Profile: Ian Anderson, president, Kinder Morgan Canada

Pushing the positive economic potential of pipelines

Ian Anderson says he underestimated the power of B.C. mayors to influence public opinion on pipeline expansion. | submitted

Kinder Morgan Canada president Ian Anderson officially lives in Calgary. But in the last few years, he has spent almost as much time in B.C. as he has in Alberta – sometimes more – thanks to his company’s flagship Canadian project, the US$5.4 billion expansion of the Trans Mountain pipeline.

When he’s not meeting with the chiefs of the dozens of First Nations along the pipeline corridor, he is spending downtime on Vancouver Island, where he and his wife and 16-year-old son spend time at their vacation home in Sydney.

“Twenty to thirty per cent of my time currently is spent on First Nations and related matters,” Anderson said in a recent interview. “I probably spend, on average, a day a week in a First Nations community meeting with chief, councillor, elders, lawyers.

Iain Black, president of the Greater Vancouver Board of Trade, whose parents were friends with Anderson’s back when they lived in Winnipeg, said it’s unusual for the president of a company like Kinder Morgan Canada to spend so much time meeting face-to-face with community and First Nations leaders.

“I’ve never seen any executive – never mind the CEO – patiently invest the time to develop the relationships and to show people that he’s serious and that he can be trusted,” Black said. “He’s a straight-shooter, and he is very comfortable having those awkward big-kid conversations and navigating through them in good faith.”

Despite the fact the project is facing legal challenges from three First Nations groups, Kinder Morgan has managed to sign benefits agreements with more than 40 First Nations along the pipeline corridor.

In May, Simpcw First Nation Chief Nathan Matthew publicly declared his nation’s support for the project, saying it gives his people a greater say on things like environmental impacts.

Anderson said he learned the value of working directly with First Nations years ago when the gas utility he worked for in Manitoba began its push to extend natural gas into rural Manitoba.

“We pursued rural gasification in Manitoba very aggressively, taking natural gas service to communities in rural Manitoba,” Anderson said. “That’s where I got my first interface with First Nations communities.”

Raised in Winnipeg, Anderson enrolled in the University of Michigan’s executive program and earned a degree in accounting. His first job was with Manitoba’s gas utility, the Greater Winnipeg Gas Co.

He moved up through the ranks as the company went through a series of acquisitions and ended up in Vancouver for two years working with BC Gas. Anderson was then sent to Calgary to work on the oil pipeline side of the business.

“I’ve been with seven or eight companies, all successors,” Anderson said.

He ended up working with Kinder Morgan Canada when the company acquired Terasen Gas. Kinder Morgan sold the gas utility business to FortisBC but kept the Trans Mountain oil pipeline.

In 2005, Anderson was named president of Kinder Morgan Canada – the Canadian subsidiary of Texas-based Kinder Morgan Inc. (NYSE:KMI) – which owns two pipelines in Canada: the 1,111-kilometre Trans Mountain, which runs from Alberta to Burnaby, and the 3,057-kilometre Cochin line, which runs from Alberta, through Saskatchewan and seven U.S. states, terminating in Windsor, Ontario.

The company also has a growing terminal business in Canada. It owns Vancouver Wharves in North Vancouver, which handles sulphur, mineral concentrates and other commodities.

“We’ve got an expanding terminal business in Edmonton, we’ve got a rail business in Alberta [and] two rail terminals,” Anderson said.

In 2008, Trans Canada twinned a section of the Trans Mountain pipeline that passes through Jasper. Then, in 2012, the company announced plans to twin the entire Trans Mountain pipeline and entered the National Energy Board’s (NEB) review process in 2013.

The project would nearly triple the pipeline’s capacity, with most of the oil going to foreign markets.

The project entered the NEB regulatory process shortly after it was streamlined. The formal part of the process was supposed to take 15 months; it took 24, and another four months were added at the end.

“By and large, we expected it to be a year and a half,” Anderson said, “and it’s going to be closer to three.”

When plans to twin the 60-year-old pipeline were announced in 2012, it was not expected to fuel the same level of public pushback as the Northern Gateway pipeline proposed by Enbridge Inc. (TSX:ENB).

Whereas Northern Gateway was a greenfield project that would introduce oil tanker traffic to B.C.’s northwest coast, the Trans Mountain project is a twinning of an existing pipeline that has been supplying B.C. refineries with oil for more than half a century.

Anderson expected the project would meet some resistance from environmentalists and some First Nations. What he didn’t expect was the power of two mayors – Vancouver’s Gregor Robertson and Burnaby’s Derek Corrigan – to influence public opinion.

Both cities have launched legal challenges against the project, and both mayors have waged a public relations war against it.

In Vancouver’s case, Robertson has used apocalyptic language, warning of toxic benzenes, 100,000 dead seabirds and a $1 billion hit to Vancouver’s economy in the event of an oil spill – worst case scenarios based on a study the city commissioned.

“He’s coming from a position that conveniently isn’t having the evidence tested by somebody thoroughly,” Anderson said. “I’m not going to judge what his motivations are. My bigger concern and interest is in local politicians like Mayor Corrigan or Mayor Robertson, given the profile they have, the effect they have on the general public and public opinion.”

Since pipelines are a federal jurisdiction, mayors like Robertson and Corrigan officially don’t have any authority to stop them from being built.

But they can wield tremendous power in the court of public opinion. Anderson believes Robertson’s dire warnings are easily countered. Based on scientific and technical studies, the NEB concluded that, despite an increase in oil tanker traffic, there is a “very low probability of a large oil spill.”

“More often than not, those counter statements aren’t the headlines,” Anderson said. “They’re page three or four or they’re a letter to the editor or they’re an editorial, an op-ed. And we all know the public doesn’t digest that as much as they’re going to digest Mayor Robertson’s comments.”

Anderson said he thinks the antipathy toward oil pipelines in general is only partly attributable to the climate-change zeitgeist that is propelling the world toward a lower carbon economy.

A number of high-profile oil spills – from Enbridge’s spill in the Kalamazoo River and BP’s catastrophic Deepwater Horizon oil spill in the Gulf of Mexico in 2010 – have increased concerns about a major oil spill in B.C.

But major spills from oil tankers have been decreasing in the last couple of decades. All oil tankers today must be double-hulled, and there are safety protocols in place to reduce the chance of a collision when in local waters.

“The probability of an incident is infinitesimal,” Anderson said. “It is so small.”

One of the 157 recommendations made by the NEB when it approved the pipeline expansion was that the company offset the greenhouse gases that will be generated from the construction work.

Anderson said he presumes the offset pricing would be $30 per tonne. At one million tonnes of carbon dioxide (the amount calculated from the pipeline’s construction), that would mean carbon offsets would cost the company roughly $30 million.

It has been suggested that the company could kill two birds with one stone with an offset program, if the money is spent in B.C., because it would not only help mitigate greenhouse gases, but it might also meet one of B.C.’s five conditions for supporting the project: providing more economic benefits for B.C.

“I fully intend to talk to the government of B.C. about what role we might play with them in providing some offset benefits to British Columbia,” Anderson said. “There’s lots of options.

When he isn’t working on trying to get the first major pipeline built in B.C. in more than half a century, Anderson sits on a number of boards and committees, including the board of governors for the Business Council of BC and the Canadian Energy Pipeline Association board of directors.

A dedicated hockey dad, Anderson spends a lot of time watching his son play Midget Triple AAA hockey.

“It’s probably one of the things during the last decade that’s been a passion of mine – following his hockey,” he said. “I build my schedule around that as best I can. I go to every game I can.”