Canada's oil feud could spill down to Washington state

Two Canadian provinces’ feud over an oil pipeline could boost gasoline prices and oil tanker traffic here in Washington state.

British Columbia has been fighting a pipeline project that would triple the amount of tar sands oil piped from Alberta to the Canadian coast near Vancouver. The pipeline expansion, scheduled to be completed by 2021, could also lead to a

quintupling

seven-fold spike in oil-tanker traffic through British Columbia and Washington state waters.

The dispute over Kinder Morgan’s controversial Trans Mountain pipeline expansion has led Alberta to issue a threat to British Columbia.

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“If the path forward for the pipeline through B.C. is not settled soon, I am prepared to turn off the taps,” Alberta Premier Rachel Notley said in May after Alberta’s legislature passed a bill allowing her administration to block anyone from exporting oil, natural gas, or refined fuels from the province.

It was no small threat: Those taps on the Trans Mountain pipeline control most of British Columbia’s oil. They also control the flow of between one-tenth and one-third of the crude oil processed by Washington state’s five refineries on the shores of Puget Sound.

Disruption of the Albertan supply could boost gas prices on both sides of the border.

“Washington refineries depend on Canadian oil,” petroleum analyst Dan McTeague with GasBuddy said. “Refineries would very quickly have to find other alternatives.”

While the conflict over the future of the Trans Mountain pipeline is centered in British Columbia, more than half of the pipeline’s flow currently goes to Washington, not British Columbia.

Demonstrating this phenomenon, McTeague said, a planned maintenance shutdown in February of the province’s main refinery in Burnaby, B.C., which relies on the Trans Mountain pipeline, led to a 20-cent increase in gas prices in Washington.

Five miles north of the international border, a branch called the Puget Sound Pipeline leads south. It sends Alberta tar sands oil to four refineries in Whatcom and Skagit counties.

Last year, that pipeline carried 60 million barrels of Albertan oil to Washington's Andeavor, BP, Phillips 66 and Shell refineries.

British Columbia Attorney General David Eby said he believed Premier Notley's threat would be "reckless in the extreme and therefore highly unlikely."

"We believe it will hurt Albertans as much if not more than British Columbians," he said.

Yet British Columbia is taking the threat seriously enough that it has been talking with Washington state officials about getting more petroleum fuels from across the border. The province currently gets less than 10 percent of its gasoline shipped up from Washington state. Eby and Washington Gov. Jay Inslee’s office both declined to provide details on those talks.

"The government’s been working on a range of contingency measures, but we’ll only be talking about these measures when and if they’re needed," Eby said."The powers in this legislation are not powers Alberta wants to use, but we will do so if it means long-term benefit for the industry, for Alberta, and for Canada," Jean-Marc Prevost with Alberta's Ministry of Economic Development and Trade said in an email. Prevost declined to say whether Alberta had the ability to retaliate against British Columbia without also stopping oil exports to Washington state.

Washington officials expressed skepticism that the state would become collateral damage in the oil feud to the north. "Alberta has certainly given no indication whatsoever that they intend to take such a step with Washington state," Penny Thomas with the Washington Department of Commerce said in an email to KUOW. "We don’t believe they would take any action that would harm businesses in our state."

But a former Trans Mountain pipeline engineer said a threat to B.C.’s flow of oil is a threat to Washington’s oil industry as well.

"There’s not a way they could shut it off to B.C. without shutting off the flow to Washington," Romilly Cavanaugh said.

"I think it’s a hollow threat, but you never know," she said. "People are taking it seriously."

Cavanaugh worked on the Trans Mountain pipeline in the 1990s as an environmental engineer. She said she left the oil industry after learning more about the climate and other impacts of Albertan tar sands production.

"There’s really no way to get around the fact it’s a dirty industry," she said. "There’s just no way to make it a clean industry."

She was one of more than 200 anti-pipeline protesters arrested this spring for blocking the gates of a Kinder Morgan petroleum-tank farm in Burnaby, B.C.

Environmentalists are worried at the prospect of Washington refineries suddenly shipping more gasoline to help British Columbia make up for lost supplies.

"We're concerned about any increase in vessel traffic, the corresponding increase in oil spill risk, and of course vessel noise impacts our endangered southern resident killer whales," said Lovel Pratt, who works on oil spill safety for Friends of the San Juans in Friday Harbor. Tankers docking at the Port of Vancouver motor by the San Juans and through the Strait of Juan de Fuca.

Washington passed a law this year aimed at helping the state brace for an increase in tankers hauling heavy Albertan oil through Washington waters. Thick tar-sands oil is diluted to make it flow freely through pipelines. If spilled, the mix floats at first but sinks after its lighter components evaporate, making it an especially difficult form of oil to clean up.

One safety measure to be considered under Washington new law is a rapid-response tugboat for the San Juan Islands, similar to the tug stationed at Neah Bay on the Olympic Peninsula since 1999. The tug’s job would be to keep any big ships in trouble from running aground and spilling their oil.

"Given our narrow waterways, we need an emergency response towing vessel that's closer at hand," Pratt said.

But that proposal and others mentioned in the new law would be of little help if Salish Sea tanker traffic spikes this year in response to an Albertan oil embargo: Most measures would kick in only after task forces and reports have examined various options over the next year or more.

The projected increase in tanker traffic after 2021 is a key reason politicians, tribes and environmentalists in British Columbia oppose the expansion of the Kinder Morgan pipeline. Washington Gov. Jay Inslee has also stated his opposition to the project, in part because of its expected climate impacts.

"I’m not so sure he consulted his refineries who use a lot of that heavy oil," McTeague said.

Washington activists took to kayaks and canoes Sunday to block a Kinder Morgan fueling facility at the Port of Seattle.

A barrel of tar sands oil, more viscous and difficult to process than most oil, releases 17 percent more climate-damaging greenhouse gases than the average barrel of crude oil refined in the United States, according to the U.S. Congressional Research Service.

Spokespeople for Kinder Morgan, Shell, BP and the Western States Petroleum Association declined to comment for this story.

“WSPA is bound by anti-trust regulations that prohibit us from discussing or speculating cost to consumers,” Kara Siepmann with the petroleum association said in an email.

British Columbia sued its neighboring province on Monday to prevent Alberta from carrying out its threat to turn off the oil taps.

Kinder Morgan has said it will walk away from its stalled, $5.8 billion megaproject if Canadian agencies have not provided certainty by May 31 that the pipeline expansion can go forward.