The wreck of Energy East

The prime minister has managed to undermine the environment, the economy, progressive values and national unity, all in one fell swoop. That would be an impressive accomplishment were it not so damaging to the country.

TransCanada Corporation had little choice but to confirm on Thursday that it had to abandon the Energy East pipeline project after the National Energy Board (NEB) irresponsibly expanded the scope of its review to encompass upstream and downstream GHG emissions. The attendant delay, cost and risk had rendered the project uneconomic. Since that was predictable, it raises uncomfortable questions about Canada’s pipeline and energy development regulator. Did the NEB somehow not understand the likely consequences of its new policy or had its political independence been compromised? Either way, it acted contrary to its national interest mandate.

But that does not absolve the government. It should have immediately rescinded the regulatory overkill, unless it had issued a direct order or whispered hints to the NEB to expand its mandate. Therefore, it bears ultimate responsibility for this fiasco.

The irony is that killing the project will increase net global GHG emissions. Oil transported by pipeline from Alberta would replace Saudi crude shipped by tanker up the St. Lawrence. Our exports to Europe and India would diminish higher emitting oil from countries with poorer environmental standards and appalling treatment of women, gays, minorities and political dissidents. Justin Trudeau wants labour and environment standards and gender equality protection included in NAFTA, although binding commitments are unlikely. Yet favouring The federal government bears responsibility for the demise of the Energy East pipeline, Joe Oliver writes. foreign energy over Canadian energy shunts those concerns aside. All his virtue signalling is empty rhetoric when he can actually do something and decides not to.

Natural Resources Minister Jim Carr falsely claimed the previous Conservative government did not get any pipelines built (there were four). But he was going to change all that. Cater to intractable environmentalists by succumbing to their insatiable demands and objections would magically disappear. A costly national carbon tax, duplicative and politicized regulatory reviews, open-ended consultation with anyone with an axe to grind. How is that working out so far? How about a big goose egg. Naïveté is as solid a foundation for public policy as a belief in unicorns.

The Liberals imposed a ban on oil tanker traffic off billion Pacific NorthWest project, a decision made more likely by Ottawa’s onerous regulatory burden. The government officially approved Kinder Morgan’s $6.8 billion Trans Mountain Pipeline expansion, subject to 157 binding conditions. However, without resolute federal leadership its prospects are in doubt, given determined resistance from the minority NDP government of British Columbia, fierce opposition from its Green Party supporter, lawsuits by First Nations and municipalities, and looming social activism.

Meanwhile, energy producing countries are taking advantage of Canada’s inability to get its resources to tidewater. The U.S. imports our oil and gas at bargain prices and sells its energy at the higher international price. As we subsidize our rich neighbour other countries funding for health care, education and infrastructure.

While Trudeau preens as a green champion, massive deficits continue without end, federal debt is projected to mushroom to $1 trillion in 15 years, punishing taxes make life difficult for the middle class and high youth unemployment robs too many millennials of hope.

Alberta and Saskatchewan workers in the oil and gas sector were especially hard hit by the commodity price collapse. They hoped the federal government would have their backs during hard times. Instead, it put up regulatory roadblocks, hiked taxes and increased the cost of doing business. Last month, at the Global Business Forum in Banff, Saskatchewan Premier Brad Wall lamented the lost opportunity for jobs, economic growth and revenue to governments from policies that are killing resource development. What frustrates him and many Westerners is that there is no environmental gain for all the pain they disproportionately bear. Justified regional resentment erodes national unity.

The prime minister does not seem terribly concerned about the impact on less populous provinces where his electoral prospects are meagre, or New Brunswick (for the moment a Liberal bastion), which unanimously supports Energy East. But he should worry if the country doubts his ability to competently manage the economy.

Trudeau claims that we can both protect the environment and develop our resources. Fair enough. But words ring hollow when actions run counter to the critical strategic challenge of getting our energy to tidewater. Canada will be poorer for his government’s egregious failure.