Rafe Mair Fund
Opinion
  |  
Energy
  |  
Local Economy
  |  
Federal Politics
  |  
BC Politics

Canada’s Bizarre and Destructive Descent into Petro Politics

Kinder Morgan battle brings Trumplandia to our country.

By Andrew Nikiforuk 16 Apr 2018 | TheTyee.ca

Andrew Nikiforuk is an award-winning journalist who has been writing about the energy industry for two decades and is a contributing editor to The Tyee. On April 7, he protested at the gates of Kinder Morgan’s Burnaby worksite as a civic duty. Kinder Morgan did not enforce the injunction that day and there were no arrests. Find his previous stories here.

Canadians have long lived on the assumption that we’re decent people and that the political dysfunction unravelling the United States could never happen here.

But the ugly rhetoric pouring forth from Alberta, the media and federal politicians on Kinder Morgan’s calculated suspension of work on the Trans Mountain pipeline shows that both petro and retro politics have consumed much of the nation.

The siren call of oil exports has also revealed our political class can be as swayed by lies, propaganda and extortion as any U.S. Republican.

The scale of Canada’s petro-inspired nastiness, which is probably startling Europeans and American observers alike, requires a few illustrations.

Kinder Morgan, a U.S. pipeline giant, started the verbal violence by blaming the B.C. government for pipeline construction delays even though the company told investors it expected those delays and more. It said it was halting non-essential work until May 31 and consulting on the future of the project.

In truth the ruthless and wily company could be setting up a NAFTA challenge under the treaty’s investor protection chapter.

After Kinder Morgan’s announcement, Alberta predictably went bananas.

Alberta deputy premier Sarah Hoffman even defended plans to cut oil shipments to B.C. with a Trumpian flourish. “Their government has caused pain to Alberta families,” puffed Hoffman. “We can certainly do the same, and we’ve put a bill on the order paper that enables us to do that.”

Alberta United Conservative Party leader Jason Kenney, who recently insinuated the Russians are funding B.C.’s pipeline protesters, then accused Notley’s administration of not being bellicose enough. “The Alberta NDP government’s weakness, fumbling and incompetence has given strength to the enemies of our biggest source of jobs and prosperity,” he said.

Business lobbyists joined the slug fest and yammered that if the pipeline isn’t built foreign investors will flee Canada like proverbial rats from a sinking ship. (In truth they already have. In the last five years Chevron, Shell, ConocoPhillips, Statoil and BP soberly considered bitumen’s volatile economics and climate liabilities and exited for rational reasons.)

Federal Natural Resources Minister Jim Carr argued last year that he might have to call in the troops and Finance Minister Bill Morneau vowed once again to use “all means under federal control” to ensure the pipeline is built.

So what exactly has got so many Canadian knickers in so many oily knots?

Let’s start with Alberta’s belligerence. Petroleum is the devil’s excrement and dominates the province’s law and economy.

Oil, the world’s most volatile and faithless commodity, hasn’t been kind to the province. It once provided the Alberta state with 30 per cent of its revenue and an excuse to lower taxes to win votes. Since 2015 lower oil prices combined with embarrassingly low royalties have dropped that revenue share to a painful eight per cent.

The income gap has created a long-term fiscal crisis that Alberta’s previous Conservative governments ignored with a string of deficit budgets. Conservative leader Jim Prentice identified the fiscal problem to Albertans during the 2015 election campaign — “In terms of who is responsible, we all need only look in the mirror,” he said. The Conservatives lost.

Notley is now counting on anticipated revenue from an unbuilt pipeline to balance the province’s budget within the next five years. How’s that for living beyond your means?

Oil, a political homogenizer, has constructed an Alberta First mentality as arrogant and thuggish as Russia’s petro-fuelled nationalism.

The resource industry brooks no critics and seemly commands every Alberta politician, regardless of ideology, like a robot. This explains why every Alberta leader sounds like a Saudi prince with one agenda — exporting more oil.

Yet Alberta’s current predicament, the overproduction of bitumen, has long been foretold.

A 2007 Bitumen Price Review warned Alberta’s government about “large dramatic price drops and recoveries” for bitumen. “Essentially there is a lack of adequate market access due to increasing production levels.”

Because bitumen isn’t being refined into higher value goods such as gasoline, the government is “absorbing a higher share of price risk” due to price volatility, the review noted.

The solutions — all rejected by the nation’s elites — include higher royalty rates, shutting in production or refining more bitumen at home. The Koch brothers, by the way, could give Alberta a few lessons on how to make a killing on “garbage crude” by upgrading and refining the stuff.

Notley, a classic petro politician, now represents the resource and resource developers instead of her citizens. Her government, which could introduce a sales tax but won’t, has no plan for the over-production crisis other than blaming B.C.

Given that the United Conservatives under Kenney appear poised to win Alberta’s next election, Notley hopes to hold onto power by sounding more petulant than Kenney.

In the process she has turned Kenney into a temporary socialist. The avowed free market man now supports state investment in a U.S. pipeline that the market considers too risky and uneconomic.

Let’s now deal with the “leftist” and “dangerous” government of Premier John Horgan. According to Alberta’s media, Horgan has challenged the rule of law and defied the Constitution by seeking advice on bitumen spills and supporting an entirely legitimate and ordinary challenge to a pipeline in the courts.

But Horgan, a practitioner of retro politics, is no climate change leader, fossil fuel hater or Constitution breaker. Like the previous BC Liberal government, Horgan believes taxpayers should subsidize LNG projects with generous tax breaks and continue industrializing northeastern B.C. with a record amount of hydraulic fracturing. Nor does Horgan apparently care if LNG exports make provincial climate targets impossible to achieve.

Intensive fracking in B.C.’s Montney shale basin now extracts a good percentage of natural gas liquids needed by Alberta to dilute its bitumen so the junk heavy crude can be moved in a pipeline.

Horgan’s opposition to the Kinder Morgan project hinges on his party’s minority status. He remains in power as long as the Green Party keeps him there, and the Greens don’t think uneconomic pipelines are a good way to fight climate change.

Horgan also knows that he can’t win the next election if he alienates voters in half a dozen NDP-held ridings along the pipeline route in the Lower Mainland by becoming a pipeline cheerleader.

Horgan is likely now hoping that the outcome of a Supreme Court of Canada case about jurisdiction over pipeline approvals will relieve him of any political responsibility. Burnaby hopes to challenge a National Energy Board ruling that the pipeline company doesn’t have to comply with municipal law.

Meanwhile, in Ottawa Prime Minister Justin Trudeau has painted himself into a black corner of his own making.

As a consequence the Janus-faced former drama teacher now lectures the great classroom of Canada that the project must go ahead because Canada can only fight climate change by building pipelines.

If we took Trudeau at his word and applied his morality to everyday life, we’d all smoke more to end lung cancer, eat more to end obesity and drink more to end alcoholism.

It is a convenient morality for a drama teacher who doesn’t know what drama he is in.

Trudeau’s wacky defence of Kinder Morgan can be traced to a backroom deal made with Notley on addressing climate change. She promised to consider supporting a national climate plan, but only if Trudeau gave her a pipeline — a kind of carbon tit for tat.

To secure that deal Trudeau had to break another promise he made to British Columbians. During the election campaign he said the NEB hearings on the pipeline expansion, a process fraught with scandal and bias, would be redone.

Under the former Harper government, the national energy regulator refused to look at upstream impacts (emissions) and gave too little attention to downstream impacts such as tankers on the coast and industry’s inability to clean up ocean spills. (Trudeau has since promised a $1.5-billion ocean spill program — a taxpayer subsidy for Kinder Morgan — but only if the project goes ahead.)

Moreover the NEB accepted an economic report by a Kinder Morgan consultant criticized as “without merit” by economist Robyn Allan. The report falsely claimed the pipeline would raise all oil prices in Canada — and didn’t explain how higher oil prices would actually benefit Canadians.

And in the middle of the hearings the Harper government appointed a Kinder Morgan consultant to the NEB.

Trudeau won the federal election, in part, by promising to address these travesties. He didn’t.

As a result nearly 300 anti-pipeline protesters have been arrested to date. Thousands more are prepared to defend the citizens of Burnaby, orcas, property values, truth, freedom, water and salmon. First Nations are leading this fight and another Oka is in the making.

Trudeau’s cozy relationship with the authoritarian Chinese government has made his pipeline corner smaller.

Han Jun, China’s vice-minister of financial and economic affairs, said in 2016 that the world’s second-largest economy would sign a free trade agreement with Canada — but only if Canada built a pipeline to the West Coast.

Much has been written about Notley’s feeble attempt to recognize the threat of climate change by introducing a carbon tax, setting a generous limit on oilsands emissions’ growth and reducing coal-fired power.

But as critics have noted recently the plan is pretty much a grand case of green washing. Increased bitumen exports will simply take the place of reduced emissions from phasing out coal power.

Meanwhile a U.S. company, the bastard child of Enron, has become a symbol of the national interest.

That version of the national interest is tied to a big lie still being repeated by politicians of all stripes. They falsely claim that the pipeline will secure higher prices for bitumen in Asian markets.

A recent story in Reuters sets the record straight on this falsehood.

The global market sets discounts and premiums on types of oil based on quality. Mexican Maya crude — a product as junky as heavy bitumen — sold at a $6.15 discount to customers on the U.S. Gulf Coast, and a $9.40 discount to customers in Asia.

Years ago the French philosopher and Christian radical Simone Weil wrote cogently about politicians who championed the national interest as if it were a fine bottle of scotch.

“The national interest cannot be defined as a common interest of the industrial, commercial and financial companies of a country, because there is no such common interest,” she wrote. “Nor can it be defined as the life, liberty, and well-being of the citizens, because they are continually being adjured to sacrifice their well-being, their liberty, and their lives to the national interest.”

In the end Canada’s crazy petro politics read like a global morality tale.

We know that we cannot continue to extract fossil fuels, spend and consume without bringing ruin to our children and civilization as we now live it.

We know that we must conserve and save and pursue another course.

Yet oil, a commodity that invites aggression like an angry drunk in a roadside bar, knows no limits or borders.

Besotted by oil, lies and political ambition, the nation’s political class has collectively turned into a snarling pack of Donald Trumps.


This article was supported by those who generously contributed to the Rafe Mair Memorial Fund for Environmental Reporting on The Tyee. To find out more or contribute, click here.  [Tyee]

Share this article

The Tyee is supported by readers like you

Join us and grow independent media in Canada

Get The Tyee in your inbox

Tyee Commenting Guidelines

Do not:

  •  Use sexist, classist, racist or homophobic language
  • Libel or defame
  • Bully, threaten, name-call or troll
  • Troll patrol. Instead, downvote, or flag suspect activity
  • Attempt to guess other commenters’ real-life identities

Do:

  • Verify facts, debunk rumours
  • Add context and background
  • Spot typos and logical fallacies
  • Highlight reporting blind spots
  • Ignore trolls and flag violations
  • Treat all with respect and curiosity
  • Stay on topic
  • Connect with each other

LATEST STORIES

The Barometer

What are you going do with your 3.27 centimetres of the Trans Mountain pipeline?

Take this week's poll