Energy politics trap Trudeau

The $15.7-billion Energy East pipeline megaproject died last week, but Justin Trudeau’s Liberals should not be blamed for killing it.

It was basic economics that sounded Energy East’s death knell and not, as some knee-jerk critics asserted, the Liberals’ love affair with environmentalists and Quebec voters.

Reality, of course, did not prevent federal Conservatives and Alberta’s United Conservative Party from trying to score cheap political points by accusing Trudeau of raising regulatory roadblocks to stop vital natural resources projects from being built.

That’s hogwash. But thanks to that pushback, the Liberals must now soothe regional tensions and prevent a full-blown national unity crisis from erupting.

They can do this, in part, by proving the naysayers wrong.

They must demonstrate that natural resources projects that serve the national interest and pass the necessary tests can proceed.

Even before this happens, Canadians should recognize the forces that halted Energy East boil down to corporate dollars and sense.

The global economy has changed since TransCanada Corp. announced four years ago its plans for the Energy East pipeline to carry 1.1 million barrels a day of western crude to refineries and export terminals in eastern Canada. Since then, oil prices have plunged and with them investment in Alberta’s oilsands.

Suddenly, the need for more pipeline capacity is less acute.

Then came another game-changer — Donald Trump.

Reversing an earlier decision made by his predecessor Barack Obama, the president gave the go-ahead to the Keystone XL pipeline, another TransCanada venture.

Since Keystone can transport 830,000 barrels a day of Alberta crude to the American Gulf Coast, TransCanada no longer needed Energy East. Why compete with yourself ?

The logic of this was lost, or at least ignored, by Trudeau’s foes.

Federal Conservative party deputy leader Lisa Raitt accused the Liberals of a “disastrous” handling of the energy sector that will cost thousands of lost jobs and billions in lost investment dollars.

Not to be outdone, Brian Jean, a candidate for the leadership of Alberta’s United Conservative Party, said the system of equalization payments that currently delivers Alberta cash to Quebec provincial coffers is “broken.”

He’s angry with Quebec for opposing Energy East, and in retaliation he and others in his party would like to negotiate an equalization deal more favourable to Alberta. It’s hard to say where this could end. But a prolonged spat between Quebec, on one side, and Alberta and Saskatchewan on the other is bad for Canada.

One important step the federal Liberals can take is to ensure the construction of the Trans Mountain pipeline from Alberta to the British Columbia coast goes ahead.

That pipeline is still needed to get western oil to market. Both the Liberals and the National Energy Board have approved it.

But the B.C. government — along with some environmental and First Nations groups — wants to stop it.

Seeing that project move forward would prove Ottawa can balance Canada’s economic and environmental interests.

And it would show we can build a pipeline and a nation at the same time.