Nov 8, 2014

Time for a Different Approach


It may be the heat here in Baja, and certainly the tequila could be taking its toll on clear, or at least correct thinking, but it seems to me that there is a better policy answer to Kinder Morgan than outright rejection of its pipeline and terminal expansion proposal, and a far better policy approach to BC Ferries than just wishing its problems away.

The trouble with simply rejecting Kinder Morgan is that it fails to address two very important environmental issues, not to mention the economic value of expanded pipeline capacity. Rejecting the current proposal means more oil will be shipped by rail which raises environmental and safety risks at least equal and likely far greater than pipeline shipment of oil. It also means that crude oil will continue to be shipped out of Vancouver Harbour from Kinder Morgan’s existing facilities, with no resources or leverage to make needed changes and improvements.

And, although Vancouverites may quite reasonably not care, rejecting Kinder Morgan and every other pipeline proposal out of Alberta will diminish the value of that oil resource to the detriment not only of oil companies and Albertans, but all Canadians. Federal income taxes are significantly reduced by excess (rail in lieu of pipeline) shipping costs imposed on that industry.

As for BC Ferries, the position of the government that this quasi-private (whatever that means) corporation (a) can’t raise fares even if it is facing losses; (b) can’t take serious measures to cut costs if that involves change in service levels or facilities; and (c) can’t expect increased subsidies from government, is pretty obviously not viable policy.

So, and here is where the heat and tequila are having their effects, maybe its time for a different approach — a time to start thinking not about how to stop Kinder Morgan but rather about how Kinder Morgan could go ahead in a way that reduces environmental and safety risks from what would otherwise continue to exist. And maybe its time to start thinking about a major realignment of BC Ferries’ major routes that could both enhance service and reduce costs.

The answer that is at least worth exploring is a suggestion that hit the papers some time ago — moving  Kinder Morgan’s oil terminal right out of Vancouver Harbour where, certainly with expanded shipments, and arguably even today, it does not belong.

Kinder Morgan’s expansion could be conditioned on their buying the Tsawwassen terminal from BC Ferries and moving their existing as well as expanded operations there. No doubt there would be issues and concerns about shipping oil from that location, but the issue is how they would compare to the issues and concerns about shipping oil from Vancouver Harbour — something which is happening now and will continue to take place if Kinder Morgan is simply rejected.

The funds from the sale of the Tsawwassen terminal could then be used to develop a new terminal on Sea Island just north of the airport, a terminal that could be designed to serve as a central hub for all major Vancouver Island and southern Gulf Island services except possibly for large truck traffic which could stay at Tsawwassen or some industrial oriented facility.

There would be economic and safety benefits from pulling the Nanaimo runs out of Horseshoe Bay. There would be economies of scale from consolidating the southern (Swartz Bay) and central (Nanaimo) Vancouver Island runs at that location.

There would also be the opportunity to extend Canada Line to the new ferry terminal, facilitating a needed shift in emphasis from moving cars to moving people. The costs savings from that alone could overwhelm all of the other savings such a change would offer.

No doubt there are lots of reasons to say no to this idea, but there could be some very good reasons to say yes. And that in itself says to me giving it serious thought is a lot better than just trying to stop Kinder Morgan and hoping for the best (but not doing anything) for BC Ferries.

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