Kinder Morgan says taxes more than enough to cover city costs

Pipeline company responds to Abbotsford and other interveners

Kinder Morgan operates a tank farm on Sumas Mountain.

In its final submissions filed with the National Energy Board Wednesday, Kinder Morgan Canada rejected the majority of the City of Abbotsford’s outstanding concerns regarding the proposed twinning of the company’s Trans Mountain Pipeline.

Abbotsford had told the National Energy Board (NEB) that the pipeline imposes millions of dollars in infrastructure costs on municipalities, and that emergency preparedness measures have thus far been substandard and must be improved. But in its final submission to the NEB Wednesday, Kinder Morgan dismissed the need for compulsory compensation, while full-scale disaster exercises at the company’s Sumas Mountain tank farm would be too onerous for other “stakeholders.”

Kinder Morgan’s reply to dozens of interveners’ arguments signals the end of the NEB hearings into the proposed project, which would nearly triple the capacity of the pipeline. It runs for nearly 30 kilometres through Abbotsford, and its expansion would also see an additional tank added to Kinder Morgan’s Sumas Mountain tank farm and pump station.

The NEB is expected to deliver a recommendation in May to the federal government, which will make its own decision on the pipeline’s future by the end of the year.

The city and several other local governments had commissioned a report that suggested the expanded pipeline would cost Abbotsford a total of $17 million in additional costs spread out over the next 50 years. Those expenses stem from having to deal with the pipeline while constructing, repairing or updating city infrastructure. Kinder Morgan had previously disputed parts of the study.

In its reply to proposed conditions by the city and its co-interveners, the company argued the NEB shouldn’t force it to compensate cities for long-term costs. It said “voluntary agreements” with municipalities will cover most costs, and noted that it pays millions in taxes to local governments.

Elsewhere in its submissions, Kinder Morgan says it currently pays around $2 million each year in taxes to Abbotsford, and that number is expected to rise to $3.4 million if the pipeline expansion goes through.

Abbotsford also had voiced concerns about Kinder Morgan’s emergency preparedness. The company had previously been criticized for its reaction to two previous spills in Abbotsford, in 2005 and then in 2012. City officials were adamant that on-the-ground training exercises were needed at the Sumas tank farm, instead of “tabletop” planning sessions that see participants drill for emergencies in boardrooms.

The city has asked the NEB to require full-scale exercises in response to both a spill and a fire at the Sumas tank farm.

But in its response, Kinder Morgan said full-scale drills at the Sumas facility aren’t necessary, referring to its existing “robust exercise program,” along with live exercises it has committed at other locations. It also said adding exercises would impose too many costs on other “external stakeholders” that would be involved.

Throughout its submission, the company pledged to continue to consult with municipalities and did accede to a request to document location of valves in each community.

Mayor Henry Braun said that while Kinder Morgan had acceded to dozens of requests from the city during discussions over the last two years, he wasn’t surprised that the company didn’t back down in response to city submissions.

“That’s just part of the negotiations that go back and forth,” he said. “We said what we said in our presentation, and the NEB will rule on that.”

Although full-bore exercises continue to be a sticking point, Braun noted that Kinder Morgan complied with a city request for an oil spill containment and response unit to be stationed at the tank farm.