Room to Grow

Home , Jervis Inlet

Jervis Inlet is about 35 nautical miles north of Burrard Inlet. With road, rail and pipeline connections, it would make a nice addition to the Pacific Gateway, and solve a lot of the Port’s growing problems. St, Vincent’s Bay and Vancouver Bay would be the two main locations.

ROOM TO GROW A Proposall to Expand the Port of Vancouver iinto Jerviis Inllet Today, as Canada enters a new era of trade with other nations in the Trans-Pacific Partner- ship deal, the Port of Vancouver – already the busiest in the country – is preparing for a period of unprecedented growth. It needs room to grow. • It needs room for an increasing number of increasingly large ocean carriers but is already keeping them waiting; • It needs room to store an increasing volume of cargo but faces high prices for increasingly scarce industrial land; • To remain competitive, it needs the freedom to operate a well-lit and sometimes noisy operation round-the-clock, but is increasingly hemmed in by neighbours in condominium towers who demand peace and quiet after dark; and • Equally important, the Port also needs a smoothly operating supply chain in order to load and offload cargo quickly and expeditiously, when in reality traffic congestion on the feeder roads, and rails, undermines that supply chain constantly. Luckily, there’s more than enough open water and reasonably priced land about 35 nautical miles (66 km) up the coast, on Jervis Inlet, where the neighbours are few and far between, but housing, health care, schools and the urban amenities are only half an hour away, in the City of Powell River.

1 Jervis Inlet: How to Get There Ocean access to the proposed port expansion is as shown on the map at right. From the Strait of Juan de Fuca, enter Haro Strait to Boundary Passage, then the Strait of Georgia just east of Saturna Island (48º 50’ N X 123º W). Proceed about 113 km to Jervis Inlet (49º31’ N X 124º 14’ W). St. Vincent Bay (the prime potential port location) is about 15 km up the Inlet. Vancouver Bay (the second location, which would be dedicated to liquid bulk cargo) is an additional 15 km. Land access: Kamloops is the main hub of the BC interior transportation system. The CNR, CPR and Trans Canada highway all converge there, as do Trans Mountain and Enbridge nearby. From Kamloops it’s not far to Lillooet and a connection with CN’s line (from Prince George) and Highway 99 (the Duffey Lake Road) to Pemberton and points south. The new transportation corridor will begin south of Whistler near the Squamish River. It will proceed west adjacent to the Squamish River and then follow the Ashlu River to a summit (1331 m) and descend the Vancouver River to Vancouver Bay and Jervis Inlet. A 1900 m span suspension bridge will cross Jervis Inlet and descend the west shore of Hotham Sound to St. Vincent Bay. St. Vincent Bay will be the primary port site and Vancouver Bay will serve liquid bulk cargos. A short connecting road to Saltery Bay will access Powell River’s hospital, schools and urban amenities. Details of the transportation corridor are at Appendix 5.

Below left: The railways feeding into Vancouver, and in red the connections necessary to expand the port into Jervis Inlet. Below right: The road-and-rail corridor closer up. Please see maps, Appendix 5 for more details.

2 Overview of Benefits Creating road, rail, and pipeline corridors in coastal British Columbia has always been an expensive business, and creating one to Jervis Inlet would be no exception. Our current estimate is just over $4.0 billion for the corridor and $1.0 billion for the rail improvements. (Details at Appendix 6.) Therefore, significant benefits must accrue to large parts of the economy, the province, and the country. The benefits of this project would include: 1. Huge business and investment opportunities, for indigenous people and others; 2. In the Port, relief from congestion, and on road and rail a wide variety of costly gridlocks and supply chain inefficiencies, primarily in the Metro Vancouver area; 3. Vastly increased berthing capacities from the current 69 berths. Current estimates are 112 at St. Vincent Bay (24 km of moorage);14 at Vancouver Bay (3 km of moorage) and ,in the future, 60 at Mt. Foley (13 km of moorage); 186 berths in all, an increase of 270% over the total berths in the existing port. 4. Major increases in cargo storage space and offloading facilities in the Port. 5. Major reductions in vessel dwell times and big gains in competitive advantage for the Port. 6. Increased opportunities to compete for cargo to or from the USA. 7. The potential expansion of Canada’s largest port on the Pacific Coast into Jervis Inlet, ensuring a thriving Asia Pacific Gateway port for decades to come. 8. Cessation of tanker traffic growth in Vancouver and relocating the Trans Mountain expansion to Vancouver Bay. 9. Adding refinery capacity at Vancouver Bay and the end of shipping diluted bitumen in Canadian waters. 10. The potential to market refined product into foreign ports.

Today there are typically about a dozen ships at anchor on English Bay, and often others throughout the Gulf Islands, all waiting for berths to discharge cargo or take it on. This wait time undercuts our competitiveness with other Pacific ports.

3 The original Second Narrows bridge, built in 1926, served both road and rail traffic. Note the lack of development on the north shore in those days. Today, the centre span must still be raised to permit ship passage into and out of the port’s eastern terminals.

Earlier times - the past 100 years For years the cry was “Vancouver has nowhere to grow!” But grow it did, and today those who live and work there face congestion everywhere. It was back in the 1920s when we really began to conquer our environment. The Patullo Bridge crossed the Fraser River and connected the lower mainland with the Fraser Valley. We were ‘one’ all the way to the US border. Burrard Inlet, southernmost of British Columbia’s many fiords, was crossed at the Second Narrows in 1926, and at the First Narrows (Lion’s Gate) 13 years later. The Second Narrows road bridge was expanded to six-lanes with the Ironworkers Bridge in 1960. Together, the Patullo and Second Narrows bridges had joined together what would become the Lower Mainland, paving the way for vast changes. It has been almost 100 years since then, but the many bridges built since the originals have not kept pace with the region’s growth, the result being that today, BC’s commercial hub, and half BC’s population, live with traffic congestion day in and day out. Metro Vancouver today - Congestion and gridlock To be sure, the north and the south arms of the Fraser River, False Creek, and Burrard Inlet have always been obstacles that call for expensive bridges and tunnels. We are also hemmed in by Howe Sound and the mountains to the north; the US border to the south; Georgia Strait to the west; and valuable agricultural land to the east. Our congestion problems are further compounded by the fact that we do not keep up with the times. Our existing crossings of the waterways are inadequate, and it seems that we’re always two or more major improvements behind where we need to be – often years behind.

4 While our port grows, our numerous level rail crossings stop road traffic, while ship traffic closes the second narrows rail bridge, which stops the trains. If and when the Trans Mount- ain project proceeds, these problems will only multiply. Additionally, throughout the lower mainland, rail yards consume vast amounts of land and must cope with increasing volumes of traffic around them. The congestion is not limited to the city; it reaches well into outlying areas. Eliminating the many gridlock and congestion locations in Metro Vancouver will be an extra- ordinarily expensive job. By our rough guesstimate, the cost could go as high as $30 billion. Meantime, the port simply copes with the congestion. Please see Appendix 1 for details. Expanding the Port of Vancouver into Jervis Inlet will ease many of these problems.

The city is full. Nowhere to grow. The Port of Vancouver - today The Vancouver Fraser Port Authority, doing business as the Port of Vancouver, is financially independent and is responsible to Canada’s Ministry of Transport. It was created on January 1, 2008 by the merger of the Port Authorities of Vancouver, Fraser and North Fraser. That year, its tonnage was 128 million. At the time, $4.5 billion of new infrastructure spending was planned to cope with anticipated growth in Asia Pacific trade. The Port is Canada’s largest, and the most diversified in North America. In fiscal 2017 its combined tonnage was 142 million tonnes, a 10.9% increase over ten years. Container traffic has been on the rise but bulk and break/bulk tonnage, which is huge, has been essentially flat.

5 The Hon. Marc Garneau, Minister of Transport, has called for a review of Canada’s ports to ensure that they can meet the country’s needs for decades to come. For the Port of Vancouver, meeting those needs will present considerable challenges. This proposed expansion of the port into Jervis Inlet resolves most if not all of them. Viewed as a whole, the current port consists of five geographic areas, serving 28 major terminals. South - City of Vancouver 8 terminals North – City of North Vancouver 8 terminals East - east of Second Narrows 7 terminals Roberts Bank 2 terminals Fraser River 3 terminals Those terminals provide 69 berths with an average length of 215 m, a total of 14.8 km. For details, see Appendix 2: Terminals and Tenants. To accommodate ships arriving at the Port prior to the appropriate berth being available, the port also provides 18 anchorages in the outer harbor; 10 in the inner; and another 18 in the Gulf Islands. The anchorages among the islands are the cause of considerable local controversy. Taken together, these anchorages are clear indications of what the Port’s customers would perceive as inefficiencies in the supply chain that count against the Port’s competitiveness. Within the port there is also a network of container handling and warehousing facilities that support major importers and exporters across Canada. Most are on the Fraser River. CN and CP have extensive trans-loading facilities in Surrey and Coquitlam Three class 1 railroads serve five business sectors: - Automobiles - 400,000 vehicles annually at two terminals - Break-bulk and project cargo, such as forest products, steel and machinery - Bulk (dry and liquid) - 19 terminals - Container - 20% of the port’s tonnage at four terminals, nearly three million twenty- tonne equivalent units (TEUs) per year - Cruise ships – approaching 1,000,000 passengers per year The Port receives more than 3,100 vessel calls annually. There has been no pipeline capacity added in southwest BC in more than a dozen years. A proposed terminal addition is under consideration at Roberts Bank. The 180-hectare container port will accommodate three container berths. It is currently undergoing an extensive environmental assessment. No cost estimate is available at this time.

6 Key issues at the Port today The port’s overriding long-term challenge is the inadequate supply of reasonably priced industrial land. Additional capital expenditures for more efficient terminal operations are regularly undertaken, but they too, are expensive. In an ideal world ships would arrive on time; moorage space would always be available; there would always be adequate storage space to offload cargo; the supply chain would always have delivered adequate inventory to fully load the empty hold, and the ship would depart for its next destination after a short “dwell” time in port. Such efficiency would be hard to beat. In the real world, as we know, when a ship arrives late, maybe another ship was early and wanted to load the same cargo. The berth is available, so the early ship loads. The late ship arrives but the early ship is still loading or the available cargo is inadequate for both ships, so the late ship anchors and waits for cargo to arrive by rail. Meanwhile, however, there are logistical problems up the supply chain, dwell times grow, Preparing to load break/bulk cargo and the number of ships at anchor increases. The simplest way to increase supply chain efficiency is to have increased inventories on hand, but that requires more land for storage. With limited industrial land, more supply chain efficiencies are needed, but those require collaboration by everyone involved, which is not always possible. Vessels commit to set arrival times but they often miss their targets. Indeed, on-time vessels decreased from 66% in 2013 to only 47% in 2014, and the problem continues today. This translates to vessels being in port for longer periods. In 2012 and 2013 terminal dwell times were running from two to four days, but by 2014 they had increased 43% to over six days in some cases because the supply chain had been disrupted by Vancouver’s chronic congestion. This, in turn, made juggling mooring times less effective. Reducing supply chain inefficiencies requires increased storage capacity, which brings us back to the expensive and limited available industrial land issue.

7 Today, rail traffic is interrupted when the bridge is raised to permit ships into the east end of Burrard Inlet. This problem will be multiplied with increased traffic and larger ships if the Trans Mountain expansion, as currently planned, goes ahead. Running the port is a 24/7 operation. Lights are on at all hours and a certain amount of noise and heavy traffic is inevitable. Maintaining good relationships with neighbours is challenging in this congested environment. Moving cargo to and from the terminals, from railway yards and elsewhere, is challenged by congestion at level rail crossings and often the closed rail bridge at Second Narrows. Taken together, these small inconveniences add up to major inefficiencies in the supply chain. Approximately 70% of terminal land is owned or controlled by the federal government. The rest is privately owned. There is pressure from some quarters to convert some of this industrial land to a higher and better use. To the extent that such conversions actually take place, they would add to the overcrowding at the port. The positive impact of such conversions is that the funding provided from the sales of such valuable real estate would go a long way to funding the cost of accessing and developing the expansion of the port into Jervis Inlet.

8 The Port – Preparing for the Future Port staff and others have spent considerable time, at high levels, studying what might happen in future, and how to improve the port, and the Asia Pacific Gateway, to best meet those challenges, whatever they might turn out to be. There are two main factors at play: 1. The capacity of the port to efficiently serve the shipping industry; and 2. The vigor with which the economy, particularly the Asian economy, expands. Fundamentally, the main issues facing the port today will continue for many years to come. Limited and expensive space to grow and accommodate increasing vessel traffic; supply chain inefficiencies; long dwell times, and the limitations imposed by close proximity to condominiums or residential neighborhoods, will continue to constrain operations. Expanding the port into Jervis Inlet is a strong possible solution. The suitability of Jervis Inlet for the Port’s expansion Ocean access to Jervis Inlet is similar to Vancouver, but about 45 additional km to the north. Enter Jervis Inlet north of Hardy and Nelson Islands. The two areas of prime interest are St. Vincent Bay and Vancouver Bay (see below). There are other areas for future additional development. The only navigational limit is the overhead power line just east of Saltery Bay. Clearance is 49 metres, high enough for all but today’s largest container and cruise ships. Plans are afoot to run it underwater. By comparison, clearance at the First Narrows is 61 metres. Adequate electrical power is available at the substation near Saltery Bay. Inlet waters are generally very deep. Details are at excerpts from nautical chart 3514 in Appendix 4: Phases of Development at Jervis Inlet. Tides are moderate. Anchoring in such deep water is an issue needing resolution. Several potential solutions exist. St. Vincent Bay lies between two peninsulas of moderate elevation. The material in these two peninsulas can be used to improve the shoreline and increase the useable foreshore to about 24 square kilometres, being 2400 hectares or 5930 acres, producing about 24 km of moorage. Please see the two charts at Appendix 4: Phases of development.

View of St. Vincent Bay. Like the rest of Jervis Inlet, this bay is currently very isolated. Land prices are reasonable, the neighbours few and far between.

9 Vancouver Bay is a second area of development. It would likely be in service before St. Vincent Bay is completed. A pipeline through the road and rail corridor would end at Vancouver Bay and thereby avoid having to cross the inlet. Vancouver Bay is also deep, with moorage estimated at about 3 km, enough space for several tankers. Half of this moorage is on the north shore, half on the south. Storage capacity above sea level is plentiful. Feasibility to build a refinery here is likely. Refining diluted bitumen here would end shipping it by sea. Please see partial chart at Appendix 4. Mt. Foley, on the eastern approach to Hotham Sound, together with adjacent Goliath Bay, could become a future phase of development. For the time being, it would be a natural place for the Sechelt First Nation to relocate its aggregate business further south, which is approaching the end of its useful life. Then, in 10 or 20 years, when mining is complete, Foley could be converted to additional port facilities.

Google Earth view of the proposed Jervis Inlet port waters.

10 The Corridor: Bridging Jervis Inlet For a very long time, the key obstacle to building a new road to the coast had always been Jervis Inlet itself. The Jervis fiord goes deep into the coastal mountains, and because of its width, bridging it was deemed impossible, so a road, entailing a potential 200 km journey around the end, through mountainous terrain and at great cost, was believed to be the only other option. Then we began reading about mega-suspension bridge projects such as one in Japan that was almost two km between the towers. Crossing Jervis is only 1.5! We studied the options and discovered a route across Jervis that’s about half as long (100 km) as the earlier route around the end. This new route could accommodate road and rail traffic, and also a pipeline. It would run from Highway 99 on the east to St. Vincent Bay, site of the proposed expansion of the Port of Vancouver.

The Akashi Kaikyo bridge in Japan has a central span of 1991 metres, a total length of 3911 m and is six lanes wide. Construction began in 1988 and cost US$ 3.6 billion. By comparison, the current estimated cost of the proposed bridge over Jervis Inlet is $1 billion. Details at Appendix 5.

The most recent long suspension bridge is the Canakkale 1915 Bridge in southwest Turkey, which will span the Dardanelles Strait about 10 km south of the Sea of Marmara. It will carry six lanes (width of 43 m) over a total length of 3563 m and its longest span will be 2023 m The two towers will be 318 m high. The engineering design was by COWI, the same firm with whom we are consulting. Construction began in March 2017 and will end in March 2022. Discussions with qualified engineers about the feasibility of a 1.9 km suspension bridge at the narrow point on Jervis are ongoing. Preliminary findings are as follows: 1. A suspension bridge with a span of 1.9 km between the towers is indeed possible – such a bridge exists today in Japan. The cables are anchored in abutments at each end.

11 2. The narrowest point on Jervis is about 1.5 km, but the bridge’s alignment would be at an angle to accommodate the terrain, and increase its length to about 1.9 km. 3. Such a bridge could carry two lanes of automotive traffic and a train. 4. The likely cost would be between $10,000 and $20,000 per square metre. 5. The water at the probable crossing is very deep, and the banks very steep. Accordingly, the towers must be built on-shore, and the cables anchored in the rock atop the banks. Additional details at Appendix 5. The Corridor: Rail connections Rail Connections from Kamloops (CN and CP), Whistler (CN) and Metro Vancouver (BNSF) are being evaluated. Distances are reasonable and the terrain is acceptable. The CNR will need to add about 80 km to connect the two, then about 100 km of new track to complete the corridor from the Cheekye substation at Brackendale to St. Vincent Bay.

Above: The railways serving Metro. To complete the Jervis rail corridor, new track will be needed at the narrow spot between the CP Rail track from Kamloops and the CN track through Lillooet. The principal highways closely follow the railways.

12 The Corridor: Pipeline infrastructure Currently, Trans Mountain’s pipeline begins at Edmonton, proceeds to Kamloops and then turns south and continues to Burnaby. Expansion plans, which have been frustrated, are to increase the capacity of that line. The existing pipeline has a capacity of 300,000 barrels per day. Average daily oil shipments by rail to Vancouver are huge and growing. The pipeline expansion plan would add almost 600,000 barrels. Because bitumen’s viscosity is so high it will not flow through a pipeline unless it is diluted with…. Thus, the volume put through the pipeline is increased by 30% by the dilutant, which is ordinarily returned via rail car to Edmonton. At Syncrude and several other major processors upgraders partially upgrade the bitumen and ship superior graded crude, rather than shipping diluted bitumen. Diluted bitumen has been successfully shipped by Trans Mountain for 35 years. However, increased environmental activism has brought the pipeline expansions to a virtual halt. It would be shorter and cheaper to follow the proposed Jervis road and rail corridor and bring the increased capacity to Vancouver Bay for shipment to the Far East.

Above: This map shows the currently proposed Trans Mountain pipeline route in red, and our suggested alternate route, from Kamloops to Jervis Inlet (Vancouver Bay), in purple.

While the debate rages on about pipelines and pollution, some positions appear to be softening and other developments are on the horizon, including discussions regarding new refinery capacity at tidewater.

13 Refinery proposed British Columbia’s capacity to refine oil is substantially below our consumption. Refining oil prior to shipping it eliminates the most serious risk arising from a spill. The Headwater Strategy Group has proposed a refinery at tidewater to serve both the domestic and Asian markets. Headwater is well structured, well organized, has established feasibility, and is prepared to build and operate a refinery at the proposed Vancouver Bay site on Jervis Inlet.

Costs and funding We are beginning to assemble the costs of the several segments and likely sources of the entire project. Most of the following estimates should be considered very preliminary at this time. Details at Appendix 6: Corridor (road and bridge) $3,900 million Improvements at St. Vincent Bay 100 million Improvements at Vancouver Bay 25 million 4,025 million

Rail link – Kamloops to Lillooet 260 million Rail in the corridor 350 million Rail tunnel 400 million 1.010 million

The current budget for the Trans Mountain expansion is $7.4 billion. We have no estimates for marine structures, a refinery or the small road linking to Saltery Bay. Potential funding sources include: 1. Current terminal owners who see a return from the increased terminal operations; 2. Current terminal owners who see an opportunity to sell high valued land and replace it with cheaper land on the shores of Jervis Inlet; 3. Aboriginal investors seeking to earn returns from participation in infrastructure and other investing; 4. Railway companies looking to maintain and grow their business from traffic through the port; 5. Pipeline companies seeking a return; 6. Refiners seeking market access; and 7. Government. In total this proposal is a huge undertaking. Indeed it is a series of huge undertakings all interconnected and able to ensure a vibrant and highly efficient port at the Asia Pacific Gateway for decades to come. Protection of marine life in the Salish Sea The Salish Sea is one of the most spectacularly beautiful and ecologically rich marine environments on Earth. In Canada it touches the shores of Georgia Strait, and in the United States of Puget Sound and the San Juan Islands. Parks Canada has called our share of it the most at-risk natural environment in the country,

14 and by 2020, when Washington State’s shores are included, the population living and working along this stretch of water is projected to rise to 10 million, so the pressure on the marine environment is already growing. The salmon fishery is expecting a grim 2019, with smaller body sizes and below average returns to Puget Sound and the Fraser and Columbia rivers. The forecast for the Chinook catch is now about half the ten-year average. So any proposal to ship goods through our West Coast waters must take the well-being of resident marine life (whales, salmon, herring, krill – the works) into account. Despite these pressures, with imagination and determination, there’s every reason for optimism that a port on Jervis Inlet can exist in harmony with the resident marine life. We start with our related proposal that a new refinery be built well up the inlet on the shores of Vancouver Bay, where elements that pose the most serious risk arising from a spill are eliminated before shipment. Second, we are also proposing that the powers-that-be – Canadian and American – declare the entire Salish Sea and its shorelines a Marine Protected Zone, and create an environmental operating authority, funded by governments and port participants, with annual budgets large enough to enforce necessary but unpopular measures such as buying out all commercial fishing to protect and expand the krill and herring stocks until they return to sustainable levels. This authority would also create ways and means of enhancing salmon habitat such as installing fish ladders wherever there’s a salmon run (the Powell River dam, for example) and clean up spawning streams. These measures would complement the $142 million federal-provincial BC Salmon Restoration and Innovation Fund announced March 16. A 1984 Supreme Court decision1 gave BC the right to create such an authority. The court ruled that BC has jurisdiction over the seabed between Vancouver Island and the mainland, south to Juan de Fuca. But since the Salish Sea encompasses waters south of the 49th parallel, to be effective, a formal protected zone would require US co-operation. In 1992 the Government of Canada placed a moratorium on cod fishing on the East Coast that now, 27 years later, is still largely in effect, with only a small commercial fishery now permitted in the waters of Newfoundland and Labrador. Needless to say, this very lengthy moratorium has had a devastating impact on the provincial economy, and especially on its many fishery- dependent rural communities. Wikipedia notes that the Russian and Norwegian governments responded to lower catches more promptly, and cod fisheries in the waters off those countries are reportedly now thriving. 1 Supreme Court of Canada, Reference re: Ownership of the Bed of the Strait of Georgia and Related Areas, [1984] 1 S.C.R. 388. Date: 1984-05-17. Per Dickson, Beetz, Estey and Chouinard, JJ. (Ritchie and Wilson JJ. dissenting): The lands under the waters between mainland British Columbia and Vancouver Island are the property of the Province since the submerged lands were part of the Colony of British Columbia when it entered Confederation in 1871.

Global warming

Global warming and CO2 emissions drive most discussions about the environment. At present, fossil fuels provide us with 87% of the world’s energy, renewables a mere 13%! The dirtiest fossil fuel is coal and it produces 41% of the world’s electricity.

15 Emissions produced by burning coal are highest, producing more than 200 tonnes of CO2 per million BTUs of energy. Emissions produced by burning Diesel and gasoline are about 26% lower than those produced by coal and natural gas emissions 54% lower. Among countries, China is the biggest consumer of energy – 28% of total world consumption – and China’s consumption grows almost 10% per year, the strongest growth in the world. Its colder climate and the migration of its population to the cities are obvious factors. In recent years, energy consumption in North America and the European Union has been shrinking, but with such high growth in China and east Asia, growth in emissions world-wide is averaging almost 5% per annum. The world emits 36.0 kilotonnes of carbon per year. China emits almost 30% of that and the United States about half that. The rest of the world produces the other 55% Great steps have been taken to reduce air pollution, particularly in North America and Europe. Formidable work has been done on coal generation of electricity with post-combustion Carbon Capture & Storage (CCS) particularly in Saskatchewan. Costs are expected to decline by 67% and scalability seems assured. It appears that a refinery at Jervis Inlet could relieve many of the concerns regarding shipping diluted bitumen from the Pacific Coast. (For further details, please see Appendix 7.)

16 APPENDICES

Readers seeking additional details of various aspects of the content of the preceding overview statement may refer to the following appendices. 1 - Congestion on road and rail, and in the port 2 - Terminals and Tenants 3 - Consultations with stakeholders 4 - Phases of development at Jervis Inlet 5 - The Transportation Corridor 6 - Cost and funding details 7 – Environmental impacts

APPENDIX 1: Congestion on road and rail, and in the port 53% of British Columbians live In Greater Vancouver. Throw in the Fraser Valley and that brings us to almost 60% living on less than 2% of the BC landmass. (2016 census). No wonder we have congestion problems. Here are some of the worst bottlenecks on our roads, rails, and waterways, starting with the bridges where vehicles line up every day: Oak Street (Fraser River) Queensborough (Fraser River) Pattullo (Fraser River) Lion’s Gate (Burrard Inlet) Second narrows (Burrard Inlet) And the list goes on: Level rail crossings - $3 billion to change (we are told.) Major BC Ferries routes – overloads, and not just in the summer months Minor BC Ferries routes - many vessels sail half empty or less in low season Horseshoe Bay Ferry terminal – operating at capacity or beyond much of the time The Port of Vancouver – Asia-Pacific Gateway Public Transit No one we know of has put a credible price tag on all this, but by our reckoning $20- to $30-billion is well within the realm of probability. Time passes and nothing happens. Matters just keep deteriorating. It’s time to get serious. Today’s larger ships require larger port capacity. The Vancouver Fraser Port Authority is operating near capacity now –what of the future? Jervis Inlet has plenty of room. Large ships will be able to come and go unhindered by space restrictions, navigational hazards or competing users.

Above: Here’s what we mean by larger vessels. The above container ship is the Antwerpen Express, owned by Hapag-Lloyd. When it called at GCT Deltaport, the big terminal on Roberts Bank, in May, 2017, it was the largest freighter ever to have visited Canada, a sign of things to come. APPENDIX 2: Terminals and major tenants Foreshore Berthing Terminal Hectares Berths Metres Type

North Shore (8 major terminals) Kinder Morgan Vancouver Wharves 57 5 800 Bulk Fibreco 1 200 Bulk Richardson International 1 145 Bulk Cargill Vancouver Terminal 2 485 Bulk Neptune Bulk Terminal 3 509 Bulk Lynnterm-West Gate G3 3 572 Brk/Bulk Lynnterm-East Gate 4 839 Brk/Bulk Lynnterm-Berth #4 (Univar) 1 200 Brk/Bulk Subtotal 20 3750 Average 188

South Shore (7 major terminals) Cascadia Port Management 1 244 Bulk

18 Viterra - Pacific Elevators 2 401 Bulk Vanterm Containers, etc. 6 1246 Mixed Centerm 6 1581 Container Alliance Grain Terminal 2 403 Bulk Lantic 1 130 Bulk Canada Place 3 1109 Cruise Ballantyne Pier 1 366 Cruise Subtotal 22 5480 Average 249 East (7 major terminals) Chemtrade Electrochem Inc 1 243 Bulk Chevron Canada Stanovan 1 210 Bulk Shell Canada Products Shellburn 1 150 Bulk Kinder Morgan Westridge 1 300 Bulk Suncor Burrard 2 262 Bulk Imperial Oil Ioco 4 say 200 Bulk Pacific Coast Terminals 43 2 470 Bulk Subtotal 12 1835 Average 153 Roberts Bank (2 major terminals) Deltaport Global Container Terminals 3 1100 Container Westshore Terminals 2 603 Bulk Subtotal 5 1703 Average 341 Fraser River (4 major terminals) Fraser Surrey Docks (2, 3, 4) 3 565 Brk/Bulk/C Fraser Surry Docks - Upriver Berths (7, 8, 9, 10) 4 905 Brk/Bulk Lehigh Cement 1 182 Bulk WWL Vehicle Services Canada - Annacis Auto Terminal 2 403 RORO WWL Vehicle Services- Fraser Wharves RORO Subtotal 10 2055 Average 206 Total (28 major terminals) 69 14,823 Average 215 A major addition is planned at Roberts Bank (see map, photo below). Terminal 2, a three- berth container facility, will be built on 108 reclaimed hectares in deep water. The reclamation will be made using sand from the Fraser River. Construction will take more

19 than five years. Environmental impact studies are underway. No cost estimates are available at this time. Containers are the fastest growing part of the port. In 2017 the Port handled 3.25 million twenty ton equivalent units (TEUs). Vancouver Port Authority handles 42% of the containers handled by all Canadian Port Authorities.

APPENDIX 3: Consultations with stakeholders

There are many stakeholders who would be impacted if this proposal was adopted in some form, and we plan consultations with them, notably: First Nations; The federal government; The railways; Business and industrial organizations, particularly shipping but also several others. First Nations We have submitted an application and a copy of this draft document to the Sechelt Nation for their consideration. The Sechelt Nation is clearly the most impacted indigenous group as Jervis Inlet is in their traditional territory and they have several reserves in the area. It is our intention to consult with them and seek their input before we submit this proposal to the Minister. We will also consult with the Squamish Nation, particularly regarding where the corridor traverses their lands. Additionally, we will contact several other native tribal councils and others and seek their input. The railroads The Port of Vancouver is served by three Class 1 railroads: CN, CP, and from the United States, Burlington Northern & Santa Fe (BNSF). This proposal provides the opportunity for all three to prosper. CN’s northern route enters the province from Edmonton near Jasper National Park and proceeds to Prince George before turning south to Lillooet and Vancouver. The southern route follows the North Thompson River to Kamloops and the Thompson and Fraser to Surrey’s

20 Thornton rail yard. From Prince George lines also connect to Prince Rupert, Fort Nelson and Tumbler Ridge. CP Rail enters via the Kicking Horse and Crowsnest passes and proceeds west to their yards at Coquitlam. BNSF crosses the border into Canada just south of Vancouver, en route there. Successful railways focus on their operating ratio (OR). For a truly remarkable success story in this vein, one need look no further than CN, a crown corporation in 1992, the year the Mulroney Government decided to privatize it. At that time, CN had an operating ratio of 97 – meaning that its expenses consumed 97 cents of every dollar of revenue earned! By the time CN went public in 1995, the ratio had fallen to 89.3, and then to 57.4 by fiscal 2017, an improvement of almost 40% from the 97% of its crown corporation days. On annual revenue of $13 billion (2017) that translated to an extra $5 billion to the bottom line – which is what we mean by success. Today, CN and CP maximize efficiencies as they approach and depart Vancouver. Inbound trains, whether CN or CP, travel west on CN’s track on the south side of the Fraser, while those outbound travel east on CP’s rail on the north side. The flow of cargo is thus efficient and uninterrupted. The rail yards are huge. Cars on inbound trains are arranged from their origin locations into their ultimate destination locations and on outbound trains, cars are arranged into their destination locations. This process has been much simplified by using unit trains where all cars in the train have the same origin and destination locations (coal, potash, wheat and oil). Another way railways have been able to increase their efficiencies has been to increase their length. In the early 2000s trains grew from 5000 feet to 7000. Today a train may be 12,000 to 15,000 – a lot of payload! All these increased efficiencies have had consequences that need evaluation. Railways are a capital intensive business. Railway construction costs have soared, especially in our mountainous region. Paradoxically, increased train lengths mean that some routes are less efficient now than they had once been. This applies to CN’s trackage in the vicinity of our proposed corridor. Apparently there are technical issues to be addressed. Indeed, CN currently minimizes use of this part of its system. Transportation industry We have had meetings, correspondence, and telephone discussions with the Port of Vancouver, the Chamber of Shipping of BC, several engineers of various disciplines, marine pilots, pipeline and refinery operators and others. These consultations are continuing. Others We will also be consulting with industry and local government stakeholders and the governments of Alberta and British Columbia.

21 APPENDIX 4: Phases of development at Jervis Inlet

Jervis Inlet may be accessed from the Strait of Juan de Fuca and Haro Strait in the same manner as approaching Vancouver, but instead of entering Vancouver, proceed north for 25 nautical miles (45 km), The entrance to Jervis is to the right. The power line crossing Jervis has a clearance of 44 metres, and the only vessels likely to find that a problem would be major cruise ships and very large container ships, which could be directed to Vancouver. Jervis presents no other navigational hazards. Nor are there navigational hazards to the north – large cruise ships navigate Seymour Narrows regularly. All foreign vessels are under the command of a qualified marine pilot. St. Vincent Bay and Vancouver Bay are deep, with no navigational hazards. They would be the first areas to be developed. Mount Foley and Goliath Bay would follow, probably in 10 to 20 years.

St. Vincent Bay - Phase 1

Above: St. Vincent Bay is on the western approach to Hotham Sound, and would be the first port area to be developed. Right: St. Vincent Bay is defined by Culloden Point on the south and Elephant Point on the north. Material from atop these points can be used to create 24 square km of foreshore area.

Right : Chart shows St. Vincent Bay’s 24-kilometre shoreline and its mooring potential – about 112 berths.

Vancouver Bay - Phase 1 - Location 2 With a road and a rail in place it’s natural to consider a pipeline, with all the controversy that that brings to the table. If such a development is considered, its natural location would be Vancouver Bay. It would shorten the rail haul, isolate the operation and avoid having to increase the weight-bearing capacity of the bridge. Additionally, if a refinery was built, there’s plenty of room at that location.

Above: A chart of Vancouver Bay and the lower section of Vancouver River. Vancouver Bay is 1.15 km wide and 1.75 km long. The 100 m contour lines show the river valley to be relatively flat. (scale 1:50,000)

23 Mt. Foley / Goliath Bay - Phase 2 Below: At the eastern approach to Hotham Sound are Mt. Foley and Goliath Bay. Ultimately this space can be expanded into. It would be useful if Mt. Foley (648 metres elevation) could be mined for gravel. We note that the Sechelt Nation’s aggregate property is approaching the end of its economic life.

APPENDIX 5: The Transportation Corridor The Jervis Suspension Bridge In the fall of 2017 we met with a large engineering firm that specializes in bridges, tunnels and marine structures. Two of their senior engineers spent most of a morning with us. The outcome was that a suspension bridge was likely possible. It would cross the Inlet at its narrowest point (about 1.5 km) but at an angle, adding a nominal 0.4 to the clear span. The whole project would have a cost estimated at $10,000 to $20,000 per square metre. In a subsequent discussion it was determined that the bridge could be built to support a freight train. It would thus carry two lanes of automotive traffic, one rail line, and a sidewalk. The possibility of a port became a reality. We are working on a better drawing, but in the meantime, the plan view shows the curving approaches and the suspension towers. The elevation view shows the towers located on or near the shoreline because of the extreme depth of the water. Note that it is only the centre span that is a truly suspended bridge – the anchors are built into the mountain sides in a manner similar to the 1533- metre Halogaland suspension bridge at Narvik, Northern Norway.

24 The Summit The road summit is planned at 1331 m, which produces a gradient acceptable for vehicular traffic, but too steep for rail. Accordingly, we would reduce the rail summit by drilling a 4.5 km tunnel at an elevation 331 m below the highway summit, 980 m at the west portal and 1000 m at the east. The tunnel would have a vertical clearance of 22 feet to accommodate double stacking of containers. Elevations – west of the summit The current plan is to maintain an elevation of 200 metres as much as possible from Vancouver Bay, to the bridge and to the decline into St. Vincent Bay . This will minimize rail elevation variances. Additionally, at Vancouver Bay this will facilitate using gravity to store crude, then to feed the refinery and subsequently store refined produce and finally to fill vessels. Maintaining 200 metres will make that journey virtually gradient free even though the corridor is traversing mountainous country, Elevations – east of the summit There are also gradient issues in the easternmost part of the corridor. From Highway 99 South of Whistler there is very little increase in elevation along the Squamish and Ashlu Rivers. Then the elevations are overly steep to the summit. Accordingly, the ascent will have to begin much earlier than otherwise necessary. This will require additional blasting on the north side of the Squamish River.

View of Vancouver Bay from Jervis Inlet. Note the modest elevation in the valley. St. Vincent Bay to Saltery Bay A selection of certain of the logging roads will likely drive the actual placement of parts of the road. The rest will require new construction. In summary, the various sections of the corridor total about 100 km: Section 1 - Ascending the Squamish and Ashlu Rivers 35 km Section 2 - Crossing the summit at Falk Lake 9 km

25 Section 3 - Descend Vancouver River & cross bridge 27 km Section 4 - Jervis Inlet to St. Vincent Bay 20 km Section 5 - St. Vincent Bay to Saltery Bay 9 km Total ~100 km

It’s another 29 km from Saltery Bay to Powell River, where there are schools, a wide variety of commercial services and ferry connections to Vancouver Island. It’s reasonable to assume that over time, new residential areas will develop closer to the port.

Rail Deficiencies There are some basic deficiencies in the current rail systems. 1. There’s no connection between Kamloops and Lillooet. We estimate the distance to be about 130 km, and have been advised that on a good base, current construction costs are about $1.5 million per kilometre, which rises with blasting, tunneling and bridging to as much as $4-million. The terrain on this part of the route is relatively gentle. At $2 million a provisional cost estimate would be $260 million. 2. CN’s rail from Prince Rupert south along the coast is a high maintenance line limited to 80 – 90 car trains (110 with robots). An optimum gradient of 1.5% Is considered steep; .05% is better, but at Pemberton it rises to 2.25%. 3. Speed is another issue. On the existing track the limit is 25 MPH. Additionally, this line is very curvy adding to resistance. The distance from Lillooet to the corridor is about 160 km. 4. Curves may also be a challenge. Ideally the turns should not exceed 10º. The Jervis bridge will cross the inlet at an angle. The approaches will be curved as necessary. 5. Finally, there is no trackage in the corridor and costs will be higher due to blasting, tunneling and minor bridging. At a nominal $3.5 million per km, the 100 km section would cost about $350 million.

26 APPENDIX 6: Cost and funding details

The main segments of the corridor are: 1. Grade construction (the road); 2. The structure (the bridge); 3. Increasing the foreshore at St. Vincent Bay. Below are some rough cost estimates for each – still very much a work in progress. The 2017 government study for a route over the top of Jervis had pegged the grade construction at $1 billion. The new route is half the distance so we simply halved the estimate at $0.5 billion. For the structures we added the Jervis bridge estimate based on the engineer’s guidance of $10,000 to $20,000 per square metre. At the high end, that worked out to $1.4 billion, bringing the grade and structural cost estimate to $2.9 billion. We then added provisions for contingencies, management, engineering, miscellaneous and escalation. In the prior government study the authors basically doubled the hard costs. Although we had serious doubts about those calculations, we did the same - $3.9 billion. In the next phase of our work we will be making reconciliations and comparisons with other suspension bridge costs, particularly the 1. Akashi Kaikyo bridge in Japan (see Appendix 5); 2. The two-lane suspension bridge in Norway (see Appendix 5); and 3. The Canakkale 1915 suspension bridge being built in Turkey under the supervision of the engineers who have been coaching us. Also, we will be advancing discussions with the engineers regarding the unique features of the Jervis Bridge. Excavation at St. Vincent Bay The plan here is to bring the terrain to an elevation of ten metres above high tide to form a large foreshore of about 2,400 hectares. This would be accomplished by leveling Elephant Point, in the middle of the chart (right) and Culloden Point, toward the bottom. We have consulted with excavating experts and obtained preliminary estimates that the likely amount of excavation would be about 1.8 million cubic metres, and that drilling and blasting, at $15 per metre would run to about $27 million. They further estimate that placing the material so as to level the foreshore would cost two or three times that. Therefore the preliminary cost estimate has been pegged at $100 million.

27 Terminal facilities would be the responsibility of the operators.

Below: The brown areas are Crown land, or Crown land on which licenses have been granted. As indicated, the blue areas, privately owned, sold in 2016 for $1,625,000. The red area is leased. Crown hectares combined total 307.598; private, 154.4, plus the small island.

APPENDIX 7: Environmental Impact The debates regarding the real and potential impacts of shipping fossil fuel, global warming, oil spill risk and the endangerment of wildlife rage on. The environmentalist view is to leave the fossil fuels in the ground. Many in the fossil fuel industries hold that current safety measures are adequate. Many scientists are convinced that significant climate problems are imminent; politicians are divided about it, but are quick to levy taxes, add them to general revenue, and do little more than set carbon reduction targets. Environmentalists block new pipelines and more expensive and riskier rail shipments continue to grow. Everybody loses. It’s time for new thinking. Can we find some middle ground? Let’s start with some facts, as we understand them. World consumption of energy World consumption of total energy and electrical energy by energy source. Total Electricity Oil 33% 4.3% Coal 30% 40.8% Natural gas 24% 21.6%

28 Fossil fuels 87% 66.7% Hydro 7% 16.4% Nuclear 4% 10.6% Other renewable 2% 6.3% “Renewables” 13% 33.3% 100% 100.0% Observations: 87% of world consumption of energy is produced from fossil fuels. Only 13% is produced from hydro, nuclear and other renewables (solar, wind etc.). About a third of electricity is generated from non-fossil sources, but fossil fuels are still dominant. Note, too, that solar reflectors are loaded with carbon, and require renewing.

Emissions of CO2

Coal produces the most carbon dioxide (CO2) emissions (in terms of pounds of CO2 per million BTUs of energy) when compared to alternate fuel sources. Coal – anthracite 228.6 Coal – bituminous 205.7 Coal – lignite 215.4 Coal – sub-bituminous 214.3 Average coal 216.0 Diesel Fuel and heating oil 161.3 Gasoline (without ethanol) 157.2 Propane 139.0 Natural gas 117.0 Observation: Natural gas produces 54% fewer emissions than coal and Diesel and gasoline emissions average about 26% lower. Emission goals – The Paris Accord In December 2015 the United Nations Framework Convention on Climate Change, commonly called the Paris Accord, was signed. Article 6 committed the signatories to reduce carbon emissions to less than 2ºC below preindustrial levels and to try for 1.5%ºC. It’s notable that Russia did not sign, the United States withdrew from it, and it appears China is ignoring it. It also appears that Europe and North America have been making progress, but between 2000 and 2009, world emissions still rose 47.9% (see below). We have made great steps in reducing air pollution in the past. Emissions have been greatly reduced in New York and elsewhere. New York City as it looked on Nov. 24, 1966. The dawn of environmental consciousness in the 1960s led to a national commitment to clean air and water in the United States.

So who’s burning all this dirty coal? Coal consumption in 2000 and its growth 2000 to 2009 was: Consumption Growth China 28% 85.5% (almost 10%/annum) Other Asia 19% 18.9% North America 25% -1.2% European Union 14% -3.8% 86% Everybody else 14% 100% 47.9% So just how much carbon is that? Total world emissions are 36.0 kilotonnes. The biggest emitters are: China 10.6 29.5% United States 5.2 14.3% India 2.5 Russia 1.8 Japan 1.3 Germany 0.8 International shipping 0.6 International aviation 0.5 Everyone else 12.7 36.0

What does all this mean? In a general sense 87% of all the heat, light and fuel in the world come from fossil fuels. Generating solar power from the Sahara Desert will not be adequate to heat China or North America or Russia or Northern Europe. Such conversions, even if done at a speedy rate, are highly unlikely to catch up to China’s consumption growth at almost 10% per year. Are there other possibilities? World emissions are 36 kilotonnes (kt) /year. China produces 29.5% of that – 11 kt – that’s 24,250,849 pounds! I’m dizzy, let’s call it 25 million pounds.. Coal averages 216 pounds of C02 per million BTUs generated, compared to natural gas at 117, a reduction of almost half – 25 million to 13 million pounds. Whether or not alternate fuels are a practical solution requires additional analysis.. But converting to LNG is under discussion and even implementation in several applications.

30 New possibilities – carbon capture & storage New technology has made major progress in automobile exhaust emissions, and scrubbing has been applied to refine fossil fuels, such as natural gas. More recently, in Canada, at Estevan, Saskatchewan, a major advance in coal emission reduction has been achieved. Here’s the story. “The Saskatchewan coal-fired electricity generating station known as Boundary Dam 3 (BD3) near Estevan was opened in 1970. Its Unit 3 was decommissioned and replaced with a new 160 MW unit with a Carbon Capture & Storage (CCS) application in 2014. Boundary Dam is the world's first commercial-scale, lignite-fired power plant equipped with carbon capture and storage technology. The $1.5 billion project transformed that unit into a long-term producer of 115 MW of baseload electricity— enough to power about 100,000 Saskatchewan homes.Captured CO2 from the CCS facility – dubbed an “Aquistore” – is transported by pipeline to nearby oil fields in southern Saskatchewan where it is used for enhanced oil recovery (EOR). This Aquistore has proven the nameplate 90% capture rate. As of November 30, 2016, it had captured a total of 1.275 million tonnes of CO2. In 2018 (to make a long story short) its capture rate had increased to 94%. This positive result can be attributed to the improvements made during the 2017 planned maintenance outage. Why Carbon capture and storage? Coal is still the most widely used power source in the world, making up about 40 per cent of the world’s electricity. Saskatchewan has lots of coal. It’s cheap to use and coal plants are very reliable. However, burning coal also creates harmful C02 emissions. SaskPower is increasing its use of natural gas, hydro, wind and solar. But these power sources together can’t replace coal overnight. As they increase these other power sources, they still need a constant power source that keeps the lights on 24/7 and is affordable for customers. By capturing and safely storing CO2 emissions before they reach the atmosphere, we can help ensure a brighter future for both Saskatchewan and the world. A new study that demonstrates significant cost reductions for carbon capture and storage (CCS) was released by the International CCS Knowledge Centre. Deep capital cost reductions – a 67% decrease per tonne of captured CO2 – is one of the key findings in the Knowledge Centre’s Shand CCS Feasibility Study. For a technology that has been perceived as expensive, the report is welcome news to those who recognize the essential role that CCS must play in addressing climate change. It is widely accepted that CCS applied to both emissions-intensive industry and power generation has a critical role to play in mitigating greenhouse gas emissions (GHGs).

31 It’s expected that the cost of the next similar facility will be about one third of BD3. Scalability opportunities are very high and it can be effectively and efficiently utilized around the globe. Tanker traffic and oil spills The Trans Mountain expansion project will increase vessel traffic from one tanker per week to one tanker per day. On an annual basis that’s 52 per year to 365 per year. In 2017 total traffic visiting the Port of Vancouver was about 3,100 ships. The expansion will increase the calls to about 3,465 ships. By comparison, BC Ferries has about 47,000 sailings per year. We do not have an accurate number but considering fishing, tug, other commercial and recreational boating, the extra 365 vessels per year is immaterial. Also, remember that Canadian traffic represents six million tonnes per year while US traffic transiting Canada’s Pacific Coast is 37 million tonnes, six times as much. Focusing more closely on tanker traffic, we have one refinery still operating in BC and it primarily serves the domestic market producing 55,000 Bbls per day. Meanwhile, Washington state has four refineries producing 632,000 Bbls which are shipped to Oregon, California, Hawaii, Asia and BC! Their oil is transported through the Gulf Islands and the Strait of Juan de Fuca – essentially the same waters as ours. When it comes down to it the amount of tanker traffic we can regulate is not that much of the total. It is true that the Trans Mountain expansion increases the amount of diluted bitumen that we could ship but consider this: 1. Trans Mountain has been shipping diluted bitumen from Vancouver for 35 years with no incidents. 2. Additional shipments of bitumen is growing, using product shipped by rail and that product supply is about to materially increase with the deployment of 6000 additional rail cars. Rail transport is more expensive that pipeline, but also, much more hazardous. The point is that diluted bitumen shipments are materially increasing with or without the pipeline expansion 3. Piping diluted bitumen to Vancouver Bay would require less distance and therefore be cheaper. 4. Refining the crude there, at tidewater, would eliminate the shipping of diluted bitumen altogether (see refinery discussion below). Steps taken to mitigate oils spills have been huge. Double-hulled tankers, stronger oversight, better preparedness and management – all have contributed in important ways, yet risks remain. It’s not just the transport of oil as cargo, large amounts are transported at sea as fuel for all types of shipping. All things considered, the shipping industry’s record is excellent. Still there have been incidents – spills – and as we all know, though infrequent, the consequences can be dire. Let’s take a closer look The Valdez (now scrapped in India, never to sail again) was a single hull tanker. Double hulled tankers are now required. In 2010, the explosion of BP’s Deepwater Horizon rig, 60 km south of Louisiana, became the largest oil spill ever. There is debate on the matter, but estimates are that it spilled 2.5 – 4.2

32 million barrels of oil over 87days. Sloppy management by Transocean and Haliburton were blamed. That was not a tanker incident. In March 1989 a US tug boat grounded in Seaforth Channel near Bella Bella (south of Prince Rupert), apparently either the skipper fell asleep or he failed to successfully navigate a short cut . 107,000 litres (672 barrels) of diesel fuel were spilled into the Ocean. The tug was a foreign vessel transiting Canadian waters without a pilot under a waiver, as is common practice for tugs transiting Canadian waters to Alaska. Again this was not a tanker. All tankers entering or leaving Canadian Waters are guided by a qualified marine pilot. By refining bitumen at Vancouver Bay any Tanker spill would be easier to deal with using modern spill management techniques It’s time to put the issues in perspective. The first fact is that there are large numbers of vessels plying our waters every day and the vast majority carry fuel, often a large volume of it. The only way to prepare for the worst of those risks is though regulation and preparation wherever vessels transit our waters. The reality is that all vessels – carrying fuel or cargo - have a very good record in BC’s waters. Most petroleum product shipped by sea is either diluted bitumen or crude oil, and many crudes are very heavy. In recent years expanding world reserves have boosted heavier oil in Venezuela, bitumen in Canada, and it must be remembered that the Exxon Valdez was carrying very heavy Prudhoe Bay crude. In the earlier days. the major producers at the oil sands did some primary refining (commonly called upgrading) of the sands to make their product flow through the pipelines. More recently they dilute the bitumen so that it will flow, This is the case at Trans Mountain As studies have been showing, a refinery in BC at tidewater is likely economically feasible, so maybe there’s a way to exploit the oil sands and not ship diluted bitumen at all. Once again: it’s time to proceed based on facts. Refinery Issues Conventional wisdom says that it makes most economic sense to refine crude oil close to the market. This makes it easiest to shift product mix to match current demand, and that is how refinery capacities have developed over the years. There is significant refining over capacity in America’s Gulf Coast, in China and elsewhere. British Columbia is one of the few places where refineries are under capacity. Refineries are expensive to build – very expensive – so there is high demand to increase the production at existing refineries. On the other hand, while the probabilities of spills are low, the risks of major spills of dirty oil are so horrendous, that the serious study of refining alter- natives is appropriate. Perhaps upgrading of bituminous at the source of supply will eliminate diluting bitumen so that it can move to tidewater by pipeline, which is both safer and much more economic than rail.

33 The Burnaby refinery Refineries and the Asia Pacific Gateway Believe it or not Vancouver was once a major refining hub. Imperial Oil’s IOCO refinery was built in 1914. Shellburn was constructed in Burnaby in 1932 and expanded in 1945. Petro Canada built in Coquitlam in 1957. All were closed in the 1990s. Only the Burnaby refinery, now owned by Parkland Fuels Corp. of Calgary, remains. It produces only 55,000 bbl/day. By comparison, Washington State production is BP Cherry Point 225,000 bbl/day Shell Anacortes 145,000 bbl/day Tesoro 120,000 bbl/day Phillips Ferndale 101,000 bbl/day US Oil 41.000 bbl/day 632,000 bbl/day What’s wrong with that picture? Washington sources its crude from the Bakkens Formation in Montana, North Dakota and Saskatchewan delivered by rail, and, you guessed it , discounted heavy oil from the oil sands delivered by Trans Mountain! Washington production is shipped to lucrative markets in Oregon, California Hawaii, Asia and (you guessed it again), a whopping 88,000 bbl/day to BCs Lower Mainland. Serious consideration of coastal refining, LNG production and the end of ocean shipping of diluted bitumen is well within reach. Jervis Inlet is the perfect location.

34 The proposed Trans Mountain expansion The existing pipeline capacity is 300,000 barrels per day. It is the only oil pipeline in North America that can ship both refined oil and crude in batches through the same line. Currently it ships to several destinations in Canada and the USA and one tanker per week of diluted bitumen by sea. The proposed expansion would create additional throughput of 590,000 barrels per day, a total of 890,000 BPD. Tankers would increase from one per week to one per day. A significant additional amount is being shipped today via rail and the Alberta Government has proposed a significant addition to that. REFERENCES Canadian Fuels Association, “The Economics of Petroleum Refining, December 2013” Canadian Hydrographic Service, Nautical Chart 3000 (Juan de Fuca Strait to Dixon Entrance), Nautical Chart 3514 (Jervis Inlet) Canadian Geographic, Indigenous Peoples Atlas of Canada, 2018 Chamber of Shipping of British Columbia Handbook, 2014 clearseas.org, Oil Tankers in Canadian Waters Green, Howard, “Railroader: a biography of Hunter Harrison, CEO, 2018” Kinder Morgan Canada, “Emergency Management Program: Research Initiatives” Oil Sands Magazine, “From Diluted Bitumen to Synthetic Crude: Upgrading Explained, 2018” Taft, Kevin, “Oil’s Deep State, 2017” Port Metro Vancouver Annual Report, 2014 Port of Vancouver, “Enhancing Cetacean Habitat and Observation (ECHO) Program, 2017 Annual Report” Port of Vancouver, port map Province of British Columbia, “Draft Principles that Guide the Province of British Columbia’s Relationship with Indigenous Peoples” Royal Society of Canada, Executive Summary: “The Behaviour and Environmental Impacts of Crude Oil Released into Aqueous Environments,” November 2015. Strategy for the Future of Transportation in Canada: Transportation 2030, Transport Canada, November 3, 2016. Trans Mountain Pipeline, Diluted Bitumen Information, 2018 https://nationalpost.com/business/environmental-and-economic-development-choices-split-canadas-first- nations/wcm/84f48a65-ff5c-487e-b604-6e7a65596392 https://www.dailymail.co.uk/sciencetech/article-1229857/How-16-ships-create-pollution-cars-world.html https://newsinteractives.cbc.ca/longform/drawing-a-line-in-the-oilsands-fight https://aptnnews.ca/2018/12/21/hereditary-chief-in-b-c-says-community-needs-lng-pipeline/

A Discussion Paper by the Third Crossing Society, March 1, 2019 Please contact Gary Fribance, President, for further details. [email protected]