Trans Mountain pipeline: spill risk fee levy

Kinder Morgan Inc. is taking criticism over a plan to push up fees on its Trans Mountain pipeline to cover costs associated with oil spill safeguards as the company seeks approval for a threefold expansion of the conduit.

US-based Kinder Morgan is proposing an increase of roughly 8% to fees paid by oil company shippers in order to bolster the industry’s ability to respond to a large marine oil spill, according to documents filed with regulators.

The change, set to take effect as early as 1 June, would tack a 28 cent/bbl surcharge on shipments from the company’s Westridge dock, where the pipeline ends in Burnaby, BC.

The levy is supported by the Canadian Association of Petroleum Producers.

Kinder Morgan says the new fees are needed now to accelerate investments in spill-response capacity. It has pledged to refund oil company shippers that use its Westridge dock the cost of the new surcharge from June to December of this year. A new funding mechanism covering 2016 and beyond will be proposed by 31 October, the company said in filings.

The levy will enable the industry-funded Western Canada Marine Response Corp. to hire about 100 additional staff and invest roughly CAN$100 million in response services and equipment, including five new bases along the proposed tanker route, said Mike Davies, Senior Director, Marine Development with Trans Mountain.

Expert drops out of Trans Mountain NEB review board

In related news, a prominent economist has dropped out of the National Energy Board's review of Kinder Morgan's proposed Trans Mountain pipeline expansion, accusing the board of betraying Canadians with a "biased" and "broken" process.

Robyn Allan, an outspoken critic of the expansion, said she is withdrawing as an expert intervener because the review's scope is so narrow that the outcome is predetermined.

Kinder Morgan's proposed CAN$5.4 billion expansion would twin an existing pipeline from Alberta to Burnaby, BC, tripling its capacity to 890 000 bpd of petroleum. The energy board is expected to make a final decision on the project next January.

Edited from various sources by Elizabeth Corner

Sources: The Globe and MailEdmonton Journal

Published on 27/05/2015

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