‘Saga of three pipelines’ is a full-blown national crisis
Canada is endowed with the thirdlargest oil reserves in the world, but lack of access to world markets means our oil is sold far below world prices. Each day, this “captive market discount” hands a $40-million gift to Americans.
Adding insult to injury, the discount also drives tens of billions of dollars in Canadian investments to American oilfields.
Now, after seven years and billions of dollars spent by proponents of three oilexport pipelines, hopes for revival of Canada’s oil industry has come down to one extremely troubled project. How could this possibly have happened?
The answer lies in politically motivated decisions that progressively narrowed those three proposals to what was always the most fraught project. Here is a précis of what I’ll call “the saga of the three pipelines.”
Enbridge filed regulatory applications for the Northern Gateway pipeline to the North Pacific port of Kitimat in 2010. The Harper cabinet approved the project in 2014 after a thorough and intense review by the National Energy Board. However, in September 2016, Prime Minister Justin Trudeau cancelled the project. “The Great Bear Rainforest is no place for a pipeline,” said Trudeau. It mattered not that the socalled Great Bear Rainforest hadn’t even been designated as such until after the regulatory review.
Some First Nation bands were pleased, but not those most affected by the loss of employment and financial benefits.
Recently, the Lax Kw’alaams, representing nine First Nations tribes, filed a lawsuit claiming that the Great Bear Rainforest prohibition against development on their traditional lands shouldn’t have been implemented without their consent.
The tragic irony is that Northern Gateway could have been built by 2019. And it would have created jobs and economic benefits in a part of the province that desperately needs it, unlike Vancouver.
In 2014, TransCanada filed regulatory applications for the Energy East Project to move Canadian oil to refineries in Montreal and New Brunswick, while providing vital access to Atlantic tidewater. The project would have replaced the hundreds of foreign-flagged oil tankers that sail up the St. Lawrence each year carrying half a million barrels per day to Montreal.
Moreover, Energy East would use existing pipelines formerly carrying natural gas. The project had all the hallmarks of a win-win nation builder. But, in the face of strident opposition from politically influential Quebec, the Trudeau government imposed an “upstream emissions test” on Energy East, blatantly ignoring the emissions emanating from foreign oil suppliers and those hundreds of tankers carrying their oil.
The government then announced a restart of the entire NEB regulatory hearing process with newly appointed board members. Realizing that the Quebec votes were more important to the Trudeau government than their project, TransCanada abandoned the project after spending $1 billion.
The Trudeau government’s cynical and politically motivated elimination of Northern Gateway and Energy East left the Trans Mountain Expansion as the lone route to tidewater. It should have been perfectly clear that the project would face vastly more strident opposition than the other two projects.
Trudeau himself provided justification for that opposition during the federal election campaign, attacking the NEB as lacking “public trust” — the very same NEB that is respected worldwide for its technical expertise and unbiased professionalism. And the NEB that had served both Liberal and Conservative governments with distinction for decades.
Now Trans Mountain opponents, including angry protestors chaining themselves to construction sites, use the prime minister’s words to support their claims that NEB approval of the project was flawed.
Finally, after investing a billion dollars, Kinder Morgan’s responsibility to shareholders left the company no choice but to suspend construction and set a firm deadline for project cancellation unless the conditions for completion are in place.
Over the nine months since the Green Party-controlled NDP government of B.C. vowed to use “all the tools in the toolbox” to stop the Trans Mountain expansion, the prime minister and members of his cabinet have repeatedly stated the project will be built. But no action was taken to enforce federal jurisdiction to make that happen.
Now, for Trudeau, the oil industry and the country, the saga of the three pipelines has exploded into a national crisis. The stakes are no longer just a crucial route to tidewater, but also a test of Ottawa’s constitutional jurisdiction over nationally important projects, a destructive breakdown in relations between two provinces and possibly a national unity crisis.
Premier John Horgan’s position will not change, because the very survival of his NDP government is in Green Party Leader Andrew Weaver’s hands.
Now we await announcement of what actions the Trudeau government will take to save Trans Mountain. Taxpayers should hang onto their wallets, as both the federal and Alberta governments have signalled funding of the $7.4-billion project is an option. That would be a lamentable, but unsurprising, chapter in a saga wherein politics killed the first two pipelines and their killers force taxpayers to pay for their mistakes by funding the third.