PIPE DREAMS

HOW THE WAY WE MOVE OIL GOT ITS BAD REP­U­TA­TION AND BE­CAME THE UN­LIKELY LYNCH­PIN OF MOD­ERN CANA­DIAN POL­I­TICS

Sharp - - CONTENTS - by Chris Turner

How oil pipe­lines came to have out­sized in­flu­ence over Canada’s po­lit­i­cal land­scape.

IN 2004, THE PIPE­LINE COM­PANY KIN­DER Mor­gan ap­plied to the Cana­dian gov­ern­ment to de­velop a project called An­chor Loop, a sub­stan­tial ex­pan­sion of its Trans Moun­tain pipe­line. The new project would widen a bot­tle­neck in the Rocky Moun­tains, in­creas­ing the flow of oil from Al­berta’s oil sands to Van­cou­ver by about 40,000 bar­rels per day. It meant lay­ing 158 kilo­me­tres of new pipe through scenic Jasper Na­tional Park and Mount Rob­son Provin­cial Park. When the pro­posal came to the Na­tional En­ergy Board (NEB) for con­sid­er­a­tion, ex­actly four peo­ple ap­peared as in­ter­ven­ers to crit­i­cize it. The project was soon ap­proved and be­gan ship­ping oil to the port of Van­cou­ver in 2008.

Funny thing about An­chor Loop: if you’re not in the mid­stream oil busi­ness, this is prob­a­bly the first time you’ve heard the name.

Skip ahead to 2013. Again Kin­der Mor­gan files an ap­pli­ca­tion to ex­pand its Trans Moun­tain pipe­line, this time run­ning a full par­al­lel pipe next to the ex­ist­ing one. By the time it reached the NEB, the Trans Moun­tain ex­pan­sion had at­tracted more than 400 in­ter­ven­ers, and the board also re­ceived writ­ten sub­mis­sions con­tain­ing more than 20,000 tech­ni­cal ques­tions about the project.

Same com­pany, same route, same gen­eral pur­pose. But the new pro­posal in­spired protests on Burn­aby Moun­tain in sub­ur­ban Van­cou­ver and swayed the 2013 provin­cial elec­tion in Bri­tish Co­lum­bia. Four years later, it has be­come a top-of-agenda po­lit­i­cal is­sue na­tion­wide, cre­at­ing di­vi­sions be­tween par­ties and be­tween the provin­cial and fed­eral gov­ern­ments. In Cana­dian pol­i­tics nowa­days, stat­ing whether you’re for or against the Trans Moun­tain ex­pan­sion is short­hand for your com­mit­ment to tak­ing ac­tion on cli­mate change, en­vi­ron­men­tal stew­ard­ship, and Indige­nous rights. So what changed? How did this pipe­line — and pipe­lines in gen­eral — be­come such a fun­da­men­tal di­vid­ing line for Cana­di­ans?

BEEN THERE HAS AL­WAYS

a deep ten­sion in Cana­dian so­ci­ety be­tween the nat­u­ral re­source de­vel­op­ment at the core of our econ­omy and our proud tra­di­tion of en­vi­ron­men­tal stew­ard­ship. That ten­sion has ratch­eted up nearly to a snap­ping point over the con­struc­tion of oil sands pipe­lines in the age of cli­mate change.

When Rachel Not­ley’s NDP gov­ern­ment un­veiled an am­bi­tious cli­mate change pack­age — in­clud­ing a car­bon tax and an ab­so­lute cap on emis­sions from the oil sands — and Justin Trudeau’s fed­eral gov­ern­ment went to Paris as a vo­cal pro­po­nent of a new cli­mate deal, en­vi­ron­men­tal­ists and cli­mate pol­icy wonks alike re­joiced. Af­ter a decade of var­i­ously drag­ging feet and

knuck­les in Ed­mon­ton and Ot­tawa, real ac­tion had ar­rived. But then, in the fall of 2016, Trudeau gave his gov­ern­ment’s ap­proval to the Trans Moun­tain project, and the de­bate — about the project, the en­vi­ron­ment, and the agenda of our new prime min­is­ter — came back to full boil.

Why did Trudeau say yes to Trans Moun­tain? The po­lit­i­cal cal­cu­lus is pretty straight­for­ward: the NEB ap­proved it, the route is se­cured, and any re­main­ing is­sues — be­tween First Na­tions and the gov­ern­ment, for ex­am­ple — are best han­dled in the courts, not in Par­lia­ment. Re­ject­ing Trans Moun­tain would have made Trudeau many new en­e­mies among the mod­er­ates that form a sub­stan­tial plank of his po­lit­i­cal sup­port, while win­ning only mild favour with an ac­tivist left that would never stick with him in the long run any­way. At the same time, it would have handed mo­men­tum to his right-wing op­po­nents and turned his re-elec­tion into a much more dif­fi­cult propo­si­tion. A bit of heat from en­vi­ron­men­tal­ists was worth it if it helped build the long-term sup­port he needed to get real cli­mate poli­cies put (and kept) in place. This made him a traitor in anti-pipe­line cir­cles; it re­mains an open ques­tion whether it was the best call for his cli­mate pol­icy goals in the long haul.

THE PRO-PIPE­LINE

ar­gu­ment is sim­ple: Canada is a ma­jor oil pro­ducer. It will be extracting the stuff from Al­berta’s oil sands at a rate of three mil­lion bar­rels per day — roughly three-quar­ters of all the oil Canada pro­duces — by the end of this year, and it will con­tinue to do so for at least an­other quar­ter cen­tury. The Trans Moun­tain pipe­line can send hun­dreds of thou­sands of those bar­rels to Asian mar­kets, where the rate of re­turn on each bar­rel sold is much higher than sell­ing all of it to the glut­ted U.S. mar­ket — $15 or more per bar­rel, ac­cord­ing to in­dus­try lead­ers, which would mean bil­lions in ad­di­tional an­nual rev­enue for the 600,000 bar­rels per day Trans Moun­tain would carry. (Over­all, Cana­dian crude oil pipe­line ca­pac­ity is cur­rently at about four mil­lion bar­rels per day.)

Pipe­lines don’t in­crease pro­duc­tion lev­els by them­selves — prices do most of that work — so block­ing an ap­proved pipe­line merely obliges the in­dus­try to ship by train, which is less safe and more ex­pen­sive. Even if you think the in­dus­try needs to be wound down as fast as pos­si­ble, it still makes sense to max­i­mize the re­turn on what’s al­ready been in­vested, es­pe­cially since a por­tion of that re­turn goes to gov­ern­ments in the form of roy­al­ties and taxes that can help pro­vide the cap­i­tal to build that next-gen­er­a­tion low-car­bon econ­omy.

So goes the in­dus­try’s case, which the Trudeau and Not­ley gov­ern­ments more or less en­dorse.

As for the case against, the main rea­son pipe­line projects are so high on the na­tional po­lit­i­cal radar is be­cause they have be­come a proxy for the larger de­bate about what Canada in­tends to do about cli­mate change in gen­eral. Op­po­nents

of the Trans Moun­tain ex­pan­sion ar­gue that it will add mil­lions of tonnes of car­bon diox­ide per year to the planet’s car­bon foot­print. Es­ti­mates range from 90 to 110 mega­tonnes per year, which has led ac­tivists to ar­gue the project could have a cli­mate im­pact greater than all other fos­sil fuel use in Bri­tish Co­lum­bia (which emits around 63 mega­tonnes per year).

This is all true on the face of it, but also mislead­ing. B.C.’S car­bon foot­print fig­ure counts only the fos­sil fu­els burned in the prov­ince, as is stan­dard in such mea­sure­ments. The 90-plus mega­tonne fig­ure in­cludes all life cy­cle emis­sions — from the mo­ment it’s dug from the bo­real for­est of north­ern Al­berta un­til it coughs out some car’s tailpipe. You could just as ar­bi­trar­ily pin mil­lions of tonnes of CO2 on south­ern On­tario’s man­u­fac­tur­ing sec­tor for all the au­to­mo­biles it makes.

Look­ing only at emis­sions cre­ated in ex­panded oil sands pro­duc­tion di­rectly at­trib­ut­able to new pipe­lines, Univer­sity of Cal­gary econ­o­mist Trevor Tombe es­ti­mates that about 10 mega­tonnes of emis­sions per year would be pre­vented if there are no new pipe­lines of any sort built to ex­port bi­tu­men to tide­wa­ter.

The cli­mate case against Trans Moun­tain also pre­sumes that ev­ery sin­gle one of those 600,000 new bar­rels of oil sands pro­duc­tion would not have been ex­tracted in the ab­sence of the pipe­line and that the only way they can be stopped is by block­ing pipe­line projects. But when oil was at $100 per bar­rel just a few years ago, pipe­line bot­tle­necks didn’t keep bi­tu­men from get­ting to mar­ket — it sim­ply went by train at a pre­mium. Sim­i­larly, the $50-per-bar­rel dol­drums that be­gan in late 2014 trig­gered a de facto mora­to­rium on new cap­i­tal in­vest­ment in the oil sands with an ef­fi­ciency that not even a daily protest of mil­lions for weeks on end could hope to in­spire. What’s more, Tombe es­ti­mates that re­duc­ing emis­sions by pipe­line protest costs as much as $2,000 per tonne (due to in­creased ship­ping costs and lost rev­enues from slightly re­duced over­all pro­duc­tion), while the same tonne could be pre­vented with a car­bon price of just $50 per tonne.

There’s no ques­tion that the Trans Moun­tain ex­pan­sion will help en­cour­age growth in the oil sands. But the ex­tent of its im­pact on Canada’s over­all car­bon foot­print will be nowhere near as large as the size of its sym­bolic im­pact on the na­tional po­lit­i­cal de­bate about cli­mate change.

STILL, THERE’S NOTH­ING

new about op­po­si­tion to the oil sands’ out­sized en­vi­ron­men­tal foot­print. Cana­dian en­vi­ron­men­tal groups have been crit­i­cal of the oil sands in­dus­try since it started to boom around the turn of the mil­len­nium. The real mo­men­tum be­hind the anti-pipe­line move­ment emerged from the to­tal fail­ure of the Copen­hagen cli­mate sum­mit in 2009, and it started with the des­per­a­tion of Amer­i­can en­vi­ron­men­tal ac­tivists.

With in­ter­na­tional cli­mate treaty talks stalled and the Obama ad­min­is­tra­tion’s cli­mate plans de­railed in Congress, Amer­i­can en­vi­ron­men­tal­ists went hunt­ing for a new way to mount a cli­mate change cam­paign — a tar­get that was spe­cific and easy to pin down, like the ef­forts to save whales and rain­forests that the move­ment had grown up on. They found their tar­get in a 2011 let­ter NASA cli­mate sci­en­tist James Hansen wrote to his col­leagues. Hansen, who’d given the very first con­gres­sional tes­ti­mony about the cli­mate threat back in 1988, wrote about a pipe­line project called Key­stone XL, which Tran­scanada Pipe­lines planned to build in or­der to move 800,000 bar­rels of Al­berta bi­tu­men from the Cana­dian prairie to the Gulf of Mex­ico. If such un­con­ven­tional re­sources were un­locked, Hansen warned, it would be “es­sen­tially game over” for cli­mate ac­tion. Au­thor and cli­mate change ac­tivist Bill Mckibben re­peated Hansen’s alarm call in an open let­ter of his own, in which he urged mass civil dis­obe­di­ence in front of the White House to pres­sure Obama into re­ject­ing the Key­stone XL pro­posal. “The Key­stone pipe­line,” the let­ter read, “would be a fif­teen hun­dred mile fuse to the big­gest car­bon bomb on the con­ti­nent, a way to make it eas­ier and faster to trig­ger the fi­nal over­heat­ing of our planet.”

By Au­gust 2011, anti-key­stone protest was the new front line in Amer­i­can cli­mate ac­tivism. In ad­di­tion to na­tional groups like Mckibben’s 350.org, re­gional en­vi­ron­men­tal or­ga­ni­za­tions from the At­lantic coast to the Pa­cific North­west turned their at­ten­tion to Al­berta’s “dirty oil” and the in­fra­struc­ture be­ing built to trans­port it.

In Ne­braska, Indige­nous ac­tivists joined ranch­ers to op­pose Key­stone. Grass­roots groups in South Port­land, Maine, came to­gether to op­pose the re­ver­sal of an ex­ist­ing pipe­line that would bring oil sands bar­rels to the lo­cal port. In Idaho and Mon­tana, ac­tivists block­aded the streets of small towns where enor­mous trucks were pass­ing through with oil sands pro­cess­ing gear headed for north­ern Al­berta. Along the way, Key­stone XL be­came not just a sin­gle project but a cen­tral sym­bol of the whole cli­mate change fight, the car­bon bomb’s fuse that must never be lit.

The op­po­si­tion to Key­stone XL brought a new sense of pur­pose to Canada’s en­vi­ron­men­tal move­ment as well. It soon found mul­ti­ple Cana­dian tar­gets for protest, as pipe­line com­pa­nies raced to find ways to get oil from the boom­ing oil sands to tide­wa­ter. Pro­pos­als in­clude En­bridge’s North­ern Gateway, which would take oil from Ed­mon­ton due west to the north coast of Bri­tish Co­lum­bia, and Tran­scanada’s En­ergy East ini­tia­tive, which in­volves con­vert­ing ex­ist­ing nat­u­ral gas pipes to carry oil from Al­berta to Que­bec. But Kin­der Mor­gan’s Trans Moun­tain pro­posal has be­come the most volatile flash­point for Canada’s pipe­line pol­i­tics.

On the face of it, the Trans Moun­tain pro­posal looks like the least likely con­tro­versy mag­net of the bunch. It fol­lows the most direct ex­ist­ing route from the oil sands to a coast. The rights-of-way have been in place since the 1950s. The pipe­line ar­rives at a port in a ma­jor city that al­ready ships hun­dreds of thou­sands of bar­rels of oil by tanker daily (not to men­tion mas­sive quan­ti­ties of coal, sul­phur, potash, and a range of dan­ger­ous chem­i­cals).

Tim­ing, though, is ev­ery­thing in pol­i­tics, and the Trans Moun­tain pro­posal hit the pub­lic agenda in the midst of a provin­cial elec­tion in Bri­tish Co­lum­bia, amid a ris­ing tide of op­po­si­tion to the ar­ro­gance of Prime Min­is­ter Stephen Harper, his al­lies in the oil busi­ness, and all things oil sands. Then-b.c. NDP leader Adrian Dix’s flip-flop from tepid ap­proval to out­right op­po­si­tion to Trans Moun­tain mid­way through the 2013 elec­tion race was the ful­crum in his cam­paign’s switch from cer­tain vic­tory to cat­a­strophic de­feat. The fol­low­ing year, as Kin­der Mor­gan be­gan prepa­ra­tion work on Burn­aby Moun­tain, the project be­came a protest flash­point, in­spir­ing civil dis­obe­di­ence by ac­tivists, Indige­nous lead­ers, and even the mayor of Burn­aby. Af­ter a new NDP gov­ern­ment in Al­berta and the dawn of Justin Trudeau’s sunny ways in Ot­tawa in 2015 — and now the B.C. NDP’S im­prob­a­ble rise to power — the Trans Moun­tain de­bate has only grown more heated.

The con­flict shows no signs of abat­ing. Pipe­lines may not ac­tu­ally de­cide Canada’s cli­mate fate, but the de­bate over them may prove to be the de­ci­sive po­lit­i­cal bat­tle over how we re­spond to cli­mate change for years to come.

“What­ever im­pact the Trans Moun­tain ex­pan­sion has on Canada’s over­all car­bon foot­print, it will be nowhere near as large as the size of its sym­bolic im­pact on the na­tional po­lit­i­cal de­bate about cli­mate change.”

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