PHOTOS: Alberta Premier Rachel Notley in an old file photo of the author’s. Below: Opposition leader Jason Kenney, B.C. Premier John Horgan, Prime Minister Justin Trudeau, and a famous flag of the Texas Revolution.

Remember “peak oil”? Don’t worry about it. Nobody else does either. But last night on social media, Alberta appeared to be approaching “peak oil hysteria.” Peak oil pipeline hysteria, anyway. I expect we’ll get there today.

The proximate cause of this unusual Sunday uproar was Kinder Morgan Canada Ltd.’s skillfully timed news release saying that if Canada can’t quickly come up with a way to silence political opposition to the Trans Mountain Pipeline expansion project in British Columbia, it’ll pull the plug on the plan by the end of next month.

Well, I’m putting words in Kinder Morgan’s corporate mouth. What the statement published at 5 o’clock Sunday afternoon said was that the company “is suspending all non-essential activities and related spending on the Trans Mountain Expansion Project.”

The company explained: “Under current circumstances, specifically including the continued actions in opposition to the Project by the Province of British Columbia, it will not commit additional shareholder resources to the Project.” (Emphasis added.)

That, it is said here, is the crux of the matter – the demand by the Canadian subsidiary of Texas-based Kinder Morgan Inc. that, in effect, Canada needs to stop acting like a constitutional democracy and start acting like a petro-tyranny, or Kinder Morgan will take its pipeline and go home.

This, in turn, suggests Kinder Morgan’s lawyers have a clearer grasp of what B.C.’s constitutional chances are with its still-vague plan to enact environmental legislation to mitigate potential damage from the expanded pipeline than do most political commentators in Alberta, who have declared the idea unconstitutional without actually knowing what it is.

Alberta’s NDP premier, Rachel Notley, held a rare Sunday news conference at which she said, rather cleverly, “maybe the government of B.C. feels they can mess with Texas, and who knows, maybe they can, but let me be absolutely clear, they cannot mess with Alberta.” She vowed “serious economic consequences” for B.C. if Alberta doesn’t get its way.

Perhaps she will soon tear another leaf from the book of the Texas Revolution and hoist a flag saying, about all the stuff we’re going to cut off, “Come and take it!” Albertans who think that sounds like a good idea might not recall what happened on March 6, 1836.

Prime Minister Justin Trudeau jumped on the fatuous rule-of-law bandwagon, Tweeting yesterday from Saskatchewan, “Canada is a country of the rule of law, and the federal government will act in the national interest. Access to world markets for Canadian resources is a core national interest.” This is ironic, of course, since Kinder Morgan’s complaint appears to be that Canada is acting too much like a country of the rule of law.

More credibly than inflicting economic pain on B.C., constitutionally speaking, Ms. Notley also suggested Alberta is prepared to invest in the deal.

Astonishingly, Opposition Conservative Leader Jason Kenney, normally a harsh ideological foe of “picking winners and losers” with taxpayers’ money, was apparently willing to make an exception for the oil industry. Sometimes, he said, “there is a compelling case for the state to come forward, using its credit, its financial leverage, to ensure economic progress. I believe this is such an instance.” Presumably they’re crying at the Regina headquarters of the Canadian Taxpayers Federation.

The Twit-o-sphere then went wild, with many commentators happily calling for all kinds of dire consequences for British Columbia and accusing B.C. Premier John Horgan, also a New Democrat, of pretty well everything short of squirting deadly nerve agents at former spies and hacking the U.S. election.

For his part, Mr. Horgan said at his own Sunday news conference that “there’s the view of the government of Alberta, there’s the view of the federal government and then there’s the view of the shareholders in Texas. I’m here to defend British Columbians.”

Well, as has been said in this space before, if the Trans Mountain Pipeline really does represent an essential national interest, then it should be a national project.

As I wrote in mid-February, “if an expanded pipeline capable of carrying diluted bitumen from north central Alberta to the West Coast is essential to the health of the national economy, and the survival of Alberta’s, then the federal government should build it and run it.”

This, I argued, would reassure both British Columbians and Albertans, including Indigenous peoples, regardless of their points of view on the specifics of the project. It would ensure meaningful financial and environmental accountability. It would protect good jobs, with fair wages, and adequate staffing for environmental protection.

It could include environmental and coastal protections in the overall scope of the project without the temptation to cut safety corners to pad the corporate bottom line.

It would restore to our national government partial influence over an essential industry it foolishly gave up when Brian Mulroney’s Conservative government partly privatized Petro-Canada, a job that was completed by the Liberals under Paul Martin. It would make it possible to ensure Canadian oilsands activities did not trash our climate commitments under the Paris Agreement and international climate change measures yet to come.

And it would reassure Canadians outside Alberta this isn’t just a boondoggle to enrich a few well-placed, U.S.-based corporate bosses.

So … don’t look for that to happen!

Lost in yesterday’s hysteria, meanwhile, was the fact many savvy observers of the oil industry have been saying for months the economics of the pipeline expansion were dubious, and predicting therefore that even without protests and talk of B.C. environmental legislation, Kinder Morgan would look for a way to walk away from the deal with its corporate pride intact.

Peak oil was the notion, much talked about in the early Naughts, that after a maximum point of oil extraction had been reached, the world’s economy would go to hell in a hand basket because there wouldn’t be enough oil to do all the stuff we humans want to do with it. Instead, it turns out the world’s economy has gone to hell in a hand basket because there’s too much oil to fetch a good price.

But don’t worry, everything will change again soon! In the mean time, peak oil pipeline hysteria rules.

Join the Conversation


    1. Notley’s not. The province is many billions into the Northwest refinery project, and building another isn’t economically feasible at the moment (see: March, 2018 budget). But the government is putting money into more value-added projects with the Energy Diversification Act introduced this spring, ( and the Petrochemicals Diversification Program which is going into the second round of funding this year. A $3.5 billion petrochemical plant has already broken ground under this program.

  1. “[Federal construction and operation of the pipeline] would make it possible to ensure Canadian oilsands activities did not trash our climate commitments under the Paris Agreement and international climate change measures yet to come.”

    Unfortunately, neither PM Trudeau nor Premier Notley has revealed a path to Canada’s targets that includes massive oilsands expansion.
    Studies showing that AB’s oil & gas emissions are grossly under-reported continue to pile up. Which puts our targets that much further out of reach. First we need accurate reporting; then we can talk about pipelines.

    The UN, the Organization for Economic Co-operation and Development (OECD), and the federal Environment Commissioner issued warnings in 2017 that Canada is not on track to meet its targets.
    OECD: “Without a drastic decrease in the emissions intensity of the oilsands industry, the projected increase in oil production may seriously risk the achievement of Canada’s climate mitigation targets.”

    “…AB’s demand for a new pipeline has nothing to do with climate change mitigation. It’s about the oil industry’s—and perhaps Premier Notley’s—short-term interests, which are plainly contrary to a credible climate change plan.”

    Increasing emissions without knowing our current output and having a credible plan to meet our targets is reckless and irresponsible.

    1. Then K-M will cancel the project and blame Horgan–and, probably, Notley–for not paying them to build the pipeline. Same way Petronas cancelled the LNG plant in BC, and blamed the Christy-Cons for not paying them enough to build it.

    2. More distressingly, what if the real reason is what the company says it is – a provincial government (BC) that is just saying “no” to oil and gas (unless it owns the oil and gas, of course).

  2. We live in interesting times for sure. Who would have thunk it?

    Here’s what we’ve got. A UCP market fundamentalist championing state ownership of a private sector venture; a social democratic government fighting for the construction of a pipeline, while its federal brethren is pondering adoption of the “Leap Manifesto” with the sole intent to leave oil in the ground; a neighbouring province whose raison d’être most days mirrors that of its Alberta cousin; and a wealthy oil company about to throw in the towel on a lucrative pipeline project. If I didn’t know better, I would have thunk that hell just froze over.

  3. “Astonishingly, Opposition Conservative Leader Jason Kenney, normally a harsh ideological foe of “picking winners and losers” with taxpayers’ money, was apparently willing to make an exception for the oil industry. … Presumably they’re crying at the Regina headquarters of the Canadian Taxpayers Federation.”

    The right-wing opposes subsidies EXCEPT when it comes to the oil industry.
    In Postmedia papers, the Fraser Institute’s Mark Milke regularly decries corporate welfare — but on massive giveaways to the oil industry, he has nothing to say.
    The silence from the right is deafening.

    The mounting costs of climate change (including increasing wildfires, floods, drought, heat waves, insect infestations, etc.), oil spills, habitat destruction, air and water pollution, acid rain, ocean acidification, etc., far outweigh the oil industry’s contribution to public revenues.
    The oil & gas industry is profitable only because it largely externalizes its health and environmental costs — a massive invisible subsidy. The industry is already digging into taxpayers’ pockets for mounting reclamation and cleanup costs.

    Put a price on pollution that reflects its full costs. Price energy systems properly. Then stand back and let the market do its work.
    Until then, we are subsidizing our own destruction.
    Free-market advocates should support full-cost accounting and the removal of all subsidies.

    1. That would mean $3.00 per litre for gasoline.

      Ordinary Canadians would then finally begin to share the same devasting economic consequences that many Albertans, Ontario hydro customers, and the Alberta government are currently shouldering alone.

      Green moral purity and clear consciences have been available to Canadians essentially free of charge. I don’t think that can last much longer. I also fear that Albertans are not going to go down without taking as many British Columbians as they can with them. The summer of discontent is coming. Expect to see shut down oil lines, railways and highways.

  4. In BC we are resting a little easier and stand 100% behind Horgan who is quite modestly pursuing this in the courts (ie “using the rule of law, Notley and Trudeau).

    KM is more worried about the protesters who (while using that fine tradition of civil disobedience, that folks revere Ghandi, Mandela and King for) are also backed by court action to challenge this. These dumb ex-ENRON thieves are just waking up to the reality of Canadian politics.

    Funny – the same folks who fumed about the NEP are now calling for FEDERAL power to quash provincial rights.

    ” the economics of the pipeline expansion were dubious” .. Yes, reality catches up to KM & Alberta.

    As to “peak oil” … it was focussed on “conventional oil” – you know, the “sweet crude” that costs very little to extract and refine and has a lower environmental footprint. We are about at that peak now … hence the unseemly rush to frack the unconventional oil and gas out of the suffering planet.

    All our focus should be on transitioning to solar and wind while we attempt (low-tech) biological methods of rapid carbon-capture. As we are all hostages to the fossil-fuel nightmare we have created, we should use only conventional sources during the transition. (And tax away enough of the profit to clean-up tailing ponds & dormant extraction facilities like abandoned wells.

    Oh, and we will not allow dilbit to ruin our coast.

      1. Victoria is spending some 765,000,000 dollars to build a sewage treatment system. How much is Edmonton paying to clean up the mess they dump into the North Saskatchewan River?

  5. Dogwood, a non-profit interest group and large nonpartisan citizen action network from Victoria, B.C., had this to say:
    “Kinder Morgan’s press release comes 24 hours after Grand chief Stewart Phillip and allies from across the province blockaded Kinder Morgan’s tank farm in Burnaby. Phillip called Kinder Morgan’s bluff – and the company folded. The Texans refused to call the police to arrest B.C.’s most prominent indigenous leaders, choosing to lose a day of work instead. Today we found out why. Kinder Morgan is bound by corporate logic. Its shareholders don’t want to lose money trying to build a pipeline through B.C.”
    It appears that Dogwood, et al, will also be lobbying Premier John Horgan hard, to stand strong because they expect “Trudeau and Notley to unleash holy hell” on Horgan.
    In the end though, agreed, it will be whether the economics of any fossil fuel project is worthwhile.

  6. Watching Rachel and Jason trying to outdo each other at competitive hyperventilation, this neighbor in BC thinks that we need to send over some medics with oxygen tanks as a goodwill gesture.

  7. Clever ploy by Kinder Morgan to offload project costs on to AB taxpayers. If one pipeline company can get the govt to fund their projects, why shouldn’t they all? Privatize the profits, socialize the costs.

    1. I’m flat out against TMX, but jeez, do I ever feel for Rachel Notley, very tough political position for her. I think she’s doing a great job (just not in BC’s interests) and Albertans would be crazy to elect Kenney over her.

      1. If committing Canada to emissions growth that puts climate targets out of reach is a good idea, then Notley is doing a fabulous job.
        If wrecking relations with our neighbour is a good idea, then Notley is doing a fantastic job.
        If coming up with a climate plan that sets no targets or timelines is a good idea, then Notley is doing a tremendous job.
        If awarding social licence to yourself in spite of community opposition is a good idea, then Notley is doing a wonderful job.
        If throwing billions of dollars in subsidies at the fossil fuel industry is a good idea, then Notley is doing a smashing job.
        If declining to raise royalties and give Albertans a fair share is a good idea, then Notley is doing an excellent job.
        If encouraging progressives to embrace oilsands expansion and pay lip service to climate science is a good idea, then Notley is doing a fine job.
        If deploying a tiny carbon tax as a fig leaf for pipeline approvals is a good idea, then Notley is doing a superb job.

  8. The project was not financially viable, so I’m not surprised they’d pull the plug. Of course they want to blame it on an NDP government. Remember that May 2017 sale of stocks to the public where Kinder Morgan raised C$1.75 billion for this pipeline expansion – one of the largest IPOs in Canadian history? Now they will proceed to invest that tidy sum in other projects – a switcheroo to get funds?

    As for the Notley Government’s idea of subsidizing this money-loser with OUR tax dollars – bizarre! I’m not sure what’s going on here. Perhaps she knows it will make no difference to Kinder Morgan’s decision, so why not offer? It also forces Kenney to show his hand. One positive: if a requirement for public investment is to look at “the books” and verify Asian contracts for the diluted bitumen, the truth behind the purpose of this pipeline will come out. I don’t believe the dilbit was ever going to Asia for refining.

  9. Pipeline benefits mostly revealed as hype by this former industry exec.’s analysis:

    Ross Belot EXCERPT: ‘The strong likelihood of a slowdown in oilsands growth means Kinder Morgan’s estimate of the project’s benefits to Canada are no longer reliable. Yes, an expanded Trans Mountain line would be a cheaper way to get Canadian heavy crude to Asia, preferable to going all the way to the Gulf Coast first. But it’s not going to shift Edmonton prices. The whole benefit of the line will accrue only to those who ship on it — they will get their product to Asia cheaper. But the Edmonton market price will still be set by the last barrels produced that will continue to clear in the Gulf Coast.

    Why is this important? Because Trans Mountain will be a windfall only for the companies shipping on the line. And for many of those companies, the benefit will occur outside Canada — providing no benefit to Canada at all.

    For example, Tesoro has a refinery in Anacortes, Washington. It was identified as a committed shipper in Kinder Morgan’s NEB submission. It has zero oil production; its whole drive is to buy cheap in Edmonton and back out expensive crude in its refineries in Anacortes or California. There is no benefit to Canada in such an operation; all the profit lands in the United States.

    Similarly, if companies like, say, Shell ship on the line, they’ll buy cheap in Edmonton and then sell at a profit in other regions (a concept known in the industry as ‘arbitrage’). So a good portion of the volume moving will have no benefit to Canada.

    How about the access-to-other-markets argument? Mexican Maya crude is moving now to Europe and Asia. Once crude makes it to tidewater, it has low-cost access to markets around the globe. Our crude is already seeing the effects of these movements to Asia because it competes with Maya to get into refineries in the Gulf Coast. There is no ‘new market argument’ here in today’s environment.’

  10. About a month ago, I wrote a letter to the editor of the Star Phoenix in Saskatoon suggesting after Trudeau said Kinder Morgan was in the national interest that if it truly was in the national interest it should be built and owned by the nation.

    The editor chose not to publish the letter. Being a Postmedia paper they wouldn’t want anything suggesting public ownership to be interrupting the privatization message they continually promote.

    I agree with you that things in the national interest should be owned by the nation. Apparently Justin isn’t following in his father’s footsteps (Petro Canada), but then he is only the pretty face of the Liberal party and not really calling the shots. That is the job of the back room boys.

  11. David:

    I agree that nationalization or perhaps a hybrid ownership model (fed + AB + token FN minority share) would be the boldest path open to Trudeau. I can certainly imagine his old man doing it.

    And with federal money in the game, there’s a greater pretext for using the military and more heavy-handed surveillance methods to squash the opponents. Implausible? Well, after JT’s recent passage to India (choreographed by Wes Anderson?), he’s got a certain deficit to make up on the Serious Big Man side. It would be a mistake to assume that PM Dressup is so needy for adulation and selfies that he wouldn’t decide to pull this stunt. Of course, its denouement could be unbelievably messy, but in the short-run, imagine all the approving Postmedia editorials, the plaudits from CBC right-wing pundit panels etc. Butts & Co. would be wetting themselves at their own brilliance.

  12. (Preface: the stories related below are my recollections of news items, mostly from the Edmonton Journal during the giant “oil,” actually construction boom of 2004 to 2008. Please don’t take my word for it; your local library and likely enough your friends will confirm at least the gist of it.–MJD)

    This whole pipeline shemozzle has gotten completely out of hand. Worse, I’m convinced there’s a fundamental flaw in the “pro-pipeline” arguments.

    Every commentator has assumed that the pipe must be built. Let me rephrase: “The Pipe Must Be Built.” Or even “The Pipe MUST Be BUILT.”

    But why?

    We keep hearing about insufficient pipeline capacity. Why is that? The Tory governments, provincial and federal, expected to increase investment in bitumen, an extra $500 million per year for 25 years. What they got was $5 billion extra in each of the first five years. Harper’s boys restructured taxes to favour rapid expansion of the bitumen industry. Ralph Klein slashed royalties to 1% until construction costs were paid off. It was a perverse incentive to keep building.

    Am I the only one who remembers the Crazy Years? 2004 to 2008 were frantic because of the Tory construction boom. House prices doubled between 2004 and 2006; yes, a 100% increase in two years. By 2008, people were LEAVING Alberta because it was too expensive to live here. Alberta in general and Fort McMoney in particular became a black hole for tradesmen from Canada–and beyond. I recall news reports that construction costs were rising 30% per year. Any other jurisdiction would call that “hyperinflation” and try to stop it.

    Not the Kingdom of Oilberduh! Ed Stelmach repeated again and again that he wouldn’t “touch the brakes.” Seems he preferred to watch the oilpatch blow up the engine. (Well, in 2007 he did try to persuade them to pay a bit more in royalties, you know, just a little. Instantly, there were frantic cries of “You’re trying to kill the oilpatch!” and snarls of “Traitor!” from the [Calgary oil-elite] mob.)

    Only one company, Shell I think, had the moral courage to oppose the cattle-stampede impulse to build, build, build! They announced a temporary halt to a construction project because of excessive cost increases. A week later, they recanted their heresy. Seems their (anonymous) partner was scared of being left behind, and persuaded (browbeat?) Shell to resume construction.

    In 2007, global oil prices went ballistic. $147 per barrel! Fantastic! Pump more, buy more, sell more!!! Supertankers were being moored for use as floating storage tanks, filled with overpriced crude. (Some may still be there for all I know.) Then–disaster. Within days, the price crashed to below $30. Panic and conniptions. Disaster became catastrophe when US investment banks ran out of suckers for their mortgage-based Ponzi scheme. Americans stopped spending, gave back their over-mortgaged houses, even started (gasp) buying smaller cars! Oh, the humanity.

    Here in Oilberduh, doom, gloom and disaster overwhelmed the Tories and their masters. Instantly, there were frantic cries of “You have to save the oilpatch!” and squeals of “Help us!” from the (Calgary oil-elite) mob. Eddie’s attempt to get a little more spending cash for luxuries (hospitals, schools, roads, social services) was loudly blamed for the sorry state of oil prices. Minor considerations like international market insanity and “We haven’t started the new royalty system yet, honest!” were brushed aside as unworthy of mature consideration. This is, of course, Oilberduh.

    So–what’s the point of this rant? Years of frantic, non-stop construction have left us with an obvious problem. No, not “we need more pipelines.” We have too much bitumen!

    It should be obvious. The oil guys are one-trick ponies. All they know is selling oil. It’s what they do, they’re good at it, and they really, really like the money. But there’s a problem. The world is changing. Bitumen is too thin for road tar, too thick for anything useful. Fracking has created a glut of lighter, easily-refined crude. But it gets worse. Sensible people are weaning themselves off oil. It’s slow, but it’s happening. The signs are there, if you have the courage to look. But Alberta’s rulers, the guys in the Calgary office towers, don’t want to face it.

    We don’t need more bitumen extraction. Every new giga-project locks us in for another 50 years of tax-funded support for an expensive, wasteful, damaging industry. No, no, NO!!! I am NOT saying shut down oil! What I AM saying is, stop building more bitumen plants! We’ve got enough. We’ve got too much! Peter Lougheed was right when he said we’re building them too fast. He said that in 2006. When are we going to listen?

  13. There are two ways that Alberta governments have failed future generations. First in harvesting our renewable resources they have failed in adequately saving a good portion of this largesse for future generations, they continue to spend it on day to day expenses. On top of blowing our resource revenue they are piling on government debt which is nothing more than deferring tax increases unto our children. Probably the only thing any of them got right was that we are blessed with many natural resources and it makes sense to produce them and market them to the world. Unfortunately Alberta doesn’t have a coastline and getting our oil to that coast has created quite a cafluffle. I don’t agree with the government buying into the pipeline and I have always wondered why the oil couldn’t be pumped to Prince Rupert and loaded on to tankers there, less population and a natural deep port. As for leaving it in the ground, Alberta produces just over 4% of the world’s oil, is leaving that in the ground going to make that much difference? It will to Alberta’s budget, by 2023-2024 the NDP project $10.5 billion in government revenue from royalties, but they are planning to spend it all!!! Enjoy your day☺️

    1. Everything is relative. Future generations will probably not be much concerned with government debt compared to devastation wildfires, droughts, floods and who knows what else as a result of inaction on climate change by successive governments.

    2. Farmer Brian:

      Last night I had a dream that the Jesus flew into Calgary with the blueprints from God for a bitumen powered air conditioner. The air conditioner put an end to global warming. It was a beautiful dream. Enjoy your life.

  14. Alberta goes wild?

    Is it Alberta, or is it the oil & gas industry? Maybe, there is no difference. Maybe, Notley is more like the CEO of the oil & gas lobby than the leader of Alberta? Maybe she isn’t a true NDP’er after all? Asking for a friend.

  15. The Alberta premier in the news talking up the plans to punish BC for looking out for it’s own interests leads me to some questions . How does the Alberta government stop a private corporation from sending its products to corporate customers in BC ? Is Kinder Morgan going to shut down its existing pipeline to stop oil and gas flowing to Burnaby ? Do the railroads turn away paying customers shipping west ? i’m sure there are contractual obligations as well as duty to shareholders that prevent that . The AB government interference in these business activities would open it up to NAFTA lawsuits for compensation by the US companies involved if my understanding of modern trade agreements is correct .

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