Tuesday, July 07, 2009

The Port tests the waters for CN's rolling pipeline

The recent Annual General Meeting for the Port of Prince Rupert provided more than the drama of a protest and the recitation of financial facts, figures and remuneration.

In among some of the highlights of the meeting at the Crest, was the indication that the Port was interested in the recent topic of CN Rail's proposed rolling pipeline project, which would see oil from the Alberta tar sands transported to tankers along the rail road's Northern line and through the Port of Prince Rupert.

The Daily News picked up that trail and found that not everyone is going to be onside with the Port when it comes to welcoming oil transporting trains to the port, with local First Nations in particular expressing the sentiment that they are unlikely to offer their support to the proposal.

The full outline of their concerns was provided in the Canada Day edition of the Daily News.

By George T. Baker
The Daily News
Wednesday, July 1, 2009
Pages one and three

When Prince Rupert Port Authority executives look towards the long-term future of what can be brought on the Skeena rail line, it's oil they hope to see coming down the tracks.

While neither side claims to have talked about it directly with each other, it appears that the PRPA believes that shipping oil through its port, as Canadian National Rail Lines has envisioned, can happen one day.

The Prince Rupert Port Authority held its annual general meeting at the Crest Hotel Thursday and while there was an interruption from local First Nations, who stopped a presentation by vice president of finance Joe Rektor, the most notable thing after was an admission that the authority would like to move ahead with a bulk liquids center.

For now, both CN and the PRPA have said that they have not talked to each other about the possibility of moving Alberta oil through Prince Rupert or Ridley Island.

"All I'll say is in the past, Prince Rupert has always been looked at as one of the best sites for liquid bulk but there has been no discussions on that. But certainly it is an option," said PRPA president and CEO Don Krusel.

But it is not as simple as CN wanting to move oil and the PRPA wanting to help them achieve that.

To get to a point of delivering oil to tankers means someone needs to take on a certain amount of capital risk, said UBC intermodal expert, Garland Chow.

Chow, who sits as an associate professor of Management and Transportation, with a unique eye on intermodal transportation at UBC's Sauder School of Business, said that there has to be a transloading tank, or a.holding tank, to place oil from the rail cars to the tankers .

"Who is paying for that?" asked Chow.

"It's one thing for the railroad to say 'we'll move this through Prince Rupert' but if the demand dies, and we assume that the railroad owns the cars, they can always use the railcars some place else."

Chow thought that if the PRPA builds the tank in Prince Rupert, it would just sit there if the demand dies and then all the liability belongs to the port.

"What a railroad will want to do is say if you guys (PRPA) build that then we'll bring the stuff through," said Chow.

But if the PRPA constructs and owns the loading tank then it might need the federal government, who would need to support the endeavor.

While it's true that the PRPA would like to move the product, there are those in the surrounding community who have serious concerns about oil tankers on North Coast waters.

And given that there is no environmental assessment needed to move oil down the Skeena rail-line, that could become a sticking point for the Coast Tsimshian and the Haida Nation.

Lax Kw'alaams elected chief, John Helin, said regardless of how it's done, he doesn't see a scenario where his nation could support the idea of moving oil through Prince Rupert

His community has already said that they oppose the idea of moving oil through Enbridge's Northern Gateway Pipeline, would bring oil to the Kitimat port but need oil tankers traveling through the Hecate Strait.

"It doesn't matter if it's in a pipeline or on a railway, it still has to go on a tanker," Helin.

"I think the risks to tanker traffic are still there and people are speaking out very strongly about it."

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