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An Open Reply to Joe Oliver's Propaganda for the Petro State

ENERGY & EQUITY: Nikiforuk joins the fray.

Andrew Nikiforuk 11 Jan

Award-winning journalist Andrew Nikiforuk writes about energy for The Tyee and others. Find his previous Tyee articles here.

Canada's Natural Resource Minister Joe Oliver has just pulled a Hugo Chavez: he's penned a formal and desperate attack on democracy and interfered in the nation's allegedly impartial regulatory regime. And all for bitumen exports to China.

In the process the Tory panjandrum has unwittingly highlighted the nation's dangerous descent from messy democracy to full blown petro state.

On Jan. 9 Oliver accused foreigners and "radical groups" of trying to derail the Gateway Enbridge pipeline as well as Canada's tardy attempts to diversify foreign trade.

The minister's petro rhetoric also charged "jet-setting celebrities" with lecturing Canadians on how to develop their natural resources. Oliver, a former investment banker and a "one per center," even ridiculed Canada's regulatory energy process, now 90 per cent funded by industry levies, as too slow, complex and cumbersome.

The implications, of course, are startling. Oliver basically told the world that Canada's right-wing Tory government would prefer do away with a democratic process in which 4,500 citizens can oppose a project. That would hasten, of course, the connection of Alberta's tar sands to their eventual customer China -- a nation where government planners simply bulldoze Aboriginal dissent and attack local communities with armed force. It's nice to know which side Oliver is on.

The minister's statements signal Canada's maturity as a dysfunctional petro state. Oil exporting nations, which run on oil loot instead of taxes, don't function like real governments because over time they come to represent hydrocarbons the same way plantation economies once championed slaveholders.

Ultimately, most petro states, from Russia to Saudi Arabia, fear dissent, transparency, fair markets and good governance. And Oliver's letter proves the case with a clarity that should strike fear into the heart of every veteran, every Aboriginal, every Canadian.

Piping in the misinformation

For starters Oliver's letter is a pipeline of misinformation. The Tory even calls a foreign funded pipeline designed to send raw unprocessed bitumen to refineries in Imperial China "an urgent matter of Canada's national interest."

But that's the crudest of fictions. A private $6-billion proposal funded entirely by 10 foreign companies (China's Sinopec is one) has nothing to do with Canada's prosperity or security. But it will support the one party petro state that has ruled Alberta for 40 years and that now forms the base of Canada's majority government. It would also provide energy for a growing Asian empire that might soon aggressively challenge the global position of the United States the same way Japan did in the 1940s. From any thoughtful perspective the Gateway proposal remains a risky and foolhardy piece of political engineering.

Oliver's letter also says that environmental groups and First Nations opposed to the Enbridge pipeline are largely funded by foreigners or a couple of U.S. foundations. Oliver's insulting implication is that Canadians only question the dominance of Big Oil when paid. But that's just nonsense.

In fact, Oliver needs to do some serious math and check his unethical sources. First, the size of environmental funding from U.S. charities ($300 million over a decade) is puny. It was used to fight industrial fish farms, tanker traffic and ruthless forestry practices. This Robin Hood funding (crudely, much of it comes from foundations started by oil wealth) gets punier on the tar sands front. Probably no more than $30 million has helped green groups fight Big Oil over the last five years. That sum is peanuts compared to $30 billion that foreign companies and states poured into the tar sands over the last decade. Or the $25 million spent by the Alberta government on bitumen propaganda last year. Or the tens of millions spent by the Canadian Association for Petroleum Producers. It's also tiny compared to the amount of annual revenue Ottawa makes from bitumen ($5 billion, according to the Canadian Energy Research Institute) And the $30 million is practically insignificant compared to the $1 billion worth of subsidies granted to oil companies every year by Ottawa's oil addicted libertarians. In other words, Oliver is as deluded as Syria's Bashar al-Assad, who also maintains that foreign interests are trying to destabilize his country.

For the record, foreign-owned bitumen companies taxed by Ottawa now pay a healthy chunk of Oliver's salary. (All corporate oil taxes go into general revenue because Ottawa's gamblers don't believe in saving oil money for future generations.) Foreign dollars also account for half of $60-billion merger activity in the industry says a 2011 report by the Canadian Energy Research Institute. These foreign investors include China, Thailand, Norway, France, Korea and the United States. (So U.S. environmental money is really watching U.S. Big Oil money in Canada because Americans care more about transparency and fairness than most Canadians dare.)

Accepting money from any group or organization, however, involves moral risks for environmental types and governments alike. A competent resource minister might well ask how more than $16 billion worth of Chinese investments in bitumen projects might impact or erode our regulatory, economic and political sovereignty?

What do resource ministers do?

In many oil producing states such as Norway or Uganda resource ministers perform their jobs competently. They do so by representing their citizens instead of resources and they put the national interest ahead of Chinese ambitions. They also save wealth for future generations and actively monitor how oil extraction can cripple other economic sectors such as agriculture and manufacturing.

Whenever oil becomes a nation's dominant export, the Dutch Disease follows. The symptoms are heavy: petro dollars inflate the national currency making it harder for other sectors to export, which, in turn, results in a loss of diversity in the economy. Oliver's failure to address these formidable curses illustrates that only one foreign group of radicals is now selling Canada short and they happen to be Ottawa Tories.

In his letter Oliver omits any mention of risks associated with expanding bitumen production rapidly. That's because Canada's single-minded petro state hasn’t done a formal socio-economic impact risk assessment as recommended by Parliament in 2007. But such foresight is urgently needed. Oil claims the most violent volatility of any global commodity. As a consequence governments that depend on oil revenue instead of taxes take on, in aggregate, boom and bust economies, revenue floods and droughts and powerful currency storms. Oliver's failure to discuss let alone address these risks again reflects the government's extreme plan to enrich China and impoverish Canada. (Subservience is one of Canada's oldest resources.)

Oliver's correspondence confirms Canada's status as a tin pot nation. Ottawa is more interested in quick and dirty revenue than in gradual wealth creation. Perhaps David Hughes, who worked for Natural Resources Canada for more than 30 years and knows more about energy than Stephen Harper's entire cabinet, says it best: "Canada lacks any sort of energy strategy other than to sell raw resources down the pipe as fast as possible hoping that the resulting economic impact will somehow stoke the political fortunes of the governments of the day -- in this case Harper's majority government and the Alberta government. Mr. Oliver's open letter underscores that dissent will be discouraged."

Just say no

In sum Oliver's letter reveals the audacious poverty of Canada's current energy agenda: Ottawa wants to live off the proceeds of a resource largely owned by foreigners with no Canadian savings plan for the future. To distract attention away this disastrous scheme, the Tories have resorted to propaganda that blames foreigner radicals for all the uproar. How Saudi-like.

But Oliver is right about one thing. Canadians are now faced with a historic choice: they can support a radical petro state that wastes a valuable inheritance; that undermines climate change science; and that actively courts an industrial Communist regime that squashes dissent. Or they can reject this extreme ideological agenda by saying NO to a commercial pipeline that will never be in the national interest.

By saying NO to the Enbridge Gateway Pipeline, Canadians can really say YES to decency, change and renewal. A NO means YES to energy policy in the national interest instead an unethical agenda drafted by foreign oil lobbyists. A NO means YES to protecting irreplaceable assets: our salmon heritage, the Great Bear Rainforest; the diverse richness of coastal First Nations and the future of our children.

A NO means YES to a national debate on the management of oil wealth for the 99 per cent. A NO means limiting development of a strategic yet dirty resource to North American markets. And a NO means YES to a clean energy transition that acknowledges both wasteful energy consumption and acidification of the ocean as costly ethical problems.

Last but not least, a resolute pipeline NO means a big YES to democracy or as one great but foreign statesman put it, "a government of the people, by the people and for the people."  [Tyee]

Read more: Energy, Politics, Environment

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