Prince Rupert could one day be exporting oil if a proposal by Nexen Energy proceeds.
The Calgary-based company, which is in the midst of a $15.1-billion takeover by China National Offshore Oil Corporation, has spent over a year working on a plan to move oil by rail to an export terminal on Ridley Island. Nexen has been in discussion with the Prince Rupert Port Authority since late 2011 and the Globe and Mail reports a piece of land on Ridley Island has been selected for a potential export terminal.
Prince Rupert Port Authority manager of corporate communications Michael Gurney said not much is known about the proposal.
“We are approached all the time by many different companies to move many different commodities through Prince Rupert. We have had discussions with Nexen, but they have been very, very preliminary,” he said, noting there would need to be a thorough environmental assessment done before this project moved ahead.
Gurney also said he could not confirm the location of any potential oil export terminal on the North Coast.
“I can’t give a lot of specific information because this is not yet a project, it is a concept.”
For its part CN said it will not rule out the movement of oil along its track to Prince Rupert.
“While CN is not moving crude oil to Canada’s west coast ports for export purposes today – there is no infrastructure in place at those ports to unload crude oil from rail cars to vessels – the Company cannot preclude the possibility of such traffic in future if the infrastructure is built. CN has common carrier obligations under law requiring it to move traffic when it’s tendered to the railway,” explained CN director of communications and public affairs Mark Hallman.
“CN supports the development of Canada’s natural resources and seeks to give industries effective access to markets. CN’s commitment is to provide efficient transportation services for all goods, including crude oil, in the safest and most environmentally responsible manner. This commitment extends to all of our customers and the communities through which we operate.”
Skeena – Bulkley Valley MP Nathan Cullen, who has been vocal in his opposition to the Enbridge Northern Gateway pipeline, said although talks between Nexen and the Prince Rupert Port Authority were very preliminary, he will be taking a thorough look at the proposal.
“Oil by rail has been dismissed by energy companies not just because of the risks but because of the cost. I would have to look at the numbers, but regardless I believe they are talking about thousands of rail cars carrying oil moving through our communities on a thin track that has a history of accidents... [Nexen] is now a Chinese government initiative, and I’m not sure they have Canada’s best interests in mind,” he said.
“I’m going to apply the same test I applied to the proposed pipelines, which is the potential costs versus the potential benefits, and will consult with people in the northwest about it. I don’t know that my opinion would change just because the oil is now moving on rail... I don’t know if we’re just jumping from the frying pan and into the fire with this.”
The prospect of oil on rail caught the attention of 16 environmental groups who banded together to warn CN about pursuing the idea.
“Should CN decide to try to move forward with its proposal, it would face major opposition and risks to the company. We urge you to stop any forward movement with shipping tar sands oil by rail through British Columbia,” reads the letter, signed by groups such as Greenpeace Canada, Friends of Wild Salmon, the Living Oceans Society and the T.Buck Suzuki Foundation.
“Transporting tar sands to the port of either Kitimat or Prince Rupert is unprecedented and would result in the introduction of oil tanker traffic to Canada’s North Pacific coast. The risks to coastal fisheries and tourism jobs, as well as to cultures and communities who reside there, are too great.”
Cullen raised concerns about the safety record of rail, something CN said is solid.
“Railways have a solid record in transporting hazardous material traffic. According to Association of American Railroads, 99.9 per cent of hazardous material carloads moved by railroads are accident-release free. CN has improved its safety record. In 2012 CN had the lowest Transportation Safety Board of Canada Main-Track Accident Ratio on record. And none of CN’s 2012 main track accidents caused the leak of dangerous commodities,” said Hallman.
Repeated calls and e-mails to Nexen communication officials went unanswered.