Exclusive: Partner in Canada's Energy East struggled with pollution controls

Wed Nov 11, 2015 10:10pm EST
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(This refiled version of the November 11th story corrects spelling of vapor in third paragraph)

By Dave Sherwood and Richard Valdmanis

(Reuters) - Irving Oil, the company seeking to become the gatekeeper for a new crude oil pipeline from western Canada to the Atlantic Ocean, has struggled to control air pollution at its existing marine terminal in Saint John, New Brunswick. 

Irving Oil records reviewed by Reuters show the vapor recovery equipment at the terminal on the edge of the province's largest city was shut 37 percent of the time between December 2012 and March 2015 due to near-constant mechanical problems, as millions of barrels of gasoline were loaded onto ships mainly bound for New England.

Official data on the unit's operations after March 31, 2015, were not immediately available, but an Irving Oil spokesman said the vapor recovery unit's (VRU) performance had been nearly flawless since June.

"The VRU has routinely met and surpassed our operational and performance goals," spokesman Andrew Carson said. "For example, since June 2015 the VRU’s availability has exceeded 96 percent and over the same timeframe has shown an average vapor recovery rate above 93 percent."

The terminal handles fuels from the company's 300,000-barrel per-day Saint John oil refinery, Canada's largest, and is the source of about one in three gallons of gasoline imported into the U.S. Northeast. Vapors can escape during ship loading when fuels are briefly exposed to open air.

Scrutiny of family-owned Irving's environmental record has intensified as it seeks approvals to build a new, larger export terminal and tank farm nearby to serve TransCanada's Energy East, now broadly seen as the most viable Canadian oil sands pipeline project after its Keystone XL pipeline to the United States was rejected by the Obama Administration last week.

Energy East would carry some 1.1 million barrels of western Canadian crude per day more than 2,800 miles (4,600-km) to New Brunswick by 2020, for the first time linking trillions of dollars worth of oil reserves with overseas markets. Irving plans to build and operate a C$300 million ($226 million) storage tank facility capable of serving more than 100 ocean-going tankers per year.   Continued...

An Irving Oil storage facility and crude rail cars are photographed at the edge of Courtenay Bay on  in Saint John, New Brunswick, March 9, 2014. REUTERS/Devaan Ingraham