaby Mayor Derek Corrigan and Burnaby-Douglas New Democrat MP Kennedy Stewart for why they are no longer supporting Chevron at its National Energy Board hearings.

The hearings are for Chevron’s application for a priority destination designation on Kinder Morgan’s Trans Mountain pipeline to ensure a steady supply of crude oil for its North Burnaby refinery. The company applied for the status last year in response to ongoing supply shortages due to it having to increasingly share capacity on the pipeline with other users. Already it has to bring in crude by tanker truck and is preparing to bring in more by rail.

Both politicians had planned to speak on Chevron’s behalf at the hearings, being held in Calgary over two weeks ending April 5. But with both being outspoken in opposition to the proposed expansion of the Trans Mountain pipeline, which runs from Edmonton to Burnaby, they felt it would be hypocritical to support Chevron if it was no longer neutral.

Lord confirmed the company had originally taken a neutral position. He has since learned that back in January it indicated its support for the expansion during hearings for Kinder Morgan’s commercial tolling application, in which it is attempting to set the rate structure for customers on the eventual twinned pipeline.

“Chevron made that decision during the hearing because it felt that it was required to do so as we were challenging the tolls that would potentially be charged and would apply to Chevron on an expanded pipeline if and when it was built,” Lord said in an email.

In short, the company’s representatives at the hearings decided they couldn’t argue as effectively against Kinder Morgan’s proposed rates without acknowledging “the fact that the pipeline [and its rates] would apply to us if the pipeline was ever expanded,” Lord said in an interview.

However, a “miscommunication” resulted in that change in stance not being made clear to staff at the Burnaby refinery, he said.

“We certainly understand the city’s position in opposition to the pipeline expansion, we understand that,” Lord said. “And we certainly understand the withdrawal that the mayor has decided is appropriate for the city to take a stand on.”

He wanted to “set the record straight” and acknowledge that the statements of Corrigan and Stewart on Chevron’s change in position were correct.

“Part of the issue is the realities of the different stakeholder relationships here in Burnaby perhaps aren’t appreciated by the priority destination team as much as they are by us here at the refinery,” he said, “or what the implications of that decision on a change in position might mean in terms of the existing relationships that we’ve established.”

Despite the loss of political support, Chevron’s argument remains the same for its application for priority status on the existing pipelineĀ—it needs a reliable, cost-effective supply of crude to continue its operations, which employ 400 people and provides an annual economic impact to the region of over $70 million spent on local goods and services.