No, the Trudeau government did not ignore the science when approving the Trans Mountain Pipeline

As my readers know, I care deeply about the quality of science used in environmental decision-making so the latest anti-pipeline activist meme crossing my desk caught my attention. The meme suggests that the Trudeau government ignored the peer-reviewed science in approving the Trans Mountain Pipeline expansion (TMX). This meme was given life in a Vancouver Sun article: Science is a casualty of the Trans Mountain pipeline debate by Dr. Thomas D. Sisk a visiting scholar at Simon Fraser University (SFU). It has subsequently been picked up in a follow-up article: Trans Mountain’s only certainty — death and carbon taxes by Jason MacLean an outspoken professor at the University of Saskatchewan, College of Law. The newspaper articles refer back to a peer-reviewed paper: Oil sands and the marine environment: current knowledge and future challenges  published in Frontiers in Ecology and the Environment (Frontiers hereafter). As described by Dr. Sisk in the Vancouver Sun, the Trudeau government

 received it [the Frontiers paper], discussed it internally, then dismissed key, peer-reviewed scientific findings without contacting us or providing any rationale for concluding that the Trans Mountain project was “safe for B.C.”

When the Frontiers paper came out, I read it and like the Trudeau government I dismissed it as an example of general interest science that had little to add to the TMX debate. Since the Trudeau government is not sharing their discussion publicly, I will explain why I dismissed the work so my readers can decide whether they agree that the Trudeau government was right to ignore the recommendations in this paper.

The Frontiers paper is in the form of a literature review. It looks at the state of existing academic literature at the time of preparation and attempts to establish what we know and don’t know about a topic. This type of literature review is very common and can be incredible useful, but alternatively, in cases like the Frontiers paper, it can be very misleading. How so? Well a literature review is deeply dependent on the sources from which it derives its information. In this case they:

conducted a systematic review (via keyword search) to quantify the number of peer-reviewed scientific studies indexed within the international database Web of Science and non-refereed literature indexed within the Canadian government library database WAVES, which catalogues all content within Department of Fisheries and Oceans (DFO) libraries and DFO reports.

To provide a more detailed study the report concentrated on two particular types of habitats (eelgrass and kelp forest ecosystems).

Now this type of review can be very useful if the paper were dealing with an abstract topic of generic science but it is of little use when dealing with a specific project like this one because each project has to be viewed in its own context. Why do I say this? Well, because the export of bitumen via the TMX is not a generic project, it is a specific project involving exports from a single port (The Port of Vancouver). Moreover, the export was strictly limited to a set of berths at a particular location (Westridge Marine Terminal). These critical facts were not incorporated into the review and as a consequence much of the content of the review becomes utterly irrelevant.

To explain, consider the “Coastal Development” portion of the paper. The review presents a number of general concerns about the construction of infrastructure for the export of bitumen, but does so while completely ignoring the fact that the exact plans for that infrastructure were already in place as part of the NEB process. The plans for the expansion of the Westridge Marine Terminal had been fully vetted and habitat offset plans created (the final plan is here). So when the authors insist that further research on “shading” associated with the construction of a hypothetical terminal is a “high” priority they ignore that all that research had already been accomplished for this particular project. Sure generic research could be proposed if a new marine export terminal was going to be built somewhere else in BC, but for the TMX this type of generic research isn’t needed. It had already been completed. Is there any wonder the Trudeau government dismissed this “high” priority, but entirely generic, research concern?

In a similar vein consider the “Shipping” section of the paper. The Shipping section indicates that:

Increasing transport of oil sands products via ocean tankers is certain to amplify at least three sources of stress to marine ecosystems: wake generation, sediment re-suspension, and acoustic pollution. It will also increase the likelihood of two probabilistic effects: animal–ship collisions, and the introduction of exotic species between ports

Once again, these would be significant considerations if they were building a new port somewhere far away from existing infrastructure but that is not what is happening in this case. The TMX will be expanding operations at an existing port. As I have written previously, the TMX tankers would represent an increase of 720 more ship movements in a Strait that sees 23,000 ship movements a year. This at a port that is engaged in a build-out that will expand ship traffic significantly. Thus, the authors’ insistence that research on “wake generation” caused by the project is a high priority issue is really a non-issue. In the Port of Vancouver wake generation is a highly studied issue and this fact is completely missed in this academic review. As for the other topics in the “Shipping” section (sediment re-suspension, noise pollution, Animal-ship collisions, non-indigenous species  introductions) these are all topics that have been heavily studied in the Port of Vancouver and for which no further study would be warranted based on the minimal increase in traffic associated with TMX. Any reasonably aware observer reading this paper would understand that none of these generic arguments would be a justification to delay the approval of this specific project. It is for that reason that the Trudeau government dismissed these “peer-reviewed scientific findings”.

The most entertaining section in this article is the one on “Bitumen in the Environment”. As many readers know the behaviour and effect of hydrocarbons on ecosystems is my specialty and I have written thousands of words in this blog on the topic. I can tell from reading this paper that it is not the specialty of any of the authors. While I could write 2000+ words on this topic I don’t have to because I already did in a previous post. Essentially the authors imagine that bitumen is a mixture so unique that none of our previous research on the topic of hydrocarbon spills applies. That is, of course, not the case. We know more than enough about the fate and effect of a dilbit spill to know that we want to prevent it happening. We really don’t need to know whether dilbit is fatal to salmonid fry at 75 ppm rather than 100 ppm because should a spill occur the numbers will be in the hundreds of thousands of ppm. As I wrote previously:

 The reality of the situation is that any oil spill, be it crude oil or diluted bitumen, represents a tragedy and catastrophe. It will harm the natural environment, will kill some marine organisms, and will be very hard to clean up. The point of this blog post is that a diluted bitumen spill would not be a uniquely catastrophic situation. It would be comparable to a spill of any other heavy crude…you know the products that have been safely shipped in and through the Salish Sea for the last 50+ years. Banning the transport of dilbit until we have done more research has no basis in science. It is a political game. Any “independent scientific advisory panel” will end up concluding that we have the information to design a world-class spill regime. Anyone who says otherwise is either not aware of the state of research in the field of spill response or has a political axe to grind.

So once again we are left to wonder why the authors of the Frontiers paper think we should delay the work while we do much more research on bitumen exposure from operational spillage. Do the authors believe that the conclusions of any new study will make us more willing to allow spills into the environment? Because right now the aim is not to have any spillage and to clean up any potential spillage as soon as possible. Knowing a bit more about bitumen toxicity to marine organisms will not change that approach.

Re-reading this post I still cannot understand how the activists can believe that the Trudeau government, on receiving the Frontiers paper would pay it any significant heed. The paper, while peer-reviewed and published in a reputable journal, is entirely generic and completely ignores the significant research conducted as part of the NEB submission. As such it does not advance the information base on the topic of the TMX. Due to its format, it didn’t consider any particular conditions unique to the TMX project. Rather the paper appears to have posited a new facility far away from existing influences and then asked what information would be needed before building such a facility. This does not provide added insight since the TMX is not building a new facility far away from human influences. The TMX project involves extending an existing facility located at the core of one of the busiest ports in western North America. A port that has been heavily studied for its environmental impacts for over 30 years.

To conclude, Dr. Sisk’s complaint was that the Trudeau Cabinet received his peer-reviewed journal article, discussed it internally, then dismissed “key, peer-reviewed scientific findings without contacting us or providing any rationale for concluding that the Trans Mountain project was “safe for B.C.””. Well had I been in Prime Minister Trudeau’s shoes I would have done the same thing. This paper raises a number of generic concerns that have little or nothing to do with the TMX project. Most of the areas they argue need more study are either irrelevant (the entire Coastal Development section) or insignificant when placed in the context of the day-to-day activities at the Port of Vancouver (the entire Shipping section). To my eye, the reason the Trudeau government ignored his group’s concerns is that the NEB submission addressed every one of them sufficiently to allow for an effective evidence-based decision-making process. I am quite certain that had Dr. Sisk read the entire NEB submission he would have discovered that the government had answers to virtually every issue his group raised in their paper. Their generic concerns were addressed by the detailed assessments that had already been carried out by the NEB.

 

Posted in Canadian Politics, Oil Sands, Pipelines, Trans Mountain, Uncategorized | 9 Comments

On the bizarre narrative about bitumen being an “inferior” form of crude oil that can’t be sold

In the last month a new narrative has arisen in the anti-Trans Mountain pipeline community: that the market for bitumen is non-existent because it is “far inferior to the higher-quality oil” sold in the United States and that due to the new Louisiana Offshore Oil Port (LOOP) there will be no market for Alberta’s bitumen. Needless to say this narrative is both uninformed and completely wrong. But given the number of places I’ve read this codswallop, it is clear that someone has to debunk the claims. I will spend the rest of this post demonstrating how and why this narrative is completely misguided and unfounded.

Let’s start with some stuff we should all know. Crude oils are described based on their API gravity. API gravity is the standard specific gravity used by the oil industry. To borrow from a useful web site:

Specific gravity for API calculations is always determined at 60 degrees Fahrenheit. API gravity is found as follows:

API gravity = (141.5/Specific Gravity) – 131.5

Though API values do not have units, they are often referred to as degrees. So the API gravity of West Texas Intermediate is said to be 39.6 degrees. API gravity moves inversely to density, which means the denser an oil is, the lower its API gravity will be. An API of 10 is equivalent to water, which means any oil with an API above 10 will float on water while any with an API below 10 will sink.

The API gravity is used to classify oils as light, medium, heavy, or extra heavy. As the “weight” of an oil is the largest determinant of its market value, API gravity is exceptionally important. The API values for each “weight” are as follows:

  • Light – API > 31.1
  • Medium – API between 22.3 and 31.1
  • Heavy – API < 22.3
  • Extra Heavy – API < 10.0

Bitumen is a heavy oil. It is characterised by high viscosity, high density (low API gravity), and high concentrations of nitrogen, oxygen, sulphur, and heavy metals. This differentiates it from virtually all the new oil finds in the US which are lighter oils (like the Bakken crude which has an API gravity of 42). As analogies go bitumen is often described as a lot like peanut butter while Bakken oil is like a salad oil.

Note the comparisons that are used to describe these types of crude oil. They imply that one type of crude oil (lighter blends) are more appealing than the heavier crude oils. This is a common theme in the activist literature. Light crude oils are “good” or “higher-quality” and the heavy crude oils are “inferior“. The problem with that narrative is that it is demonstrably wrong.

Heavy crudes and light crudes are simply different products and have different characteristics and different demand curves. To explain let me make a simple analogy, consider the two major types of transportation fuels: gasoline and diesels. Both gasoline and diesel are refined petroleum hydrocarbon fuels but they aren’t interchangeable. You can’t fill a diesel train with low-octane gasoline and expect that diesel engine to run. Nor can you fill a race car with diesel and expect it to operate. You use gasoline when you want horsepower and you use diesel when you want torque. No one would say diesel fuel is inferior to gasoline. It is simply a different fuel.

The same is true in the differences between heavy and light crude oils. Like gasoline and diesel engines, there are light crude and heavy crude oil refineries. Light crude oil refineries tend to be simpler in design and cheaper to build than heavy oil refineries. This primer on the topic can really help fill in your gaps but the critical thing to understand is that any refinery is incredibly expensive to build and when built a refinery is optimized for a certain type of input and does not operate well using the wrong input.

Heavy crude oil refineries will include very expensive cracking and coking units, designed to break down the long chain hydrocarbons into the smaller hydrocarbons used in gasoline, kerosene and diesel. Unfortunately, the simpler light crude refineries don’t typically have these cracking and coking units. Ironically, this can mean that the light crude refineries can’t handle the heavier components in the light crude oils and so the refineries end up producing more undesirable byproducts (like petroleum coke) per barrel of input. What this means is that the heavy oil refineries produce more gasoline/diesel/kerosene per barrel of heavy crude oil than the light refineries do per barrel of light crude oil and the heavy refineries produce a lot less waste petroleum coke per barrel as well. In financial terms, the heavier crudes produce much higher margins per barrel of input than their lighter crude cousins and generate less waste byproduct that have to be disposed.

Reading back that last paragraph something becomes clear. If you have spent the billions to build a heavy oil refinery there is absolutely no way you are going to fill it with light crude. It would be like building a high-precision race car at the big race and filling it with a low-quality ethanol blended gasoline…it just isn’t something anyone would do. This is particularly important because:

over the past 10 years, most refineries in the Gulf Coast and US Midwest have been modified into high-conversion facilities. These refineries crack and coke the heavy crude “bottoms” into high-value products, removing all traces of sulphur to produce expensive low-sulphur fuels. These highly complex facilities are specifically designed to process heavy sour feedstock, such as Western Canadian Select. In fact, refining margins are better with heavy crude feedstock than lighter oil.

Going back to the topic of this blog post we now understand three things:

  1. A heavy oil refinery will seek heavy, not light crude oils for its inputs.
  2. The US and China have a lot of very expensive high-conversion heavy oil refineries.
  3. Virtually all the oil produced in the US is light crude that is not an appropriate input for the high-conversion refineries in the US Midwest and Gulf Coast.

Now let’s look at all these recent articles that popped up in my Twitter feed in the last month:

All these articles share two common features:

  1. they all claim that there will be no demand for Alberta bitumen because of recent developments in the US, and
  2. they all derive their analyses back to a single author: Paul McKay at The Energy Mix.

The number of times this same analysis has been sent to me is simply insane. The man is a one-man, bad-content provider who, through the power of repetition via numerous alternative publications, has almost single-handedly convinced the activist community that there is something wrong with bitumen and that there will be no demand for this “inferior” product in the future. As I have shown in this blog post, the truth is entirely different. The heavy oil refineries in the US Midwest, the Gulf Coast, in California and in China all want heavy crude and do not want light crude. They like the high margins, the lower volume of waste and the range of products that a high-conversion refinery can produce that a light oil refinery can’t produce. This would explain why the US is importing so much Canadian heavy oil while exporting so much  of their light crude oil production. It would also explain why sophisticated oil companies are looking for ways to move oil sands to market via rail and pipelines.

So when an activist links to one of these ridiculous screeds recognize it is simply a load of codswallop and that even a cursory investigation into the actual business of refining shows how this narrative is completely misguided and unfounded.

Posted in Canadian Politics, Pipelines, Trans Mountain, Uncategorized | 15 Comments

On the ridiculous claims that the Trans Mountain pipeline expansion will increase Vancouver’s gas prices

Last night they had another of the now regular stories on the local news about the rising gasoline prices in the Lower Mainland. On my walk to work today I passed the local Shell station and looked up to see the gas price was $1.549 per liter. That is closing in on a record and apparently prices are still on the way up. According to Dan McTeague from Gasbuddy.com, gasoline will soon hit $1.60/L. Needless to say a lot of people are complaining about this with Dan pointing out on Global News that one way to see a decrease in gas prices would be to see the completion of the Trans Mountain Expansion Project (TMX).

I agree with Dan. My opinion is based on the National Energy Board (NEB) documents that describe how the TMX could eliminate the bottleneck for the shipment of refined fuels from the refineries near Edmonton to the West Coast. It will also free up space on the new pipeline so that Alberta’s new Sturgeon refinery can ship diesel to the coast. As such, I was a bit shocked by what came next in that Global News report. Specifically, it was a series of quotes from an academic from Simon Fraser University by the name of Dr. Perl. In the story he made a claim that

B.C. is unlikely to see any bargains from increased supply because of the cost of financing infrastructure like the Kinder Morgan pipeline expansion.

“They’re going to want their money back,” Perl told Global News.

“Not in 50 years, but in 15 years, and that means higher prices because of the higher return, higher interest rates, expected returns on that investment.”

Needless to say I was a bit shocked by that claim and the intention of this blog post is to put paid to these ridiculous claims by simply explaining the facts about the pipeline and our local gas prices. Once I do, I will leave it to you, the reader, to decide who is right and who is wrong on this topic.

Our local gas price has a lot of factors built into it. Let’s start with taxes. Provincially, in the lower mainland we pay 32.17 cents/L (c/L) of provincial taxes for every liter of gas, this can be broken down to:

  • 17 c/L in TransLink Tax,
  • 6.75 c/L in British Columbia Transportation Financing Authority  Tax
  • 1.75 c/L in Provincial Motor Fuel Tax, and
  • 6.67 c/L in Carbon tax

The feds also get their pound of flesh. Federally we pay:

  • 10 c/L federal excise tax and
  • 5% GST on our total purchase price (or 7.5 c/L on our $1.549 gas)

Adding up all the taxes together we get 49.67 c/L for taxes. That leaves about $1.079 for non-tax sources. Now the problem with the gas business is that it is very opaque. The internal prices are kept private but one thing we are privy to is the rack price. The rack price is defined as:

the cost of the gas itself, as well as transportation, overhead, and profit costs. The price can vary from terminal to terminal and depends on the cost of crude oil and related refining costs. The rack price also depends upon the distance between the fuel retailer and wholesale terminal. A gas station located far from a terminal is going to pay a higher fuel rack price than one located just down the street.

That would be all the costs, exclusive of the dealer’s mark-up which pays for the retail facility and all its staff. Most oil companies publish their rack price somewhere. Here is a link to the Petro-Canada daily rack price for Canadian cities. In Edmonton today it was 69.4 c/L while in Vancouver it is 92 c/L. There is a 22.6 c/L difference in the rack rate. In Anacortes the rack price (converted to Canadian dollars) is 76.36 c/L so the difference is 15.64 c/L.

Assuming the rack price is pretty comparable between retailers (to simplify this discussion) then the dealer’s mark-up would be 12.33 c/L. So from our $1.549/L we end up with:

  • $0.92 rack price
  • $0.3217 provincial taxes
  • $0.10 federal excise tax
  • $0.075 GST
  • $0.1233 dealer’s mark-up

We can’t do anything about the taxes and the retailer has a pretty small margin so let’s look at the rack price and the effect of the Trans Mountain pipeline on this price.

As discussed above, transportation costs are part of the daily rack price. Transportation costs vary by means of transportation but luckily we already know that the Trans Mountain benchmark rate (average rate for fuels running down the pipeline) is around 1.6 c/L – 1.7 c/L. Since gasoline is a lot easier to move down the pipeline than diluted bitumen it has a lower rate (called a “toll” in National Energy Board speak). Based on the most recent toll information gasoline shipped from Edmonton to Burnaby costs about 1.3 c/L (note gasoline is called “Super Light” on that chart). That is a pretty small part of the rack price so how would toll increases affect that number?

As part of the TMX discussion economist Robyn Allan calculated that the costs associated with building the pipeline could increase the benchmark rate by 2.2 c/L. Since her calculation is based on the benchmark the gasoline component (as a Super Light) will have a lower increase but for argument’s sake lets say the price will increase by 2 c/L for shipping.

The doesn’t sound like much but a little goes a long way as the opponents of the pipeline will tell you. As Economist Allan argues:

B.C. motorists buy about 4.7 billion litres of gasoline a year. At 2.2 cents a litre on gasoline sales of 4.7 billion litres, the financial drain from the wallets of B.C. consumers to the treasuries of multinational oil producers comes in at just over $100 million each year.

But that argument has a hole the size of Vancouver Island in it because it ignores the other features built into the rack price.

As discussed above the rack price in Vancouver is 22.6 c/L higher than Edmonton and 15.6 c/L higher than Anacortes. Most of that difference is due to the supply issues. To explain let’s go back to the Petro-Canada rack rate chart and look at similar markets that are not subject to our supply bottlenecks. The price difference between Edmonton and Saskatoon (525 km apart) is only $2. The price difference between Edmonton and Winnipeg (1300 km apart) is $2.70 and the difference between Edmonton and Toronto (3500 km apart) is $7.2. Notice a trend? Those communities without transportation issues have tiny differentials. The distance between Edmonton and Vancouver (1150 km) is less than the distance to Winnipeg but our mark-up is almost ten times theirs. If we eliminated the bottleneck it might result in an increase in 2 c/L in transportation costs but will likely eliminate the 10 c/L – 20 c/L mark-up caused by our transportation bottlenecks. An increase in 2 c/L that results in a decrease of up to 20 c/L…that is a trade I am willing to make any day of the week.

Having demonstrated that Ms. Allyn’s argument is faulty let’s look at the argument made by Dr. Perl in the Global News story that introduced this blog post. In the story Dr. Perl argued that our prices could increase stupendously if Kinder Morgan decided it wanted to amortize their pipeline over 15 years instead of over 50 years. Well if unicorns existed I would want one for a pet but I’m not making any plans for that either. The reason his suggestion is unbelievable is that the toll is set by the National Energy Board and they have to consider the national interest in their decisions. So unless Kinder Morgan can convince the NEB that it is in the national interest to change their amortization schedule then it is more likely that the NEB will maintain the rates right around where they have been for the last decade and where they were when the project was proposed and approved.

So let’s step back and look at that $1.549 gasoline at my local corner. A large percentage of that cost is the result of a shortage of capacity to move refined fuels across the province. Now let’s remind ourselves about the TMX. As I have written a couple times recently, the TMX has two major components:

  • Line 1 would consist of existing pipeline segments (with pump upgrades) and could transport 350,000 b/d of refined petroleum products and light crude. It has the capability to carry bitumen but at a much reduced volume per day. Notice that absent the heavier bitumen it can carry an extra 50,000 b/d.
  • The proposed Line 2 would have a capacity of 540,000 b/d and is allocated to the transportation of heavy crude oil. This new pipeline and configuration setup would, add 590,000 b/d to the existing system for a total capacity of 890,000 b/d.

As I have explained, Line 1 is intended to help mitigate the supply bottleneck that has Vancouver drivers paying such high prices for gasoline and diesel. It will supply more capacity to carry gasoline from the refineries near Edmonton to the west coast; it will provide new capacity to transport the diesel produced by the new Sturgeon Refinery (you know one of those refineries the activists insist we start building) and it provides capacity to supply the Parkland refinery (formerly known as the Chevron Refinery). The Parkland refinery historically got about half of its raw crude by rail (due to a shortage of capacity on the current Trans Mountain) [note: this paragraph has been changed to reflect info provided after the original blog post was posted].

Recognize that nothing I have written should come as a surprise to people like Robyn Allan or Dr. Perl and yet they have omitted this information in their submissions and their television/radio interviews. I am left to wonder why.

Correction:

The best thing about a blog is when someone reads it and can provide help to make it better. In this case I received information from Parkland that updates the information that I have relied on from a previous source. In my earlier blog post I reported that that the Parkland refinery in Burnaby gets about half  of its 55,000 b/d from the Trans Mountain and half by rail due to the lack of space on the existing pipeline. That reference is now out of date. I have been contacted by a representative from Parkland who informs me that Parkland now gets all its supply from the Trans Mountain. I will be editing my blog posts accordingly.

For those looking here is the NEB final document that many have asked about

Thanks for the information.

 

Posted in Canadian Politics, Pipelines, Trans Mountain, Uncategorized | 13 Comments

Why a Pragmatic Environmentalist supports the Trans Mountain Pipeline

I am a pragmatic environmentalist. I have worked in the environmental field for over twenty-five years. My area of professional expertise is the investigation and remediation of former industrial and commercial sites with a specialty in the assessment of petroleum hydrocarbon contamination and its effects on human and ecological health.

In my professional capacity I serve as a technical specialist in: industrial chemistry; the biodegradation of contaminants; the effects of contaminants on natural systems; and ecosystem restoration. I have no connection, financial or otherwise, to Kinder Morgan or the Trans Mountain pipeline but I have some strong opinions on the project which are based on my personal experience and specialized knowledge of this field. I have spent the last 16 years cleaning up the messes made by the generations before me. I have seen the consequences of oil spills and industrial activities first-hand and I recognize that all industrial activities have environmental consequences.

We live in a society that, like it or not, is dependent on oil (petroleum hydrocarbons) and petroleum hydrocarbon-based products. Our food is produced on farms that need heavy equipment to operate. That food is shipped around the world by air, water and rail, all of which rely on petroleum hydrocarbons to operate. Petroleum hydrocarbons also serve as the feedstock of the petrochemical industry, which forms the basis of all the things that make our modern world work. They are the building blocks of our plastics, our computers, the tools we need to keep us healthy and the drugs we take when we are sick.

In 2015 world leaders passed the Paris Agreement. As part of the process Canada agreed to drop our greenhouse gas emissions to 30 per cent below 2005 levels by 2030. Irrespective of what many activists may claim, Canada did not commit to trashing our economy nor did we agree to abandon all fossil fuels. Canada certainly did not commit to achieving a fossil fuel-free status in less than two decades. I have read many recent articles written by activists who repeat ridiculous claims like: “new research shows that the fossil-fuel era could be over in as little as 10 years.” As I have demonstrated at this blog, the claim that we could eliminate our reliance on fossil fuels in the next 10 years does not even rise to the level of laughable. It is simply magical thinking. If we undertake herculean efforts and dedicate a historically unprecedented per cent of our national gross domestic product to the task we have a reasonable chance of weaning ourselves off fossil fuels in 30-50 years. Even then it is likely closer to the 50-year than the 30-year timeline. What this means is that Canada has, and will have, an ongoing need for fossil fuels for the foreseeable future.

A point seldom discussed by activists is the costs. As I noted, the effort to wean ourselves off fossil fuels is going to be incredibly expensive. That money has to come from somewhere. That somewhere is the Canadian tax base and the way to build that tax base is to take advantage of Canadian natural resources not to undercut them.

I know that the term “ethical oil” has some blemishes because of issues surrounding its origin, but I believe in the concept behind the term. As a Canadian I want my personal gasoline purchases to go towards subsidizing medicare and not subsidizing a despot or paying for a tyrant to bomb his neighbour. I want to know that the oil used in my car was not generated using slave labour in a country without a free press, and where environmental regulations are noted by their absence rather than their application. I want my oil being produced by well-paid Canadians in a country with a demonstrably free press, strong government oversight and a strong tradition of NGOs to watch over the regulator’s shoulder.

As a Canadian I will point out again that Canadian oil helps support Canadian jobs and Canadian institutions, and provides the funds to pay for our education and medical systems while subsidizing transfer payments. This brings us to the Trans Mountain Expansion proposal (TMX). The TMX has two major components:

  • Line 1 would consist of existing pipeline segments (with pump upgrades) and could transport 350,000 b/d of refined petroleum products and light crude. It has the capability to carry bitumen but at a much reduced volume per day. Notice that absent the heavier bitumen it can carry an extra 50,000 b/d. Line 1 is intended to help mitigate the supply bottleneck that has Vancouver drivers paying such high prices for gasoline and diesel.
  • The proposed Line 2 would have a capacity of 540,000 b/d and is allocated to the transportation of heavy crude oil. This new pipeline and configuration setup would, add 590,000 b/d to the existing system for a total capacity of 890,000 b/d.

Freeing up Line 1 will allow the west coast to become less reliant on foreign imports and provide a means for the Sturgeon refinery to get its production to BC. Meanwhile, a big complaint is that much of the increased pipeline capacity is for “export”, but “export” can mean a lot of things. It is likely that a major “export” location for Trans Mountain oil will be the Puget Sound with most of that increase traveling along the existing upgraded pipeline. Much of the remaining export will be to California which is also suffering from a heavy oil shortage. Due to its proximity, tankers from Vancouver to California will be the cheapest way for California to get heavy fuel which means Albertans will get the best price for that oil (as there will not be a transportation premium).

As I wrote in my previous post the current pipeline capacity to the West Coast is inadequate to supply demand. The volume in excess of demand still needs to get here so where is it going to come from?

  • Absent the TMX we will be seeing more foreign tankers in Washington waters. Those tankers will not meet the stringent safety requirements that the NEB has imposed on the TMX ships but those tankers will be still sailing through the same “treacherous” waters. So we see a significantly higher risk from tanker spills.
  • Absent the TMX upgrade we will see a significant increase in oil-by-rail to the Puget Sound (Bakken oil transported along the Columbia River Valley).
  • Absent the TMX we will see continued movement of oil-by-rail to the Lower Mainland down the Thompson and Fraser River valleys. A spill on any of the rivers is more likely by rail than by pipeline and would cause untold damage to endangered fisheries.

So what are we looking at if the activists manage to stop the TMX? Certainly not a decrease in ecological risk. Rather we will see an increase in risk to our rivers and the marine environment…and at what cost? Any rent-seeker who thinks that blocking the pipeline will somehow help us fight climate change is barking up the wrong tree, because the countries that will serve as the replacement for Canadian oil (the Saudis, Nigerians and Algerians) are not paying into our federation; they are siphoning money out of it. If you want your bridges, roads and sewage plants built/repaired, then you are going to need money and blocking the Trans Mountain is exactly the wrong way to obtain those funds.

As I have written numerous times at my personal blog, we need to wean Canada off fossil fuels as our primary energy source. If we are to avoid the serious consequences of climate change, we will need to eliminate fossil fuels from our energy mix. However, contrary to what many say, the process of doing so will take decades, and in the meantime we will still need petroleum hydrocarbons.

So, the question that must be asked is: from whom do we want to source our needs? From Canadian provinces that pay into equalization or from foreign despots who use the money generated to fund wars and underwrite totalitarian regimes?

The reality is that you can’t have a legitimate discussion about the topic of oil without considering the ethics underlying our oil supply. Regardless of branding, ethical sourcing has to be part of the discussion. As a pragmatic environmentalist seeking only to ensure a healthy economy on a healthy planet, I would be remiss if I ignored this topic.

Some commentators say we should get out of the oil business and cede the field to the despots, the tyrants and the murderers. I disagree. I see a need to supply the Canadian market with Canadian oil, produced by Canadian workers who pay into the Canadian tax system and thus underwrite the costs of Canadian civil services, the Canadian way of life and the Canadian move away from fossil fuels.

Put simply, I want the funds generated by Canadian oil to help fund our Canadian transition away from our dependence on fossil fuels. The first step in that process is getting that oil to market in the safest, least environmentally harmful manner and that means via pipeline. Most importantly, blocking the pipeline is not going to reduce our dependence on fossil fuels, rather it will simply redirect the crude to less safe means of transport while simultaneously reducing our economic ability to fight climate change. One might say we will end up with the worst of both worlds, a greater risk to the environment and less financial ability to finance the fight against climate change.

Posted in Canadian Politics, Climate Change, Pipelines, Trans Mountain, Uncategorized | 37 Comments

The question anti-Trans Mountain Pipeline Expansion activists refuse to answer

This weekend both pro- and anti-Trans Mountain Pipeline Expansion Project (TMX) rallies were held. Sadly I couldn’t attend either. I did take advantage of the interest to try to figure out what was going on in the heads of the people fighting TMX so I asked them a question:

My challenge to #StopKM protestors: Show me a safer way than the @TransMtn to get the fossil fuels we need to run our society to the West Coast What is your alternative to #KinderMorgan?

I tagged so I figured that I would get some informed discussion. Some people tried to change the topic but not one addressed the question at hand. At last count the tweet had over 16,000 views with no one actually addressing the question posed. Later in the day I sent out a follow-up which said:

This morning I asked the question: Show me a safer way than @TransMtn to get the fossil fuels we need to run our society to the West Coast What is your alternative to #KinderMorgan? 10,000 views and not 1 response

It got 6,000+ views. I got more non-responses with Tzeporah Berman providing the prototypical answer:

The alternative is don’t expand production.

My reply thread is here 

This blog post will provide the details and the references that I could not fit into a Twitter thread. I hope it will show just how hollow the arguments of the anti-TMX protesters really are.

There is a common misconception about the role of pipelines in our daily lives. We live in a society that is dependent on oil and oil products. These products aren’t just refined into gasoline and diesel to run our vehicles; they also serve as the feedstocks for the petrochemical industry which provides the building blocks of our plastics, cell phones and many of the drugs we take when we are sick. Without fossil fuels our economy would simply stop. Every calorie eaten by David Suzuki has fossil fuels carbon incorporated into it. There is literally no food a Vancouverite can eat that wasn’t in some direct way, obtained using fossil fuels.

As I have written previously, British Columbia is nowhere close to reaching a fossil fuel-free status. So let’s acknowledge the reality, we need gasoline, diesel and oil to run our society. So where do these oil products come from? In coastal B.C. most of it comes via the Trans-Mountain pipeline. So let’s look at what the pipeline currently does:

The Trans-Mountain currently has a capacity of about 300,000 barrels a day (b/d).

Now you will notice that I said that only half of Parkland’s raw crude comes via the pipeline. You might ask: why? The reason so much of the Parkland refinery’s crude comes by rail is that the current pipeline is typically oversubscribed by about 30% on a month-to-month basis. This means that only about 60% of the product that shippers want to send on the pipeline actually ends up on the pipeline. There is simply not enough room to get all the crude and refined fuel we need on the West Coast to the West Coast using the existing pipeline. So when activists say we have enough capacity that is simply wrong the pipeline is already unable to ship all the production that we need to move.

Because of the shortage of volume on the pipeline Vancouver Island is supplied with almost all of its refined products via barges from Vancouver and the Puget Sound.

So let’s talk about the TMX because this is another case of the activists always getting their facts wrong. I cannot count the number of people who claimed on my timeline this weekend that the pipeline was only to export bitumen to Asia. That is what they have been told and heaven help the person who directs them to the National Energy Board documents that say otherwise. Well here is what the NEB submission actually says:

The TMX has two major components:

  • Line 1 would consist of existing pipeline segments (with pump upgrades) and could transport 350,000 b/d of refined petroleum products and light crude. It has the capability to carry bitumen but at a much reduced volume per day. Notice that absent the heavier bitumen it can carry an extra 50,000 b/d. Line 1 is intended to help mitigate the supply bottleneck that has Vancouver drivers paying such high prices for gasoline and diesel (as I will explain later).
  • The proposed Line 2 would have a capacity of 540,000 b/d and is allocated to the transportation of heavy crude oil. This new pipeline and configuration setup would, add 590,000 b/d to the existing system for a total capacity of 890,000 b/d.

A big complaint is that much of the increased pipeline capacity is for “export” but “export” can mean a lot of things. Thanks to the lack of refining capacity in the Vancouver region, we actually “export” oil and almost immediately need to re-import it as aviation and jet fuel from the Cherry Point refinery in Washington (or as refined fuels on Vancouver Island).

Most Canadians don’t know that there are five major refineries in the Puget Sound with a combined capacity of 647,000 b/d. So why is that important? For the last 20 years, up to 600,000 b/d of Alaskan crude have traveled down the coast of B.C., in tankers, and into the Puget Sound. Now let’s talk about some hypocrisy. US NGOs bragged about sending busloads of protesters to the Saturday rally. One of their complaints was the increased tanker traffic. In response Stewart Muir of ResourceWorks tweeted this:

Muir

It is a map from the TankerTracker App that shows that at the same time as Seattle protesters were driving up the coast to complain, eight tankers were in US waters. Unlike the tankers under the TMX none of these tankers are carrying local pilots while attached to two rescue tugs. These American protesters came up to Vancouver to fight against seven tankers a week when they have eight tankers in their waters at the same time. Could these activists be any more hypocritical?

Now a not well-known fact is that the Alaskan oil fields are drying up and new sources are needed to keep the Pacific Northwest in fuel. As a result, new railway capacity is being built to supply up to 725,000 b/d of Bakken crude to the West Coast and the Puget Sound refineries. The route will travel over any number of rivers including the headwaters of the Kootenay River and alongside the Columbia River to the Puget Sound.

Transporting oil and gas by pipeline or rail is in general quite safe. But when comparing rail to pipelines, rail is over 4.5 times more likely to experience an occurrence than pipelines, and when it does, we get more Gogamas, Galenas and Lac Megantics. But the big ones and the ones we hear about, they aren’t the only ones, let’s not forget the dozen or so other rail issues that didn’t make our local press. As for the protectors of our coast they never mention the Mosier derailment that came within feet of hitting the Columbia River. We share the Columbia with our American cousins and if they need to transport crude along the Columbia it is only a matter of time before a big spill happens there and then what will the activists be saying?

In a previous blog post I did the math and realized that because of where the rail lines run (along the river valleys), the 4.5 times number is not even relevant in BC, Washington or Oregon. The number is actually much higher. The environmentalists claim to want to protect our fragile ecosystem but instead they will greatly increase the likelihood of a spill and when that spill happens it could wipe out the Columbia or Fraser River fisheries…something the activists choose not to talk about while simultaneously complaining that the TMX will put those fisheries at risk.

To put my number into perspective according to industry statistics, in 2014 about 185,000 b/d of Western Canadian crude oil was transported to market by rail. In 2018, rail volumes are estimated at around 500,000 b/d to 600,000 b/d if Keystone XL is not available.

Now before I finish up I have to point out another way in which the anti-TMX activists are talking out of both sides of their mouths. I can’t count the number of activists who declare that Alberta should refine bitumen in Alberta. Well had any of them bothered to do their research they would discover that Alberta is about to open up its first new refinery in decades: the Sturgeon refinery It is the first refinery built exclusively to refine bitumen and has cost billions to build.  Now that the refinery is almost ready to go online guess what one of its biggest headaches will be? That’s right getting its production to market. The Trans Mountain is oversubscribed and the rail lines are full. One of the big benefits of the TMX will be the space opened up in Line 1 for refined fuels. British Columbia could finally have a steady supply of clean, Canadian diesel. But only if the pipeline is upgraded.

So I’ve thrown a lot of numbers around but let’s go back to my original question to the activists. We have now clearly demonstrated that the current pipeline capacity to the West Coast is inadequate to supply demand. The volume in excess of demand still needs to get here so what is their solution?

  • Absent the TMX we will be seeing more foreign tankers in Washington waters. Those tankers will not meet the stringent safety requirements that the NEB has imposed on the TMX ships but those tankers will be still sailing through the same “treacherous” waters. So we see a significant increase in risk from tanker spills.
  • Absent the TMX upgrade we will see a significant increase in oil-by-rail to the Puget Sound (Bakken oil transported along the Columbia River Valley).
  • Absent the TMX we will see continued movement of oil-by-rail to the Lower Mainland down the Thompson and Fraser River valleys. A spill on any of the rivers is more likely by rail than by pipeline and would cause untold damage to endangered fisheries.

Remember the complaint about all the oil being exported? Well it is likely that a major “export” location for Trans-Mountain oil will be the Puget Sound with most of that increase traveling along the existing upgraded pipeline. Much of the remaining export will be to California which is also suffering from a heavy oil shortage. Due to its proximity, tankers from Vancouver to California will be the cheapest way for California to get heavy fuel which means Albertans will get the best price for that oil (as there will not be a transportation premium).

We need to move towards a society where oil products are not used for power or fuel but that is not going to happen in the next decade or even two. Until that day comes, we need these products and the safest, most environmentally responsible way to get them to us over land is via pipelines. While we transition away from fossil fuels lets ensure that we use the safest modes of transport in order to protect our joint ecological heritage. The argument that we can do without simply doesn’t hold water. Currently (and for the next 20+ years) our transportation and food systems will remain utterly dependent on fossil fuels to keep our communities and economies alive. Given those real needs a pragmatic environmentalist looks for the safest way to move those fossil fuels and in this case that means pipelines like the Trans-Mountain.

Addendum:

Dr. Andrew Leach has used NEB data to graph what has gone through the pipeline since 2006. This is presented below:

Leach Graph

note that in the last few years Westbridge terminal has not been receiving its full allotment for export as the domestic light going to Burnaby (and presumably Parkland – see below) has displaced some of the marine exports.

Correction:

The best thing about a blog is when someone reads it and can provide help to make it better. In this case I received information from Parkland that updates the information that I have relied on from a previous source. In this blog post, I reported that that the Parkland refinery in Burnaby gets about half  of its 55,000 b/d from the Trans Mountain and half by rail due to the lack of space on the existing pipeline. That reference is now out of date. I have been contacted by a representative from Parkland who informs me that unlike Chevron, Parkland now gets all its supply from the Trans Mountain. I will be editing my blog posts accordingly.

Posted in Canadian Politics, Pipelines, Trans Mountain, Uncategorized | 80 Comments

On Jason Kenney’s threat to shut off Vancouver’s gasoline supply

In the last week Jason Kenney was on a West Coast swing as part of his continued attempt to replace Rachel Notley as Premier of Alberta. During the trip Mr. Kenney repeatedly threatened to stop the flow of oil to B.C., in response to the BC government’s use of regulatory processes to delay and possibly convince investors to give up on the construction of the Trans Mountain Pipeline Expansion (TMX). While many have argued that Mr. Kenney might lack the regulatory authority to block the movement of fuels, Mr. Kenney has indicated that he can return control of the authorization of fuel exports to his government and then turn down/off the flow of refined fuels to the West Coast. The environmentalists have argued that this might be a good thing. Much to my surprise, one of the top minds in the field Dr. Andrew Leach of the University of Alberta echoed their argument and this started a rather odd discussion between the two of us. It all centered around this comment:

If you’re going to be left short fuel, being so with a deepwater port and a refining complex around the corner isn’t really the worst circumstance.

While we had a somewhat less than cordial discussion, I was left with the need to fill in the gaps left open during the discussion. Specifically, I want to point out some critical facts that individuals like Dr. Leach have overlooked when discussing the potential outcome of a partial shut-down of refined fuel shipments through the Trans Mountain Pipeline system.

Let’s start with the biggest myth being advanced by those who are belittling the risks associated with Mr. Kenney’s threatened shutdown. This with summed up by Dr. Leach’s comment in the National Post: “It’s pretty hard to hold someone hostage … when they have a port”. The problem with that suggestion is that it completely ignores the facilities, layout and limitations of the Port of Vancouver. The loading and unloading of fossil fuels is a dangerous process that requires specialized facilities and when you off-load that fuel you need somewhere to actually put it. The Port of Vancouver lacks any large tank farms for off-loading the fuel needed to keep Southwestern British Columbia supplied with refined fuel. That facility already exists on Burnaby Mountain.

It is not like ships can get the fuel to the current Trans Mountain tank farm which is located on a mountainside (180m – 190m above sea level), 2.5 km east of Burrard Inlet. The pumps at the tank farm are designed to take advantage of that altitude loss, the facilities at Westbridge terminal are not built to fight against that gravity challenge. They can’t pump fuel up that mountain.

Dr. Leach’s reply was you’ve got 400kbbl of storage at Westridge which is 2x interior storage. You’ve got docks. There are tankers. Storage is the easy part. This completely mis-represents the situation. The Westridge marine terminal houses three storage tanks and can handle volumes of approximately 395,000 barrels (63,000 m³) of fuels. Currently those tanks are being used mostly for jet and specialty fuels. To suggest that the terminal would be able to off-load and store all the jet fuel, diesel, gasoline and bunker fuel needed to run Southwestern BC simply ignores the laws of physics. Three tanks simply can’t simultaneously hold four types of fuel and the three tank aren’t nearly big enough to keep us supplied. Not only that, but I remain amazed that the people fighting the facility would expect Kinder Morgan to simply turn over their facility to help the government trying to put them out of business. Mr. Kenney has never suggested that he would block all exports, just refined fuels. Kinder Morgan would likely want to use their facility for export which would be consistent with its existing license and all its existing permits.

Even more challenging would be the supply network in the Okanagan. Virtually all the fuel used in the Interior of BC funnels through Kamloops. Some have argued that this supply can simply be replaced by refined fuel-by-rail. That, of course, ignores the critical shortage of rail cars in Western Canada. Just look what happened during the summer of 2016 when a minor hiccup in oil-by-rail left West Kelowna dry. Shut down the Kamloops terminal and the interior goes dry, and with it goes the tourist industry.

So the question arises, do we have an indication of what to expect if Alberta decided to reduce the movement of refined fuels down the Trans Mountain? This week gives us a pretty good indication of what would happen. As reported in BusinessinVancouver the Parkland refinery processes 55,000 barrels of oil per day to produce gasoline, diesel and jet fuel. The refinery supplies 20% to 25% of B.C.’s gasoline and diesel. As part of an upgrade, the refinery has reduced its throughput and the result has been a spike in gasoline prices with prices already over $1.50/L with the possibility of hitting $1.60/L in the near future.

We are talking about a minor reduction in the operator that produces less than a quarter of the fuel used on the West Coast. As reported by Natural Resources Canada, Edmonton refineries provide about 50%-60% of the petroleum product needs in the Vancouver market. If a minor cut from the producer that supplies 20% to 25% of B.C.’s gasoline and diesel results in gasoline priced at $1.60/L imagine what shutting down 60% of our supply for a week or two would do. As I have pointed out previously, there is simply not an excess of supply in PADD 5 so our trading partners don’t have the excess to sell us. Instead we would be looking at gas in the $2/L – $3/L zone.

Ultimately the challenge faced by British Columbia is that our geography conspires against us in the transportation of fossil fuels. With mountains and water bodies in the way, getting fossil fuels to market is particularly challenging. This is aggravated by the fact that we have allowed ourselves to become completely dependent on outside sources to keep our economy running. When those other constituencies choose to direct their output elsewhere this can leave us in a bind. It can be argued that we have allowed the market to become too tight such that even the smallest fluctuations in supply can result in large price spikes. Expanding the Trans Mountain to provide more space for refined fuels can only help improve the market conditions on the coast. In particular adding capacity to get access to the output from the new Sturgeon refinery would go a long way to reducing our fuel shortages on the coast. Alternatively, we need to accept the risks associated with replacing that supply via rail. Given our anticipated population growth and our still relatively slow transition off fossil fuels for transportation, British Columbia will remain dependent on Alberta for our fuels and will thus remain potentially at risk from unfriendly governments in Edmonton who may choose to rattle their swords in our direction.

Addendum

An earlier version of this post had a discussion of BC politics that likely represented a bridge too far and given the individuals who have made the suggestion (including Keith Baldrey who knows this stuff) I was probably being a bit too Machiavellian in my thinking. Admittedly, few people have gone wrong guessing that Jason Kenney would take things a step further than the consensus opinion. That being said, my expertise is definitely not provincial politics so I have removed the last paragraph from the main text and left it below for the political plotters.

Dr. Leach has also pointed out the difficulties Jason Kenney would have given that the Trans Mountain is a federally regulated pipeline. This also may be true but for the purposes of this thought experiment I will take Mr. Kenney at his word that he has the power to manipulate what goes down the pipe. Alternatively he could simply act and then use the delays inherent in NEB processes to his advantage.

To conclude I would point out that I have followed the back-and-forths between Dr. Leach and Mr. Kenney and by my count Dr. Leach is ahead by a landslide if not a TKO. Given a discussion between the two I would place my bets on Dr. Leach when it comes to this topic.

Removed paragraph discussed above

Politically, $3/L gasoline could well end the tenure of the BC NDP/Green government. Currently the BC NDP/Green government has a very slim majority in the Legislature. BC has recall legislation that allows recall petitions beginning 18 months after the last election. Several swing ridings in Surrey were won by the NDP, reportedly on the strength of the promise to reduce bridge tolls (making commuting cheaper). Meanwhile Diane Watts, who still has a powerful political machine in Surrey, is sitting on the sidelines biding her time. Consider what would happen if 18 months after the election gasoline was at $3/L based on the new Jason Kenney government being true to his word? Do you not expect 3-4 “spontaneous” recall petitions starting up in key swing ridings in Surrey? That is the political game being played here. Anyone who analyzes Jason Kenney’s plans while ignoring that he is a career politician who thinks this way is completely missing the point. The best way for Jason Kenney to get the pipeline built is to change the government of BC and doing that would simply involve reducing the flow of gasoline to the coast and watching the political dominoes fall.

Posted in Canadian Politics, General Politics, Pipelines, Trans Mountain, Uncategorized | 5 Comments

On questionable science about fugitive emissions in the BC natural gas industry

I was mostly off-line earlier in the year when two publications came out on fugitive emissions in the British Columbia natural gas industry. These two publications were:

Mobile measurement of methane emissions from natural gas developments in northeastern British Columbia, Canada by Atherton et al., 2017 and

Fugitives in Our Midst Investigating fugitive emissions from abandoned, suspended and active oil and gas wells in the Montney Basin in northeastern British Columbia by the Suzuki Foundation (primary author Dr. John Werring).

These two publications were hailed by opponents of the BC LNG industry as destroying the “myth” that BC LNG could be used to help reduce global carbon emissions. I discussed why I believe BC LNG is good for the planet in my previous blog post On the global climate change math supporting BC LNG. Coincidentally these two publications came out just when a different article (Country-Level Life Cycle Assessment of Greenhouse Gas Emissions from Liquefied Natural Gas Trade for Electricity Generation by Kasumu et al., 2018 ) appeared in the peer-reviewed press supporting the thesis that BC LNG can help reduce global global greenhouse gases (GHG) emissions. Since that paper is behind a paywall you can get a taste of its contents in this Business on Vancouver article: BC LNG exports would have net GHG reductions: study or this Intelligence Memo from the C.D. Howe Institute.

Given the importance of this topic I have decided to look more deeply into these two fugitive emissions studies. While Dr. Weaver (leader of our BC Green Party) likes to refer to the Atherton paper as the St. Francis Xavier Study it is important to recognize that both publications were funded, in whole or in part, by the Suzuki Foundation which is a strong opponent of BC’s LNG industry. Unsurprisingly, the results of these studies were seized on by politicians like Dr. Weaver  and activists who are fighting against the BC LNG industry. My conclusion from reading these publications is that both have significant flaws and neither represents, in my mind, science that should be considered in any serious policy discussion.

Let’s start with why I called them “publications”. Both were, arguably, “peer-reviewed”. The Artherton paper was peer-reviewed as an open-access article and so the peer reviewers were 1) self-selected, 2) not all necessarily experts in the area under consideration 3) not able to exert any authority over the process (i.e. the authors could choose to ignore the peer reviewers). Dr. Werring’s work doesn’t even rise to that that level. It was published independently by the Suzuki Foundation and  doesn’t even pretend to represent a balanced report but rather appears to be part of an anti-LNG campaign by the organization and has to be viewed in that light.

Since it is the most serious of the two let’s start with the Artherton paper. It presents a novel approach to estimating fugitive methane emissions. They did so by installing an “ultraportable greenhouse gas analyzer” (UGGA) into a vehicle and driving it around BC then using their results to extrapolate an emission volume calculation for the entire Montney formation. Now there are some incredibly significant issues with this paper that would have had any editor in a real journal pulling out their hair but given the limitations of this blog post I will only highlight the three most critical points.

We need to begin by considering how the authors generated their minimum detection limit (MDL). This is an incredibly important number for this assessment because it is the number used as a multiplier for almost all their total emission volume calculations. In this study they took their MDL, multiplied it by the percentage of facilities where they detected emissions and then multiply that number by the total number of facilities in the Montney. Thus if the MDL was flawed the resulting conclusion would be equally flawed.

The challenge with the instrument used (the UGGA) is that it is intended to be used in a stationary position when taking a reading. The amount of air it takes in matters for calibration purposes. In this study they operated the instrument while driving around the country-side. To address that the instrument was not being used according to design specs the authors reportedly did a bench experiment and came up with correction factor for their instrument readings (a multiplier of 3.3 times). The problem is they don’t present any details about how they derived that multiplier or the range of values generated in the process. They just reported that their “mean level of dilution was about 70%“. They don’t include error bars or any consideration of uncertainty they just multiply their observed values by 3.3 times. The problem is that this number really matters. It is critical to establishing total emission volume estimates. Recognize that later in the publication they report numbers to 6 significant figures from an initial value “about 70%”? Put another way, their headline volume estimate could be 3.3 times smaller and we, the reader, would have no way of knowing. Since the conclusion of the report was that total emitted volumes are 2.5 times higher than are officially being reported, this factor of 3.3 is pretty darn significant. By omitting the critical calibration data we are left to simply trust that they got the number right. Most confusingly, this is passed on as a minor issue barely worthy of consideration?

Taken alone the absence of calibration information should inject a serious level of doubt about the publication but then you have to consider how they addressed “surveyed facilities” which make up almost a third of all the emissions they report in the publication. In the study they use modelling to justify why we should consider their numbers as valid. In doing so they acknowledge that they have uncertainty about  their readings from “surveyed facilities” (collection facilities etc…) since those facilities don’t match the conditions of their model. As a consequence, they decide to ditch their established methodology altogether and to use a number essentially picked out of thin air.

For this reason, instead of actual measured MDLs we used previously published natural gas facility emission volumes of 2.2 g/s (Omara et al., 2016),

Now this is a pretty big deal because if you look at the study you see that almost 35% of the reported Montney emissions are based on this assumption. This caused me to go look at the Omara paper and I admit I am confused. I have read the Omara paper forward and backwards a half-dozen times and do not see where they get that number. The paper doesn’t even look at production facilities, it uses that term to describe multi-well pads. The paper is also studious about not providing individual numbers, it provides ranges with confidence intervals. Finally, the paper addresses facilities in the Marcellus Basin. The natural gas in the Marcellus formation is renowned for being low-sulfur (sweet) which means that leaks from their facilities are bad but not life-threatening. BC and Alberta natural gases are known for being high-sulfur (sour) and as such the facilities have to be much tighter because leaks from these facilities can be fatal to the employees who visit those facilities. This is a huge deal, the facilities simply aren’t comparable. To add insult, this issue was raised by one of the “peer reviewers” and the response by the authors was that:

We will seek to verify the definition of “facility” with Omara and perhaps a corrigendum can be issued that clarifies.”

They were told that one third of their total was based on an incorrect figure and instead of pulling back the paper to confirm their estimate they simply said they might have to offer a correction sometime later?

The third issue with this paper was raised by one of the peer reviewers (Tony Wakelin from the BC Oil and Gas Commission (BCOGC))and essentially ignored by the authors. Yes that is right the the BCOGC decided to have one of their people review the article. Needless to say the BCOGC, as the regulatory body that controls the database used by the authors, would be the people who could tell the authors a lot about what the coding used in the database means. For instance this is what the BCOGC told the authors the term “cancelled” facilities meant in the database.

“Cancelled” means the well permit expired without drilling commencing. So these wells do not physically exist in the field and can not be attributed to the release of methane.

Why is this important? Well the authors attributed pretty significant emissions to those  cancelled facilities which is a physical impossibility.

The BCOGC also raised the calibration issue (3.3 time multiplier I mentioned above) and the authors provided this reply:

The primary purpose of the paper was to determine emission frequencies, not to create a highly accurate volumetric inventory

Read that again. The intention of the paper was not to create a “highly accurate volumetric inventory”….except that the HEADLINE CONCLUSION of this publication is a volumetric inventory. Literally the only reason people are talking about this paper is that it provides a number (a volumetric inventory) for fugitive emissions in the Montney formation. How can the authors say it was not the purpose when that is literally the only reason people talk about the paper.

Finally let’s look at the final comment from the BCOGC:

The fact significant quantities of emissions were attributed to wells that do not exist (i.e. 25 per cent of cancelled wells were reportedly emitting) calls into question the accuracy and validity of the discussion paper. Also, the basis for determining emission factors used in this discussion paper is highly questionable – therefore, this study should not infer that the estimates constitute an emission inventory that could be compared with what is reported under the Greenhouse Gas Emission Reporting Regulation.

Yes you read that right in the final table (Table 2) 11.5% of the total emissions reported in the survey were assigned to wells that WERE NEVER DRILLED! These numbers were then extrapolated so that magically 1989 of these imaginary non-wells supposedly emit 12,948 tonnes of methane a year into the atmosphere. Can you imagine a professional editor letting a paper go into their journal when 11.5% of the volumetric assessment is simply imaginary? The response of the authors…crickets….

To summarize, in this publication:

  • 53.5% of the reported emission volume calculations could be inflated by as much as 3.3 times;
  • 35% of the reported emission volume calculations result from an extrapolation based on a number (2.2 g/s) that never appears in the referencing document and if it did would represent results from a geologically different formation in a different jurisdiction that produces sweet gas and thus has very different safety requirements; and
  • 11.5% of the reported emissions volume calculation is from wells that were never drilled in the first place.

I think it is pretty clear that this volume estimate represents problematic science to say the least and any expert reading the work would be shocked that a former scientist turned politician like Dr. Weaver would use these results to develop policy.

Now this post is already too long but I still want to touch on the Suzuki follow-up study by Dr. Werring. I really don’t have much to say about this report because it starts off so wrong that it is hardly worth digging deeper. Why do I make such a bold statement?  Here is how they describe their methodology:

On each survey day, our field investigators would drive to the chosen area for investigation and access any or all oil and gas facilities (wells, batteries, compressor stations), depending solely on whether they were accessible (whether or not the well site or facility was flagged as a possible emitter was only one determining factor). Accessibility was key. If a facility was behind a locked gate or if the property housing the facility was marked “No trespassing”, the facility was passed by, unless it could be reasonably and safely inspected using the FLIR camera from public roadways

Now re-read that paragraph again do you see the issue? The problem is an issue called “sampling bias“. Sampling bias is when your sampling program over-samples from a particular proportion of the population with respect to the entire population. To explain here is a simple analogy. Consider you decided to study the effect of drinking on incarceration. One Sunday morning you send a researcher to stand outside the municipal drunk tank just as the police were releasing the revelers from Saturday night. Your researcher dutifully interviews each reprobate about their drinking habits and their overnight incarceration. Suppose at the same time you send a different researcher to ask the same battery of questions outside the Mormon Temple in Langley. If the two researchers interviewed the same number of people your combined results might read something like 50% of the people interviewed in our study spent the night in jail and 100% of the people who spent the night in jail were drinkers. 100% of non-drinkers had not spent any time in jail in the last year. These would represent some pretty inflammatory results if you were trying to argue the connection between alcohol and incarceration wouldn’t they? Almost like there was a bias in your sampling methodology.

Now let’s look at the sampling program Dr. Werring used in his study. He only went to facilities that had zero security (not even a “No Trespassing” sign). They did not enter facilities that had any security whatsoever. Do you honestly think that investigating only those facilities that are completely unsecured can be used to extrapolate to all facilities in the region? Do the folks from the drunk tank represent all people in Langley? Of course not. The sampling bias introduced by the sampling plan makes the results essentially meaningless. Certainly Dr. Werring can argue that the natural gas facilities from the cheapest producers, (the producers too cheap to even put up a “No Trespassing” sign) leak at a high rate…but then you might expect that result. If you are too cheap to put out a “No Trespassing” sign you are likely too cheap to maintain your wells effectively. Admittedly, Dr. Werring encountered a bunch of bad facilities that deserve to be inspected by the BCOGC, but to brand an entire industry using the results from a subset of its worst members represents bad science and should not be the basis of a policy decision.

To conclude, fugitive emissions are an important concern in establishing the effectiveness of BC LNG in reducing global GHG emissions but anyone who relies on these two publications in establishing and inventorying emissions has made a bad choice. Both publications have easily recognizable flaws and neither should serve as a critical reference in any further policy assessment.

 

Posted in Canadian Politics, Renewable Energy, Uncategorized | 4 Comments