Five thoughts on Trans Mountain, pipeline politics, Alberta’s future
Albertans desperately awaiting economic relief must have been unsure how to feel this week as the federal Liberal government announced it was green-lighting, again, the Trans Mountain expansion project.
For some reason, the analogy that came to mind was the plight of diehard Oilers fans, watching the team stockpile high draft picks and then waiting for the overdue breakthrough.
Sure, the potential is enticing, but it’s hard to get excited after so many years of unmet expectations. Until the wins start flowing, the clenching will continue.
CAUTIOUS OPTIMISM
That at least seemed to be the general demeanour of Premier Jason Kenney, who wasn’t cracking any smiles about the latest milestone for a project vital not only to the Alberta economy’s resurgence, but to his own government’s hopes of climbing out of deficit in the next decade.
The caution was undoubtedly in part due to lessons learned watching the Alberta NDP twice engage in premature victory dances, first in 2016 when Ottawa gave its initial approval and again last year when the Trudeau government announced it was buying the pipeline.
As Kenney correctly noted, the success of TMX will ultimately be gauged when the pipe is built and carrying bitumen. And stubborn obstacles to that goal remain, including specific Indigenous groups, the City of Burnaby and B.C. Premier John Horgan, among others.
Albertans can only hope the Trudeau government conducted its second round of consultations with enough care this time to survive further legal challenges, and is ready to counteract protesters determined to interfere.
ELECTIONEERING
Kenney’s coolness to the news was also due to the fact that he is still in election mode, campaigning not for his own job but for federal Conservative Leader Andrew Scheer.
Saying anything that even remotely smells like praise for Prime Minister Justin Trudeau would be counterproductive to that effort.
On that front, the premier at least still has bills C-48 and C-69 on which to hammer the federal Liberal leader.
Those pieces of legislation have just been through an exhaustive review and amending process in the Senate, which has improved the bills but not enough for Alberta’s interests.
ADITIONAL PIPELINES
The fate of both bills, particularly C-69, will be crucial to determining whether TMX is the last major pipeline to be built in Canada.
How many further pipelines are necessary or even economical is an open question at this stage, especially since Enbridge’s Line 3 and Keystone XL could still be built if they ever escape legal wrangling in the U.S.
And the Trudeau government’s interest in such projects seems tepid at best.
Asked Tuesday if more than one pipeline was needed to fix Canada’s oil export constraints, Finance Minister Bill Morneau wouldn’t answer the question.
When you throw in the onerous approval process laid out in C-69, you have to wonder if the Liberals see TMX as the end of the line for pipelines.
Emiss ions cap
In approving Trans Mountain, Trudeau justified the project as in keeping within the country’s climate change goals, in part because Ottawa is insisting on a 100-megatonne cap on total emissions from the oilsands.
The usefulness of such a cap, and how constraining it might be, is an intriguing debate, but Kenney’s response to it has been peculiar.
On one hand, the premier has said he doesn’t see the wisdom of a cap since other oil-producing nations don’t have one. Yet he also hasn’t shown any desire to fight Trudeau on the issue. Kenney’s position is that the oilsands are still a long way from reaching the limit while, at the same time, innovation is driving down the carbon intensity of a barrel of oil produced in Alberta.
As such, he says, oilsands operators should still have lots of room to increase production, which, in turn, may necessitate additional pipelines.
To me, there are some flaws in Kenney’s thinking here.
While emissions intensity may be decreasing, total emissions from the oilsands have continued to go up.
As of 2017, the total already stood at 81 megatonnes. Add to that a concerning Environment Canada paper published this spring that suggested some oilsands operators have been emitting an average of about onethird more carbon per barrel of oil than they have reported.
While more study is needed, the findings indicate that Alberta may already be closing in on the 100-megatonne maximum.
TMX PROFITS
There is good reason to applaud the idea of encouraging Indigenous investment in TMX, and to put any profits from the operation or sale of the pipeline into cleaner energy technology.
Or as Trudeau put it, using one energy economy to help transition to the next. (This assumes TMX will generate profits at all).
In many ways, I can’t help but wish Alberta governments had adopted a similar policy years ago with our resource royalties, putting them toward a modernization of the economy rather than using them to oversubsidize government services, or send out “Ralph bucks.”
While we can’t undo the past, Alberta needs to be all over any TMX windfall, demanding that a big chunk of that money go to bolster innovation work here.