Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 47 - Evidence - June 4, 2013
OTTAWA, Tuesday, June 4, 2013
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day, at 6:16 p.m., to study the current state of the safety elements of the bulk transport of hydrocarbon products in Canada.
Senator Richard Neufeld (Chair) in the chair.
[English]
The Chair: Welcome to this meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources.
My name is Richard Neufeld. I represent the province of British Columbia, and I am chair of this committee. I would like to welcome honourable senators, any members of the public with us in the room, and viewers across the country who are watching on television.
I would now ask senators around the tabling to introduce themselves, beginning with the deputy chair Grant Mitchell from Alberta.
Senator Mitchell: Grant Mitchell, Alberta.
Senator Massicotte: Paul Massicotte from Quebec.
Senator Lang: Dan Lang, Yukon.
Senator Seidman: Judith Seidman from Montreal, Quebec.
Senator Patterson: Dennis Patterson, Nunavut.
The Chair: I would also like to introduce our staff, beginning with the clerk, Lynn Gordon, and our two Library of Parliament analysts, Sam Banks and Marc LeBlanc.
On November 28, 2012, our committee was authorized by the Senate to initiate a study on the safe transportation of hydrocarbons in Canada. The study will examine and compare domestic and international regulatory regimes, standards and best practices relating to the safe transport of hydrocarbons by transmission pipelines, marine tanker vessels and railcars.
Our committee has held 13 meetings on this study to date. We have also travelled to Calgary; Sarnia; Hamilton; Saint John, New Brunswick; Halifax and Point Tupper, Nova Scotia.
Today I am pleased to welcome, in the first segment of our meeting, from Western Canada Marine Response Corporation, coming to us by video conference from Burnaby, B.C., Kevin Gardner, President and General Manager; and Scott Wright, Manager, Operational Response Readiness.
Gentlemen, I will turn it over to you, but first I would like to apologize on behalf of all senators. We had to stay in the chamber. We have now recessed and I appreciate very much that you have patiently waited for this amount of time to have a discussion with us. I look forward to your presentation and to the questions that will come from senators. Thank you and please proceed.
Kevin Gardner, President and General Manager, Western Canada Marine Response Corporation: I am Kevin Gardner, President of Western Canada Marine Response Corporation. Thank you for the opportunity. To my right is Scott Wright, the response readiness manager. He will walk us through a presentation, but we would encourage you to ask questions as we go through the presentation. Again, we will have time at the end. It is, I think, 20 after 3:00 our time now. We have about 45 minutes and then we have another commitment. If we could move along quickly, we would appreciate any effort on your side.
The Chair: I do not let the senators ask questions while you are presenting because you will never get through your presentation and we would like to hear it. They will all have lots of questions. I appreciate that you have another appointment, so if we can keep your presentation to 15 minutes or so, then we will give the senators that much time. I will try to keep it on time so you can make your next appointment.
Scott Wright, Manager, Operational Response Readiness, Western Canada Marine Response Corporation: We have provided a presentation that I will walk through and hopefully you can follow along. I will reference slides as we proceed.
We will be looking at what Western Canada Marine Response Corporation's mandate is as well as looking at our relationships with our government agencies, our stakeholders and the public. We will also look at the incident command system; also the planning, preparedness, training and our research and development programs.
You can refer to slide 1, "Marine Oil Spill Response in Canada." As Canada's West Coast certified response organization, our mandate is to deliver safe and effective oil spill response preparedness and response for coastal waters of British Columbia from Alaska to Washington State and out to the 200-mile nautical limit. We also cover all the inland navigable waters as defined by the Canada Shipping Act planning standards.
Turning to slide 2, I want to remind you that we have a YouTube video that will summarize many of the points covered in today's presentation. It will give a who-we-are and what-we-do sort of thing. You can refer to that later.
Slide 3 is "Partners in Response." We always like to have this early in our presentation. Partners in response are incredibly important to us. We have Transport Canada, which is our regulating or governing agency. They ensure that we are meeting all the requirements of the Canada Shipping Act. The Canadian Coast Guard is federal monitoring. They will ensure that any response we are engaged in is appropriate and that the responsible party is doing a good job. If at any time they deem that that response is not going well, they can take over the response.
We also have listed Environment Canada and the Ministry of Environment. These folks provide the scientific and technical information necessary for us to help determine what the sensitivities are within a spill area, as well as determine the priorities in which we are addressing those sensitivities.
Another partner that we have is a user group. Twice annually we will meet with a user group. Any of our members are welcome to attend. These meetings will cover off different things — our fee structures, our staffing plans and our corporate goals. Some of the members of our user groups that attend are tug and barge companies, marine contractors, marine lawyers, the chamber of shipping, and oil handling facilities.
The fourth slide is Canada's approach to spill response. Industry pays for the preparedness through the user fees. Essentially, our members provide the funds for us to purchase equipment, hire personnel and create the management processes for us to respond to oil spills.
The responsible party in the event of a spill is in charge. They manage and they pay for the spill response. We will produce incident action plans daily for them to approve. The incident action plans will detail what our activities will be the following day, including all the personnel and the equipment that we will engage. For the response organizations, again, we will provide the management, processes, the personnel and the equipment.
Slide 5 is "Canada's Approach to Spill Response." It is a diagram. On the top of the diagram we have the Canada Shipping Act and the regulations and standards. That provides the framework for us to provide prevention and preparedness plans. Essentially, we look at the regulations and we will build plans to respond or to satisfy those regulations.
Following around clockwise, we see "Response Organizations." Again, we are responsible for putting together those prevention and preparedness plans, and those plans are certified annually by Transport Canada.
For the spill response management system, on the West Coast we use an instant command system. It allows us to liaise with other agencies and spill response organizations and it is a way of managing spill response.
With respect to the response organization support personnel, again, we really are the management company and provide the equipment. The bulk of our responders come from contract and these are marine contractors, fishers and other contractors.
Completing the loop up to "Government & stakeholders," engaging with government agencies, we are working together at all times through exercise and other initiatives and our stakeholders. Stakeholders can be anyone within our communities where we would respond that can help us to identify sensitivities or lend resources.
Our next slide is again under the heading "Canada's Approach to Spill Response." To operate in Canadian waters, the following must have an arrangement with a certified response organization. Vessels that are 400 gross registered tonnes and above, as well as bulk oil carriers that are 150 gross registered tonnes and oil handling facilities are required to have an arrangement with a certified response organization. As well, they are required to have spill response plans that are reviewed and approved by Transport Canada.
Our next slide is "WCMRC Membership." We have approximately 2,200 members. This will include oil handling facilities, oil companies, tankers, barges, freighters, ferries and cruise ships.
The next slide is "WCMRC Funding Structure." There are four main sources of funding. Our membership fees come from vessels and oil handling facilities. We also have a bulk oil cargo fee, the CALF or the capital asset loan fee, and response fees.
Mr. Gardner: Let me expand on that. The membership fees are like an insurance policy. The members pay $620 a year for the membership, but the bulk oil cargo fee makes up about 85 to 90 per cent of our funding. The bulk oil cargo fee is our operating budget less any revenues we have made from the previous year divided by the forecasted volumes for the year, and that comes up with a bulk oil cargo fee that is charged for any product going across a dock. As I said, that makes up about 90 per cent. Out of that 90 per cent, the five major oil companies pay the majority of those fees. Out of the 2,200 members, basically the four big oil companies and the pipeline company pay 90 per cent of WCMRC's fees.
Mr. Wright: The next slide is "Geographic Area of Response." You will see a map of the West Coast of British Columbia. As a reminder, our area of response is from the Alaska border to the Washington State border out to the 200-mile limit. You can see from this slide the areas in which we have caches of equipment. Any circle is a cache of equipment. It can be vessels, trailers or a certain package that is suitable for responding to spills in that area. The stars are locations where we have not only equipment, but we also have warehouses and full-time staff. We have a full-time staff of about 30 and 6 to 8 part-time.
Our next slide shows roles and responsibilities. The top centre of the slide will show you who the responsible party is. This is the way they manage a spill. They will have input from stakeholders. Stakeholders can be any number of people who may have been impacted by the spill.
They will have concerns that will translate into response priorities for the responsible party. The responsible party will also get advice from the federal government, the provincial governments and First Nations.
A little lower down you will see that the responsible party has the casualty to deal with. Whatever has become damaged and released that oil is the casualty. The responsible party will be looking after that. The community will look after any issues that may be impacted because of the spill. They also need to look after corporate interests, their shareholders and the cleanup.
Under the Canada Shipping Act, the responsible party looks after wildlife recovery and waste disposal. You will see in the green box, the response organization will clean up oil off the water and shorelines. They will also help to haze and scare wildlife out of certain areas and also segregate waste for disposal.
You can see the box that says "REET Input." This is a group of government agencies that will help provide scientific or technical information to help us identify sensitivities and priorities for our response.
Mr. Gardner: REET is the Regional Environmental Emergency Team.
Mr. Wright: The next slide is "Incident Command System." On the West Coast, we use the Incident Command System together with our provincial government partners and our other response organizations that we "mutual-aid" with. The basic structure is that the incident commander is supported by the public information officer, safety officer and liaison officer.
On the bottom, we have the functional boxes. The Operations Section is the teams or crews that are physically responding to the spill.
The Planning Section is generally inside of a command post. They are getting information from the field that helps them look forward to the next day's activities, possibly the next week's activities or the next month's activities. These people are putting together plans that the operations people implement.
The Logistics Section looks at what is necessary to keep equipment and people going in the field. Whether that is food, fuel, personal protective or safety equipment, Logistics provides those services to the field.
The Finance/Admin Section is compiling all the documentation necessary to put an invoice together so that we are reimbursed from the responsible party for our services.
The next slide is "WCMRC Exercise Program." Under the Canada Shipping Act Regulations, we are required to conduct exercises every year. We have to deploy a 150-tonne equipment package. In the regulations, it will tell us what packages we are required to deploy.
Mr. Gardner: For clarification, one tonne is equal to about 1,000 litres.
Mr. Wright: The equipment package would be adequate to clean up a spill of 150 tonnes.
Every two years we do the next deployment of 2,500 tonnes. Every year we do cross-border exercises with our partners in Alaska and Washington State.
In addition to the on-water exercises or deployments, we train annually with our contractors. This allows us to stay sharp, to ensure our equipment is working and to test strategies in the real world.
We have tabletop exercises annually where we will do a 1,000-tonne exercise. We will engage our government agencies and stakeholders. The government agencies are Transport Canada, Coast Guard, Ministry of Environment, and Canada Wildlife Services. This is an opportunity to work together in a scenario where we work through these issues and, hopefully, iron them out for any potential spill response.
The next slide is "Area Plans/GRPs," geographic response plans. We will start to look at areas within our geographic area, and we will identify where the sensitivities and priorities are. How can we protect those sensitivities? What needs to be done? How much boom do we need? Where do we need to position equipment?
We will look at where we can establish incident command posts, decide who the local contacts are within the municipality, where we can stage equipment, land helicopters and launch vessels. We will do coastal mapping.
We will look at strategies to protect those sensitivities. Where is the local equipment? Do we have our equipment close by, or does the Canadian Coast Guard have equipment we can use in the event of a spill? Do our contractors have equipment there? We look at any logistical support services that may assist us in our response.
The Chair: Gentlemen, we have five minutes left if we leave room for questions.
Mr. Gardner: We will move along.
Mr. Wright: The next slide is "Resources - People." It is our most important asset. We have a number of different contractors around B.C. that we use: marine contractors, tug boats, fishermen's oil spill emergency team, and land spill contractors that work with us in the event of a spill.
Next is "Resources — Equipment." We are required to have a variety of equipment capable of working in a number of different environments. It is important for us to be able to work in an unsheltered area. That is essentially an open- water or offshore area, as well as in sheltered waters and shorelines. It is important to have equipment that is unique and capable of working in a variety of environments.
We have 31 vessels ranging in size from small skiffs to large, dedicated barges. We have three large barges with response equipment on board, ready to go.
We have 31 vessels and 30,000 metres of boom. We have over 50 response trailers positioned around the coast. We have three mobile command centres where we can run field offices or manage incidents from. We have a number of tools in our toolbox for incident command posts. It is our field operating guides, our display boards and our incident command trailer.
Mr. Gardner: WCMRC is certified by Transport Canada for 10,000 tonnes. We have a growing capacity of 26,000 tonnes.
Mr. Wright: The call-out, it is probably not necessary to go into detail there. We do have a call-out that works quite well. We can activate 24/7, 365 days a year.
Mr. Gardner: The next deals with partners and the mutual aid that we have in place. We have an agreement with Eastern Canada Response Corporation, and we work closely with the Coast Guard, Transport Canada, and the B.C. shipping industry. The message is we are not alone. We belong to a global response network, and we partner with people from around the world.
Mr. Wright: We have already touched on our outreach program. With respect to stakeholders and the public, we are getting into those communities and seeing how we can work together ahead of a spill.
Going forward, one of the initiatives we are looking at is the benchmarking of world-leading spill response organizations. We have developed 25 different criteria that make up a response organization. We have developed questions against those criteria, and we are now looking at other organizations around the world and asking them what the best practices are. We will then take all those together, review them and consolidate the best practices in each of those categories or criteria.
Mr. Gardner: We met with the tanker panel yesterday for a couple of hours and mentioned this to them. The organizations are from Norway, Australia, Alaska, the U.S. and the other Canadian response organizations, so we have a good group of folks that we are working with. Out of those 25 elements, we will summarize that and then share back. We have agreed to share it with the tanker study group as well as the panel.
Mr. Wright: Some of the other things we have going on are an enhanced training program, geographic response plans and coastal mapping upgrades. Going forward, we have more capital projects, our ten-year capital plan and some five-year enhancements planned if the pipeline projects go ahead.
The last thing we have is the research and development that we have been conducting. We are part of some industry testing. We recently participated with diluted bitumen testing on water for 10 days. We were able to test our skimmers for 10 days and see any effects or changes in the diluted bitumen and any changes in the efficiencies of our skimmer.
We would now be open up to questions or discussion.
Senator Mitchell: Thank you, gentlemen. It is great to have you with us.
You mentioned the partners you work with, one of which is the Canadian Coast Guard. There were reports yesterday or today of an audit done of the Canadian Coast Guard in 2010 that suggested perhaps some of their equipment is not as new or modern as it might be. What is your relationship with the Canadian Coast Guard? Can you depend on their equipment? How does your equipment compare to theirs?
Mr. Gardner: I will answer that one in a general sense. When the regime was built back in 1995, the response organizations across Canada were to be certified for 10,000 tonnes and were to be supplemented by the Canadian Coast Guard, which was to have a 25,000-tonne capacity. I do not believe that is in place today, and I think that came out in the Auditor General's report. Their systems are not as robust as ours, and we look forward to them actually investing in new equipment as they move forward.
Senator Mitchell: How much of your capacity is supplemented by the Canadian Coast Guard capacity? How much of a drain is there if they are not up to speed?
Mr. Gardner: There is no dependency at this time on the Canadian Coast Guard on the West Coast.
Senator Mitchell: On the question of ownership, I think you are owned by the same four companies that own the eastern counterpart.
Mr. Gardner: No, that is not correct.
Senator Mitchell: Sorry.
Mr. Gardner: We are owned by Kinder Morgan, Chevron, Shell, Imperial Oil and Suncor.
Senator Mitchell: There is some overlap but not exactly?
Mr. Gardner: That is correct: Imperial Oil, Suncor and Shell.
Senator Lang: I would like to go to the issue really confronting Canada, and that is whether or not we have the capacity to deal with an oil spill on the West Coast if a new pipeline like Gateway was built or even, for that matter, Kinder Morgan.
In the executive summary of your handbook, it states your organization has completed preliminary analysis to determine the equipment and resources needed to meet a range of increased capacities to meet these changing conditions. This preliminary analysis reveals that the WCMRC is well positioned to meet increased capacity requirements.
That statement is made, yet at the same time we are told that the B.C. government is not prepared to support the environmental assessment process at this point because of the lack of information or the lack of ability to cope with an oil spill. Perhaps you would like to comment on that.
First, did you appear before the environmental assessment process? Second, would you like to comment with respect to the position of B.C. perhaps and what more you can do to assure them that you can deal with a spill?
Mr. Gardner: Sure. There are a number of questions in there.
First, as I stated a while ago, we are certified for 10,000 tonnes, but we actually have a capacity of 26,000 tonnes. To give you an example with one of the planning standards, to be able to skim product off the water, the planning standard today is about 26 to 27 tonnes per hour. WCMRC has the capability today of 340 tonnes per hour. You can see the difference in capacity we have out there already.
In relation to provincial conditions, a lot of those conditions are also land-based. I am not sure if you heard from B.C. Environment Minister Terry Lake. He mentioned it is the path of the pipeline through the wilderness and the type of plans they have in place for that. Ours is marine-based and tied to the Canada Shipping Act today. We are the open and navigable waters but not the land-based at this time.
The other thing we are doing is working closely on projects with Enbridge and Kinder Morgan to look at what the changes would be in volumes, where we would domicile additional equipment and what that additional equipment would be. I will give you a rough idea. We looked at the organization. As Mr. Wright said, we have 30 today and we are hiring more this year. The numbers we are looking at when we look at these two projects, we would be going from 30 to 200. The count goes way up when it comes to both personnel and equipment.
In the South, we have, as I said, locations with the main office here. We would look at an office in the North, which would also be another hub. We would look at a 32,000-tonne package, basically, in the North. We would be looking at another probably close to 32-plus in the South. As the environment around us changes, so do we, is the answer.
Senator Lang: Perhaps you can answer this question, then. Are you saying to us that the B.C. government is satisfied with your ability to cope with a spill if it happens outside of Kitimat?
Mr. Gardner: No. Again, it is in the planning base. They are satisfied that we would be able to respond today. As the environment changes and the new equipment and the organization are put in place, I think we can satisfy them. However, again, they will have to review the process and exactly what is going in place. They have not formally sat down to review that yet.
Senator Wallace: Gentlemen, what would the capacity of the tankers be if bitumen were to be exported from the West Coast? What is the capacity of the tankers that would come along the West Coast?
Mr. Gardner: There are two different ones. You would be looking at the Aframax in the South, which is no different than the tankers that come in and out of Kinder Morgan today. It is the same size tanker. In the North, you would be looking at the VLCCs, which are the larger tankers.
Senator Wallace: What is the tonnage of each of those classes of ships, approximately?
Mr. Wright: The VLCC is up to 320,000 dead weight tonnes, and I believe the Aframax is around 100,000, but I cannot say for sure.
Senator Wallace: I think you said that the capacity you are required to have in spill response is 26,000 versus ship sizes of 100,000 or 300,000. Is a 26,000 spill response capacity sufficient for a worst-case scenario, if it ever occurred?
Mr. Gardner: Keep in mind again that all these tankers are compartmentalized.
Senator Wallace: I realize that.
Mr. Gardner: Therefore, you are not rupturing an entire vessel.
We are certified, again, under the Canada Shipping Act Regulations today for 10,000. We have 26,000, just for clarification. Really, we are only regulated for 10,000.
What we expect is that we will continue to increase our capacity somewhere in the 50 or plus capacity. I would venture to say that you need more capacity in a 10,000-tonne certification today, but do you need to the max? Probably not.
Senator Wallace: If 300,000-tonne vessels are coming in, do you need more than a 26,000 spill response capacity?
Mr. Gardner: Yes.
Mr. Wright: What they have considered in risk assessment models is that a tanker could rupture two cargo tanks on a VLCC, and the contents of those two cargo holds would be 36,000 tonnes. Those are some of the criteria that have been used by Enbridge to determine their capacity.
The risk models suggest that the entire cargo of a tanker would not be lost and that the worst-case scenario is that two cargo holds are impacted and the entire contents of those two cargo holds would be lost.
Senator Wallace: I think you mentioned that your organization would be called upon to provide spill response if bitumen were being transported. Are your spill response techniques and equipment suitable for bitumen? We understand it reacts quite differently from conventional crude. There is some debate as to whether it sinks or floats. Do you have equipment that is appropriate for bitumen versus conventional crude?
Mr. Gardner: First, again for clarification, the product coming off the West Coast is diluted bitumen, not bitumen. Diluted bitumen is cut with condensate, so it has a density less than 1; and 0.94 is the density that it would travel through the pipeline, and a lot of that has to do with the efficiency of the pipeline itself.
To answer your question: Yes. We had a real spill in 2007 when a mishap occurred with the rupture of the pipeline by a backhoe that ended up getting in the drainage system and ended up in Burrard Inlet. We were able to pick up that product with our conventional mechanical skimmers.
As Mr. Wright mentioned, we just finished conducting a 10-day test with a variety of skimmers on the product that would be coming down in test tanks, and every one of those skimmers worked from day one right through to day ten for collecting it.
Senator McCoy: That is a very good segue into my questions. Thank you for taking our questions. To clarify: First, you do only oil and you do it only on navigable waters, is that correct, not rail?
Mr. Gardner: Yes. By law, we have the membership agreement. We have subscriber agreements with folks like CN and Kinder Morgan for supplementing their response. Because we have trained folks in incident management with the Incident Command System and we also have surplus equipment above and beyond the Canada Shipping Act standard, we can loan out that equipment or supply resources above and beyond. As a clarification: Yes, we can help, and we have helped, in other spills.
Senator McCoy: Is there a similar organization dealing with natural gas?
Mr. Gardner: No, not that I am aware of. Terasen Gas has its own emergency group. The chemical side does not have a regime.
One of the things we have been trying to push the government to do is put in what we call umbrella legislation. Umbrella legislation means that we can respond above and beyond the Canada Shipping Act, where a ship has to be on site, basically. We will be able to respond to oil-handling facilities, rail, pipeline, truck rollovers, and take advantage of the equipment and the personnel who are trained and multi-purpose them. Right now we get responder immunity, an indemnity clause in the Canada Shipping Act to protect us when a ship is part of the incident. However, under any other circumstance we do not get that responder immunity.
Senator McCoy: I do not have time to follow that up, but I have another question.
You have deluged us with wonderful detail about all your equipment and qualifications and so forth, but nowhere do I find any real-time, real-life statistics on how you perform. You must have those. You just referenced a response to the Burnaby spill in 2009, was it?
Mr. Gardner: 2007. Yes.
Senator McCoy: Without taking your time now, could you detail for us the number of spills, their quantity, your response time and the success of the cleanup for the last five years?
Mr. Wright: Sure.
Mr. Gardner: I do not have all those statistics at my fingertips, but we average anywhere from 14 to 20 spills a year. The majority of those are small, touch wood. We are very lucky. We have great controls in place with the oil handing facilities and the ships.
Transport Canada, as we said, certifies us on a three-year cycle — but annually reviews our training and exercise programs — and monitors all spills, along with the Canadian Coast Guard. Your best audit is the personnel within the government that can stand up and say that WCMRC has met every one of its time commitments and all its equipment functioned as required. I think our reputation in the general public and in the industry itself stands by itself.
Senator McCoy: I am not questioning your competence, sir, but I think it is information that would be useful to our study.
Mr. Gardner: I understand. Absolutely.
Senator Seidman: If I might continue from Senator Wallace's question about diluted bitumen. There still remains a degree of uncertainty about what happens to it when it leaks into the water. I noticed on your website you say: "In Canada we are not permitted to introduce oil product into the marine environment for the purpose of training."
My question to you is this: In your practice responses — and you even referred to an enhanced training program in the future — how do you deal with this particular issue, which obviously is a concern that just sits there without really being able to move forward on it?
Mr. Gardner: The difference is that we cannot introduce it into the environment. In other words, we cannot spill oil into the inlet in Vancouver, or whatever, and then go and practice. In Norway, they can actually do that, and they do it on an annual basis. They actually spill oil and then practice and pick it up off the water.
We use test tanks. We can actually put the product in a test tank. We can demonstrate with our contractors the different skimmers and the effectiveness of those skimmers. We actually have measurement times, how much did they pick up, how much water did they pick up, how much oil did they pick up and what volumes over time. We have those as test results and as part of the training program.
Mr. Wright: There are substitutes for using real oil, but they are not as good as the real McCoy, so to speak. You can use hula hoops, oranges and peat moss, and they take on a similar characteristic of oil floating on the surface of the water.
Senator Seidman: Are you satisfied, using the simulated process in your test tanks, that you are approximating real- life circumstances well enough that this satisfies your ability to respond in case of a spill in terms of what is necessary and what will be needed?
Mr. Gardner: Personally, from our standpoint, what we would like to see is more R&D and more involvement between industry and government to develop research and development, larger test tanks and the opportunity to do that.
We do try to simulate as best we can, even to introduce wind conditions and tidal changes, all as part of the tests. However, they are not perfect, by any means. We do it to the best of our ability.
Senator Patterson: I appreciate your offer to send us information on spills you have dealt with over the years. Could you tell us what is the largest spill you have dealt with? Was that in Burnaby? What was the volume of the largest spill? Have you had spills to deal with offshore as opposed to near shore?
Mr. Wright: We did respond in 2005 to 1,000 tonnes of bunker that entered Wabamun Lake because of a train derailment there. We did oversee the on-water cleanup operations there.
We have had a number of other bunker spills around the Vancouver area, south coast, and in the neighbourhood of up to 100 tonnes. Kinder Morgan in 2007 was 100 tonnes or 700 barrels that entered the water. We also had another spill in 2006 that was around 100 tonnes in Squamish, British Columbia.
Mr. Gardner: We also responded to incidents like the Queen of the North ferry sinking in the North, implementing the Incident Command System, the stakeholder group and remote access. That is the one I would say has been one of the most challenging. It is not offshore, but it is in a very remote area and we had to manage that.
Senator Patterson: Did the Queen of the North incident require recovery of oil?
Mr. Gardner: Diesel was the key product.
Mr. Wright: Our strategies there focused initially on containment and recovery and then we quickly moved to protecting environmentally sensitive areas and taking a defensive approach.
The Chair: Thank you.
Senator Massicotte: My question has been answered.
The Chair: Very good, thank you.
When you send in any of the information to our clerk, she will ensure that all senators get a response.
I have a couple of questions. You gave us a map, the geographic area of response. I appreciate that very much. It shows where your offices, warehouse facilities and response equipment caches are located. Could you do the same kind of map to show us what you envision if Kinder Morgan and Northern Gateway go ahead? What would happen to that map as far as warehouse facilities and where would they be? Could you do that?
Second, for the 200-mile limit, are you responsible for the tankers that come from Valdez to Bellingham or down to the West Coast? Do you look after those if there is a spill?
Mr. Gardner: If there is a spill in Canadian waters, absolutely, but they are travelling down outside the 200-mile nautical mile limit entering Juan de Fuca Strait, so they should not be coming inside the limit.
To answer your first question, we have a confidential agreement signed with Northern Gateway. We do have exactly what the map looks like. We would have to get permission to share that from Kinder Morgan and Northern Gateway. We will have to let you know on that, but we already have all the caches, where they would be, what type of equipment, the personnel, all that is being developed.
The Chair: I would appreciate if you could find that out. I would be surprised that they would not want that public with all the discussion that is going on.
Mr. Gardner: We will.
The Chair: To get back to the 200-mile limit, you guarantee me that the ships from Valdez stay out of 200-mile limit even down to the bottom of your red line and then they stay in the U.S. waters going into the Strait of Juan de Fuca, never touching Canadians waters?
Mr. Gardner: No, that is not true. In fact, in Juan de Fuca Strait they have an inbound and outbound lane. One lane travels in Canadian waters and one travels in U.S. waters as a safety precaution. There is the first change. To guarantee you that they do not come into Canadian waters on the 200 nautical miles, that is Transport Canada, Coast Guard, not the response organizations monitoring of those, so we do not know what the answer is. I cannot tell you.
The Chair: You do monitor.
Mr. Gardner: Transport Canada has a surveillance program where they travel the coast up and down and they are probably your best answer. We would not be able to tell you if the tankers do come into Canadian waters.
The Chair: I appreciate that. I got that. In the Strait of Juan de Fuca, though, if they are in Canadian waters inbound or outbound, are you responsible for the cleanup?
Mr. Gardner: We will respond and we have to do it under a third party agreement. In 1995, there was a reciprocal agreement put in place between the response organizations from Washington State and Canada and it was an interim reciprocal agreement until such time as Canadian Coast Guard and U.S. Coast Guard put an agreement in place. Eighteen years later that agreement is not in place.
The Chair: Okay. Thank you very much, gentlemen. I appreciate you taking extra time to stay so that we could have that presentation. There could be some other questions that some senators have that we will put in written form to you, but thank you very much for your time. I appreciate it.
Mr. Gardner: We would welcome anyone who would like to visit us on the West Coast. We could spend any time to help educate folks.
The Chair: I think we are coming to visit you. That is still in the works.
Welcome to the second half of our meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources. We are continuing our study on the safe transportation of hydrocarbons in Canada. I am pleased to welcome, from Canadian Pacific, Glen Wilson, Vice-President, Safety, Environment and Regulatory Affairs; and Brent Dornian, General Manager, Marketing and Sales, Energy, Chemical and Plastics.
We met when we were in Calgary before. I am sorry that we had to keep you a while. However, they would not let us out of the Senate chamber because they were still busy in there. Contrary to popular belief, we do work and so we had to stay in there. I appreciate your patience, gentlemen, and I look forward to your presentation and some questions from our senators.
Glen Wilson, Vice-President, Safety, Environment and Regulatory Affairs, Canadian Pacific: Thank you very much, Mr. Chair. Good evening, my name is Glen Wilson and I am the Vice-President, Safety, Environment and Regulatory Affairs for Canadian Pacific. I am joined by Mr. Brent Dornian, General Manager, Marketing and Sales, Energy, Chemical and Plastics for Canadian Pacific. We thank you for the opportunity to follow up with you today after our initial meeting with many of you in Calgary on March 6, 2013.
We will make brief introductory remarks and then take your questions. For the benefit of those who were not able to be at our meeting in Calgary, and to refresh those of us who were, I will briefly introduce you to how safety is managed at Canadian Pacific. Mr. Dornian will then provide a quick overview of the markets for transportation of hydrocarbons by rail.
CP operates a 22,000-kilometre network throughout Canada and the United States. In 2012, we moved 2.7 million carloads of traffic, with each car moving an average length of 1,400 kilometres. Approximately two thirds of that traffic moves to or from a port or border gateway as part of Canada's global trade.
The Canadian railway industry is also one the safest in the world, and CP recognizes that the best way to provide effective service to our customers and to execute our part in the supply chain is to operate our railway safely. I am proud to say we have been doing so, and that CP has achieved the lowest frequency of train accidents in the North American railway industry in each of the last seven years. In 2012, that equated to 1.67 FRA-reportable train accidents for every million train miles. A train accident was reportable in 2012 under FRA standards when the damage exceeded $9,500. With locomotives costing approximately $2.5 million, and the amount of heavy steel and motion that we have in our business, you can imagine that it is not very hard to have damages exceed $9,500. Yet, we only did so 1.67 times for every million miles of train operations.
CP achieves these high standards for safety through a combination of people, process and technology. In the interests of time, I will not reiterate the details that we discussed in our session in Calgary in March, but I do want to emphasize, generally, that our safety management system is modeled after the highest international standards for health and safety management, and it is extensively audited by CP itself as part of our drive for continuous improvement, by Transport Canada as part of its responsibilities for oversight and regulatory compliance, and by shippers and other stakeholders. The chemical industry is a good example with their Responsible Care Program.
Without getting into the details, I can also tell you that CP employs an array of technology across its network that is increasingly effective at detecting defects in infrastructure and in the locomotives and cars moving across our network. Vast strides have been made in scanning for subsurface defects, micro cracks in steel and other early indications that cannot be detected through manual inspection process but which are allowing CP and other railways to transition from reactive to predictive.
This journey is not yet complete but the continuous improvement in safety is evident, as we better and better understand how to monitor, predict and prevent where we could previously only search and react.
I recognize that this committee is specifically tasked with inquiring into safety as it relates to the transportation of hydrocarbons, so I also want to make the point that CP has been transporting dangerous goods for well over 100 years. Crude oil shipments, while growing and garnering a lot of interest, still make up only a small percentage of the dangerous goods shipments that we see.
CP is very mature and has proven operations for handling these products safely, and for quick and effective emergency response in those rare instances when incidents do happen. We proactively work with communities we operate through to educate about, exercise and test our emergency response processes. Our response capability and our commitment to the community and the full restoration of a site when incidents do happen are also proven and ongoing.
With that I will ask Mr. Dornian to introduce you to the shippers, products and markets for hydrocarbons moving by rail.
Brent Dornian, General Manager, Marketing and Sales, Energy, Chemical and Plastics, Canadian Pacific: Thank you. I will simply remind you of a few key points we made regarding the markets and our volume and growth projection.
The crude-by-rail model started as a solution to production spikes that had no off-take capacity to really get to market, but the model has been proven to be a reliable and "rateable" way to get all types of crude to all refinery markets in North America. At origin, our access in the Bakken continues to grow as facilities expand and scale including the Saskatchewan Bakken. Our Western Canadian volume continues to grow on the same basis. Across our network, we have 19 origin facilities, 14 of which are in Western Canada, and more are under development.
We will access heavy crude to the major pipeline hubs in Edmonton and Hardisty. An extensive pipeline feeder system will draw volumes down to these hubs. We will provide a rail option for barrels that want to travel to the Gulf Coast or reach other non-pipeline-served markets.
On a destination basis, CP is now moving crude to all eastern Canada, the northeast U.S., the Midwest refiners, the U.S. Gulf Coast, as well as the West Coast.
Primarily, our markets are to the Gulf Coast and northeast refinery markets. We expect both of those primary markets to continue to grow. The northeast market will be served both through terminals, such as the example of Global at Albany, New York, which then vessels product on to the refinery, as well as rail direct to specific refinery facilities. Many of the refineries in this market are building infrastructure that will allow them to accept large volumes of crude on a direct-rail basis.
This is also happening in the Gulf Coast. CP is working with a number of parties and has connections on the Kansas City Southern, the Burlington Northern and the Union Pacific to continue to build our portfolio of rail destinations in the Gulf Coast market.
The West Coast refinery market will be important to CP, as well, particularly as the demand for the heavier oils grows. Industry is working on solutions for the export market, and we are involved in discussions on the development of this capability. Rail capacity does exist across our network, and the industry will solve the issues of terminal capacity at the West Coast.
With respect to volumes and growth, growth of continues to be strong on CP both out the Bakken, as well as the heavier crude in Western Canada. In 2012, we moved 53,500 rail cars, or roughly 95,000 barrels per day. In January of this year, we hit an annualized run rate of 70,000 carloads, or roughly 125,000 barrels per day. We have a line of sight to two to three times this volume based on specific initiatives, and we expect to reach this run rate by sometime in late 2015 or early 2016.
The rate of growth is dictated by the speed at which terminal infrastructure comes online at origin as well as destination, and the ramp-up capacity of the tank car fleet. There is roughly a year and a half to two years queue for tank car builds, and the railway is working with industry to also maximize capacity of every car through existing speed in unloading and offloading, as well as transit times.
Rail can handle significant growth in the crude oil volumes. Current volumes approximate only 4 per cent of our total carloads, and they move across a number of our corridors. There is capacity to handle more.
CP is partnering with industry in the development and scaling of the crude-by-rail model. Key players are making significant investments in infrastructure and fleets. We see rail as a permanent part of the transportation of crude to market, based on the model's availability with respect to capacity, flexibility, economics, access and speed to market, and the industry is investing in this model.
In summary, CP's network covers unique access to refiners and marketers to all grades of crudes, from the light sweet in the Bakken through to the mids and heavies in northern Alberta. We also provide access to key refinery markets in North America, either directly on our network or through connections with our partner railroads.
Rail offers a product that is safe, reliable, flexible and fast, and it provides access to markets. Capacity exists today.
Thank you.
The Chair: Thank you very much, gentlemen, for your presentation. We will now go to questions, and I will defer to Deputy Chair Grant Mitchell.
Senator Mitchell: Thank you, gentlemen. I am interested in the use of DOT-111 tanks. There has been some concern in the U.S. and that has been reflected, I understand, as well in the Transportation Safety Board Canada assessments that the DOT-111 tank cars may not be as secure from punctures as these organizations would like them to be. Could you comment on that? Do you use them? Are you phasing them out? How many do you have?
Mr. Wilson: The U.S. Department of Transportation sets the standard for the tank car construction and the DOT- 111 is a tank car that is the standard for North America-wide transportation of a lot of liquid products with dangerous goods qualities to them. I should clarify that it is the shipper community that owns the cars, but there are tens of thousands of these cars in service for crude oil transportation. They are the North America-wide standard.
The criticism that I think you are referring to in your question is I think answered by a revision to the standards. A petition was filed and accepted, to which now all cars I believe constructed since October 1 of 2012 meet heightened standards for head and shell thickness, rollover protection for top and bottom fittings on the car, and we believe that will be a significant improvement to the performance of those cars.
Senator Mitchell: How long does a railcar stay in service on average? How long before you would phase out all the old ones and get the new ones at the higher standard?
Mr. Wilson: They typically would run for about 40 years.
Senator Mitchell: That is almost as old as you are.
I am interested in the culture of safety within your organization. We talked about that when we were in Calgary and to some extent with the people we have met with across the country. Could you talk about how you do it? I would be interested to know whether you bring in outside consultants or advice on how to establish it.
Mr. Wilson: We certainly have in the past. We survey culture every two years, I believe. We saw over time a continually improving level of engagement in safety by the employees, and this is surveying literally thousands and thousands of our unionized and front-line workforce employees. We have seen our number as recently as, I think the last survey would be two to three years ago, reach as high as 80 per cent for engagement in safety and believe that Canadian Pacific treats safety very seriously. That is the baseline culture that we operate out of and how we measure culture.
We also have a continuous auditing process under our safety management system, methods that seek out employees on the front line regularly, that questions them about safety, ensures follow-up to observations conducted and other things like that.
Senator Wallace: Gentlemen, the tanker vessels are involved with spill response organizations and I am sure you are aware of that. In the event a spill occurs, there is a network that the spill response organizations are tied in with. Spill response equipment is strategically located at key locations along the coast and so on. Has CP a similar arrangement to strategically locate equipment, resources and personnel in the event that a spill of petroleum occurs from one of your tank cars?
Mr. Wilson: Yes, we certainly do, senator. We have a number of hazardous material specialists who are deeply trained and experienced in handling these commodities positioned around our network. We map out our network from the standpoint of where various contracted expertise is, so we ensure that we have both contract expertise, whether it be air monitoring, water monitoring and testing and sampling, and physical equipment such as booms and pumps, so we know that we have that kind of equipment, that kind of expertise, and our own in-house people all within a relatively close range to any particular site.
Senator Wallace: In doing that assessment as to where you would locate your resources, would you pay particular attention to waterways, for example, the timeliness of the response if a railcar should derail and spill into a major waterway? The timeliness of the response would be critical in recovery and minimizing environmental impacts. Do you take special note of those types of areas and ensure that spill response resources are close at hand and would be effective in dealing with spills in those areas?
Mr. Wilson: Yes, we certainly do. Hazardous materials or dangerous goods that we move on our network are quite vast. There are hundreds and hundreds of different products that we have to factor into our emergency response planning. We look at what those products are, where they flow from origin to destination across our network, and we look at factors like, as you mentioned, water, but also population centres. There are a number of other factors that you have to consider in planning out where you put your resources and what resources you put in those locations.
Senator Wallace: When you are transporting bitumen and you are positioning your spill response equipment and resources in the event an incident occurred, are there any special steps you take if bitumen is being carried? Is there special equipment and special expertise you would require from the people who would be directing the response? Does bitumen bring up anything out of the ordinary versus conventional petroleum?
Mr. Wilson: Yes. In fact, what it does is some of the firefighting equipment needs to be specialized. It takes what is called AFFF foam. Regular water does not work to suppress a fire. We have acquired, I think it is three or four just in the last year of these foam trailers that we have positioned across our network and we can deploy them, mix them with local firefighting and basically they pump the water through the trailer to create the fire suppressant necessary.
Senator Wallace: Have you found your equipment to be effective in responding to a bitumen incident or have you had one?
Mr. Wilson: We have had a couple of incidents involving crude. We have not had a fire, so we have not tested it in that way, but it has been tested in other industries and many other ways that we are confident it would be very capable in response.
Senator Seidman: The transportation of crude oil by rail is growing, and the increase in traffic is resulting in a greater public scrutiny of safety records. What do you see as CP's greatest challenge in terms of safety? Are you taking any steps to innovate or tighten your safety measures, R&D initiatives, for example? I would be interested in hearing your response to that.
Mr. Wilson: Yes, we certainly are. We are routinely revisiting and upgrading our technology base. The challenge, as you refer to it, in next generation for safety is to be able to detect things that are very difficult to detect. With subsurface defects in rail, the technology that is available can only scan about the top half inch to three quarters of an inch of a rail head. Defects can exist lower than that in the steel. Those are some of technology challenges that we are facing.
The rail industry at large in North America participates in a centre in Pueblo, Colorado, called the Transportation Technology Centre, which has a 55-acre facility constantly researching the next generation of these kinds of technologies. In Canada, CN and CP both have partnered with Transport Canada to also fund greater research through a centre of excellence at the University of Alberta. Research and development is very much a priority in the industry at large and for Canadian Pacific as well.
Senator Seidman: Are you saying that railway companies share their technology innovation and best practices relating to safety? If you are saying that, how is that information shared?
Mr. Wilson: Typically, it is developed collaboratively. The centres that I just described are funded by the entire railroad industry, by both the Canadian and U.S. government contributions as well. The belief behind that is there will be a greater ability to drive that research forward with a collective effort and that we should not compete within our industry over the development of safety technologies.
Senator Seidman: That is good to hear.
Have you participated in studies related to the safe transport of bitumen?
Mr. Wilson: We have not studied it as an isolated commodity per se. We certainly do risk assessments at any new facility to ensure that a facility that comes online is up to standards. We look at marshalling of trains and all kinds of other things. However, as I said at the outset, we have been moving dangerous goods for well over 100 years at Canadian Pacific, so crude oil just falls within that as another class of product that we have to move.
Senator Patterson: I believe there has been a rapid expansion in the volume of hydrocarbons transported by rail in Canada and the U.S. in recent years. Could you share with us what percentage of total rail traffic on your system in Canada is devoted to hydrocarbon commodities and whether that trend is changing?
Mr. Dornian: I do not have the number for the hydrocarbon portion, but it is safe to say the crude portion in 2012 made up roughly 4 per cent of our loads overall for the railway. The railway moved, in 2012, 2.67 million carloads. You heard me mention 53,700 that were crude. As you can imagine, it is a very small percentage. That percentage will, of course, grow. Also, our growth in other commodities will progress at the same time.
There may be a higher proportion of crude shipments and, by default, energy shipments, but we do not anticipate it to be the majority or a functional, large block of our overall book of business.
Senator Patterson: Are you looking to expand the volume of hydrocarbon products? Is that an opportunity that the company is looking at, may I ask?
Mr. Dornian: Yes, very much so, Senator Patterson. As we have indicated to our investment community and industry at large, we do see potentially, by 2015 or 2016, a growth rate of something like two to three times what we achieved in the early part of this year, which was roughly 75,000 carloads. You can imagine that we would be in the area of, say, 150,000 to 200,000-plus barrels per day growth rate by that particular time.
Senator Patterson: I have one other quick question. Your CMO, Jane O'Hagan, is quoted in your presentation as saying that "The pipelines will never be replaced by railways. But they are a good additive that gives the oil industry flexibility and capacity."
This may be a challenging question, but from the safety point of view, do you have any views or have you done any studies on the comparable safety of transporting hydrocarbons by rail compared to pipeline?
Mr. Wilson: We have not done studies ourselves within Canadian Pacific, but I have certainly seen them and understand that a number of them exist.
My answer to that would be that what I have seen indicates — and I think pipelines have said this in testimony before you — that 99.999 per cent of their product safely reaches destination without an accident, and the data for the railway industry shows 99.998 per cent. I would characterize that discussion as being a debate among a thousandth of a percentage point as to whether rail or pipeline moves more safely, and I think it supports the conclusion that both are very safe modes of transportation.
Senator Massicotte: On that note, I have a follow-up question. Our Prime Minister, Stephen Harper, as well as the U.S. transportation board, made a comment approximately three weeks ago, at least as reported in the Canadian Press, that railways were a lot less safe than pipelines. I gather that, given your earlier comment, you would disagree with that?
Mr. Wilson: I am not looking to debate our Prime Minister at all. I believe his comment was that it was more environmentally challenging. I am not sure I have the full context of what he meant to include by that.
I have looked at the various studies. I think they are somewhat open to interpretation. I have seen different audiences — and the media, in particular — put different interpretations on it. It is really just my interpretation that I am offering you to say that it appears to me to be very similar.
Senator Massicotte: Having said that, there have been some reports that the cost of spills generally, in pipelines and railways, has gone up dramatically in the last seven years compared to previous years. Is that the case? If so, why would that be the case? If you look at the average cost in the last several years, it has risen dramatically. Is there any particular reason why, or is that just some journalist speculating on that fact?
Mr. Wilson: It may be. I do not believe I have seen that kind of analysis, senator. As a general rule, responding to incidents and the cost of cleaning them up is over probably a longer period than recent times, but I believe companies are now very environmentally sensitive; they fully restore sites and they are probably spending greater sums in ensuring a full and complete cleanup.
Senator Unger: Regarding Emergency Response Assistance Plans, do rail companies submit an overall plan to take into account shipments throughout the year or is a separate plan required for every shipment?
Mr. Wilson: A separate plan is required for each shipper, and it is the shipper of the product that has to file the plan. That is part of the regulatory regime under the transportation of dangerous goods legislation. The rationale for that is that the shipper is best positioned to understand the properties of their product and to be able to understand what needs to happen in response to it. We work collaboratively with our shippers. If it is as a result of a rail incident, we would be first responders, but the shippers would be notified and their Emergency Response Assistance Plan would come into effect.
Senator Unger: Are small-volume deliveries treated differently than large-volume shipments involving many railcars? If there is a small supplier with just a few cars, are they treated differently with regard to the emergency response? You say that is the responsibility of the shippers but that you help. Do you do something different if the size of the shipper differs?
Mr. Wilson: No. If it is a rail incident, Canadian Pacific is really indifferent to the size of the shipper because presumably that incident has happened involving a rail car and one of our trains. Whether it is, as you say, a small shipper or a very large oil producer who has much greater resources, we would respond in the same way.
Senator Unger: My last question concerns the rail cars used to ship bitumen or dilbit. You said you do not own them so shippers buy their own, and we also heard that some shippers lease them. Do you have any connection or different attitude about a car that is leased versus one that is owned by a company? Do you own any at all?
Mr. Wilson: We certainly do own rail equipment. Maybe Mr. Dornian can answer in terms of specifics for tank cars.
Mr. Dornian: For the tank cars, the only tank cars that Canadian Pacific owns and operates are for the purposes of its own fuel distribution supply for locomotive refueling in the field. With respect to freight revenue shipments, the shipper owns all the cars.
From a commercial, operation and safety perspective, the railway is indifferent as to whether that shipper is taking a complete ownership of that car or whether he has leased that car from a car manufacturer or a tank car leasing agent. In fact, in many cases we would not necessarily know on a shipment-by-shipment basis.
Senator Unger: Regarding the safety of these particular cars travelling over your tracks, that is not a concern for you?
Mr. Wilson: Our train crews and our mechanical employees, the vast majority of employees across our network who touch or handle those cars would not know the difference. Where the difference might come in is if there was a defect detected on that car and a bill was generated to bill back to the car owner. Only at that point it would become visible as to whom that car owner was.
Senator Wallace: Senator Unger's question raises another thought in my mind.
Back to the point of who has the obligation to respond to a derailment or a spill from one of the tank cars, CP owns the tracks and CP owns and operates the locomotive. The tank cars themselves could be owned by a leasing company or a supplier, and then you have the owner of the product that is carried in the tank car. If there is a derailment, who has the obligation to respond to the spill, recover the product and minimize environmental damage? Is it CP's obligation? Who has the legal obligation to put a spill response plan in place if an incident occurs, such as I just described?
Mr. Wilson: Simply, senator, we do. Canadian Pacific has the obligation to respond, and we do not shy away from that obligation. We take on a lead role in response to a train accident. Because of the nature of the commodities and the vast number of commodities, we rely on shippers for information relating to those products. If it is a product that is subject to an emergency response assistance plan, then that shipper shares some legal obligation as well. It is not necessarily in the sense of being a first responder so much as participating in the safe handling of the commodity.
Senator Wallace: Perhaps you participate in the financial consequences of the spill, but the point is that the first responder is CP, correct?
Mr. Wilson: Yes.
Senator Wallace: Thank you.
Mr. Wilson: If they want to participate financially, we would welcome that.
Senator Wallace: Yes, I am sure. Whether you need lawyers or not to encourage them, that is another issue.
Senator Mitchell: With the question of the response plan, is it not the case that the shipper has to have a response plan? Do you have to have one as well? How are those two things coordinated?
Mr. Wilson: We do. Ours is very much about train accident response. We cannot have a specific plan to contemplate the unique properties of the hundreds of different commodities that we move. We have a thorough response set to international standards, audited and exercised. Our plan is very thorough, but you cannot contemplate all the various potential consequences of all the various potential commodities that could be on any given train, and there can be multiple commodities on any given train.
Senator Mitchell: Thank you very much.
Mr. Wilson: You are welcome.
The Chair: I have a couple of questions. Do you go as far north as Edmonton or do you interline and go farther north from Edmonton?
Mr. Dornian: Our network goes to Edmonton as a terminal hub, and if any traffic was to go north of Edmonton, it would require a CN interchange in the Edmonton area.
The Chair: I think you said you were moving product to Vancouver. Can you tell me what kind of oil you are moving to Vancouver, how much and where it is destined?
Mr. Dornian: I should caution that for some of our answers, we are under a confidential contract. All of our freight traffic moves in a confidential contract and, therefore, we are not at a tremendous amount of liberty to discuss a specific piece of business.
I can say that the majority of the crude that CP is moving into the Lower Mainland today is for local consumption, and it is largely coming from the southern part of Western Canada.
The Chair: That is good enough, then. I would assume it is not bitumen, that it is lighter oil, not heavy oil, and that it would be going to the Chevron refinery. Would that be correct?
Mr. Dornian: That is a great question for Chevron.
The Chair: I can read between the lines on that one.
Mr. Wilson and Mr. Dornian, thank you very much for staying late tonight. We appreciate it very much and appreciate your presentations. Have a good evening.
Mr. Wilson: You are welcome.
(The committee adjourned.)