It’s official: the Harper Government’s approach to petro-diplomacy was a spectacular flop

Posted on November 07, 2015, 2:35 am
8 mins

PHOTOS: The White House, home of the Most Powerful Person, etc. Below: Stephen Harper, one of the architects of Canada’s Bitumen bullying export policy, the fruits of which are now apparent; Barack Obama, President of the United States.

The office of the President of the United States may not be what it once was, but it’s occupant remains “the Most Powerful Person in the World.”

Can we agree on just that much before we plunge ourselves into full-blown apocalyptic hysteria on the topic of the Keystone XL pipeline, of which the officeholder formerly known as the Most Powerful Man in the World yesterday said No, thank you, Canada, it will not be built?

HARPER2JPGMaybe, just maybe, telling the most powerful person on the planet that we just weren’t going to take no for an answer, and his political enemies would soon be ushered into power anyway – neener! neener! – might not have been the best way to get what we wanted.

Among those Canadians (whom I suspect are a majority) and Albertans (whom I am confident are) who want to see economic activity continue in this province’s oilpatch, and for the good times to continue to roll, there has always been a significant rift over how best to accomplish this goal.

There was the established Alberta political approach, brutal in nature, best exemplified by former prime minister Stephen Harper, who said in effect get out of our way or we will roll over you. Global warming? The environment? Just shut up!

There was the social license model advocated by Alberta Premier Rachel Notley, that argued, in effect, if we can’t persuade the markets we’re doing our bit to ensure the planet’s survival, no one will buy our product.

The advocates of the first approach tended to dismiss the advocates of the second as weaklings and ninnies, patently unwilling to fight hard enough “for Alberta” in the Imperial Capital.

Ms. Notley’s reaction to President Barack Obama’s announcement yesterday that he would deliver the coup de grace to the Keystone XL Pipeline, the basket into which our former Conservative masters placed all of our eggs, emphasized the social license approach she has advocated from the start: “The decision today underlines the need to improve our environmental record and reputation so that we can achieve our goal of building Canada’s energy infrastructure, including pipelines to new markets,” she said.

Obama“This highlights that we need to do a better job and that’s why I’m so pleased about the work that is ongoing towards a new climate change plan for Alberta. We’re working hard with stakeholders and we intend to act decisively to increase the likelihood of getting our product to tidewater.”

Prime Minister Justin Trudeau seemed to be expressing similar thoughts in Ottawa.

This, I expect, will drive the advocates of the Harper steamroller approach, now reduced to fortifying their redoubt in Alberta, to sheer fury. The province’s Wildrose Opposition certainly sounded like that, when Leader Brian Jean stormed in a press statement that “Premier Rachel Notley has failed to stand up and fight for this important project over the past several months.”

“Instead, she has spoken against it,” he went on, a statement that is not true, unless you count acknowledging that the KXL Pipeline had turned into a dud anyway because our neighbour, the Most Powerful Nation on Earth, had at least for the moment turned its back on it.

The Wildrosers and their remaining federal cousins will stick bitterly with this line, even though there’s a strong case to be made it was never the answer to marketing Bitumen Sands oil abroad, and indeed is at the heart of our problem selling the stuff now.

One feels a certain empathy, if not sympathy. After all, it’s hard to give up a strategy that was so effective at home (as long as the Conservatives held overwhelming majorities in Ottawa and Edmonton) even if it was a dud in Washington. If you win every home game, it can be hard to believe there’s a tougher opponent waiting somewhere else.

But surely it should be obvious now that Mr. Harper’s hectoring, Bitumen bullying and expressions of sympathy with President Obama’s political enemies was a really terrible strategy. At the least, if we wanted this project built, perhaps we should have tried to offer our American cousins a proposal that worked for them, instead of demanding they take one that we had decided worked for us.

The irony now is that even with more diplomatic leaders in Ottawa and Edmonton, the Harper approach has likely made it much more difficult for Notley’s strategy to succeed.

Mr. Obama now seems disinclined to play ball with a country that wouldn’t play ball with him on a question important to his presidency.

The Canadian right keeps insisting Mr. Obama is the proverbial lame duck, and that his decisions will count for nothing when a new president is sworn in. Well, it could be. And the supply situation could tighten up again too … or maybe not. But don’t bet your TransCanada PipeLines shares on it!

It seems most likely the White House will be occupied by another Democrat no more enthusiastic about Alberta’s Bitumen Sands oil than the present occupant. Ms. Notley is right that if we want anyone to buy our Bitumen, we need to get it to tidewater. But that too will require co-operation and diplomacy, not blunt force.

Surely one thing should be obvious – though I doubt it will be to the Usual Suspects – and that’s that the late Harper Government’s approach to petro-diplomacy was a spectacular flop.

This post also appears on Rabble.ca.

9 Comments to: It’s official: the Harper Government’s approach to petro-diplomacy was a spectacular flop

  1. Expat Albertan

    November 7th, 2015

    I’m not sure the C/conservative pipeline lobby did win every home game. Rather, I think they were actually playing a scrimmage amongst their own players. Indeed, the pipeline wasn’t even an issue in Canada (among its opponents) until Harper, and his nasty then-natural resources Minister Joe Oliver (he of the ‘foreign radicals’ claptrap), actually made it an issue by pushing the pipeline into everybody else’s face and, hence, dividing the population into pro- and anti-pipeline factions. You reap what you sow.

    Reply
  2. Paul Anderson

    November 7th, 2015

    I’ve appreciated your posts at Rabble.ca and have added your site to my list of regular destinations. Thanks for the work.

    Reply
  3. ronmac

    November 7th, 2015

    The writing was on that particular wall for quite some time now. No surprise.

    Forget it Jean. There was nothing Rachel or anybody else could do about it. If you feel that strong about it you should fly yourself to DC, pour gasoline over yourself on the steps of Capitol Hill, light a match, and set yourself ablaze in protests. Like those monks did in Saigon in 1963.

    Alberta had no say in this game, zero, zilich, nada. We were just the place where the gd bitumin came from.

    Years from now they should be teaching XL in corporate PR classes. It was genius how we were portrayed as the bad guys in all this. The real battle was between the rights of landowners fighting against a “foreign” pipeline company wanting to rip up their backyards vs. US oil interests who stayed out of the limelight.

    It was Valero, the US energy giant who first drew up this scheme to pipe Alberta bitumin to Texas terminals, send it to the Isle of Man to refine into diesel for sale in Europe. They managed to get Canadian pipeline companies to become the point man in this debate and take all the flak while they flew under the radar.

    To this day Americans believe evil Canadian pipeline companies were storming across the border with bulldozers like Atilla the Hun we had a right. Hilarious.

    Reply
  4. political ranger

    November 7th, 2015

    Don’t be betting your Suncor or CNQ shares either.

    Here’s what you can count on; we will never see another interprovincial or continental oil pipeline built in Canada. Not in anyone’s lifetime, not ever.
    Unless the Paris COP21 is another Copenhagen flop it’s unlikely that much more of the tarsands will be developed either. Fort Mac has 80,000 residents today; it’s likely to be the smaller neighbour to Fort Mackay in the future.
    We are more likely to see national policy that promotes 10% annual declines in GHG production rather than the 1-2% annual increases we are presently incurring.
    That means ALL the tarsands stay in the ground!
    Highly unlikely given the economic weight of the industry and it’s bought and paid for media, and political counter-weight of this province to Trudeau’s ‘rumspringa’. But this is the direction we must go, and eventually, will go.

    Another item that cannot be mentioned too often; harpers approach to all things petroleum was Klein’s approach first. David is quite right to suspect that the majority of Albertans are still in thrall to the petro industry. It’s also worth noting that that ratio also applies to Alberta’s public service; it is going to be very difficult for Notley to develop credibility and legitimacy at home and on the national or global stage at the same time.

    Reply
  5. PJP

    November 7th, 2015

    Doesn’t the following sound like what the Neoliberal Harperites, present and past, look for in a leader? (I’ve lifted it from this piece http://www.theguardian.com/commentisfree/2014/sep/29/neoliberalism-economic-system-ethics-personality-psychopathicsthic)

    “There are certain ideal characteristics needed to make a career today. The first is articulateness, the aim being to win over as many people as possible. Contact can be superficial, but since this applies to most human interaction nowadays, this won’t really be noticed.

    It’s important to be able to talk up your own capacities as much as you can – you know a lot of people, you’ve got plenty of experience under your belt and you recently completed a major project. Later, people will find out that this was mostly hot air, but the fact that they were initially fooled is down to another personality trait: you can lie convincingly and feel little guilt. That’s why you never take responsibility for your own behaviour.

    On top of all this, you are flexible and impulsive, always on the lookout for new stimuli and challenges. In practice, this leads to risky behaviour, but never mind, it won’t be you who has to pick up the pieces.

    The source of inspiration for this list? The psychopathy checklist by Robert Hare, the best-known specialist on psychopathy today. ”

    Just saying.

    Reply
  6. Sub-Boreal

    November 7th, 2015

    While it makes a convenient journalistic device to counterpoint the “social license” and “bitumen bully” approaches to managing the tar sands, Albertans and all Canadians need to realize that both are ultimately dead ends – exercises in sustainable wishful thinking.

    Much as I like and admire Ms. Notley – and I’m definitely glad that she gets to run the next-door province for 4 or 5 years – it should be a huge disappointment to her supporters that she’s not going beyond the same positioning as Stephane Dion in yesterday’s post-Keystone comments.

    Sadly, it’s pretty much delusional to think that New, Improved Bitumen, Now with Nicer People in Charge!! (TM) will magically unlock markets and make the Mayor of Burnaby stop worrying about having parts of his town get hosed down with tar occasionally. This may indeed work as a diversion long enough to get you through an election campaign, even one that’s 2 1/2 months long. But it won’t hold up very well when Canada has to make serious international commitments, and then implement them at home in a highly regionalized economy. Here in central BC, for example, will we have to keep our home thermostats at 5C all winter just so Alberta can use most of the national emissions quota to keep producing bitumen for export? That would be a pretty tough sell, even with a full-on Trudeau charm offensive. You could clone a caravan of Justins, complete with cute family and Peter Mansbridge tagging along, and they’d be lucky to survive long enough to make it to the edge of town.

    What seldom gets discussed in mainstream energy coverage, and even in most leftish think-pieces, is that a bitumen-fueled economy is quite different from the conventional oil economy of the last century. In the new bitumen economy, there is just a lot less useable net energy produced, relative to all of the effort invested in extraction and processing. This was brought home to me a couple of years ago on a visit to Ft McMurray. A geology professor explained that a new 100,000 barrel per day operation would cost (then) about $15 billion, and need at least 1000 people to run it. To put this into perspective, 100,000 barrels per day would be the production of half a dozen Saudi wells of the early 1980s. When you do the math (which seems to be hard, or at least avoided, regardless of political stripe), and factor in the amounts of energy yielded relative to what gets put in, the ratio looks pretty grim. A recent peer-reviewed study of energy yields from current bitumen operations gave ratios in the low single digits, depending on whether mining or in-situ methods were used (http://dx.doi.org/10.1016/j.energy.2013.03.080). In contrast, the ratio of energy return from current conventional oil is somewhere between 15 and 30.

    Unfortunately for Ms. Notley, this means that there isn’t going to be a Norway-on-the-Athabasca. While almost any rejigging of royalties will certainly improve returns to the owner, this isn’t going to be a great bonanza. That window closed in the last century. The energy (and financial) surplus obtainable from bitumen extraction is inherently smaller than for conventional oil. It’s just physics and chemistry.

    With new governments in Edmonton and Ottawa, there is a brief opening that may allow some unconventional ideas to inform the debate. But it will take a lot of creative pushing from NGOs and perhaps even the federal NDP – if they can stop being afraid of their own shadow – to keep the window open. The new book by your own local, Gordon Laxer, gives an excellent starting point, and deserves much wider circulation and coverage.

    Reply
    • Greenhick

      November 8th, 2015

      Thoughtful points, Sub-Boreal, the tenor and substance of which I’m largely in agreement with. Unfair and regrettable as this may seem, it’s hard to imagine the Notley government re-elected unless between now and next election they are able to change or capitalize on new possibilities to change the conversation in radical ways. As it is, Oslo on the Athabasca is a train that left town a good while ago, and the NDP appear to be left holding the bag.

      That said, there are additional perspectives. Even where the net energy returned on energy invested (EROEI) may be close to zero or even negative for bitumen (depending on how inclusive one is about the embedded energy in infrastructure), even much higher yield hydrocarbon sources seem plausibly to be declining towards this point at a much higher decay rate. Appropriate that you referenced Saudi reserves in the 1980s, since it would appear that that picture is much less forgiving now. The EROEI of the early finds in Texas was not 15 to 30 barrels produced by a barrel of energy but such a barrel yielding 100 barrels of energy.

      Exploration costs are low relative to extreme hydrocarbons (deep sea, arctic). The EROEI is, I believe, low but predictable and perhaps marginally improvable. Hard to imagine new investment for oilseeds expansion. One of the tough questions is whether to sink public funds into refineries or whether at this point it would be good money after bad. It strikes me that if the tarsands have much of future it may be in terms of security of supply for essential services in Canada, rather than for export.

      At any rate, lean times ahead.

      Reply
  7. Athabascan

    November 7th, 2015

    So, Harper with all the fake bravado he could muster announced to everyone that, “We won’t take no for an answer.” Seems he just did.

    Reply
  8. barry

    November 9th, 2015

    The fact that Keystone XL was rejected after the election makes it Trudeau’s fault. Had Harper been re-elected, the pipeline would have been approved.

    Reply

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