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Rachel Notley: The Kinder Morgan Interview

Bill Tieleman sits down with Alberta’s premier to talk pipelines, climate change and jobs.

Bill Tieleman 13 Dec

Bill Tieleman is a former NDP strategist whose clients include unions and businesses in the resource and public sector. Tieleman is a regular Tyee contributor who writes a column on B.C. politics every Tuesday in 24 Hours newspaper. E-mail him at [email protected] or visit his blog.

“Approving Kinder Morgan establishes the best balance for climate change progress and success and job creation.” — Alberta Premier Rachel Notley

Controversial, confident, and completely committed to the Kinder Morgan pipeline proposal — that’s Rachel Notley.

In one wild week Alberta’s NDP premier went from visiting British Columbia to defend Kinder Morgan’s Trans Mountain oil pipeline project, to hearing chants of “lock her up” as anti-carbon tax protestors echoed Donald Trump’s attacks on Hillary Clinton, to reaching a national agreement on carbon pricing with Prime Minister Justin Trudeau and most premiers.

Notley showed in a Dec. 5 interview with The Tyee that she is not easily intimidated by either protestors or politicians in her mission to transform Alberta from its overwhelming dependency on oil, gas and coal into a climate change leader.

Many disagree with her on Kinder Morgan, including some First Nations and environmentalists, the federal NDP and BC NDP leader John Horgan — a friend and former colleague of Notley on the opposite side of Canada’s only NDP government on the pipeline expansion.

But Notley is not dissuaded in the least, and shows no fear in challenging what she sees as misconceptions about Kinder Morgan and Alberta.

Notley was politely outspoken in the interview, telling me that First Nations have no veto on Kinder Morgan or other projects and that the new pipeline will not change either the amount of oil sands bitumen produced and exported, nor the volume of greenhouse gas emissions.

Notley also said Alberta will fund the transition from fossil fuels in part with the extra money Kinder Morgan will produce through higher oil prices in a competitive market; that whales off the B.C. coast face more threats from other shipping than increased oil tanker traffic; and that new marine safety measures will make B.C. waters safer for all vessels — a Kinder Morgan bonus.

Notley and I worked together in the BC NDP provincial government and the labour movement, but I have not spoken to her since well before she was elected premier in May 2015. This interview took place on Dec. 5 at the Bayshore Hotel in Vancouver and, at more than 3,000 words is, I believe, the longest published from her visit to B.C.

(To be transparent, my strategy and communications firm has clients on both sides of the Kinder Morgan issue; the company has never been a client. My views are my own and clients have not been consulted on this column.)

Notley started off by explaining her government’s legislation to impose a 100-megatonne cap on the oil sands’ annual greenhouse gas emissions. The move is supported by the oil and gas industry and helped lead to the national carbon pricing deal and federal Kinder Morgan approval.

The legislation is part of a climate change plan that will eliminate the use of thermal coal to generate electrical power in Alberta by 2030. Coal-fired plants now provide 38 per cent of the province’s electricity.

And the plan will see renewable energy production, including wind, solar and hydro power, increase to 30 per cent in the same period. The oil sands emissions are 66 megatonnes a year now and would be expected to rise to 100 megatonnes by 2030 if no changes were implemented. 

But if the oil sands industry can keep the GHG emissions below the 100 megatonnes cap through improved extraction technology, emissions can eventually go down without cutting oil production. And Alberta’s new carbon pricing of $30 a tonne applies to the oil sands.   

It appears to dwarf British Columbia’s climate change efforts, Kinder Morgan notwithstanding — but Notley defends that too.

Tieleman: One of the most interesting things for me, Premier, is that you’ve said that Kinder Morgan — if the pipeline goes ahead — won’t increase the volume of oil produced and would diversify the market, resulting in a higher price for Alberta and Canada and more jobs. I don’t think most people understand that.

Notley: Well, basically the bottom line is we put in an emissions cap, and obviously the volume can grow under the emissions cap as technology reduces the amount of emissions associated with production of each barrel.

But nonetheless, as things stand now, industry has the capacity — they will pull everything they can out of the ground, as allowed under the emissions cap, and they will either put it on rail, which will cost them a lot more, which means that taxpayers and citizens will get a lot less for it, or they’ll sell it south to the U.S. at a discounted price. So no matter what happens, it’s going to go somewhere. It’s just a question of whether we get the maximum value for it as the owners of the resource.

And so Kinder Morgan really has no impact on volume, it has no impact on emissions — it merely has an impact on the rate of return.

Tieleman: The caps were established by your government in the last year.

Notley: Right — so as a result of our Climate Leadership Plan, one of the components of the plan — and this was negotiated by environmentalists, by industry, with Indigenous people and various and sundry communities at the table — one of the products of that plan was the 100 megatonne cap. Previous projections had the emissions coming out of the oil sands projected to go as high as 300 megatonnes, so this is quite significant.

Yes, it does allow for an increase from where we are now, but the cap means it will not go past a certain point and for volume to increase, industry will simply have to engage the technological wherewithal to reduce the emissions associated with extraction.

Tieleman: There’s some room before you hit the cap now, but that was going to happen regardless of Kinder Morgan?

Notley: Right, that’s exactly right. So we’re in the midst of debating the cap in the Legislature even as we speak — the opposition is rallying against it.

Tieleman: I’m sure Chris Alexander will help! [Conservative leadership candidate Alexander was on the podium when some protesters at an anti-carbon tax rally began chanting “lock her up,” a reference to similar chants at Donald Trump’s rallies when he attacked Hillary Clinton as “crooked.”]

Notley: “Yeah!” [Laughs.]

Tieleman: I work with a number of unions in construction, oil and gas, etc., so can you speak to transition, because you’ve talked about transition funding to renewables, with a reduction in fossil fuel dependency being financed by the additional money from the Kinder Morgan pipeline?

Notley: It’s not a direct financing, but we’re putting in place the carbon pricing system and that’s going to help fund the transition in a number of different ways.

Obviously the net outcome of adding Kinder Morgan is growth to our economy. So it counteracts any slight reduction that you would see as a result of our climate pricing and more than exceeds it, so we see growth — and that’s just the Kinder Morgan project — so it allows us to engage in what is I would say is the most ambitious climate change move in North America, and it allows us to do it relatively quickly without having a negative impact on the economy.

And the numbers are clear. It offsets considerably — by about 100 per cent — any of the negative outcomes that would have resulted in applying carbon pricing in the economy.

The other piece, of course, is coal — we use 60 per cent of the [thermal] coal that’s used in Canada right now and we made the decision to phase out by 2030, which is big.

Tieleman: In terms of transition for workers in the oil and gas industry and related construction, what’s your plan on that presuming Kinder Morgan goes ahead?

Notley: There’s a variety of things. In the most immediate form, we’re working with the federal government to look at “just transition” for people that are in coal — that’s our immediate focus right now.

Generally speaking, what we need is to be able to afford to diversify, so at this point it’s more of an investment in diversifying our economy generally, and so there’s a whole range.

We have a jobs plan we introduced in the fall budget last year, which included a number of investments to promote diversification as well as job creation throughout the province. Because between April 2015, right before we got elected, and June or July 2016 we lost about 65,000 jobs in Alberta, and so we’re producing jobs, we’re creating jobs, but we’re scrambling to keep up with it, and obviously the greater net back [on oil sales] that we get as a result of the Kinder Morgan project is huge.

Obviously too, Kinder Morgan itself immediately creates jobs — 35,000 person years of employment.

Tieleman: The NDP in B.C. is pretty much on the opposite side on Kinder Morgan. How does that factor into what Alberta is doing as an NDP government? What do you say to B.C. New Democrats?

Notley: Obviously I have a great deal of respect for John [Horgan]. I think that there’s much more that unites us than divides us, and I look forward to working with him on those things that unite us. On this issue we disagree.

What I hope though is by keeping the lines of conversation open and keeping the lines of discourse open we can establish a platform on which we can engage in civil discussion as we work through the process.

At the end of the day, I believe that this is the best balance — that approving Kinder Morgan establishes the best balance for climate change progress and success and job creation.

So I think it is ultimately in the best interest of British Columbians as well as Albertans, but you know, right now we’re going to have to agree to disagree. But I think we need to continue the conversations going forward and no matter who the government is, we’re going to work really hard with that government to try and get the project to move ahead.

Tieleman: I’m not sure if you’ve heard [BC Green Party Leader] Andrew Weaver today saying it’s a plot, a conspiracy — that the only reason you’re here is to sell Kinder Morgan to John Horgan, and you’re all one NDP so you’re all going to fall in line? It’s a little bit crazy.

Notley: Well I will say I came out here not expecting any immediate changes in people’s opinions, but rather to simply put out into the general sphere of discourse the ideas that an NDP-led Alberta government brings to the table, how this contributes to jobs in B.C. and how it contributes to progress on climate leadership, and how the pipeline is not actually in any way a symbol or an actual, factual contributor to greenhouse gas emission increases — and so that’s my role in this and I think there’s value to it.

But that doesn’t mean I expect to walk away from here with a whole bunch of people saying: “Oh you’re right! We’ll change our mind now!” That wouldn’t make sense.

What’s different is that under the federal government and the previous [Alberta] Conservative government and other Conservative governments, the answer has often been to simply tweet insults at each other or yell from different corners of the country at each other.

That’s not nation building, that’s not problem solving, that’s not laying out a path to resolution. That path is not necessarily an easy one, but you don’t get onto it if you don’t actually take a step on it and ask people to join you. It doesn’t mean they’re with you yet but...

Tieleman: What frustrates you most about the B.C. attitude, position, public — what’s most frustrating to you?

Notley: I wouldn’t even phrase it that way. I understand that people in the Lower Mainland in particular care very much about the ocean and the mountains and the environment — I mean, we all do. The coast is B.C.’s coast, but it’s also Canada’s coast.

And I hear the concerns about safety. But I actually think that we’re improving safety through this process. The fact of the matter is that the threats to the whale population, for instance, are greater from other types of ship traffic than they are from tanker traffic; that the six per cent increase in ship traffic attributable to Kinder Morgan is going to happen anyway as a result of other ship traffic.

But now what we’ve got after many, many years of efforts going back as far as the BC NDP government — we had requests going to the federal government for more support for coastal safety — well, now we’ve got $1.5 billion and we’ve got $150 million coming from Kinder itself and so the work is going on to increase the safety standards. So we’re going to increase safety standards to keep the Kinder Morgan product safe and in so doing we’re actually going to increase safety standards for all the other [ships] that are not double hulled and are also dangerous.

We’re actually going to increase the standards and our capacity to accommodate the concerns around the whale population as a result of moving ahead on this — so it’s a net benefit.

Tieleman: Are you somewhat satisfied the federal government, in terms of the Coast Guard and other things they’re doing, is going in the right direction?

Notley: I think it is. They’ve made a major investment. And there’s a major commitment to working with First Nations groups as well as others to look at the science-based, evidence-based strategies that can be put in place to not only protect the whale population, but also to look at the best practices as far as clean up strategies and spill response.

So I think it actually is a benefit and a bonus, and I absolutely understand that BCers wouldn’t rightly have been expected to accept this in the absence of the federal government’s investment on this matter — but they have now done and that needs to be acknowledged.

Tieleman: The rail question: some people I suspect will say “nobody’s going to ship by rail anyway so if this doesn’t go ahead — it’s not like we’re not going to have rail cars full of bitumen coming to Vancouver.” So, is the rail option still viable? Because it seems to me that it has a lot or all of the problems a pipeline would have, plus more.

Notley: Absolutely. Production will move up to that cap — it would have anyway. And as that happens more and more rail will be used and as we all know, rail is not as safe as pipelines, so it really doesn’t make a lot of sense. And also it pushes other things off of rail, other resource products, finished products get pushed off rail — we find that impacting farmers quite significantly in Alberta. So we need to have rail shipping the right stuff.

Kinder Morgan has a good safety record. This is a pipeline that has been in place for over 50 years and if it’s done right it can be done safely.

Tieleman: I find it highly ironic — which I’m sure you think of every day — 10 years of Stephen Harper, [former Alberta Conservative premier] Jim Prentice, everybody else — no pipelines. One year of Notley, Trudeau — two pipelines?

Notley: What are you going to do? [Smiles]

Tieleman: Only [ex-U.S. President Richard] Nixon could go to China, so...

Notley: That’s right. I absolutely think, as the prime minister himself said, our government’s unprecedented and very ambitious move on the climate change file really helped change the conversation in this regard all over the country. People know about our efforts, but maybe not in a lot of detail.

We are doing everything we can on our part on this, so that’s helpful. I think that generally speaking, it’s probably fair to say that both governments are willing to consider the argument of opponents and try to accommodate them, as opposed to labelling them “enemies of the state,” kicking them out of the hearings and then continuing in your own echo chamber.

And then you’re surprised that nobody had faith in the process you’ve gone through. Well, you know, that’s not the way you move forward in a pluralistic society like we are here in Canada.

Tieleman: Are you satisfied with the National Energy Board process? Tony Penikett [ex-NDP Yukon premier], Kim Baird [ex-Tsawwassen First Nation chief] and Annette Trimbee, [former Alberta deputy] did the second part of that and there’s been criticism, which I presume will be part of court battles. Are you convinced the NEB process — which the prime minister said was problematic and was going to change — is sufficient to withstand court challenges and the court of public opinion?

Notley: What it has to do is withstand court challenge. [The Enbridge Northern Gateway pipeline proposal was overturned by the Federal Court of Appeal in June for failing to adequately consult affected First Nations.] I suspect that the Kinder Morgan process was already starting to read the writing on the wall and was better.

More importantly, the process between the NEB report and cabinet decision I think has been far more robust under the current federal government, and they worked hard to deal with the concerns that were raised as a result of the Northern Gateway decision.

I think it’s important to move forward on improvements to the NEB process, but that’s not something that happens overnight. And so there’s integrity to it but the actions of the government since have added to that as well.

Tieleman: My last question concerns First Nations. Some are signing agreements [with Kinder Morgan], some are opposed, some are going to court — what do you say to those groups, at least those First Nations in British Columbia?

Notley: Obviously First Nations are stakeholders and partners in this issue. We know Kinder Morgan has made a good deal of progress in many of the communities along the line — $300 million in Mutual Benefits Agreements have already been put out there, which is a fairly sizeable amount of money. Others may or may not agree and ultimately they may go to court, and that is their right, so we’ll let the courts adjudicate on the concerns that they raise.

We need to accommodate their concerns, we need to hear their concerns, we need to do as much as we can to address them. We are not at a stage where we are saying that there is a veto, so it’s a process again of giving legitimate and meaningful and authentic air to the concerns that are raised by Indigenous people and doing everything we can to accommodate them.

Tieleman: Do you think people think there is a veto? There isn’t a veto as far as I can see from the courts, but you have the legal background — there isn’t a veto, there’s a consultation requirement.

Notley: Absolutely.

And so the interview ended — with Notley controversial and completely confident throughout. Agree or disagree with her views, but don’t doubt her tenacity.  [Tyee]

Read more: Energy, Politics, Environment

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