Marking 20 years
of bold journalism,
reader supported.
Opinion
Energy
Environment

My Cage Fight in Fort McMurray

Alberta invited me to give a talk. Next thing I know, I'm duking it out with the VP of Enbridge Northern Gateway.

Michael Byers 9 Mar 2012TheTyee.ca

Michael Byers holds the Canada Research Chair in Global Politics and International Law at the University of British Columbia.

image atom
Scene of the battle: Conference room in Fort McMurray's Quality Hotel.

Fort McMurray is full of guys who look as if they could take care of themselves. In contrast, I wouldn't be much help in a bar fight -- anymore.

As a much younger man, I earned my share of callouses on a hardscrabble family farm. The oil workers of Fort Mac remind me of the folks I knew in rural Saskatchewan: good-hearted people working hard to make a buck in the face of bad weather, fluctuating global markets and profit-driven corporations.

Paul Fisher is tall, slim, and handsome in a well coifed-and-tailored sort of way. But when the VP of Enbridge Northern Gateway stood up to introduce himself -- at a conference organized by the Northern Alberta Development Council -- I couldn't help but think that he looked a bit soft.

A quick scan of the conference program confirmed my instinct: Fisher's short biography, which he would have submitted to the conference organizers, mentions his service on the board of Calgary's Priddis Greens Golf and Country Club, where memberships cost $39,000. There were other "one-percenters" in the room, but Fisher was the only one to flaunt it.

For the most part, the audience was made up of mid-level managers, consultants, government bureaucrats and union representatives. The conference hall itself, in the hopefully named Quality Hotel, smelled faintly of bacon and beer.

My brief was to explain the challenges facing Alberta's two proposed bitumen pipelines -- Keystone XL and Northern Gateway -- as seen from a non-industry, non-Albertan perspective. Fisher's job, not surprisingly, was to explain my concerns away.

Keystone is dead

I began by questioning the widespread assumption that the Keystone XL pipeline, which would run from Fort McMurray to refineries on the Texas Gulf Coast, will be approved by U.S. President Barack Obama once he's re-elected on Nov. 6.

I pointed out that Obama has long spoken of climate change as one of the great challenges of our time. That he appointed Stephen Chu, the Nobel Prize-winning physicist and climate change activist, as U.S. Energy Secretary. That he sought a nationwide cap-and-trade system, only to have the bill die in the Senate. That he used his executive powers to raise fuel efficiency standards for automobiles and light trucks significantly. That he refused to bow to strong pressure from industry and some parts of the labour movement to approve Keystone XL during the current election campaign.

You could have heard a pin dropped when I reminded the audience that a second-term president doesn't have to curry favour with anyone since he cannot run for election again.

Radical environmentalists

Turning to the Northern Gateway pipeline to Kitimat, I reminded the audience that the global environmental movement started in British Columbia; that this province is where Greenpeace was born. That the battle to save old growth forest in Clayoquot Sound catalyzed a deep rooted, widespread, organized and determined community of environmental activists. That their efforts resulted in the creation of the Great Bear Rainforest and the maintenance of a de facto moratorium on oil tanker traffic along B.C.'s central and northern coast.

That Canadian environmental groups were happy to take foreign donations, just like their opponents at the Fraser Institute, but that they are in no way dependent on foreign money for their commitment and capacity to run effective campaigns.

The audience looked positively reflective when I explained that attempting to demonize the environmental movement as "radicals" controlled by foreign interests would only strengthened their commitment -- and increase the generosity of their mostly Canadian donors.

Aboriginal rights

People continued to listen politely as I explained the considerable protection accorded un-extinguished Aboriginal rights under Section 35 of the Constitution Act 1982, as elaborated in the Supreme Court of Canada's decision in the Delgamuukw Case. I quoted The Globe and Mail's Jeffrey Simpson, who in January wrote that "the Gateway pipeline has entered the impenetrable thickets of Aboriginal politics, title and law -- meaning it won't be built for a very long time, if at all."

I reminded the audience that Aboriginal concerns postponed the Mackenzie Valley natural gas pipeline for 10 years, even before Section 35 was adopted. A pipeline that ultimately was not built, after technological change -- in the form of shale gas extraction by fracking -- rendered it unnecessary and uneconomical.

It was time, I suggested, for the industry to consider alternatives to Northern Gateway, including refining more bitumen in Alberta and shipping the value-added synthetic crude east to Quebec and the Atlantic provinces, where it could replace the 50 per cent of Canadian oil consumption now supplied by "unethical" sources.

Enbridge strikes back

Paul Fisher responded by accusing me of spreading falsehoods. "Make sure you separate fact from fiction," he told the audience. "Go to our project website. Make an informed decision based on logic, not emotion. The more that people understand the project, the more they support it." He gave as an example the Northern Gateway Alliance, a supposedly grassroots group that is financially supported by Enbridge.

Specifically, Fisher disputed the existence of a moratorium on oil tanker traffic, saying that condensate tankers were already arriving in Kitimat, and that liquefied natural gas exports through that port had already been approved.

I replied that I'd said "de facto" moratorium, that condensate was mostly derived from natural gas and not oil, and did not pose anywhere near the same environmental risk as bitumen in the event of a spill.

Fisher then launched into an attack on environmental groups, saying that the biggest problem with them was not that they receive outside funding, but that their concern is about climate change rather than local environmental impacts. The pipeline battles are, he said, "part of their strategy to stop the development of the oil sands."

And those, as a member of the audience shouted out, are "fighting words" in Fort McMurray.

Fisher was no kinder to First Nations, who he accused of "using projects as a way to get the federal government to the table to talk about land claims." He said that, over 10 years of consultations with First Nations, there had been a total of 17,000 meetings. He also made it clear that, from his perspective, consultation is about educating backward First Nations on the otherwise evident economic advantages of the pipeline. "We have to meet, listen, engage, and understand the mutual benefits," he said.

I replied that B.C. coastal First Nations already have an economy: in the form of sustenance hunting and fishing, a substantial salmon fishery, and a growing eco-tourism industry. The choice, for them, isn't between doing nothing and a few pipeline-related jobs.

I also suggested that the number of meetings is less relevant than the seriousness and cultural sensitivity with which they are conducted; that the duty to consult isn't simply a box to be ticked on the way to project completion; that consultation, indeed, can only ever be meaningful if a possible outcome is "no."

Prices, not markets

Fisher told the audience that Northern Gateway was not about gaining access to any one market but rather about achieving the best possible price -- and therefore more royalties for the Government of Alberta to use for education and healthcare. As he explained, the price for Alberta bitumen is currently discounted because it is sold into one market only, where it has to compete with a surplus of heavy oil from Venezuela.

Fisher went so far as to claim that $28 billion in "incremental value" is being "left on table" because Alberta bitumen cannot access world markets, and that the additional incremental revenue forgone by the Alberta government amounts to $42 billion and 460,000 person years of employment. As for the rest of Canada, Fisher claimed that it is missing out on $37 billion and 97,000 person years.

Fisher did not respond when I brought up the subject of "Dutch Disease," though from the look on his face he knew full well what I meant: the rapid expansion of the tar sands has contributed to a 40 per cent increase in the value of the Canadian dollar since 2004, and that in turn has contributed to the loss of hundreds of thousands of manufacturing jobs in Ontario and Quebec. The Netherlands had a similar experience in the 1970s, after the discovery of copious amounts of natural gas in their portion of the North Sea: this explains the name of the phenomenon, which might now be taking more money out of the Canadian economy than the tar sands are putting in.

I also pointed out that many of the principal beneficiaries of the tar sands -- the owners and shareholders -- are located offshore. Here in Canada, the extracting and shipping of unprocessed bitumen creates fewer jobs per dollar of investment than just about any other industrial activity except, perhaps, felling and shipping raw logs.

Fisher looked almost sullen when I pointed out that Alberta has some of the lowest royalty rates in the world. These include a variable one-to-nine per cent rate on tar sands projects that have not yet recovered their capital costs, and a 25-40 per cent rate thereafter. It's a surprisingly low rate of return for a publicly owned non-renewable resource, and there's little doubt that the Government of Alberta could significantly increase its revenue without allowing any more projects. That is, if the province's new premier -- Alison Redford -- was willing to take on Big Oil.

But if Albertans remain intent on flushing it all away, they'll need a drain. And that means, for Enbridge, there are billions to be made.  [Tyee]

Read more: Energy, Environment

  • Share:

Facts matter. Get The Tyee's in-depth journalism delivered to your inbox for free

Tyee Commenting Guidelines

Comments that violate guidelines risk being deleted, and violations may result in a temporary or permanent user ban. Maintain the spirit of good conversation to stay in the discussion.
*Please note The Tyee is not a forum for spreading misinformation about COVID-19, denying its existence or minimizing its risk to public health.

Do:

  • Be thoughtful about how your words may affect the communities you are addressing. Language matters
  • Challenge arguments, not commenters
  • Flag trolls and guideline violations
  • Treat all with respect and curiosity, learn from differences of opinion
  • Verify facts, debunk rumours, point out logical fallacies
  • Add context and background
  • Note typos and reporting blind spots
  • Stay on topic

Do not:

  • Use sexist, classist, racist, homophobic or transphobic language
  • Ridicule, misgender, bully, threaten, name call, troll or wish harm on others
  • Personally attack authors or contributors
  • Spread misinformation or perpetuate conspiracies
  • Libel, defame or publish falsehoods
  • Attempt to guess other commenters’ real-life identities
  • Post links without providing context

LATEST STORIES

The Barometer

Do You Think Naheed Nenshi Will Win the Alberta NDP Leadership Race?

Take this week's poll