YVR airlines dragged environment into commercial issue

The YVR fuel-procurement issue before the B.C. Environmental Assessment Office is primarily a commercial dispute. That was expressed in a federal Environmental Assessment Panel report for a similar proposal in March 1989. Then as now, the Vancouver Airport Fuel Facilities Corporation (VAFFC) was at odds with the company that owned the jet fuel pipeline to the airport. The report puts in clearly:

Much has changed in the 23 years since the federal assessment panel submitted those wise words to the federal environment minister, Hon. Lucien Bouchard, but the dysfunctional relationship between VAFFC and the pipeline company sounds the same.

Then as now, a single company owns both the pipeline bringing crude oil from Alberta to Burnaby and the pipeline bringing the refined product (jet fuel) from Burnaby to YVR. That company, currently Kinder Morgan, has a YVR-pipeline monopoly, but VAFFC now has a strong bargaining position in a small window of time because Kinder Morgan could lose both its steady business from that pipeline and its application to the National Energy Board to double the capacity of the Trans Mountain pipeline from Edmonton. Kinder Morgan faces some opposition to the application for environmental reasons, and it will make a difference if it appears to be working (a) in the public interest or (b) against the public interest in the jet fuel issue.

VAFFC could ask for another suspension in the provincial environmental assessment process for its current application. It could then work with sympathetic parties such as Metro Vancouver and Chevron (with the only remaining refinery in this area) and with Kinder Morgan to come up with an agreement that ensures a secure supply of jet fuel for a long term. Fuel that is essentially coming by a direct route from Alberta should have a cost advantage over competition using roundabout routes, so it should be possible to come up with a deal that makes economic sense for all while reducing threats to the Fraser Estuary ecosystem and food security.

In contrast, if VAFFC keeps bulling ahead with its current application, it will make an enemy out of the city where it operates, very likely be turned down in the end, and then have to try to bargain from a weaker position with a pipeline monopoly company in a strong position.

Read other articles on this blog on this topic. Also visit the VAPOR website.

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