Trans Mountain Pipeline Dispute

From Tokyo, Japan and Auckland, New Zealand, this is Down to Business English, with your hosts Git Montreau and Samantha Vega.

I see through Facebook that someone has a big trip coming up.

Ah, you saw my last post, did ya?

I did.

Yes, we're thinking of heading to Canada in July. Vancouver and the lower mainland of British Columbia to be exact.

Oh, that's wonderful. It's a great time of year to visit that part of the world.

Yeah, I know. I haven't been back in many years, so I'd like to go. But we haven't pulled the trigger just yet. Airline tickets from New Zealand to Canada are quite pricey.

I'm sure they are. Well what does a return ticket go for?

Um two thousand dollars.

So for a family like three, you're looking at six thousand dollars? That is really up there. How many years has it been since you have been back in Canada?

Good question. I'd have to think about that for a minute.

Well, do you remember who was Prime Minister when you lived there?

I'm Jean Chrétien, maybe.

Yeah, he was prime minister when I left the country back in nineteen ninety-seven.

And now it's Justin Trudeau with the helm. Not sure what I think of him yet. I loved him at first, but now I'm starting to change my opinion somewhat.

Well, his father, Pierre Elliott Trudeau, was prime minister when I was growing up, and boy, I was not a fan of his.

Is that because you're from Western Canada? He wasn't very well liked out west.

No, it's more because of my name rhymes with his name. And all the kids in my school really enjoy teasing me about that.

Oh, Trudeau, Montreau Yes, I I guess they do rhyme.

But having said that, Pierre Trudeau did bring in many of the social programs that Canada is now famous for.

That is true.

Well, if you do decide to visit Canada, I hope you don't get caught up in this trade dispute between British Columbia and Alberta.

Ah yes. The dispute over the Kinder Morgan Pipeline expansion. That is certainly some crazy stuff going on around that.

But I'm sure for any of our listeners outside of Canada, they have no idea what we are talking about.

But it does make a great topic for today's show.

Absolutely. Big business, government intervention, trade boycotts, some of my favorite business themes.

Well let's do it then. Let's get D2B down to business with the Kendra Morgan Trans Mountain Pipeline Dispute.

I think a good starting point would be to clearly understand who Kinder Morgan is and what the Trans Mountain Pipeline project it all involves.

Well, Kinder Morgan is one of the biggest, if not the biggest, pipeline companies in North America. Based in Houston, Texas. Kinder Morgan is famous for building and operating oil and natural gas pipelines that stretch all across the US and Canada.

That is a good description. Currently, Kinder Morgan maintains somewhere in the neighborhood of 130,000 kilometers of pipeline and 152 shipping terminals.

And one of those pipelines is the Trans Mountain Pipeline, which runs from Edmonton, Alberta to a terminal in Burnaby, British Columbia, on Canada's west coast.

And it is this transmountain pipeline that is at the center of the controversy.

Yes, but what is important to understand is that Trans Mountain Pipeline has actually been in operation since nineteen fifty three. What a lot of people don't realize is that this dispute centers on the expansion of an already existing pipeline.

Right. So Samantha, can you tell us exactly why the province of British Columbia is opposed to this expansion, seeing as how oil has been pumping through the province for the past sixty-five years? Why are they now suddenly against us?

Well it's not that VC is adverse to oil. Their opposition has more to do with the type of oil that will be coming through the pipeline. You see, the whole reason for the expansion is to move oil that is being extracted from the Alberta tar sand. As you were from that area of Canada Skip, I'm sure you are well aware that tar sand oil is not the same as crude oil, which is extracted through drilling underground.

Sure. Tar sand oil, or bitumen, as it is formally called, is found on the surface, and is mixed in with sand and clay, and has extremely high viscosity.

A high viscosity is

What does that mean?

Simply that it is very, very thick, almost a solid. In fact, it needs to be separated from the sand and clay in order to be of any use as an energy product.

And I imagine that it is very expensive to process, extracting the bitumen from the sand and clay.

Absolutely, yes. I remember when I was growing up back in the nineteen eighties, a barrel of oil sold for about fifteen dollars. And even though there were all these tar sand areas in northern Alberta, they were not very active. Tarsand oil was just too expensive to extract and bring to market. Fort McMurray, the city closest to the huge Athabasca Tar sands field, was just a sleepy little town in the eighties.

And Fort McMurray just boomed, didn't it?

It did. The population pretty much doubled within a decade, increasing from just over 30,000 people to 60,000.

But oil prices have dropped considerably from the one hundred and fifty dollar a barrel mark. It's surprising that bitumen is still profitable.

Well it certainly is not as profitable as it once was, and that is why it is so important for oil companies to get this tar sand oil to the high demand markets in Asia, specifically China.

And that is where the Trans Mountain Pipeline comes into play.

Precisely. So what can you tell us about the controversy that surrounds the Transmountain Expansion Project?

Well, it started six years ago in twenty twelve, when Kinder Morgan announced that they were intending to expand the Transmountain Pipeline. The following year they made an official application to the Canadian National Energy Board to build a second pipeline alongside the current one. and increase the delivery capacity from three hundred thousand to eight hundred and ninety thousand barrels a day.

So their plan was to more than double the pipeline's capacity. And what were the cost projections? How much did they think this would all cost?

Projected it would cost seven point four billion dollars.

Ho ho huge! That would translate into a lot of money being injected into the British Columbia economy and lots of jobs being created.

It would. So it is strange that the province would be against the expansion, even if those benefits were short term.

Well, at first the BC government did support the project. As Kinder Morgan's application went through the NEB approval process, it was mostly environmentalists and First Nations who were speaking out against it.

And what were they opposed to specifically? As we mentioned earlier, oil had been flowing through the province for years. What is it about bitumen that created so much opposition?

First of all, it's a very dirty oil and emissions from its extraction and use significantly contribute to global warming. The aim of environmentalists is to keep it in the ground and to promote investment in clean energy.

Okay, there's that.

On top of that, with the expansion of the pipeline would come increased shipping activity out of the Burnaby terminal. It is estimated that an additional three hundred and fifty oil tanker shipments would be made out of the terminal each year. Obviously, the more tanker activity, the bigger of a chance of an oil spill.

And any oil spill in that area would be devastating, not only for the environment, but for BC's tourism industry as well, which is a major part of their economy.

Part of the problem is that the BC Coast is so remote. The infrastructure in place to deal with an oil spill is just not adequate.

There was that diesel oil spill in Howe Sound near Vancouver in February this year. Environmentalists say that it took authorities way too long to respond to the spill, and it significantly damaged the salmon fisheries and orca population in the area.

And opponents to the Kinder Morgan pipeline point directly to that event as a warning as what would happen on a much larger scale if the Kinder Morgan expansion goes through.

But wouldn't Kinder Morgan be liable in the event of an oil spill?

That is very much at the heart of the opposition to this pipeline. Of course, Kinder Morgan would be responsible if there was an oil spill on land along the pipeline route. But it is unclear who would be liable if there was an oil spill at sea. You would think that shipping companies would be responsible, but they are notorious for avoiding liability in major events like an oil spill.

Not Kinder Morgan?

No. But having said that, part of the expansion project's plans calls for Kinder Morgan investing$150 million in the Western Canadian Marine Response Corporation.

That is the organization that actually deals with responding to and cleaning up oil spills along Canada's west coast.

That's right. With an upgrade to their infrastructure, the full response time to an oil spill can be reduced from 72 hours to 36 hours.

Even still, thirty six hours is a long time to respond.

And some studies are showing that bitumen, because it is such a dense and heavy oil, will have long sunk to the bottom of the ocean by the time a cleanup crew can be fully assembled.

But even with that in mind, the NEV approved the expansion in May of twenty sixteen and the federal government under Justin Trudeau blessed the project later that year. Environmental concerns aside, the project was all systems go.

But then something remarkable happened. British Columbia held a provincial election in May of twenty seventeen, and the Liberal Party only won a minority government.

They could defeat the government in what is called a vote of non confidence.

And that is exactly what happened. The New Democratic Party and the Green Party joined together and voted against the Liberals, which in turn allowed them to form a coalition government.

And both the NDP and the Green Parties are quite left leaning, and the Greens especially are advocates of the environment.

So when they formed their coalition, they stated that they would employ every available tool to stop the Trans Mountain Project. And immediately after taking the reins of power, they put the brakes on the project.

How did they do that?

First, they called for more studies into oil spill response times. These studies would take years and would in reality slow the project down so much that it would cost Kinder Morgan too much money to stay involved in the project.

So the strategy was to hit Kinder Morgan's bottom line, hoping they would pack up and go home.

But then the province of Alberta got involved. In response to BC's new environmental studies, Alberta retaliated by banning wine imports from BC.

That must have upset a lot of Alberta wine connoisseurs, not to mention Hurt VC's wine industry.

Fortunately the ban only lasted a few months. Alberta lifted it after the BC government agreed to take their concerns into the court system, but that too would cause delays in the project.

And Kinder Morgan and their investors must not have been happy about that.

Not happy in the least. In fact, in April of this year, Kinder Morgan announced that they would pull out of the project entirely unless they could get some guarantees from the provincial and federal governments.

Well, here we are in June. What happened? Did Kinder Morgan kill the project? Did the V C N D P Green government win?

Fortunately, it is not a case of a clear cut winner or loser. At the eleventh hour, Justin Trudeau and his Federal Liberal Party stepped in and acquired the Trans Mountain Pipeline Project from Kinder Morgan for four point five billion dollars.

Crazy. I thought he was a big supporter of reducing greenhouse gases and carbon emissions. Why would he get Canada involved in such a carbon intensive endeavor?

Politics. Alberta voters and its economy want the jobs that producing and exporting tar sand oil will bring. If Justin wants to keep his Liberal Party in power, he needs to address that.

So Kinder Morgan is out, the Canadian government is suddenly in the oil business, and the environmentalists in BC are just out of luck.

I wouldn't go that far. In many ways this is a developing story, and even now there's no certainty this expansion will be finished.

We should revisit this topic in a few months and see how things are panning out.

Very good idea. But now I think it is time for you and I

Two vocabulary.

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section we are going to be mainly looking at idiomatic expressions. I am sure our listeners will know the meaning of each individual word in the idiom.

पत्नी

Idiomatic meaning might be a little bit more difficult.

Idioms are tricky, and English has so many of them.

It does. So let's get started with an idiom that you used right at the beginning of the show.

Which idiom was that?

To pull the trigger. To pull the trigger means you make a final decision or you decide to put a plan into action. And that plan usually has been carefully made or considered.

Just like when you shoot a rifle. First you carefully aim at the target, and when you are ready, you pull the trigger. And if you had aimed carefully, the bullet hits the target.

Very nice mental picture, Samantha. Have you been hunting recently?

I don't hunt.

I didn't think so. In today's introduction, when I was asking Samantha about her travel plans to Canada, she used this idiom in the negative. She said that she had not pulled the trigger just yet. In other words, she was still thinking about taking the trip. She hadn't made her final decision. Can you give us a business example, Samantha?

As you know, the field of supply chain management deals with production planning and logistics. A part of being a good supply chain manager is to know when to pull the trigger.

Of course, you want to order raw material and supplies so they arrive at your factory just on time, not too early, and definitely not too late.

That's right.

What's our next word?

Up next is the expression to come into play. When something comes into play, you were saying that it is starting to have an effect or impact on the situation. In the story, I said that the Trans Mountain Pipeline would come into play for shipping Alberta tar sand oil to Asian markets.

In other words, the completion of the Transmountain Pipeline expansion would have a big impact on getting that oil to China and the surrounding regions.

Exactly.

If your job involves deciding the price of a product or service, you know very well that many, many things come into play when setting the price. There's the cost of manufacturing the product, your competitors' price, your customers' cost tolerance, and the list goes on and on.

It is a complicated process deciding the price to sell a product for. It is almost an art form, I'd say.

Well, I don't know about that. A person's experience certainly does come into play though.

Nice double example.

Thank you.

Shall we move on?

Sure. The next idiom or expression I want to look at is to be at the heart of something. When you use this expression, you are saying that something is the center of an issue or situation.

In the story, Skip told me that at the heart of opposition to the Trans Mountain Project was who would be liable for cleaning up an oil spill if one occurred.

In other words, who would be responsible for the cleanup was at the center of everyone's opposition for approving the project. Samantha, can you give us an example in a business situation?

Recently, the City of Seattle tried to put into place a special tax on large companies. The idea was to tax any corporation$275 per employee. The revenue raised from this tax would go towards helping homeless people in Seattle.

Yes, I did hear about that. Amazon, who is Seattle's largest employer, fought very, very hard to get that tax killed. And they were successful too. Seattle has decided not to impose the tax.

That's right, Amazon threatened to drastically reduce their business operations in Seattle if the city went ahead with it. Now, at the heart of the matter was how the tax money would be spent. Amazon didn't have an issue with helping the homeless, but thought the city would just waste the tax revenue and the homeless situation would not really improve.

Yeah right. It sounds to me like Amazon just didn't want to foot the bill.

Hey, that's our next idiomatic expression. To foot the bill. Thanks for the segue.

My pleasure. So what do we mean by foot the bill?

When someone foots the bill, it means that they pay the entire cost of something. In the story, Skip said that even in the event there was a major oil spill, it would probably be the Canadian government who would foot the bill. In other words, the Canadian taxpayers, not Kinder Morgan, would have to pay all the cleanup costs.

I'm off on a short two-day business trip next week to Nagoya and Nagano. I'll be taking the bullet train from Tokyo, staying overnight in Nagoya, then jumping on a highway bus to Nagano the next day, spending another night in another hotel, and then back to Tokyo by train the following morning. Of course, my company will be footing the bill for all of that.

Sounds busy. But it's always nice to hit the road once in a while.

I'm a little embarrassed to admit it, but this will be my very first time to the Nagano area of Japan. I'm looking forward to seeing the mountains. What is our next expression?

Actually, we are going to finish D2V today with a plain old verb, to retaliate. To retaliate means to respond or react when something bad is done to you. In the story, Skip reported that in response to British Columbia slowing down the Trans Mountain Project, Alberta retaliated by banning wine imports from BC.

So what I was really saying was that Alberta responded to BC's attack on their oil sector by attacking BC's wine industry. Kind of an eye-for-an-eye situation.

What would be an example of using retaliate from the business world skip?

Well, the most obvious example that comes to mind is the trade war that seems to be starting between the United States and China. First, the U.S. placed tariffs on$50 billion of Chinese goods coming into the US. And then China retaliated with their own tariff. Now the US is threatening their own retaliation of another$200 billion worth of tariffs.

Yep, that is war for you. Two groups retaliating against each other until one of them gives up.

And until someone gives up, a lot of damage will be done. What a wait.

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It's always nice discussing these stories with you. It was nice to talk about Canada for a change.

Feeling a little homesick there, are you scared?

Oh no, I'm very much at home here in Tokyo. Has talking about BC and Alberta helped you decide to travel to Canada this summer? Are you going to pull that trigger?

Not sure yet. It would be nice to visit, but at the heart of it, two grand a ticket is very steep. I'm going to have to think on this a little more.

You do that. But let me know what you decide. Just before we go today, I want to thank all of the our D2B members for their continued support. I know that there was a little delay between the last episode and this one, but I still hope to get a third episode out to you before the end of June.

Is that what you're shooting for? Three episodes a month?

Basically yes. Our target is to release two free episodes every month. And at least one, hopefully two, members-only episodes. If you already are a D2B member, don't worry. We will email you directly when we release a members-only episode. And if you are not a member, please do consider becoming one.

D2B memberships help us bring you even more content to help you with your Business English studies. Just visit the Down to Business English website, click on the membership link at the top of the page, and choose the membership level that best suits you.

Our website address is down to businessenglish.com. That's down to businessenglish dot com. Thanks again, everyone. See you next time.

Take care.

Salvation.

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