Alberta’s pipeline problem is not from want of sharing
Following President Joe biden’s veto of the Keystone XL Pipeline, one commentary on the bloomberg business website asserted that “Alberta has only itself to blame for the pickle it’s in. If its leaders had been more willing to share their wealth a decade ago, when people were still concerned about oil running out, they might have got their pipelines built.”
Not willing to share the wealth? What about the $630 billion of net transfers that have been taken out of Alberta and shared with the rest of Canada since 1961? Or in the past decade alone, prior to 2020, during which the net transfers out of Alberta still averaged $20 billion a year? by any fair accounting, there’s been plenty of “sharing” of Alberta’s energy wealth.
The article criticizes Alberta for not “giving british Columbia a financial incentive to host export pipelines.” The author evidently is not familiar with Canada’s Constitution. Neighbouring provinces do not have the legal authority to blackmail one another by blocking the transportation of goods across provincial boundaries.
The Constitution’s Section 121 declares that, “All articles of growth, produce or manufacture of any one province … shall be admitted free into each of the other provinces.” And to ensure the unrestricted flow of interprovincial trade, Section 91(2) gives the federal government the explicit power to regulate all “trade and commerce.” The well-established doctrine of “paramountcy” ensures that federal pipeline policies prevail in any conflicts with otherwise valid provincial laws. This authority is supplemented by the Section 92(10) “declaratory power,” which allows Ottawa to declare a “local works … extending beyond the limits of the province” to be “for the general advantage of Canada.” In the 19th century this meant railways, canals or telegraphs; in the 20th century, interprovincial pipelines, among other things.
In February 2020, the Supreme Court declared british Columbia’s various attempts to block the Transmountain expansion and new LNG lines unconstitutional, although by then the damage had been done. Ten years of delay doubled the costs of TMX and further eroded investor confidence in Western Canadian oil and gas. The Trudeau government could have quickly quashed british Columbia’s unconstitutional attempts to block new export pipelines. but with the 2019 election on the horizon — and their 17 seats in the Lower Mainland on the line — the Liberals did nothing to pressure the minority NDP government to stop its unconstitutional behaviour, thus putting short-term partisan advantage ahead of Canada’s public interest.
And, yes, developing our oil and gas resources is in all of Canada’s interest, not just Alberta’s. In 2018, the energy sector constituted more than 10 per cent of Canada’s GDP. It creates direct employment for 282,000 Canadians, and indirectly another 550,000 jobs. Oil and gas constitute Canada’s largest export. And they are the basis of Alberta’s $20-billion-a-year contributions to help pay for better health and social services in the poorer “have-not” provinces. Shut down Alberta’s energy sector and Canada can kiss goodbye to all of this.
Julian Lee, bloomberg’s author, is also wrong when he invokes the spectre of the “post-hydrocarbon world embraced by president biden” and the necessity for Albertans to immediately “put themselves on the path to their post-oil future.” yes, global oil consumption is going to stop growing in the coming years. but it’s not going to decrease, much less disappear. The rest of the world wants the same levels of public health and prosperity enjoyed by such First World economies as the u.s., Canada and europe — all of which use energy more intensively than the global average. And Joe biden will soon discover what his Pentagon generals already know: armies, navies and air forces run on oil.
Global oil consumption very likely will remain at or around 100 million barrels per day for several more decades. Where will this oil come from? OPEC? russia? Iran? Iraq? Venezuela? These are not great choices. Canada — more specifically, Alberta, home to the third-largest proven oil reserve in the world — carries none of the baggage these other sources do. As a former governor of Montana once said, “you don’t have to send the national guard to Alberta.”
Julian Lee is right about one thing: “If (Alberta) can’t develop its own export system, those riches risk being left in the ground.” but that’s not an option Albertans will accept. Albertans are not going to sit by idly and let climate-change alarmists in Ottawa and their foreign-funded ENGO allies destroy what we have built.
As derek burney recently observed: “the only way Alberta can grow and prosper economically is through the continued development of its energy and related industries and if (it) can’t do it under the Canadian federal system, Albertans will be obliged to look at an alternative political regime.” derek burney was Canada’s ambassador to the united States. He gets the big picture. And so do Albertans.