The abundance of liquid natural gas produced in Canada is raising the demand for export and increased movement; tankers are gaining in popularity and in policy, and are proving their worth in safety.
As the Canadian oil and gas industry seeks attractive offshore markets, the thirst for profit is being played out against the backdrop of mounting environmental concerns about the safety of more tankers carrying oil or liquefied natural gas (LNG) along the nation’s coastlines.
Annually, 80 million tons of oil are shipped off Canada’s East and West coasts with, on any given day, 180 vessels of more than 500 tons gross tonnage operating in waters under Canadian jurisdiction. The numbers are expected to increase exponentially as new markets, especially for LNG, are sought, and with the likely approval of the Northern Gateway pipeline to Kitimat, British Columbia, the doubling of Kinder Morgan’s line to Vancouver, and TransCanada’s Energy East pipeline to Saint John, New Brunswick. By 2020, the partial switch from nuclear to gas in Europe’s power sector in the aftermath of the 2011 Fukushima nuclear disaster in Japan is expected to lead to an increase in annual gas consumption of 20–40 bcm. And declining domestic production, mainly in the United Kingdom and the Netherlands, will lead to a 27 percent increase in gas imports by 2020.
Producers and shippers say transporting product by tanker is safe, considering the volumes moved. Not so say the environmentalists, who use past tanker disasters to predict more of the same for the future and seek a moratorium on all shipments. That doesn’t sit well with industry players like Bill Streeper of Fort Nelson, BC, who has owned and operated several oil and gas companies since 1975, and now also serves as mayor of his community.
“According to Seaspan, there have been no incidents with tankers out of Vancouver,” he said, adding that outlawing single-hull tankers in favor of their double-hull counterparts has been an improvement, “and navigation is better now than it was five years ago.”
Double-hull tankers have been required in Canadian waters since 2010, and experts stress the nation has an exemplary tanker safety record. The oft-mentioned 1989 Exxon Valdez disaster that spilled 40,000 tons of oil off the West Coast occurred with a single-hull vessel without a marine pilot aboard and without a tugboat escort, both required by Canadian law. The only significant spill off the West Coast in the past 20 years wasn’t tanker related. In 2006 the BC ferry Queen of the North sank with 240 tons of oil aboard.
“We should have been shipping LNG already,” said Streeper. “We need to start from a position of how do we get there, and then work together to resolve any problems that come up.”
Ports are ramping up to handle an increase in demand on both coasts that’s expected if TransCanada’s Energy East pipeline goes through, if the Kinder Morgan and Northern Gateway pipelines reach BC’s west coast, and if the half-dozen LNG plants proposed for BC’s northern coast are approved.
“Currently tankers and LNG carriers do not routinely call on the Port of Prince Rupert. However, we are, of course, preparing for continued growth and are always revising and updating our Practices and Procedures to be ready for future cargos,” said Michael Gurney, manager of Corporate Communications for the Prince Rupert Port Authority (PRPA).
“The PRPA Practices and Procedures are currently undergoing a review and updating [that] will consider best practices established worldwide . . . Our commitment is to provide world-class safety, security, speed, and reliability when moving cargos of any kind. Our enhancement of practices and procedures in anticipation of handling liquid bulk products reflects this commitment.”
Spurred by the BC government’s demand for improved tanker safety before it allows oil sands pipelines to the West Coast, Ottawa recently announced a new regime of safety measures. Backed by $120 million in federal funding, the measures include naming an expert panel to review tanker safety; requiring oil handling facilities to submit spill response plans to the government; furthering research into the behavior of diluted bitumen; conducting a study of whether or not the $1.3 billion available in various funds is enough to ensure taxpayers don’t have to cover costs associated with spills; and, designating Kitimat as a public port, which offers better traffic control and vessel safety.
“We have an opportunity to ensure that our products, particularly oil and liquefied natural gas, reach world markets and command world prices,” said federal Natural Resources Minister Joe Oliver in making the announcement.
“Our government knows that, to be an energy superpower, we need a world-class safety system for our waters,” concludes Oliver.
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