Trans Mountain Corp. wants the federal energy regulator to let it keep the name of its insurer secret, arguing that public pressure on insurance companies over environmental concerns in the oil sector has already made it harder and more expensive to insure the pipeline expansion.
The federal Crown corporation told the Canada Energy Regulator in a filing last month that “certain parties” have already used public filings in the regulator’s database to try to press insurance companies to drop their pipeline policies. Trans Mountain argues that revealing its insurer would therefore result in higher premiums, because fewer companies are willing to insure the pipeline.
“Trans Mountain has already observed increasing reluctance from insurance companies to offer insurance coverage for the pipeline and to do so at a reasonable price,” it wrote in its application to the regulator.
“For instance, in 2020, Trans Mountain experienced a significant reduction in available insurance capacity. It sought and secured partial replacement policies to compensate for this reduction, but did so at a significantly higher cost.”
Trans Mountain said while the information was not confidential in the past, “increasing pressures on insurers to avoid insuring pipeline assets” now makes it necessary.
The regulator has agreed to assess the confidentiality request, and said Thursday members of the public will have until March 22 to comment.
Three parties have already objected to Trans Mountain’s ask, including environmental group Stand.earth and the Green Party MP for Saanich-Gulf Islands, Elizabeth May.
As a publicly owned enterprise, Trans Mountain has “an obligation for transparency that it did not have when controlled by Kinder Morgan of Texas,” Ms. May argued in a letter to the regulator.
“Confidentiality works against the public interest,” she wrote, and Canadians “have a right to know who our insurer is,” regardless of whether they support the pipeline expansion.
Ms. May said there is no justification for denying citizens the right to know the details of the project, including “whether our insurers are prepared to manage and compensate Indigenous peoples, fishers, tourist operators, communities, municipal governments and others who may require compensation” in the case of a pipeline spill.
Trans Mountain counters that because it’s a commercial enterprise, the need for confidentiality outweighs the public interests in disclosure.
Robyn Allan, the former president and chief executive officer of Insurance Corp. of British Columbia, is also opposed to Trans Mountain’s request. Granting it, she argued, “will do nothing to increase the number of insurers willing to provide coverage or reduce premiums.”
Instead, she said, it would only erode public trust in the regulator.
In a scathing four-page letter to the Canada Energy Regulator, Ms. Allan dismissed as “hearsay” Trans Mountain’s assertion that targeted public pressure is reducing the number of companies willing to provide insurance.
“A poorly managed fossil fuel company with a lack of safety culture is an easy client” for an insurance provider to cut loose, she wrote.
“Instead of running to the CER to help it skirt transparency and accountability, Trans Mountain would be well-advised to refocus its executive efforts on improving the management of its operations.”
But the Canadian Association of Petroleum Producers has defended Trans Mountain’s request.
It says denying the confidentiality application could negatively affect the Crown corporation’s access to insurers, because providers “have been placed under pressure through media campaigns to publicly cease business with Trans Mountain.”
In a letter to the regulator, the association’s manager of transportation and markets, Beth Lau, said members who will eventually ship on the pipeline expect Trans Mountain to prudently manage operating costs.
“Higher insurance costs could be caused by a smaller insuring pool and these increases would be flowed through to and paid by the shippers,” Ms. Lau wrote.
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