Template for pipelines
Approval for B.C. LNG shows Liberal strategy
Make no mistake: t he f ederal cabinet’s approval of Malaysian state- owned Petronas’s $ 36- billion Pacific North-West liquefied natural gas project is a template for things to come. The Liberals’ longevity in power depends on it — and they know it.
Whether the plan unfolds as designed remains to be seen. But the political reality changes immediately. With New Democrats and Greens hollering “s l ow down!” and Conservatives shouting “speed up!,” the Liberals are now precisely where they want to be on energy. The opposing lines of attack stand to solidify the government’s position, not hurt it.
It is the fruition of a strategy that dates to 2012, before Prime Minister Justin Trudeau became Liberal leader, when he and his team were casting about for a lever by which to persuade skeptical kitchen- table conservatives in Ontario — yes, there are many such beings, provincial politics notwithstanding — to take him seriously.
The gambit needed to appeal to economic pragmatism. It needed to be pan-Canadian, at least enough to resonate in southwestern Ontario without annoying Quebec or the West. And it needed to account for the blast residue of Pierre Trudeau’s national energy program of the early 1980s, which had transformed Alberta into a barren moonscape, from a Liberal electoral point of view, for decades thereafter.
The solution they arrived at was both novel and obvious: cast Justin Trudeau as a champion of resource development, within an environmentalist f rame. Put him between Stephen Harper’s Conservatives, who would be painted as minions of Big Oil, and Thomas Mulcair’s New Democrats, whose squeamishness with pipelines would feed into the old stereotype of them as wildeyed Trotskyites bent on killing your job.
It worked ( notwithstanding a temporary surge in Mulcair’s fortunes last spring sparked by Alberta New Democrat Rachel Notley’s landslide) rather well — until, early in the 2015 federal campaign, Trudeau & Co. perceived an even more tantalizing opening in the NDP’s pledge of balanced budgets, and zigged sharply to their left, promising deficits and spending.
That counter- intuitive move upended Canadian political orthodoxy in a morning. It began the inexorable Liberal absorption of the left that won Trudeau his majority last October and now has Mulcair rooting in the cellar for the desiccated remains of his party’s former reputation as a beacon of protest.
Now click forward to Tuesday’s statement about the Petronas decision. Sentence one reads: “The government of Canada is working to grow our economy, create good jobs for the middle class and opportunities for Canadians while protecting the environment for future generations.”
The statement tosses out impressive dollar figures — $ 11 billion in direct investment, rising to $ 36 billion i ncluding upstream natural gas development — and promises more than 5,000 jobs. It then boasts of the 190 “legally binding conditions, determined through extensive scientific study, that will lessen the environmental impacts,” including safeguards for wildlife and a cap on project greenhouse gas emissions.
Taken together, this decision reads like a long, thematic footnote to Trudeau’s first leadership foray into Alberta, when he joked he had had “nothing to do with the national energy program — I was 10 years old.” On the same trip, he said, “There is not a province in this country that would find 170 billion barrels of oil and leave it in the ground.”
Granted, that was oil, this is gas — easier politically than bitumen, because it can be argued that anything moving big emitters such as China away from coal, as large volumes of Canadian natural gas would, is a net win from a climate- change perspective. But the template for further approvals of oil pipelines, including the proffered carbon-pricing offsets, is now in place. All proponents of a resource project, whether for gas or oil, will look to the detail here and tweak their plan accordingly.
Here’s what it amounts to, politically: after a halcyon first year of puttering about in the wading pool of the centre- left, the Liberals are now grinding their way back to the centre, where Trudeau began his leadership run. They have initiated the process, which will not be pleasant or painless, of sloughing off the party’s new left fringe. The prize is an Ontario constituency that, partly courtesy of Premier Kathleen Wynne’s deepening unpopularity, is primed to swing back to the pragmatic centre-right.
The next break in this process will be cabinet approval of the twinning of Kinder Morgan’s Trans- Mountain pipeline, a decision expected in December. Further out will be an accommodation with Quebec on Trans-Canada’s Energy East project. Two- thirds of that pipeline — all but the Quebec and New Brunswick portions, essentially — are already in the ground. The environmental frame, or cover, will be a national carbon-pricing scheme, details to be determined.
There are no guarantees any of this will come to pass, obviously. The government’s quest for “social licence” has been an invitation to zealots to never grant it. Market conditions now militate against investment, including by Petronas.
But of the ultimate objective there can now be no doubt: deliver resource job growth in Alberta, with spinoff benefits in British Columbia, Ontario and Quebec. Boost prospects for the middle class, as promised. Secure a second term.