Canada’s experience moving oil by tanker on East Coast could be applied to increased West Coast tanker traffic, IHS study says

IHS

Canada has extensive experience moving crude oil by tanker, with policies and regulations similar to other major shipping nations, says a new IHS study that reviews oil tanker activity and regulations in light of proposed new pipeline projects to accommodate increased oil production led by the growth in oil sands. The proposed projects could more than double oil tanker traffic on Canada’s West Coast.

Oil accounts for a third of all Canadian cargo, and it is the largest international commodity handled by the shipping industry. Canada is party to the same international agreements and rules – such as those set out by the International Maritime Organization – as many other major shipping nations, including the requirement for tug escort and pilotage. Further, if an oil spill were to occur, compensation in Canada exceeds what is available internationally.

The IHS CERA Oil Sands Dialogue study, Assessing Marine Transport for Canadian Oil Sands on Canada’s West Coast, developed in conjunction with IHS Maritime, provides a review of oil tanker activity and regulations to better inform discussions surrounding potential tanker movements on Canada’s West Coast. The study draws on the IHS Maritime extensive database of ship movements which includes global data on tanker movements, incidents and oil spills.

Currently, there is less West Coast tanker activity compared with the East Coast. About 3,500 tankers visit Canada’s eastern region each year, while the West Coast has less than 500. If approved, the two proposed projects – the Northern Gateway from Alberta to the port of Kitimat, British Columbia, and the Trans Mountain Expansion to Vancouver – would bring an additional 1.3 million barrels per day to the region, resulting in about 750 additional tanker visits to the West Coast.

The study’s review of global tanker activity finds that, despite a near doubling of the global oil tanker fleet over the past decade, the frequency and rate of oil spills have been dramatically reduced. Improvements in tanker technology, operations and regulations such as the use of double hulls, segregated cargo tanks and greater ship maneuverability, as well as policies affecting human performance, have all contributed to the reductions in oil spills, the study says.

“Think about how much technology has changed our lives in the last quarter century – how we communicate, the information technology and the interconnectivity, the technology used in the cars we drive – and the shipping industry is no different,” said Jackie Forrest, IHS senior director and head of the IHS CERA Oil Sands Energy Dialogue. “These improvements and innovations have drastically reduced the likelihood of oil spills and limited the amount of oil released in the event that a spill occurs.”

Despite the near doubling of the oil tanker fleet, the vast majority of incidents (94%) involving large tankers over the past decade have resulted in no oil spill, according to IHS Maritime data. Further data show that, for those incidents where a spill does occur, the average volume has fallen 75% over the past 10 years.

The level of compensation available in Canada in the event of a spill also exceeds what is available internationally, the study finds. In addition to being party to both of the international funds established to provide compensation in the event of a spill, Canada has also established its own additional layer of compensation domestically. Canada’s Ship-Sourced Oil Pollution Fund can provide up to C$159 million (US$152 million) of compensation in addition to the international funds.

The review process for the proposed pipeline projects has the potential to provide answers for the concerns regarding increased oil tanker traffic on Canada’s West Coast, the study concludes. In March, Canada’s government appointed an expert panel to review the country’s current tanker safety system and to propose improvements. The regulatory review process is currently under way for the Northern Gateway Project and is expected later for the Trans Mountain Pipeline Expansion.

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