Update: On June 20, the Canadian Senate approved Bill-C-48, the Oil Tanker Moratorium Act by a vote of 49-46. The Canadian Association of Petroleum Producers (CAPP) issued the following statement:
“The federal government’s passing of the Oil Tanker Moratorium act is unacceptable. Bill C-48 was clearly opposed by individuals across the country because they recognize it as an unfair attack to land lock Canadian oil at the expense of the Canadian economy. After extensive consultations, a senate committee recommended Bill C-48 be scrapped altogether; yet the Government of Canada pushed forward this legislation. Bill C-48 does nothing to address marine safety and ensures that foreign oil from OPEC nations and other hostile regimes continues to be shipped into Canada. Instead, it targets Canada’s energy sector and blocks the potential export of responsibly-developed Canadian petroleum products to our trading partners in international markets. The result is self-inflicted damage to the Canadian economy and more oil being used around the world that lacks Canadian environmental and social standards.” – Tim McMillan, President and CEO – CAPP
The proposed Bill C-48, The Oil Tanker Moratorium Act, is a federal bill that would introduce laws to significantly limit Canada’s ability to export crude oil to growing global markets in Asia. Bill C-48 was introduced in the House of Commons in May 2017 and passed to the Senate in May 2018. The Senate is conducting hearings in Western Canada (excluding Alberta and Saskatchewan) through April and May 2019.
If implemented, the bill would prevent large oil tankers (those carrying more than 12,500 metric tons) from anchoring, loading or unloading, and transporting oil and other petroleum products such as partially upgraded bitumen and synthetic oil along B.C.’s North Coast. The moratorium zone would extend from the Canada-Alaska border to the northern tip of Vancouver Island.
What does this mean for Canada?
1. C-48 is not needed: Canada already has world-class marine safety standards.
In creating the bill, the Government of Canada has provided no scientific basis for a tanker ban.
In fact, Canada already has excellent marine safety standards and spill response systems. For example:
Marine inspectors board oil tankers in Canadian waters to confirm the ships have double hulls, which greatly reduce the likelihood of a spill.
Knowledgeable local marine pilots are required on board to navigate oil tankers entering Canada’s harbours and commercial waterways.
Tugboats guide loaded vessels through constricted waterways.
Surveillance planes patrol Canada’s coastlines to detect spills as small as one litre.
Recently, the federal government introduced its $1.5-billion Oceans Protection Plan (OPP), which includes comprehensive plans and augmented resourcing to handle increased shipping along Canada’s West Coast.
2. Bill C-48 would harm Canada economically by limiting exports to growing energy markets in Asia.
The moratorium would effectively prevent construction of oil export facilities on the northern section of Canada’s West Coast, along with associated pipelines.
However, Canada’s West Coast is closer to Asia than any other oil exporting facilities, especially in the U.S. Gulf Coast. The International Energy Agency (IEA) projects total world oil demand will be about 106 million barrels per day (b/d) by 2040, or some 11 million b/d more than today. China became the world’s largest importer of oil in 2017 and now imports about 72 per cent of the oil it consumes. Increasing refinery capacity in India and Southeast Asia presents additional opportunities for Canadian oil exports.
Exporting oil to Asia represents a significant economic opportunity for Canada by supplying the world responsibly produced energy that it needs.
3. The bill would only impact Canadian exports; other tanker traffic will continue to move through the region.
The moratorium would affect the export of Canadian oil, but would not affect other marine traffic such as tankers transporting oil from Alaska to Washington, Oregon and California. Under international law, Canada cannot limit the passage of these vessels in its waters.
So the bill would have the ultimate effect of harming Canada economically while still allowing other oil tanker traffic through the moratorium area.
4. Bill C-48 would negatively impact communities in northern B.C. and Alberta, including Indigenous groups.
Indigenous peoples are often portrayed as uniformly opposed to resource development, but there are varying perspectives. Many Indigenous communities wish to participate with industry to grow energy development in a sustainable and mutually beneficial manner. These communities see resource development as a path to economic reconciliation, Indigenous self-determination and a means to end poverty in their communities.
Today, approximately 134 First Nations in Canada generate revenues from oil and natural gas production – current production declines due to lack of market access are already hurting families in these communities. Bill C-48 will deprive First Nations of future economic opportunities on their traditional territories by blocking access to a western deep water port for crude oil transportation.
5. The bill is inconsistent with federal government policy.
Through its purchase of the Trans Mountain pipeline and the proposed Trans Mountain Expansion Project (TMEP), the Government of Canada made a commitment to increase tidewater access for the export of Canada’s natural resources, ensuring long-term economic benefits to Canadians.
In its 2018 Fall Economic Statement, the government also committed to increasing exports to overseas markets by 50 per cent by 2025.
Bill C-48 directly contradicts these commitments.
Large oil tankers already safely transport oil along pristine and environmentally vital coastlines, including in Atlantic Canada, the St. Lawrence River system, and B.C.’s South Coast. There is no reason oil transport cannot be safely accomplished from B.C.’s North Coast.
What does industry recommend?
In its recent report Leveraging Opportunities: Diversifying Canada’s Oil and Natural Gas Markets the Canadian Association of Petroleum Producers (CAPP) recommended the Government of Canada withdraw Bill C-48.
CAPP also calls on the federal government to support:
Developing deep-sea port facilities for Canadian oil and natural gas on Canada’s West Coast and a marine corridor enabling safe access to Asian markets.
Increased market access and diversification so Canada receives fair value for our energy products. Canada needs more than one customer for our oil and natural gas.
Economic reconciliation by protecting the value of existing benefit agreements between industry and Indigenous communities and by leaving the door open for Indigenous communities to benefit from growth opportunities in the oil and natural gas sector.
Responsible development of Canada’s oil and natural gas resources and our potential role in meeting growing energy demand and ending energy poverty.