En­ergy and the En­vi­ron­ment: Kinder Mor­gan in the crosshairs

Policy - - Opinion - BY DALE SMITH

We’re now get­ting into a zone where de­ci­sions we make in the le­gal process, or the po­lit­i­cal process, or the reg­u­la­tory process, can no longer be re­lied upon by in­vestors. — Rick An­der­son Earn­scliffe Strat­egy Group

With the drama ramp­ing up be­tween Bri­tish Columbia and First Na­tions on one side and Al­berta and Ot­tawa on the other over Kinder Mor­gan’s pro­posed Trans Moun­tain pipe­line ex­pan­sion, a Be­fore the Bell­panel looked into what’s at stake, both in the im­me­di­ate im­passe and in the longer term.

Rick An­der­son, prin­ci­pal with Earn­scliffe Strat­egy Group, sur­mised that the cur­rent pipe­line de­bate is chiefly a disas­ter for busi­ness and in­vest­ment in Canada.

“We talk about in­vestor con­fi­dence but we also talk about po­lit­i­cal risk,” said An­der­son. “Ma­jor cor­po­ra­tions from around the world look at coun­tries as places to in­vest, and Canada has tra­di­tion­ally been a pretty sta­ble place on that score. We’re now get­ting into a zone where de­ci­sions we make in the le­gal process, or the po­lit­i­cal process, or the reg­u­la­tory process, can no longer be re­lied upon by in­vestors.”

An­der­son said that — es­pe­cially when it comes to en­ergy projects — Canada now demon­strates a high level of po­lit­i­cal risk.

“I don’t think there’s much risk for po­lit­i­cal ac­tors,” said Rachel Cur­ran, prin­ci­pal with Harper and As­so­ciates, not­ing that she doubts ei­ther of the two pre­miers or even the prime min­is­ter will nec­es­sar­ily pay a heavy po­lit­i­cal price for the brouhaha. The Cana­dian econ­omy, how­ever, will pay the price as we are still de­pen­dent on re­source de­vel­op­ment for ex­port, Cur­ran as­serted.

“We are one of the best coun­tries in the world for de­vel­op­ing re­sources safely and re­spon­si­bly and get­ting them to global mar­kets in a safe way,” said Cur­ran.

Cur­ran said that Canada re­mov­ing it­self from the re­source de­vel­op­ment game is a shame, as it rep­re­sents more than 50 per­cent of our ex­port mar­ket. She be­lieves that this is lead­ing to a flight in for­eign capital, with in­vestors un­will­ing to take on the risk of re­source de­vel­op­ment projects.

“One of the ma­jor rea­sons is we can’t get these projects done,” said Cur­ran. “That’s bad for busi­ness, it’s very bad for our econ­omy, and ul­ti­mately it will be bad for fu­ture gen­er­a­tions.”

That pre­dic­tion of capital flight was dis­puted by Craig Ste­wart, vice-pres­i­dent of fed­eral af­fairs with the In­sur­ance Bureau of Canada. Ste­wart said that for­eign capital may be balk­ing at en­ergy projects not be­cause of what is hap­pen­ing in Canada around pipe­lines like Trans Moun­tain, but rather be­cause they are di­ver­si­fy­ing and mov­ing away from riskier, en­vi­ron­men­tally un­sound in­vest­ments.

“There is a shift in capital mov­ing away from these twen­ti­eth-cen­tury projects to new twenty-first cen­tury projects,” said Ste­wart. “It’s hap­pen­ing glob­ally, and our mem­bers are di­ver­si­fy­ing around the world.”

Anna John­ston, a lawyer with West Coast En­vi­ron­men­tal Law, con­veyed her sense is that if built, the Trans Moun­tain ex­pan­sion would be a disas­ter for fu­ture gen­er­a­tions.

“It was a pre­ventable is­sue,” said John­ston. “With greater en­gage­ment with Indige­nous peoples and the pub­lic in advance of the project in the very early stages, be­fore any ma­jor de­sign de­ci­sions were made, be­fore any en­vi­ron­men­tal ap­proval de­ci­sions were made and even be­fore lead­ers and gov­ern­ment started to cham­pion the project, had there re­ally been a gen­uine di­a­logue, then we might have been able to pre­vent this is­sue from the very be­gin­ning.”

John­ston said that al­ter­na­tives could have been found if they were at the table ear­lier, but even if the pipe­line ul­ti­mately doesn’t get built, it won’t af­fect the country’s GDP in a sig­nif­i­cant way.

John­ston says that any in­vestor un­cer­tainty hap­pen­ing right now is be­cause of the country’s bro­ken en­vi­ron­men­tal as­sess­ment sys­tem, which is why the pro­posed new sys­tem un­der Bill C-69 shows prom­ise.

But would the Trans Moun­tain ex­pan­sion be ap­proved if it had been as­sessed un­der Bill C-69? John­ston is un­sure.

“That’s one of the fun­da­men­tal prob­lems with the Act,” she said. “We don’t have that pol­icy di­rec­tion from the out­set. We don’t know whether projects that are clearly con­tra­dic­tory to our cli­mate obli­ga­tions and are op­posed by Indige­nous peoples and the pub­lic, whether they would go through.”

Cur­ran is also un­sure, and doubts that a pro­posal would have even been made.

“I don’t think a com­pany would frankly en­ter in the process at all,” Cur­ran said.

Cur­ran noted that the pipe­line is sup­ported by 50-plus First Na­tions who have signed ben­e­fit agree­ments with the com­pany, and that it has the sup­port of the ma­jor­ity of Bri­tish Columbians.

“With this leg­is­la­tion, it will make it even harder to get these projects done,” said Cur­ran.

An­der­son pointed out that the pipe­line in­dus­try as­so­ci­a­tion has also stated that there wouldn’t have been an ap­pli­ca­tion un­der the new sys­tem.

“There might be a per­mit if it went through the ap­pli­ca­tion process, but would they find them­selves in the same sit­u­a­tion with a per­mit that they feel they can’t pro­ceed with?” An­der­son asked.

Su­san Dela­court, Anna John­son , Lawyer at West Coast En­vi­ron­men­tal Law, Rachel Cur­ran, Prin­ci­pal at Harper & As­so­ciates and Rick An­der­son, Prin­ci­pal at Earn­scliffe Strat­egy Group.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.