Term Project CHEE 4803
Term Project CHEE 4803
Term Project CHEE 4803
April 2015
TABLE OF CONTENTS
1.0
INTRODUCTION
1.1
OVERVIEW OF ISSUE
1.2
IDENTIFICATION OF STAKEHOLDERS 5
2.0
LITERATURE REVIEW
3.0
STAKEHOLDERS VIEWPOINTS 9
3.0
4.0
5.0
6.0
REFERENCES
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EXECUTIVE SUMMARY
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The Enbridge Line 9B Pipeline is a 639-km section of Enbridge Line 9 pipeline. The pipeline is
30-inch in diameter with a possible overhead capacity of circa 330,000 bbl./day. The pipeline
currently runs from a Montreal Terminal, Quebec to North Westover Station, Ontario, flowing in
the same direction. The project scope includes the reversal of the current direction of flow,
increase in maximum overhead capacity across the whole Line 9, and a review of the Tariff rules
and regulations to accommodate the transport of heavy crude. This project has been subject of
numerous debates from numerous interest groups.
Supporters of the project highlight the overall cost saving possibility, increased healthy
competition within the market, energy security, employment and overall boost of the economy.
Opponents of the projects highlight the possible environmental damage due to spill and the high
risk of same due to engineering flaws and lack of proper emergency response and management
plan.
This paper follows the hearing process conducted by the National Energy Board, providing an
objective view point of the supporters and opponents of the project. The scope of the paper is
limited to information required by NEB to make a decision in its judiciary position.
This paper does not explore the decision of the NEB. However, it identifies the bias displayed by
both interest parties through the hearing proceedings and attempts to explore the line of
reasoning of the interest parties.
The personal view of the author is also explored and a self evaluation of the basis of his bias is
also included in the report.
1.0
INTRODUCTION
1.1
OVERVIEW OF ISSUE
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Prior to July, 2012, the entire 833km-long, 766mm-diameter Enbridge Line 9 pipeline flowed
from Montreal to Sarnia in an East to West direction, carrying primarily light crude. In July,
2012, the National Energy Board, which regulates the pipeline activities, granted standalone
approval for the flow reversal (West to East) of a section of the pipeline from the Sarnia terminal
to the North Westover Station (Line 9A).
On the 29th of November, 2012, Enbridge Pipelines Inc. submitted an application to the National
Energy Board, requesting approval to carry out modifications to the Line 9 pipeline. The project,
tagged Line 9B Reversal and Line 9 Capacity Expansion Project, required approval from the
National Energy Board for the following modifications (Enbridge, 2012):
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The reversal of the current direction of flow of a section of the Line 9 pipeline from the
North Westover Station to the Montreal terminal (Line 9B).
Increase of the annual capacity of the whole Line 9 pipeline from the current capacity of
38,157 m3/day (240,000 bbl/day) to 47,696 m3/day (300,000 bbl/day).
The revision of the Rules and Regulations Tariff binding the Line 9 pipeline, to
accommodate the transportation of heavy crude.
The National Energy board is required to evaluate the application based on public engagement,
engineering, environmental and socio-economic effects, Aboriginal matters and Economic
feasibility. The hearing proceedings of this project have posed a controversial issue from the
onset as it stimulated massive protests and demonstrations from individuals and environmental
groups alike, opposing its approval.
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IDENTIFICATION OF STAKEHOLDERS
Prior to the submission of its application, Enbridge Pipelines Inc. identified and contacted the
potentially affected individuals and groups, ensuring all the stakeholders were informed and
updated on the project specifics, as highlighted in the attachment 4 of (Enbridge, 2012). The
833km pipeline covers a large land area, traversing two provinces and numerous wetlands and
watercourses along its sections. This provides a scope of the amount of stakeholders involved, all
of which fall into one of the categories below:
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The landowners, tenants and residents of the land over which the Line 9 crosses and
Landowner associations (Canadian Association of Energy and Pipeline Landowner
Associations and Ontario Pipeline Landowners Association)
Municipalities and Communities that are located along or near the existing pipeline
corridor and facilities.
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LITERATURE REVIEW
The Line 9B Reversal and Line 9 Capacity Expansion project has been a subject of great
controversy following the application of Enbridge Pipelines Inc. for its approval.
The National Energy Board is the body granted judiciary duty over this application. It is required
to review the application, develop a series of issues to be addressed, approve a list of
stakeholders, and hold hearings of the viewpoints of the stakeholders, after which either approve,
offer a conditional approval, or dismiss the application, based on the information obtained and
government policies.
After rigorous review of the application and consideration of commenters opinions, the
following issues were a result of the streamlined effort:
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The appropriateness of the proposed Rules and Regulation Tariff and tolling
methodology.
The safety, security and contingency planning associated with the construction and
operation of the proposed Project, including emergency response planning and third party
damage prevention.
Consultation with Aboriginal groups and the potential impacts of the proposed Project on
Aboriginal interests.
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The terms and conditions, related to the above issues, to be included in any approval the
Board may issue for the proposed Project.
To examine the issue identified above, it is important that a brief overview of some fundamentals
relating to the pipeline project itself which include properties of diluted bitumen, pipeline
transport integrity and related concerns, Factors affecting oil prices and a number of other
concerns. The views of the interested parties will be based on the aforementioned context.
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STAKEHOLDERS VIEWPOINTS
PROPONENT:
Enbridges interest and viewpoint on the project is quite straightforward. Firstly, they cite the
economic advantages of the project to the western Canadian and U.S. Bakken crude producers by
exposing them to the eastern Canadian refining market. Also, the eastern Canadian refineries will
be provided with more reliable and relatively cheaper western Canadian and U.S. Bakken crude.
Secondly, they highlight the socio-economic benefits, projecting a substantial increment to the
Canadian GDP and work force.
Numerous environmental concerns about the project specifics were presented by the various
stakeholders and commenters. With regard to the effect of increased flowrate on the integrity of
the Line 9, Enbridge highlighted that flowrate increase will be as a result of the introduction of a
Drag Reducing Agent (DRA) Therefore, pipeline physical conditions (Temperature and pressure)
remain relatively unchanged, hence minimizing the effect of increased flowrate on the pipe
integrity. On the issue of increased tendency of internal pipe corrosion due to the transportation
of diluted bitumen, Enbridge argued that the composition of dilbit plays a lesser role in pipe
corrosion than the water and solid particulate content within the pipe. Enbridge emphasized the
presence regulatory limits on the impurity content within pipelines, and provided materials to
show the behavioral similarities between dilbit and conventional crude. Finally, concerns
regarding the environmental effects of the project operations were met by arguments that
majority of the project work would be carried out within existing Enbridge property and Right
Of Way, therefore environmental footprints would be relatively insignificant.
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GOVERNMENT STAKEHOLDERS:
Enbridge identified various government bodies and individuals as stakeholders, providing them
with notice about the project. Majority of the government bodies contacted highlighted the
importance of consultation with local emergency responders to design better emergency response
plans and to provide proper training periodically, through the lifetime of the pipeline. The
Ontario Ministry of Energy also stressed the importance of increased transparency regarding
pipeline operation and management activities post project execution and through the pipeline
lifetime.
ENVIRONMENTAL CONSERVATION AUTHORITIES AND ENVIRONMENTALIST GROUPS:
Environmental Conservation Authorities and environmentalist groups spearhead the opposition
of the project. Arguments were made against the projects on all issues identified by the NEB. On
the forefront is Equiterre (coalition), who sponsored and submitted the Goodman Report and
Accufact Report, arguing against the economic justifications and design specifications of the
project respectively. Toronto and Region Conservation Authority highlighted the deficiencies in
Enbridges Line 9 monitoring and leak detection system, citing various scenes of leakages.
Another important argument posed by the opposition is the lack of or inadequate location
specific Emergency Management Plan and Emergency Response Plan. East End against Line 9
also highlighted the effect of acute weather conditions on pipe sections located at watercourse
crossings. A major concern displayed by the opposition was the ability of Enbridge to bear the
financial responsibility associated with spill remedial activities.
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back in voicing their support for the project with an across the board reason of economic
viability.
ABORIGINAL COMMUNITIES:
Aboriginal consultation and interests play a major role in the NEB approval process. The
aboriginal groups which participated in the hearing proceedings mostly opposed the project,
emphasizing their disdain in the methods and approach used by Enbridge in the consultation
process. Aamjiwnaang First Nation showed grave displeasure in Enbridges negligence in
identifying it as a primary landowner seeing that its land is located less than 1km from the Sarnia
terminal. It goes in depth by providing historical literature linking the group to the land space.
Aamjiwnaang First Nation also directed its grievances at the Crown requesting compensation
from collected royalties. Also, Aamjiwnaang First Nation provided an overture Traditional Land
Use document highlighting the activities currently being carried out on its land space and the
possible adverse effect of a spill, leakage or discharge. These views were mirrored and strongly
supported by the Chippewas of the Thames First Nation.
Mississaugas of the New Credit First Nation (MNCFN) shared the views of AFN regarding the
possible adverse effects of spills, leakage or discharge on its traditional practices. However,
MNCFN focused primarily on the possible destruction of Archaeological Artifact during
integrity digs. MNCFN requested that conditions should be place on the approval requesting
Enbridge to carry out archaeological assessment prior to every integrity dig. MNCFN also
requested that Enbridge permit a third party contractor of its choice to participate in the
assessment and to provide funding for evaluation of project details.
In addition to sharing the above views, the Mohawk Council of Kahnaw:ke commented greatly
on the effect on water bodies adjacent the Line 9. It displayed its worry over Enbridges limited
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Emergency Response Plan, after which it requested that Enbridge consult First Nations in
developing and updating emergency plan manuals. MCK highlighted the limited amount of
sectionalizing valves along the Line 9 and also suggested the change of manual valves to
remotely controlled valves. MCK went further to question the risk assessment model used as it
only showed percentage risk increments or decrease instead of attributing a number quantity to
the percentage values.
In conclusion, the Aboriginal community was gravely discontent with the project and its possible
effect, and strongly showed their opposition of the project.
GOVERNMENT STAKEHOLDERS:
Enbridge described government stakeholders to include, affected Municipalities in Ontario and
Quebec, various provincial ministries and federal government bodies and individuals. The
Ontario Ministry of Energy in its final oral arguments stated that although it understood the
importance of pipeline to the energy system, it has identified several issues that require critical
review prior to approval of the project. It showed concerns towards the risks attached to spills
and leakages and its effect on the way of life of the Ontario population. Firstly, it identified the
deficiency in Enbridges insurance against spill incidents on the Line 9 pipeline compared to the
$1 billion estimate spent during the Marshall incident and insisted that the pipeline companies
should bear the cost of remedial and environmental responsibilities. OME also commented on
the level of transparency of the project, insisting on availability of operational and management
activity data to the public. Lastly, OME requested a third party review of the risk assessment
prior to approval of the project (NEB, 2013).
The City of Toronto, liaised with several other municipal government bodies to advice and
recommend conditions to the NEB. Similar concerns to those displayed by OME were
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highlighted, however specifics were drawn to the highly generic emergency response plan
designed by Enbridge. This feeling was also shared by majority of the other government bodies
present during the hearing. It requested that a pre-named ERP official liaise with its ready team
to develop locally specific response methods. The City of Toronto also requested that Enbridge
review and update its Lead Detection System and provide its report prior to leave to open
application.
LANDOWNERS AND LANDOWNER ASSOCIATIONS:
Although most Landowners and Landowner Associations did not show strong opposition to the
project, nearly all showed dissatisfaction in the consultation methods adopted by Enbridge.
Council of Canadians York University Chapter (COC-Y) opposed the approval of the project. It
cited the report (NRDC, 2011) which showed the harsh possible effects of pipeline transport
where the Kalamazoo, MI spill was considered. COC-Y also showed concern at the lack of an
Emergency Response Plan after contacting the local fire station authorities who were oblivious to
the project details. COC-Y also stated the effect of a spill or leakage on both the resident students
and the education in general as evacuation will be required.
National Farmers Union of Ontario and Ecological Farmers of Ontario showed disappointment in
the inadequate public awareness system. It cited Fountainhead Apartments and Transit Workers
Union as public bodies which were in close proximity to the Line 9 with little to no idea of the
project. It also stated that NTSB have exposed the flaws in Enbridges Emergency response plan
and leak detection system in its report on the Kalamazoo spill (NSTB, 2010) and Enbridge is yet
to incorporate the recommendations made by the body.
Ontario Pipeline Landowners Association (OPLA) aired the complaints of some of its members
about the lack of ample notice (21 days) prior to previous Operation and Management activities.
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It also supported the suggestion that the environmental risks involved in the project be evaluated
by a third party as those provided by Enbridge seemed vague.
Durham Citizens Lobby for Environmental Awareness and Responsibility Inc. (DurhamCLEAR)
cited the age of the pipeline as a huge issue, stating that its current specification is CSA Z183, 1973
where the latest is CAN/CSA-Z662-99 with over 5 reviews in between. DurhamCLEAR also showed
concern about the toxicity level of DRA in the event of a spill.
The concerns above reflect the concerns of the Landowners and Landowner associations who called
for either dismissal of the project application or incorporation of more stringent requirements.
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rupture. Finally, it highly criticized the Leak detection system adopted by Enbridge stating that it
depends too much on its In-line Inspection tool ignoring the advice of the NTSB to like corrosion and
crack detection to real conservation.
Toronto and Region Conservation Authority (TRCA) also played an important role in the evaluation
of the project faults. It draws light to the lack of proactive pipeline monitoring to prevent failures,
and cited leakages at The Rogue and Don River as some of the shortcomings. TRCA also highlighted
the limited effort put into a critical ERP by Enbridge.
PROPONENT:
Throughout the hearing proceedings, Enbridge was subject to constant criticism of its facilities
and environmental practices. On the issues of poor communication of project specifics, Enbridge
reiterated its full commitment to informing all stakeholders, stating dates of communication and
tolling its outreach to 2600 stakeholders, further stating that the update process is continuous and
would go on through the lifetime of the project.
In respect to claims of poor local consultation emergency response and management plans and,
Enbridge committed to more periodical meetings with first responders and local emergency
units, to train and update its practices.
Regarding criticism requesting the use of hydro-testing for leak detection as highlighted in a
cited reference (John & Willard, 2013), Enbridge highlighted that hydro-testing favored new
pipelines, however hydro-testing older pipelines will result in production of waste water which is
toxic and will require cleaning and reclaiming.
Enbridge also requested that the NEB disregard the requests for third party engineering
assessment stating that evaluations done by the NEB should be more than sufficient.
In respect to Land claims and traditional right infringement stated by most of the aboriginal
representatives, Enbridge reaffirmed that project activities will only occur within the property
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and Right of way owned by Enbridge. However, Enbridge agreed to make avenues available for
First Nations to tour and observe project activities to expose them to Enbridge safety practices,
and also committed to involving First Nations in emergency response and management plans.
Enbridge also committed to work with appropriate authorities and comply with the rules and
regulations regarding heritage and cultural sensitive sites.
Finally, to counter the Goodman report submitted by Equiterre (coalition), Enbridge submitted
the Demke Reply Report. The Demke Reply report, stated that the Goodman report failed to
consider the possibility of the assumed uncertainties resulting in cost savings. It also argued that
cost savings are expected by the shippers hence the lack of hesitance to sign a 10-year TSA.
4.0
SUPPORTERS:
The commercial backers have mentioned numerous reasons justifying the project. One of which
is the creation of jobs, approximated to 5500-person years. These numbers look quite significant,
however information on the amount of those jobs are temporary and how many will remain in
the system. A lot of focus was also placed on the cost savings and increased supply of western
Canadian and U.S. Brakken crude. However, predictions were made by manipulating variable
favorably. Therefore, an approval of the Keystone XL project, for example will drastically affect
the decision and the justification of the project.
Also it was cited that there would be a significant increase in the Canadian GDP due to the
project. However, spreading the amount predicted over the period suggested, leaves the figure
insignificant compared to size of the annual GDP.
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OPPONENTS:
The major issue identified by the opponents is the possible risk attached to the execution and
operation of the project. Current pipeline condition and lack of Enbridges preparedness for a
possible environmental hazard has left opponents worried. However, some of the views
displayed lack objectivity and are smeared by bias towards specific goals.
The First Nations provided valid arguments siting the risk of spillage within their designated land
area which is fair. However, most concentrated on the negligence of the Crown in consulting
them on the issue in order to discuss possible tribute. Also, although the argument for the
possible location of archaeological artifacts within locations identified for integrity digs is valid,
one cannot fail to ignore identifying the underlying request for First Nation hired third party
evaluation of digging operations as a means of gain. These views are well brought up, however
they shift the focus from the importance of the project and its effect on the environment.
The environmentalist groups and associations have an uncompromising resolve to protect the
environment. That in itself creates bias in view of the decision at hand. Their views are generally
justified in that the footprint left on the environment has the oil and gas industry should be
reduced to the barest minimum, however, the worlds energy requirement cannot be totally
ignored. Renewable energy is nowhere close to substituting fossil fuels, therefore emphasis
should be put on instigating strict regulations to ensure compliancy and reduce footprint.
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After a thorough review of the arguments presented by both of the interested parties, in my
personal opinion, I would support the approval of the project. My thought pattern toward
choosing this view is explained below.
On the issue of the need and commercial impact of the project, I believe that the urge to increase
cost savings is a practical path for any company with growth in mind. The project provides the
opportunity for local companies to become more competitive within harsh market environments.
The argument that the asset would otherwise remain dormant further backs the need for the
project. The commercial impact on the other hand is quite minimal in my opinion. Majority of
the savings and revenue will be circulated within the companies and leveraging the taxes gotten
from the tolling of the pipeline and other operational processes against the capital base of the
country and province makes it relatively insignificant.
On the matter of the engineering design and integrity of the project, I believe that the facilities of
the proponents have been operational prior to the application. The NEB has periodically
evaluated the status of the equipment to ensure that they remain above industry standards.
However, there is room for improvement as we cannot ignore the argument that technology has
advanced significantly from the conception of the pipeline therefore, state of the art equipment
should be enforced to reduce the risk of a spill or leakage.
On the matter of Environmental and socio-economic effect of the project, I believe that there is
no compromising the environmental stability for human gain. However, there is a problem at
hand and it cannot just be erased, and if the crude is not transported through that medium, there
are numerous other avenues for its transport. Therefore, I advocate that the strictest restrictions
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(within economic sense) be placed on all areas of the project to ensure environmental and socioeconomic safety.
On the review of the tolling tariffs to accommodate the transport of dilbit, I remain indifferent,
strict regulations have been placed by regulatory bodies and refineries alike to ensure the
optimum quality of feed and pipeline integrity. Again, other avenues can be used to transport the
dilbit feedstock if it is not moved through that avenue. Therefore, restrictions should be enforced
minimize risk of leakage.
Evaluating my position on this issue, some bias can be tribute to my educational background. As
an engineer, I understand the detail put into project and equipment design. This leads me to
believe that although risk cannot be totally eliminated, it can however be reduced significantly,
and tracked. This justifies my ease in decide for the project. Also, as a partner in the energy
industry, the project presents an avenue to learn and grow, which also tilts me towards its
approval.
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REFERENCES
Accufacts Inc. (2013). Report on Pipeline Safety for Line 9B application to NEB.
Redmond: Equiterre (Collation).
Board, T. R. (2013). Effect of Diluted Bitumen on Crude OIl Transmission Pipelines.
Washington: National Academy of Sciences.
Enbridge, P. I. (2012, November 29). B01 - Application for Line 9B Reversal and Line
9 Capacity Expansion Project (A49446). Retrieved from National Energy Board
- Regulatory Document Index: https://docs.neb-one.gc.ca/ll-eng/llisapi.dll?
func=ll&objId=890501&objAction=browse&viewType=1
Gray, M. R. (2010). Upgrading of Oil Sands Bitumen and Heavy Oil. CHE 522 Course
Notes - Fundamentals of Oil Sands Upgrading . Edmonton, Alberta, Canada:
Murray, R. Gray.
IHS, G. C. (2013). Outlook For Enbridge Line 9 Re-Reversal Impact on Quebec
Refinery. Quebec: Suncor Energy Marketing Inc./Valero Energy Inc.
John, F. K., & Willard, A. M. (2013, November). The benefits and limitations of hydrotesting. Quebec: Commission Parlementaire du Qubec novembre.
NEB, N. E. (2013, October 17). Hearing Order OH-002-2013, volume 6. Toronto,
Ontario, Canada.
NRDC, N. R. (2011). Tar Sands Pipelines Safety Risk. Newyork: NRDC.
NSTB, N. T. (2010). Enbridge Incorporated Hazardous Liquid Pipeline Rupture and
Release. Washignton : NSTB.
The Goodman Group,. (2013). The Relative Economic Cost and Benefits of the Line
9B reversal and Line 9 capacity Expansion. Berkely: Equiterre (Collation).
Valero, E. I. (2013, August 6). Valero Evidence. Retrieved from National Energy
Board Website: https://docs.neb-one.gc.ca/lleng/llisapi.dll/fetch/2000/90464/90552/92263/790736/890819/956564/95694
1/981430/C34-2-2_-_Valero_Evidence_-_Final-CAL_LAW-1975574-v1_
%282%29_-_A3J8A5.pdf?nodeid=981549&vernum=-2
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