VANCOUVER - Oil and water don't mix, at least as far as the City of Vancouver is concerned.
As Kinder Morgan launches a series of information sessions in the Metro Vancouver area about the proposed expansion of its Trans Mountain pipeline, city officials are exploring whether Vancouver can force the Texas-based company to increase its liability coverage in kind.
Vancouver Mayor Gregor Robertson, whose council has voted to oppose the expansion, said the city will be directly affected by any oil spill and staff are working on a bylaw that will ensure the company has enough liability insurance to cover costs in a worst-case scenario.
"We're seeing taxpayer impact from the spill in Alaska, the Exxon Valdez. We're seeing that impact in the Gulf oil spill. We don't ever want to see that in Vancouver," Robertson said Wednesday.
Demanding liability coverage over and above the $1.3 billion the company currently has access to is an extra measure of accountability, he said.
"That can't be on the back of the city. That's part of our overall concern with having a pipeline tripled and oil tankers coming through our harbour and putting our city at risk."
The proposal by Kinder Morgan to see the existing pipeline from Alberta to Metro Vancouver twinned has gone largely unnoticed as public debate has focused intensely on the Northern Gateway pipeline proposed by Calgary-based Enbridge through northern B.C.
But the National Energy Board will hold a public hearing early next year on Kinder Morgan's toll application — the first step toward regulatory approval of the expansion.
The Tsleil-Waututh Nation, an aboriginal band with about 500 members on the shores of Burrard Inlet, has refused to take part in any information meetings organized by Kinder Morgan but has encouraged other members of the public to appear and voice their discontent. The turnout at the meetings so far has been light.
"The Nation has experienced the results of crude oil handling and refining on Burrard Inlet for a number of decades. The risks associated with the pipeline expansion are just too great for its people to accept," the band said in a statement Wednesday demanding the federal government consult them on the project.
Kinder Morgan has not yet applied to the federal energy board for the overall expansion project and doesn't anticipate doing so until late 2013. The hearing to be held in Calgary in February will deal only with commercial terms of the expanded pipleline should it go ahead.
The City of Vancouver will be allowed to participate as a government intervener, but Robertson is not pleased that hearings will only take place in Calgary.
"That's nowhere near where the pipeline is, nowhere near where the tanker impacts could be," he said, adding that First Nations and community groups will not be allowed to participate in the preliminary application.
"I don't think it serves our city, it doesn't serve our country when we shut people out of this kind of debate and consultation."
In operation since 1953, Trans Mountain runs from just outside Edmonton to its terminus in Burnaby, and from there, oil is distributed through separate pipelines to local terminals, a refinery and the Westridge marine terminal in Port Metro Vancouver.
If the application is successful, construction could begin in 2016 and additional oil could be flowing in 2017.
The $4.3-billion project would increase the capacity of the 1,100-kilometre pipeline from 300,000 barrels a day to 750,000. It would also allow the pipeline — which currently transports crude and refined oil from the Alberta oil sands — to transport diluted bitumen, a molasses-like oil that is more difficult to contain and clean-up in the event of a marine spill.
The Westridge terminal currently handles about eight vessels a month, five of them tankers. If the pipeline expands, that will increase to about 28 a month, 25 of them tankers.
A call to Kinder Morgan's Vancouver office seeking comment was not returned, but the company has said the Trans Mountain system has operated safety for almost 60 years "safely and efficiently providing the only West Coast access for Canadian oil products."
Critics say Kinder Morgan has forgotten July 2007, when 250,000 litres of oil from the Trans Mountain line rained down on a Burnaby neighbourhood after a construction crew accidentally punctured the line. About 70,000 litres — 450 barrels — spilled into Burrard Inlet, and the clean-up costs reached $15 million.
The maximum liability coverage available now is $1.3 billion, said Andrea Reimer, the Vancouver city councillor who sponsored the bylaw motion earlier this year.
"Although I know that sounds like a big number, it's worth noting that the Exxon Valdez spill is at $3.5 billion and counting to clean that up; the Deep Water Horizon that happened in 2010 in the Gulf of Mexico is over $20 billion, and that's just direct cleanup," Reimer said. "Forget the economic impacts, the reputational impact, the impacts on individual residents."
The city hopes to have that bylaw in place by the end of the year.