Kinder Morgan-Trans Mountain pipeline heats up

By Judith Lavoie, December 2014

Critics complain the National Energy Board hearings are a farce; Kinder Morgan plays hardball.

The spectacle of energy giant Kinder Morgan wading into pipeline protests swinging legal clubs, while company lawyers claim their survey crews were assaulted by facial expressions, is shaking public confidence in a process that could triple the amount of diluted bitumen flowing through an expanded Trans Mountain pipeline from the Alberta oil sands to BC’s West Coast.

The hardball tactics startled many British Columbians who watched Kinder Morgan first seek an injunction (which it won on November 14) and then file suits claiming millions of dollars in damages against a citizen’s group and four individuals, including two Simon Fraser University professors.

“You really couldn’t make this stuff up,” said BC Green Party MLA Andrew Weaver, questioning why Kinder Morgan believes the Trans Mountain pipeline expansion can go ahead without social licence.

“Who have they not alienated? When do you get regular citizens getting taken to court? It’s so egregious,” said Weaver, shortly before posting his photo on Twitter where people are displaying “KMfaces.” The site, which includes selfies from local politicians, shows scowls, snarls, curled lips and expressions of disbelief.

The Twitter pics do not amuse Kinder Morgan president Ian Anderson who said at a media briefing that the campaign seems to be making light of intimidation tactics used against the survey crews.

Anderson admitted that some have seen the company’s lawsuit as heavy-handed, but said there was no intention of stifling dissent or seeking damages, provided the company can undertake work it has a legal right to complete. “We are firm supporters of freedom of speech,” he said.

The company’s insistence it has the right to cut trees in a park and its aggressive legal maneuvers may come as a surprise to Canadians, but are familiar to many Americans who have come up against energy or pipeline companies. A speech by a veteran Washington political consultant, leaked to the New York Times in October, advised oil and gas industry executives to think of problems with environmental groups as an “endless war.” Richard Berman, founder of the consulting firm Berman & Co, told the audience at an event sponsored by the Western Energy Alliance that major corporations should not worry about offending the general public because “you can either win ugly or lose pretty.” (It is not known whether representatives of Texas-based Kinder Morgan were at the meeting.)

Meanwhile, back in Canada, public indignation about Burnaby Mountain and concern about a precedent-setting decision by the National Energy Board to scrap cross-examination during the Trans Mountain hearings, has focused renewed attention on the pipeline expansion.

Questions are being raised about the independence of the NEB, and were exacerbated when the Board overrode Burnaby’s efforts to stop work in the park. There have also been renewed calls for the Province to ditch its four-year-old equivalency agreement with the federal government and come up with a made-in-BC process. The agreement to send major pipeline and energy projects to the NEB for assessment can be terminated with a month’s notice, but Environment Minister Mary Polak has said she is not ready to opt out of the deal.

However, Provincial support for the project appears lukewarm with the Environment Ministry emphasizing that any heavy oil pipeline project must satisfy five conditions before gaining BC’s support. Those conditions include world-leading oil spill prevention and response and a fair share of economic benefits. “We are not pre-judging the project. We have been reviewing the information that was submitted by Kinder Morgan in its application,” said an Environment Ministry spokesman.

The $5.4-billion pipeline expansion proposal would triple the capacity of the existing pipeline, bringing 890,000 barrels of diluted bitumen a day to Burnaby. About 400 supertankers a year would then travel to Asian markets through the Gulf Islands and Juan de Fuca Strait.

That means, as Kai Nagata of the non-profit Dogwood Initiative points out, BC is taking all the risks of an oil spill, yet the decision will be made by the federal cabinet following a recommendation from the Calgary-based NEB. “It is galling to see the Province continue to prop up a process that has lost credibility with so many British Columbians,” he said.

The NEB, constrained by new rules and time limits brought in by the Harper government in 2012, will make a recommendation to cabinet by January 25, 2016. If the NEB does give its blessing, the decision is likely to face stiff opposition both legally and in the court of public opinion.

Nagata, citing polls that show only 30 percent of Canadians believe that the NEB is working in the public interest, said. “There is a widespread perception they are there to facilitate the industry and they do have a track record of never having rejected a pipeline.” With most of the NEB’s budget coming from corporate levies, “it is bought and paid for by industry funding,” said Nagata.

Even before hearings began, controversy swirled around NEB-set criteria that it would not “consider the environmental and socio-economic effects associated with upstream activities, the development of the oil sands or the downstream use of oil transported by the pipeline.”

Most galling for the 400 intervenors is the denial of cross-examination, which opponents see as giving the company free range to submit untested information. Instead, written questions can be submitted, but intervenors complain that Kinder Morgan is not providing adequate answers.

“This can never, ever go through as it stands because there’s a lack of confidence,” said Weaver, who has intervenor status and is struggling to obtain answers. 

The Province filed a motion with the NEB asking Kinder Morgan to provide more information and, although the NEB denied BC’s motion, much of that information has now been provided. A few issues remain outstanding, said a ministry spokesman

Kinder Morgan initially refused to file its emergency spill response plans, citing confidentiality, but after being told by NEB to hand over the information, the company filed redacted versions.

University of Victoria law professor Chris Tollefson, Environmental Law Centre executive director, said cross-examination is essential as the foundation for a recommendation. “Without cross-examination they are unable to do that job and…their recommendation could quite readily be overturned in the courts,” he warned.

NEB spokeswoman Sarah Kiley said the aim of the hearings is to gather information the panel needs to make a decision. With more intervenors than any previous hearing, it was decided answers could be obtained from two rounds of information requests and hearings to gather oral Aboriginal traditional evidence, rather than cross-examination. “We had lots of other tools to get that information,” she said. “Kinder Morgan received 10,000 questions from 155 intervenors and just over 8000 have been answered.” Kiley pointed out that a second round of questions starts in January and NEB help is available for those wanting to put together a strong information request.

In October, a  body blow was struck to NEB claims of independence in a scathing letter from Marc Eliesen, former CEO of BC Hydro and former chair of Manitoba Hydro, who withdrew as an intervenor last month, calling the process a “farce” and the NEB a “a truly industry-captured regulator.”

His letter stated: “The unwillingness of Trans Mountain to address most of my questions and the Board’s almost complete endorsement of Trans Mountain’s decision has exposed this process as deceptive and misleading. Proper and professional public interest due diligence has been frustrated, leading me to the conclusion that this Board has a predetermined course of action to recommend approval of the project and a strong bias in favour of the proponent.”

In an interview from his home in Whistler, Eliesen, who has 40 years experience in the energy sector, said he finally lost patience after submitting 100 questions and receiving replies that reflected a lack of serious effort on the part of the company. “I am not going to participate in a game that is rigged,” he said.

The company’s actions against protesters on Burnaby Mountain show a “bullying nature” that is also evident in the hearings, noted Eliesen. “Maybe it’s the way they have done things in Texas and they decided to try it here,” he speculated.

Lindsay Meredith, Simon Fraser University marketing strategy professor, said neither the company nor government seem to realize that the game has changed. Public pressure, using social media, means the application is not quite the slam dunk it used to be, he said. “Anything that smacks of secrecy or lack of opportunity for public discussion is going to set off a bombshell…They need to be proactive and explain what they are doing. They can’t play the old secrecy game and believe that after a few meetings with the NEB they are going to jam it through anyway.”

Meredith feels it’s curious that the company is insisting the pipeline should go through Burnaby Mountain, when Burnaby has bad memories of Kinder Morgan’s response to a 2007 pipeline rupture. A backhoe operator ruptured the pipe and the spill damaged 50 houses and dumped 250,000 litres of crude oil into Burrard Inlet. The company spent $15-million cleaning up the mess, but then tried to sue the City—even though the Transportation Safety Board found Kinder Morgan did not have accurate maps of their pipeline location. Meredith noted that alternative routes to Burnaby Mountain, although more expensive, could have been considered. “I think they’re going to learn the hard way,” he predicted.

As all sides consider how to inspire more confidence in the process and what tactics are acceptable, the company, said Andrew Weaver, needs to listen to the concerns of British Columbians. “Sometimes no is the answer and it’s not about saying no and you beat us until we say yes,” he said.

But up on Burnaby Mountain on November 20, Kinder Morgan’s injunction was enforced by the RCMP, though without violence. About two dozen protesters were arrested including Adam Gold, one of six citizens against whom Kinder Morgan has filed a multi-million- dollar civil suit, and Tamo Campos, David Suzuki’s grandson. On facebook the group declared: “We are sending a clear message that the pipeline will not be built on unceded lands without the consent of Indigenous nations and the approval of all those who love these lands.”

UPDATE: Since this story was first published, there have been developments, including the arrest of hundreds of citizens protesting Kinder Morgan's presence on Burnaby Mountain. This was followed by the revelation that Kinder Morgan had provided inaccurate GPS coordinates for the site for which it sought a court injunction to prevent citizens from visiting, thereby making the outcome of any subsequent legal action by the company doubtful. On November 27 Justice Allen Cullen invited Kinder Morgan to drop civil contempt proceedings against the citizens and the company obliged. Cullen also refused Kinder Morgan's request to extend the injunction beyond the original Dec 1 expiration date. On November 28 the company withdrew its geotechnical equipment from Burnaby Mountain.

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Judith Lavoie is an award-winning journalist specializing in the environment, First Nations, and social issues. Twitter @LavoieJudith