Countering Energy East Pipeline Spin: Talking points

TransCanada Corp. is actively promoting plans for the “Energy East” pipeline that would carry up to 1.1 million barrels of oil per day, including tar sands crude, from Alberta to eastern markets. The 4,400-kilo-metre pipeline is expected to lead to massive tanker exports from Quebec and the Atlantic coast to send crude to the much larger and more profitable markets of the U.S., India, China and Europe. TransCanada would convert its up to 40-year-old natural gas pipeline (between Saskatchewan and Quebec), connecting it with new pipeline in the west to Empress, Alberta, and through Quebec to Saint John, New Brunswick.

The Council of Canadians opposes the Energy East pipeline. This export pipeline would pose serious threats to local water supplies, communities and coastal waters. It would promote the expansion of the tar sands, which contaminate the water, land and air of nearby communities, and stand in the way of the alterna-tive energy future we need. We encourage you to use these talking points when you attend open houses hosted by TransCanada Corp. to voice your objections to this broken pipeline plan.

For more information and resources please visit www.canadians.org/energyeast

Countering the Energy East spin at a TransCanada sponsored open house in Stittsville, Ontario.

Countering Energy East Pipeline Spin 2

The Energy East pipeline will result in a stronger oil refining industry and lead to greater energy independence in Atlantic Canada.

In reality:• Canada’s energy sector is market-based – oil goes to the highest bidder.

• The report Energy East: An Export Pipeline, Not for Domestic Gain shows that the vast majority of the pipeline’s oil – an estimated 750,000 to 1 million barrels – would likely be shipped, unrefined, to places such as India, Europe and possibly the United States.

• There are three refineries along the Energy East route: Suncor in Montreal, Valero in Levis and Irving in Saint John. These three refineries have the joint capacity of processing 672,000 barrels per day (bpd). There are three main existing and soon-to-be North American sources for these refineries: Atlantic Canadian offshore (100,000 bpd), U.S. imports (200,000 bpd), and Enbridge Line 9b reversal (250,000 bpd). This leaves a difference of only 122,000 bpd that the Energy East pipeline could supply.

• There is no assurance that crude refined in Quebec and Saint John will meet Eastern Canadians’ oil de-mands. According to a press release from Irving Oil (Saint John refinery) from early 2013, “the refinery exports over 80 per cent of its production to the U.S.” as refined products such as gasoline.

• Michel Martin, a spokesperson for Valero, one of the two Quebec refineries in question, stated in the Financial Post: “[The Valero refinery has] ‘no firm interest’ in the Energy East project at the moment because it has already made other significant sourcing commitments.”

• Enbridge Senior Adviser Stephen Wuori said in reference to Energy East: “Any other project [beyond Enbridge Line 9b reversal] would have to be for markets beyond Quebec.”

This is a nation-building project. It’s a “done deal” that is only being opposed by professional activists.

In reality:• What kind of nation is built on reckless expansion in the tar sands? The tar sands, expected to triple

production in coming years, are already Canada’s fastest growing source of greenhouse gas emissions. First Nations living downstream from the tar sands, one of the largest industrial projects on Earth, are facing frontline impacts including higher rates of rare cancers.1 The tar sands are causing serious water and air pollution and destroying large tracts of boreal forest.

• This deal is far from “done.” Opposition is already bubbling up along the route and organizing is under-way. TransCanada will face opposition to this project in each province it crosses. Tar sands pipelines, including Keystone XL, Enbridge’s Northern Gateway and Kinder Morgan’s TransMountain, are under heavy scrutiny and are unlikely to move forward. Why should Ontario, Quebec and Atlantic Canada accept the risks that other provinces are unwilling to?

• The Council of Canadians is one of Canada’s largest advocacy organizations. We do not accept govern-ment or corporate funding. We are sustained by the donations of supporters – individuals who believe in the work of the organization. We are working with families, landowners, students, workers, munici-palities and First Nations who recognize the risks this pipeline poses to our land, water and air. Unlike TransCanada’s multi-million dollar PR machine, the Council of Canadians’ campaign work opposing Energy East is sustained by a modest budget and is powered by the support of volunteers across this country.

THE SPIN

THE SPIN

Countering Energy East Pipeline Spin 3

Canadian regulations ensure pipeline safety.

In reality:• The Harper government’s 2012 omnibus budget bill almost entirely wiped out environmental regula-

tion in Canada. To streamline project approvals, the industry-friendly National Energy Board (NEB) was put in charge of energy projects and final decision-making power was given to the cabinet.

• The NEB regulates pipelines that cross provincial boundaries. Many of the federally-appointed board members come straight from the energy sector or from provincial regulators that green-lighted re-source projects.2

• The NEB does not have separate regulations for the transport of diluted bitumen from the tar sands despite ample evidence of the greater risks it poses when spilled.

• The Harper government has made it extremely difficult for people to participate in NEB hearings. To submit a comment letter about a tar sands pipeline, individuals now need to fill out a nine-page NEB online application form justifying the reasons why they should be allowed to do so, including profes-sional credentials and expertise.

• Prior to the NEB’s approval of Enbridge’s Line 9b reversal, CTV’s W5 found that the NEB only knew of seven spills along this pipeline, while Enbridge claimed there were 13. In fact, W5 found the pipeline had spilled about five times as much as the NEB disclosed – a total of 35 spills.3

• The NEB failed to report a massive explosion in a natural gas pipeline owned by TransCanada in 2009. The explosion sent 50-metre-tall flames into the air and destroyed a two-hectare site in Northern Alberta on Dene Tha’ First Nation land. A 2011 draft report by the NEB on the incident criticized TransCanada-owned subsidiary NOVA Gas Transmission for “inadequate” field inspections and “inef-fective” management. The report further revealed that “the section of the pipeline that burst in 2009 was 95 per cent corroded. TransCanada’s own rules required that it physically inspect a pipeline when it reached 75 per cent corrosion.” Conveniently for TransCanada, the failure to post this report – which the NEB deemed to be an “administrative error” – coincided with the environmental review of the controversial Keystone XL pipeline in the U.S. that included TransCanada’s negotiation of U.S. safety requests on pipeline construction, operation and design. The report only came to the public’s atten-tion thanks to a CBC Access to Information request and report.

THE SPIN

Countering Energy East Pipeline Spin 4

TransCanada prioritizes environmental safety.

In reality:• TransCanada is proposing to convert an existing natural gas pipeline in their Mainline Pipeline system,

parts of which are up to 40 years old. This system of pipelines has seen nine catastrophic events since 1991. Despite TransCanada’s claims of strict spill monitoring controls, almost all of the spills were discovered by people, not fancy electronic monitoring systems, and most were caused by stress, cor-rosion and cracking.4

• Evan Vokes, a former TransCanada engineer became a whistleblower when he publicly stated the cor-poration was consistently placing budget and schedule considerations ahead of pipeline quality and integrity. Vokes raised these concerns with the NEB.

• The NEB recently found TransCanada “non-compliant” in four out of nine categories regarding key safety systems.

• While TransCanada promised their Keystone pipeline (the Keystone XL will add to the Keystone pipe-line) would be state-of-the-art, there were 12 oil spills in its first year of operation, including one that spilled 79,493 litres of oil in North Dakota.5

• When the Keystone pipeline was being built, Mike Klink, a pipeline inspector working for a TransCana-da contractor, says he witnessed the use of cheap steel that is prone to cracking, poorly spaced rebar, sloppy concrete jobs, and fudged pressure testing. When he reported these issues to TransCanada, he was first ignored and then fired.6

Tar sands spills are no more damaging than other spills.

In reality:• Bitumen produced in the tar sands is thick and requires dilution with toxic chemicals to ship in pipe-

lines.

• While it is possible for all oil to sink in water, diluted bitumen (dilbit) is much more likely to do so. Conventional crude consists of primarily mid-range chemicals that are light enough to float on water, but too heavy to gas-off. Dilbit contains bitumen that is heavy enough to sink and light diluents that can evaporate into gas. Dilbit is more likely to sink when it is mixed with sediments such as earth and sand, which is a likely scenario for a large spill. The longer the mixture stays in the water, the more likely it is to sink.

• When an Enbridge pipeline ruptured and spilled close to 3.8 million litres of dilbit in the Kalamazoo River in July 2010, much of it sank to the river bed. This has posed significant challenges for clean-up, making conventional spill response measures largely ineffective. More than four years later and with over $1 billion spent by Enbridge on clean-up, submerged oil remains.

• Industry, including TransCanada, often refers to the U.S. National Academy of Sciences study to sug-gest dilbit reacts no differently than conventional oil when spilled. This study was widely criticized. It was not based on new research, but rather self-reported industry data, scientific research that was funded or conducted by the oil industry, and government databases that even federal regulators ad-mit are incomplete and sometimes inaccurate.

• A recent Canadian federal study conducted by Environment Canada, the Department of Fisheries and Oceans and Natural Resources Canada found that dilbit, when mixed with sediment and beat by waves in salt water – which would happen in the Bay of Fundy and in the St. Lawrence – forms tar balls that sink.7

THE SPIN

THE SPIN

Countering Energy East Pipeline Spin 5

Converting a pipeline does not increase safety risks.

In reality:• The pipeline that would be converted is up to 40 years old and is part of TransCanada’s Mainline pipe-

line system, which includes up to six pipelines that ship natural gas from Alberta to Quebec.

• Pre-1970s pipelines (i.e. the type of pipe TransCanada is proposing to convert) are predisposed to cracking and corrosion along lengthwise seams.8

• The Exxon Pegasus pipeline spilled an estimated 1 million litres of dilbit from the tar sands in May-flower, Arkansas in early 2013. Like the proposed Energy East pipeline, this pipeline was initially built to carry thinner oil at lower pressure.

• In a study for the U.S. Department of Energy, the National Petroleum Council stated that “pipelines operating outside of their design parameters, such as those carrying commodities for which they were not initially designed, or high flow pipelines, are at the greatest risk of integrity issues in the future due to the nature of their operation.”

• Richard Kuprewicz of Accufacts Inc. warns in his report on Enbridge’s Line 9b reversal: “Changing crude slates, especially running dilbit, can significantly increase pressure cycles that can accelerate crack growth. The various and changing compositions of dilbit, both the bitumen and/or the diluent, can significantly impact pressure cycles on a pipeline where crack risk is a bona fide threat. Accufacts be-lieves that the movement of dilbit in pipelines at risk to cracking presents a higher potential to cause pipeline ruptures if not adequately managed.”

The Energy East pipeline project would generate thousands of jobs.

In reality:• TransCanada has a bad record of over-estimating potential jobs. While President Obama now talks

about 50 to 100 long-term jobs being generated by the Keystone XL pipeline, TransCanada has re-ferred to 20,000 jobs being generated.

• According to a report authored by The Goodman Group Ltd., a consulting firm specializing in energy economics, Quebec will see few economic benefits from both the Energy East and Line 9 pipeline projects. These minimal economic benefits pale in comparison to the significant environmental and economic risks of a major spill.9

• While the Energy East project would generate some jobs, it would also imperil jobs. A spill along the pipeline route in the Gulf of St. Lawrence and coastal waters of New Brunswick would threaten farms, jobs reliant on clean water sources, fisheries and tourism.

• There is tremendous potential for jobs that improve energy efficiency and transitioning to renewable energy sources. Studies suggest that the job potential of energy efficiency and renewable energy gen-eration outpaces jobs in oil and gas by as much as six to eight times. What we are lacking is the political will to make the new energy economy a priority.

THE SPIN

THE SPIN

Energy East won’t dramatically affect climate emissions.

In reality: • Pipelines like Energy East will allow the tar sands to expand, and this simply isn’t compatible with tak-

ing action to reduce emissions that cause climate change.

• The International Energy Agency has stated that two-thirds of fossil fuel reserves must stay in the ground if we are to avoid dangerous climate change. This means stopping further expansion of the tar sands and the infrastructure that will allow it.10

• Filling the Energy East pipeline would allow a 40 per cent increase in tar sands production. This is like doubling the number of cars in Ontario, or restarting all the dirty old coal plants that took 15 years to close down. It would produce more emissions than any one Atlantic province generates.11

• Producing tar sands crude generates three to four times more climate emissions than conventional oil.

• In 2012, the tar sands produced 1.9 million barrels of bitumen every day. The Canadian Association of Petroleum Producers expects the industry will surpass 5 million barrels a day by the end of 2030. The industry has disclosed plans to produce more than 9 million barrels of bitumen per day.12

THE SPIN

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October 2014

Notes

1 McDermott, Vincent. “Fort Chipewyan Cancer Study Set to Begin.” Fort McMurray Today. February 20, 2013. <www.fortmcmurraytoday.com/2013/02/20/fort-chipewyan-cancer-study-set-to-begin>

2 McCarthy, Shawn. “Energy Panels a World Apart.” The Globe and Mail. July 7, 2010. <www.theglobeandmail.com/report-on-business/industry-news/energy-and-resourc-es/energy-panels-a-world-apart/article4323430/>

3 Burns-Pieper, Annie. “Line 9 has had significantly more spills than previously stated, W5 reports.” CTV News. February 21, 2014. <www.ctvnews.ca/w5/line-9-has-had-significantly-more-spills-than-previously-stated-w5-reports-1.1698286#ixzz2x5LJgZsb>

4 The Council of Canadians. Energy East: When the Pipeline Spills. 2014. <www.canadians.org/too-risky>

5 Lacey, Stephen. “After 12 Oil Spills in One Year, Trans-Canada Says Proposed Keystone XL Pipeline Will Be Safest in U.S.” ThinkProgress. August 17, 2011. <thinkprogress.org/romm/2011/08/17/297576/oil-spills-transcanada-keystone-xl-pipeline/>

6 Klink, Mike. “Keystone XL Pipeline Not Safe.” Lincoln Journal Star. December 31, 2011. <journalstar.com/news/opin-ion/editorial/columnists/mike-klink-keystone-xl-pipeline-not-safe/article_4b713d36-42fc-5065-a370-f7b371cb1ece.html>

7 Government of Canada. Properties, Composition and Marine Spill Behaviour, Fate and Transport of Two Diluted Bitu-men Products from the Canadian Oil Sands. 2013. <crrc.unh.edu/sites/crrc.unh.edu/files/1633_dilbit_technical_report_e_v2_final-s.pdf>

8 Fletcher, Mike. “The Gift That Keeps on Misgiving: An (Unending) Ottawa Dilbit Spill.” Ecology Ottawa. April 3, 2014. <ecologyottawa.ca/2014/04/03/the-gift-that-keeps-on-misgiv-ing-an-unending-ottawa-dilbit-spill/>

9 Rowan, Brigid and Ian Goodman, The Goodman Group, Ltd., in collaboration with Équiterre and Greenpeace Canada. Economics of Transporting and Processing Tar Sands Crudes in Quebec. 2014. <http://www.greenpeace.org/cana-da/Global/canada/report/2014/06/Goodman%20report.pdf>

10 “North America Leads Shift in Global Energy Balance, IEA Says in Latest World Energy Outlook.” International Energy Agency. November 12, 2012. <www.iea.org/newsroomande-vents/pressreleases/2012/november/name,33015,en.html>

11 Flanagan, Erin and Clare Demerse. Climate Implica-tions of the Proposed Energy East Pipeline. Pembina Institute. 2014. <www.pembina.org/pub/2519>

12 Dyer, Simon, Jennifer Grant and Eli Angen. Forecast-ing the Impacts of Oilsands Expansion. Pembina Institute. 2013. <www.pembina.org/pub/2455>