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Burrard Inlet in Vancouver (LAURA LEYSHON For The Globe and Mail)
Burrard Inlet in Vancouver (LAURA LEYSHON For The Globe and Mail)

The energy bridge to China Add to ...

They are the scouts of a new frontier, slipping beneath the Lions Gate Bridge. Few notice, and even fewer understand their importance.

But the growing numbers of crude tankers steaming past Vancouver to the Pacific are quietly rewriting the politics and economics of Canadian energy. Their destination: China, land of mounting energy thirst and growing energy might.

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The first vessel, loaded with Alberta crude, set sail roughly half-a-decade ago. Ever since, the numbers have steadily risen. In 2008, about four ships steamed across the Pacific. Last year, China-bound traffic doubled. This year, a vessel a month, each one carrying roughly 600,000 barrels of crude, will head out from Vancouver, en route to Asia.

If this is a trickle - and it is, compared with the 2.8 million barrels of oil Canada extracts every day - consider it the first dribble from a faucet that is set to turn wide open.

Two of Canada's most powerful energy companies, Kinder Morgan and Enbridge are laying competing plans to pipe and ship massive volumes of crude to Asia. Their projects could, for the first time, free the Canadian energy industry from its dependence on the U.S. market while at the same time fattening profit margins.

If the industry realizes its ambitions, a steady stream of tankers will become a floating bridge between British Columbia and Asia, fundamentally altering not only the way Canada's resources are viewed by the world, but the way this country views its own natural treasures. Canada's enormous reserves will become a potential source of energy for the planet rather than just a gas tank for us and our immediate neighbours.

Yet industry support for the proposals is growing at a time when the public is turning against the idea of transporting crude by water. With pictures of the Gulf of Mexico spill fresh in their minds, outraged coastal residents have conjured up images of a similar ecological disaster on B.C. shores if a tanker ran into trouble there. In the interior, some landholders have pledged civil disobedience to block construction of new export pipelines. Federal Liberal Leader Michael Ignatieff has come out against crude tankers in northern B.C. waters, while Vancouver's city council is questioning the impact of more oil vessels in its own inlets.

Despite the opposition, Canadian energy producers are pouring hundreds of millions of dollars to lay the groundwork for projects that would cost billions more to build. Negotiations have already begun between pipeline firms and Chinese entities on how to "repatriate" the barrels of Canadian crude the Chinese have bought by investing in the oil sands.

"We have a world-class resource and we're going to match that resource with the soon-to-be-largest, but also fastest-growing, market in the world," said John Carruthers, the president of Enbridge's Northern Gateway project, one of the two proposals competing to export crude to the Pacific. "It's a huge project for the country."

'More than one customer'

When Enbridge submitted its Northern Gateway application to the National Energy Board this spring, it marked the culmination of a decade of effort and $250-million in development costs. Gateway, a $5.5-billion proposal for a pair of pipelines, is designed to bring 525,000 barrels of crude per day from Edmonton to the northern British Columbia port of Kitimat. There, it would be loaded on to large crude carriers, which would take it across the Pacific two million barrels at a time.

Kinder Morgan has a more modest but still expensive idea. Rather than building a new pipeline, it is laying the groundwork for an expansion of its TransMountain pipeline system, which today brings 300,000 barrels a day into B.C.'s Lower Mainland from Alberta. It is that pipeline that feeds the ships already leaving for China.

The company has spent millions upgrading its ship loading dock in Burnaby, B.C., to handle more traffic.It has studied how to bring larger ships beneath the Lions Gate Bridge and it has quietly worked with the Port of Vancouver to install new navigation aids, while training harbour pilots to guide those larger tankers through the sensitive waters of Burrard Inlet.

"We've done a lot of work at preparing ourselves for the next phase of expansion," said Ian Anderson, president of Kinder Morgan Canada.

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