If aliens from another planet recently visited Canada they would have to be forgiven for thinking that Justin Trudeau is to blame for everything that is going wrong in the oil-and-gas sector.
Trudeau’s refusal to pick up his predecessor’s pom-poms and be sufficiently pro-pipeline combined with his inability to silence Montreal mayor Denis Coderre – who until now I had been under the mistaken impression was a completely different person – seem to have blown up into Canada’s latest constitutional crisis.
Eager to score some political points by painting the Liberals into a corner, the now-opposition Conservatives recently introduced a motion in the House of Commons calling on the government to support the proposed Energy East pipeline, which would transport Albertan oil to refineries in New Brunswick.
The Liberals rejected the motion, saying that pipeline proposals must sink or swim on their merits considered by regulators with the technical expertise to make such determinations. Such a sensible approach was of course met with predictable howls of outrage from the Official Opposition.
It might seem obvious to some that a policy of forceful advocacy favoured by the Harper government is the best way to get pipelines built, but I am not at all convinced. Despite 10 years of bluster, it is notable that Stephen Harper’s Conservative government didn’t succeed in getting a single pipeline constructed to bring Albertan oil to the coast.
Whether it was goading U.S. President Barack Obama by telling him that the Keystone XL pipeline will be built one way or another, or attempting to rig various process in favour of constructions to the chagrin of the First Nations with whom the feds must ultimately consult, it is debatable whether the bellicosity of the last decade was really the best way forward. When it looks like you only care about the “pros,” as Harper did, you lose credibility with those who aren’t completely convinced.
Perhaps an honest broker can get more flies with honey than vinegar, to mix cliches just a bit.
Unfortunately the motion came during what has been a highly emotional few weeks in pipeline politics, with old wounds being torn open by some tone-deaf comments being made in opposition to the project by some Quebec municipal leaders.
Those leaders led by Montreal Mayor Denis Coderre decided now was the time to pick at scabs by coming out against the project with an emphasis on self-interested economic factors. Whatever the merits of Energy East, it takes a tremendous amount of gall for leaders who receive such significant indirect benefit from the oil-and-gas industry via transfer payments and federal spending to invoke the lack of direct economic benefit as grounds for their opposition.
Denis Coderre’s insistence that the project brought little economic benefit to Quebec was not only myopic in how it defined “benefit” but, in these hard economic times, came across as profoundly ungrateful to Alberta’s role as an important net financier of the federation. I can certainly appreciate why this poorly timed and communicated statement brought renewed calls to “let the eastern bastards freeze in the dark.”
There is no doubt that Alberta is hurting, with more jobs being lost on an annual basis than at any time since the oil crash of the early 1980s, and the desire to help the people who work in the province’s energy industry is entirely understandable. The hurt is no doubt exacerbated by the fact that each barrel of Alberta oil is worth substantially less than oil produced elsewhere because it is so expensive to get the product to market.
But the Energy East pipeline is at best a long-term fix to what ails the struggling province. Even if the project ultimately receives the green light to proceed it will be many years before shovels break ground. By that time the economic conditions facing the oil industry will be entirely different.
This isn’t to say that it isn’t in Alberta’s best interest to advocate for the pipeline, nor is it to say that were this pipeline already built it wouldn’t put the province on significantly better footing. But the short-term problem of what to do about struggling oil-producing regions and the long-term question of whether the Energy East pipeline should proceed are very different. There has been an implicit coupling in the public discussion between the current economic turmoil the province finds itself embroiled in and the Energy East pipeline, yet the notion that the latter is the solution to the former is pure fantasy.
The climate change dimension to Energy East has also factored into the discussion. The question on many people’s minds is what effect a pipeline would have on greenhouse gas emissions and our commitments to reduce them? Will a pipeline increase the amount of fossil fuels we’re pulling out of the ground (and thus our emissions) or simply allow producers to finally get what their oil is worth, rather than losing a good chunk of the price to transportation costs? For people like me who are concerned about climate change, this is a critical question before the project gets a thumb up or down.
I’m inclined to believe it is the latter, but there isn’t a clear answer to that question, so the Liberal plan to actually look at what effect the project will have on emissions “upstream” seems eminently reasonable – albeit a departure from how such projects have been evaluated in the past.
Unfortunately, this is a debate that has lately been anything but reasonable.
Kyle Carruthers is a born-and-raised Yukoner who lives and practises law in Whitehorse.