Enbridge’s Northern Gateway project: profit at what price?

Attaching a dollar value to the damage that spilled oil does to marine and terrestrial ecosystems is an extremely difficult task. The true costs dramatically exceeded the estimates.

A spokesperson for Enbridge Inc. recently claimed that the chance of a catastrophic spill from the oil tanker traffic which would accompany the energy giant’s proposed pipeline from the Alberta tar sands to British Columbia’s north coast was “one in 15,000 years.”

However, the “independent risk analysis” commissioned by Enbridge suffers from industry’s usual self-serving biases, primary amongst these being an over-emphasis on imprecise and unknowable probability as opposed to impact or consequence. This is the recipe for “Black Swans,” the highly improbable and unpredictable events that have massive impact.

If the Enbridge Northern Gateway project is approved, an estimated 225 supertankers a year would enter Kitimat, B.C. to load about 318 million litres (two million barrels) of oil for shipment to American and Asian markets. Loaded tankers would pass directly through Wright Sound, a body of water with more than 5,000 vessels moving through it annually. More than 400,000 vessel movements occur annually on the B.C. coast, so it is not surprising that accidents are common, including collisions, groundings and fires on board. Even vessels with state-of-the-art navigational equipment are vulnerable.

The marine approaches to the coast of northern B.C. and the port of Kitimat are dangerous. This area is at least as dangerous as Prince William Sound, where the Exxon Valdez hit Bligh Reef in Valdez Arm, in a navigable channel almost 10 kilometres (6.2 miles) wide. To enter Kitimat, supertankers will need to transit Douglas Channel, which is 1.35 kilometres (0.84 miles) wide at the narrowest point. Severe weather heightens the risk of shipping accidents.

Should an accident occur involving a large ship, serious inadequacies in response capabilities would hinder rescue and containment operations. The south coast, for example, relies heavily on the availability of American rescue tugs based out of Washington state to respond to problems.

Moreover, procedures between the provincial government and the federal government to coordinate responses to large vessel incidents at sea are not well harmonized. In the past, this has resulted in considerable delays, as evidenced in the Leroy Trucking barge incident, or no response at all, as in the sinking of the Queen of the North.

A November 2010 article by Postmedia News revealed that, according to an internal audit, “The Canadian Coast Guard lacks the training, equipment and management systems to fulfil its duties to respond to offshore pollution incidents such as oil spills… The audit paints an alarming picture of an agency that would play a key role in Canada’s response to a major oil spill off the world’s longest coastline.” The article also identifies the relatively paltry budget of $9.8 million for the coast guard’s environmental response unit.

Enbridge manager of engineering Ray Doering’s recent claim in the Kitimat Northern Sentinel that a spill “is likely never going to occur” contradicts Enbridge CEO Pat Daniel’s statements in an April 2010 Globe and Mail article in which he said, “Can we promise there will never be an accident? No. Nobody can.”

Enbridge officials assert they would not be financially liable for any oil spill at sea, while a June 2010 Vancouver Sun report revealed that owners of the tankers are liable for the costs of oil recovery, cleanup and compensation for environmental damage — but only to the limit of their liability insurance. Economists have tried to predict the costs of an oil spill cleanup.

Globally, the cost to industry for spill cleanup averages $16,000 US per tonne, not including the costs to restore habitat or repair socio-economic damages to the communities impacted.

In 2003, the cost of cleaning up a 378,000-litre heavy fuel oil spill in San Francisco Bay was an estimated $93 million. Forty to 60 per cent of the estimated cost was attributed to restoring habitat and compensating for socio-economic losses. However, in 2007 when the Cosco Busan spilled a little over half that amount into the bay, the cost for the cleanup alone was $70 million. In other words, true costs dramatically exceeded the estimates.

Attaching a dollar value to the damage that spilled oil does to marine and terrestrial ecosystems is an extremely difficult task. The Exxon Valdez spill was the most expensive in history; the true costs were estimated to be $9.5 billion, of which only $2.5 billion were related to the cleanup. While Exxon-Mobil paid more than $1 billion, U.S. taxpayers ended up footing the bill for the rest.

But does any oil spill damage cost estimate even begin to cover the price of a pod of killer whales driven to extinction or the demise of a coastal fishing community’s way of life?

A version of this article previously ran in the Vancouver Sun, and in The Huffington Post on June 22, 2011.

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