With three major Canadian pipeline proposals on the table, the Canadian Energy Pipeline Association CEO Chris Bloomer is a busy man
BY ALBERTA OIL STAFF
Chris Bloomer, CEO of the Canadian Energy Pipeline Association
Photograph Bluefish Studios
Pipelines are central to Canada’s economic development and are universally regarded as the safest and least environmentally taxing way to transport oil and gas. But pipelines are also easy targets for anti-oil sands campaigners in Canada and abroad.
While recent pipeline spills in Alberta, including last year’s incident on Nexen’s Long Lake system, have typically been from gathering and feeder lines, it has been transmission lines—the long-distance petroleum highways that cross provinces and international borders—that bear the brunt of the blowback.
When that happens, Chris Bloomer often finds himself answering to—and educating—people on both sides of the pipeline debate. And, as the CEO of the Canadian Energy Pipeline Association (CEPA) at a time when Canada is considering three major Alberta-to-tidewater pipeline projects, he’s had no shortage of work as of late.
Crude-by-rail has taken off in the absence of long-haul pipelines from Alberta. How do pipelines compare to rail?
Pipelines are the most cost-effective way to transport crude oil. They require significantly less energy to operate than trucks or rail and have a much lower carbon footprint. While the movement of crude by rail has significantly increased, and rail is one complementary mode of transportation, it is not necessarily a safer mode of transportation. We view other modes of transportation, such as rail or trucks, as a complement to pipelines.
Why have we seen apparent spikes in pipeline incidents in the past five years?
Every year CEPA-member pipelines transport approximately 1.2 billion barrels of oil and 5.4 trillion cubic feet of natural gas. While performance statistics have shown significant improvement over time, there has been an increase in the number of pipeline incidents over the past several years. This increase is in part due to a concerted effort by our members to ramp up their pipeline inspection and leak detection activities, which has led to the detection of smaller defects. These were repaired before they became more serious.
Our 2015 “Pipeline Industry Performance Report” was our first foray into disclosing our performance statistics. We recently published our second report, “Taking Action on Our Commitments to Canadians,” which looks at statistics from 2011 to 2015. The report provides a comprehensive narrative of how our industry is collaborating to maintain and improve safety, minimize environmental impacts and sustain operational excellence. In 2015, CEPA-member companies experienced zero significant liquids incidents. This ongoing collaboration drives our desire to have zero incidents and our 99.999 percent safe delivery record.
Nationally, pipeline operators are accountable to the National Energy Board, which regulates the transmission pipeline industry. The National Energy Board has proven itself to be highly effective at lifecycle regulation, with over 60 years of experience regulating pipelines. This includes a very specific focus on safety, environmental protection, technical pipeline considerations, aboriginal and stakeholder engagement and socioeconomic benefits. Recently, the Auditor General has told the NEB it must improve its monitoring of pipeline safety by becoming more transparent, increasing its workforce as well as the monitoring of companies that have already had their pipelines approved. The Auditor General is seeking continuous improvement, which aligns with CEPA and its members’ goal towards zero incidents.
How do you view the U.S. market?
We’re captive to the U.S. market and historically this has been a problem. It’s like those TV commercials—you need Captain Obvious to tell us that pipelines are good for the country. The U.S. just drives right past us and has developed ten Keystone XLs during the time that the Keystone XL debate was raging. And the Northeast U.S. has incredibly large unconventional gas resources and it’s pushing Canadian gas out of traditional markets. So LNG is one way for us to get our gas to new markets, but it’s coming up against the same political and social issues that the oil pipelines are enduring. And instead, in the U.S. there’s now a tremendous drive to export gas to Canada and to the overseas LNG markets.
Why do you think that Canadian pipelines have become so politicized?
There has been a lot of debate, decision making and controversy around pipelines recently. In turn, pipelines have become leverage for an array of different issues.
Energy is a combination of upstream and downstream industries, and sometimes pipelines are caught between the two, which is not constructive. Canadian transmission pipelines are tiny emitters of greenhouse gases. The safety record on pipelines is exemplary and when there is the very rare occurrence such as Kalamazoo, it is dealt with expeditiously and thoroughly with the best interest of all stakeholders in mind. The upstream environmental impact piece has been brought into the process and the Federal government’s ambiguous about how this will be used in decision making about new pipelines. We shouldn’t be a part of those downstream environmental issues either, such as CO2 issues on automobile emissions, or other upstream issues such as prompting renewables. Again, we’ve had little clarity from government on how taking CO2 emissions into account when granting pipeline permits will work.
Also, the Paris climate agreement came at a time of dramatic changes in the political landscape. As a result, environmentalists say “leave oil sands in the ground to cap the global temperature rise at 1.5 degrees; we’re going to save the world.” Yet, Canada’s output makes a negligible contribution to global warming. So pipelines are caught up in that debate.
Additionally, aboriginal consultation has also created another overlay—the enhanced ability of First Nations to weigh in and feel they have a veto. Communities and cities such as the mayors in Quebec feel this way too. But it is federal bodies that have the responsibility and jurisdiction over these projects.
Meanwhile, all of these uncertainties and delays have impacted Canada’s ability to attract and deploy third-party capital. The industry has $68 billion in projects ready to go in the next five years.
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