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Pipeline politics and the 2015 election

October 7, 2015

3-minute read

In early 2012, then Natural Resource Minister Joe Oliver dropped a bombshell on BC. He asserted that Enbridge's proposed Northern Gateway Pipeline was in the national interest, but, he warned, "environmental and other radical groups" were undermining this effort to diversify Canada's export markets.

If anything, Oliver's letter only inflamed opposition to Enbridge's pipeline. In the months that followed, mass protests dogged National Energy Board (NEB) hearings, mostly reflecting deep concerns about spills on land and at sea.

Flash forward three years and pipelines are facing major hurdles in every direction they are proposed. Just in the recent news cycle, consider the following:

Case 1: Eight BC First Nations began a court challenge against the federal government's 2014 decision to approve Northern Gateway. The case will be fundamental to the future of pipelines in the context of First Nations rights and title.

Case 2: Democratic presidential hopeful Hillary Clinton came out against TransCanada's Keystone XL pipeline. After years of delay and widespread protest along the pipeline route, President Obama is anticipated to officially rule against KXL.

Case 3: To the east, Quebec Premier Couillard states that he is yet to be convinced that the economic benefits of TransCanada's Energy East pipeline project outweigh the substantial environmental risks.

Case 4: Alberta Premier Notley publicly called for a change in the terminus of Kinder Morgan's proposed Trans Mountain pipeline expansion, from Burrard Inlet in the heart of Metro Vancouver to Roberts Bank just outside the city. An NEB decision is still pending, but a year ago, pipeline politics erupted on Burnaby Mountain when site testing and drilling by the company met with massive protest and civil disobedience.

Surprisingly, Election 2015 has failed to give expression to these concerns about pipelines at the federal level. None of the main three parties have ruled out new bitumen pipelines. Prime Minister Harper backs all pipeline projects, and has deployed considerable government resources to advance them.

The Liberals and NDP are unified in opposition to Enbridge's Northern Gateway project, while being publicly open to other options, although they differ in which pipelines they open to considering. Both have argued that the Conservatives' shredding of environmental regulations is to blame for failure to get new pipelines online. This presumes that restoration of environmental regulation would build the "social license" to proceed.

In 2015, it is clear that no one wants a bitumen pipeline running through their backyard. And given the terrible safety record of the industry, with thousands of spills over the past decade, why would they?

The nature of pipeline and tanker operations over rugged terrain and ocean conditions means it is not a question of if there will be a spill, but when and how bad it will be. One recent estimate from Simon Fraser University put the potential economic damages from a major spill in Metro Vancouver from the Trans Mountain pipeline at $2-5 billion.

Even absent a spill, hundreds of oil tankers plying the BC coast would be disruptive to already existing fishing and tourism jobs. Meanwhile, local benefits in the form of new jobs tend to be miniscule, once the construction phase is over.

While provincial governments have not rejected pipelines outright, they have responded to protest by stating conditions for approving them. The BC government has stated five conditions for approval of pipelines, including safety and spill response measures, addressing First Nations legal rights and title, and receiving a fair share of the fiscal and economic benefits.

Beyond spills, addressing climate change must also shape our decision-making. The world is marching towards a new climate agreement in Paris later this year, while scientists have warned that most of the world's proven fossil fuel reserves will need to stay underground.

Ontario and Quebec have jointly stated seven conditions before signing off on Energy East. The terms are similar to BC, but also include an assessment of greenhouse gas emissions – a welcome addition. Climate issues also factor into the southern option, where the Obama administration has made climate impact central to its (long-awaited) decision on Keystone XL.

If greenhouse gas impacts were considered in NEB hearings, as recommended by NDP's Mulcair, any serious review would likely reject them as inconsistent with climate action.

The good news is that economics of an energy transition to renewables are also looking better all the time, as the cost of clean energy comes down. Moreover, investments in green jobs and industries would create between 10-20 times the number of direct jobs per million dollars spent.

The public conversation in Canada needs to shift to creating new jobs and economic opportunities by investing in the green infrastructure of the future, a theme advanced by both Liberals and NDP. We should make this happen as a matter of national urgency rather than have change externally imposed on us.

Today's pipeline delays may be a blessing in disguise for investors. As former Bank of Canada Governor Mark Carney has warned, multi-billion-dollar fossil fuel infrastructure risks becoming a “stranded asset” as the world transitions to clean energy sources.

Marc Lee is a Senior Economist with CCPA-BC. Follow Marc on Twitter @MarcLeeCCPA.

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