“Exemplary Environmental Emergency Management through Leadership, Organization, Team Work, and Shared Responsibility.” Good morning - acknowledge Sara & Task Force We hoped to have a representative from the Canadian Association of Petroleum Producers, but were unable to secure a representative to attend. I am here to share information around Energy Transportation in British Columbia and the anticipated future developments that are driving change in BC. D’Arcy Sego, Emergency Planner with the Ministry of Environment D’Arcy Sego

Changes to our Energy Transportation Natural Resource Development British Columbia Advantages Pipelines LNG Coal

Natural Resource Development Natural Gas Oil Coal In 2007, the BC Ministry of Energy and Mines announced – “B.C.’s mineral potential is among the best anywhere; having vast, untapped reserves of metals and other resources. Today in 2013, British Columbia's Natural Resources continue to play a large part in B.C. economy. Business and industry sectors are able to use these resources to generate income and create jobs. These economic drivers and the world’s commodity market are increasing the demand on energy production, the transportation frequency/rate, and exportation of natural resources form BC.

British Columbia Advantages Better Pricing Economic Benefits Shorter transits Better pricing in the world markets provides a greater economic benefit for industry, more jobs for Canadians, and a stronger healthier economy in British Columbia. BC is Canada’s Pacific Gateway for the movement and transportation of products to Asia and the Pacific Rim. Transit Times Prince Rupert has a 10-day supply chain advantage to the Asian market. On average vessel transit from Prince Rupert is 24 hours faster than departures from Vancouver, Seattle, or Tacoma, and over 50 hours quicker than departures from Los Angeles.

Pipelines New or expanding pipelines are being proposed to facilitate the movement of heavy oil and liquid natural gas across BC as we seek access to international markets Oil: Two crude oil pipeline proposals are being advanced through the environmental assessment processes set up in Canada. The first is a proposal by Enbridge to build a new 1177 km pipeline from Bruderheim, Alberta through northern British Columbia to the Port of Kitimat. This proposal involves a twin pipeline that would transport condensate from Kitimat eastward to Alberta, and oil westward to Kitimat for export to Asia and the U.S. This Enbridge pipeline will carry an average of 525,000 barrels per day of oil and 193,000 barrels of condensate per day. The second proposal involves an expansion of the existing Kinder Morgan pipeline from Edmonton to Vancouver, and an existing spur line down to the refineries just across the border into Washington State. The Kinder Morgan expansion would increase the existing capacity of 300,000 barrels per day to 850,000 barrels per day. Crude oil pipeline construction

Liquid Natural Gas Canada is the world’s third largest producer of natural gas with production of 13.7 billion cubic feet per day. The industry in British Columbia is growing rapidly. The province is already the second-largest natural gas producer in Canada and more activity is on the horizon. Companies have been setting records for the amount of land they have leased from the provincial government, especially in the northeast area of the province. LNG Facilities: British Columbia’s potential LNG production get larger every day. We have a 12 natural gas pipeline proposals at various stages that would bring natural gas from Northeastern BC to new LNG export facilities to be built in Kitimat. In April 2013, the provincial government received four “new major international LNG project proposals” to develop liquefied natural gas export terminals, all in the Prince Rupert area. That was on top of six multi-billion-dollar export facilities already proposed for this area, and at least two others that are in preliminary stages of consideration _______________ Canada’s Second Largest Natural Gas Producer http://www.cepa.com/about-pipelines/types-of-pipelines/natural-gas-pipelines http://www.cepa.com/about-pipelines/types-of-pipelines/liquids-pipelines

Coal Export Markets: 40% of the coal produced in Canada is exported and BC is Canada's largest exporter. British Columbia’s role in the global coal industry has avoided scrutiny because not much coal is burned in the province. There are no coal fired power plants in BC, so it surprises many British Columbians to discover that BC is now the seventh-largest coal producer in North America. Coal comprises a third of the industrial traffic at the Port of Vancouver, the largest port in Canada. Eighty per cent of Canada’s seaborne coal exports are shipped through coal terminals in Vancouver. CN (Canadian National Railway) alone ships, on average, every year 45 million tonnes of coal. Coal mining in BC is expanding. Eighteen new coal mines are at various stages in the government’s approval process. Six mines await environmental assessment certificates, one has already received its certificate, and eleven more are conducting feasibility and pre-feasibility studies. Exploration is under way for a dozen more. With increased coal production, transportation, and exportation comes an increased risk of terrestrial, inland water, or marine spills involving coal and the fuel powering the transportation. Increased amount of coal dust, increased air pollution from vessel traffic, and increased environmental risks to marine mammals (vessel strikes).

Rail Traffic Canada has two major rail operators, Canadian National (CN) and Canadian Pacific (CP) which transport Canadian coal. Canada’s railroads move over 45 million tonnes of coal annually. Condensate tankers are currently being received in Kitimat where it is then loaded onto rail cars for shipment to Alberta. CN Rail, at the urging of Chinese-owned Nexen Inc., is considering shipping Alberta bitumen to Prince Rupert, B.C., by rail in quantities matching the proposed Northern Gateway pipeline. In 2011, both CN and CP invested almost $3 billion on infrastructure and fleet upgrades. Both CN and CP are making major efforts to support industry through increased cooperation and track sharing.

Tanker Traffic Proposed LNG terminal and tanker in Kitimat Both the proposed LNG and Petroleum pipelines developments would result in increases to the number of tankers plying the coastal waters of British Columbia and the north pacific. Currently no crude oil or LNG tankers are travelling the 140 km route from open water to the port of Kitimat. If the proposed projects go ahead it is estimated that 250 oil and condensate tankers per year would be transiting this area. There would also be the addition of the LNG tankers from up to 3 proposed facilities in Kitimat. The expansion of the Kinder Morgan pipeline to Vancouver would result in a 5 fold increase in the number of tanker transits out of Vancouver, approximately 1 tanker every 4 to 5 days. Tanker traffic out of Kitimat is predicted to take oil both north through BC / Alaska Trans-boundary waters to Asia and southward to California and other west coast destinations LNG tankers out of Kitimat will be bound for Asian markets. Tanker traffic out of Vancouver travels through our shared waters with Washington state, predominantly serving the U.S. market but with increased shipments to Asia are expected Tanker in Burrard Inlet – Image courtesy Vancouver Sun LNG tanker in Kitimat – Photo courtesy of Apache Corp / Calgary Herald Oil tanker in Burrard Inlet (Vancouver)

Port Expansions A number of significant port developments and expansions are also increasing the vessel traffic on our coast which could result in increased spill risks. Our northern Port of Prince Rupert just south of the Alaska / BC border is currently shipping out about 500,000 containers a year and has plans to increase the port to enable it to handle 2 million containers a year. Expanding resource development in northern BC is also fuelling further port expansion to handle other types of shipments out of Prince Rupert, Stewart and Kitimat. On the south coast the Port of Vancouver continues to expand its facilities to handle greater volumes. Port of Prince Rupert Strategically located to handle excess capacity on one of the world's busiest shipping corridors, this is the closest port to Asia by up to 58 hours of sailing time compared to any other west coast port in North America. With expansion plans in the near future, the Port of Prince Rupert is the port of choice. Port of Vancouver The Port of Vancouver is Canada’s largest and busiest port. A dynamic gateway for international trade, this port is located in proximity to many of our transload facilities, making shipping that much easier. Photo courtesy of the Port of Prince Rupert Photo of delta port courtesy of Journal of Commerce Prince Rupert container port Deltaport facility and planned expansions (Vancouver)

Additional Information... Canadian Association of Petroleum Producers - www.capp.ca Canadian Energy Pipelines Association - www.cepa.com Canadian National Railway Company – www.cn.ca Canadian Pacific – www.cpr.ca LNG in BC – www.engage.gov.bc.ca/lnginbc/ Close – Summary: The province is attuned to the public’s concerns over oil spills and wants to ensure all level of government and industry are prepared for the existing and potential increased risks of spills. We are working closely with the federal government and industry to evaluate existing levels of preparedness and the planning that is necessary to address the risks and ensure the spill response regime in British Columbia is commensurate with those risks. The province and industry recognize that “social licence” is essential for us to take advantage of the natural resources we have been blessed with to provide jobs and support our economy, and that requires us to have sound spill prevention strategies and a robust capability to respond in the event of a spill. As outline by Deputy Ministry Shoemaker earlier: A World-leading marine oil spill preparedness and response regime needs to be in place. A World-leading land based oil spill preparedness and response regime needs to be in place. For more detailed information about changes to energy transportation in BC visit any of following websites. Thank You!