Alberta Politics
Members of the Tsleil-Waututh Nation demonstrate their opposition to the Trans Mountain Pipeline Expansion project (Photo: Tsleil-Waututh First Nation).

Calculating the winners and losers in yesterday’s Trans Mountain Pipeline debacle

Posted on August 31, 2018, 2:44 pm
12 mins

No doubt they were chuckling discreetly at Kinder Morgan headquarters in Houston yesterday as they counted up their additional spare change.

They had, after all, just managed to sell off the Trans Mountain Pipeline to the Liberal government led by Canadian Prime Minister Justin Trudeau, backstopped by Premier Rachel Notley’s Alberta New Democrats, at the very moment the Federal Court of Appeal dealt a significant blow to the project.

Alberta Premier Rachel Notley (Photo: David J. Climenhaga).

Yesterday morning in an appeal by a coalition of First Nations governments, coastal municipalities and environmental groups of the 2016 approval by the federal cabinet of the pipeline expansion project, the court quashed the cabinet orders authorizing the multi-billion-dollar expansion of the pipeline, back when it was still the Kinder Morgan pipeline.

In the afternoon of the same day, while the meaning of that ruling was still sinking in, Kinder Morgan’s shareholders approved the sale to the federal government of the creakily geriatric existing line from Alberta to Burnaby, B.C.

Well, as has been said many times in this space, Kinder Morgan was clearly looking for an exit strategy from this project, which began to seem a lot less appealing as the price of oil headed south back in 2014 and persistently stayed there long after that.

The economics of the pipeline expansion were always pretty questionable, and remain so, despite the enormous political capital invested in it and its public takeover by numerous political players.

Alberta Opposition Leader Jason Kenney (Photo: David J. Climenhaga).

So we have to count Kinder Morgan Inc. as a big winner in this situation. Possibly the biggest.

As for the Canadian petroleum industry, despite media coverage portraying the ruling as a disaster for it, you can count on it the effects will be minimal. For one thing, Ottawa has vowed to continue with the project and it will likely move ahead in time. There are certainly grounds for appeal to the Supreme Court of Canada.

For another, the industry will have a clear-eyed assessment of the project’s true potential, which has been exaggerated by many players for political reasons. The industry knows how to wring profits out of governments, as Kinder Morgan has just demonstrated. So, this may not be a big victory for the industry, but it is not likely to be a serious setback either.

The media narrative notwithstanding, the decision should not be portrayed as “a bombshell,” as many journalists have claimed. As my blogging colleague Dave Cournoyer pointed out in a thoughtful analysis of yesterday’s developments (while this correspondent sat in an airplane over the American Midwest), the court’s decision was quite reasonable.

First, Justice Eleanor Dawson wrote in the unanimous decision in Tsleil-Waututh Nation v. Canada, the National Energy Board report on which the federal cabinet’s decision was based unjustifiably defined the scope of the project under review not to include project-related tanker trafficand its potential impact on marine wildlife. Second, that the federal government “fell well short of the minimum standards” required to consult with Indigenous communities during the project’s consultation process.

Prime Minister Justin Trudeau (Photo: David J. Climenhaga).

Whether or not the media fraternity expected this outcome, it was obviously a strong possibility. The courts do make reasonable decisions now and then. It’s what happens when you live in a democracy governed by the rule of law. No one should be shocked.

It is ironic Mr. Trudeau, the Great Promiser, fell short in much the same way as the Conservative Government of former prime minister Stephen Harper, which rushed the process on the Northern Gateway pipeline project and paid the tariff in the courts of law and public opinion.

Still, it’s quite possible Mr. Trudeau’s government will not suffer that much from this outcome, which engages Canadians in provinces other than Alberta and Saskatchewan much less than a casual observer of the day’s journalistic output might think. So let’s call the federal Liberals a loser yesterday, but not necessarily much of one.

Federal NDP Leader Jagmeet Singh (Photo: David J. Climenhaga).

As for the federal Conservatives led by the hapless Andrew Scheer, they will try to portray this as a national cause célèbre. It is unclear how much success they will have outside the Prairies. Obsessed by their own divisions, they will likely gain less than you might expect, if they manage to gain anything at all.

Of course, there are plenty of people in British Columbia who were engaged by this story – but they are mostly environmentalists and members of First Nations along the route who oppose the project.

Environmental groups that oppose the pipeline can count yesterday’s decision as a significant victory, as they will see any delay as making it less likely ever to be completed – and as a continued fundraising opportunity.

First Nations governments determined that the consultative process demanded by the courts be observed, can also count this as a major win.

Nor is this bad news for B.C. Premier John Horgan and his NDP Government, or for that matter the federal NDP led by Jagmeet Singh.

They can all rightly point to the court’s specifically articulated concern about the danger to the region’s marine wildlife presented by tanker traffic sailing to and from the Kinder Morgan terminal in Burnaby as a justification for their continued opposition to the project. Indeed, it may embolden both branches of the NDP to turn up the heat in their simmering dispute with the Alberta NDP.

For Mr. Singh, who has had a bumpy ride since he won the leadership last fall, this presents an opportunity to differentiate his party from the Liberals in the federal election expected next year.

B.C. Premier John Horgan (Photo: David J. Climenhaga).

So B.C. environmentalists and New Democrats from outside Alberta should be considered winners yesterday too, no matter what the long-term outcome is.

But the Alberta NDP, it goes without saying, will be hurt by this development.

Premier Notley’s entire strategy of becoming the oil industry’s determined advocate has suffered. Having put so many of her party’s eggs in the pipeline basket, she is bound to have to wear yesterday’s events. This is probably true even if the pipeline is eventually completed, as it would be far too late to be much help in the provincial election expected next year.

So mark the Notley Government down as the biggest loser from the court’s decision. At the very least, as Mr. Cournoyer tartly observed in his commentary, it’s time for the government to quietly roll up its “Mission Accomplished” banner and stop drawing attention to this disappointment.

Finally, what of the United Conservative Party, the official Opposition in the Alberta Legislature led by Mr. Harper’s former lieutenant, Jason Kenney?

If Mr. Kenney were privately gleeful about this setback for the Alberta economy – as of course he is – that would be easy to forgive.

But like U.S. President Donald Trump, he doesn’t seem to have a filter to warn him when a little modest stillness and humility might become a man, or at least offer a better course than promoting the hysteria that energizes the UCP’s red-meat base.

Yet there he was yesterday, railing at the courts as if they were involved in a conspiracy against Alberta.

“Today’s ruling makes it abundantly clear that the federal Court of Appeal has no regard for the real world economic impact this decision will have on ordinary Canadians’ lives and livelihoods,” Mr. Kenney huffed in an email to journalists that was reposted on social by Jason Markusoff of Maclean’s Magazine. With this blast, Mr. Kenney was either demonstrating an unseemly misunderstanding of how the courts operate or a remarkable level of cynicism.

Perhaps the intervention of the courts will mute some of the more outrageous calls in Alberta for anti-pipeline protesters in B.C. to be locked up until the project has been completed. Then again, perhaps not.

Naturally, Mr. Kenney’s hastily typed missive ended with a shot at the NDP. “This decision further proves that the NDP’s idea of punishing Albertans win (sic) a carbon tax to buy social license has been a failure from day (sic).”

This project got as far as it did and may yet be completed is a direct result of Ms. Notley’s social license approach. Nevertheless, the premier seems to have recognized the effectiveness of the UCP’s attack on the carbon tax and yesterday announced her government would pull out of Mr. Trudeau’s climate plan as a result of the court decision and not implement the next step in the tax.

So Mr. Kenney and the UCP can rightly celebrate yesterday’s court ruling as a significant win for their cause. The potential remains, though, for them to shoot themselves in the foot with overheated rhetoric before voting day.

18 Comments to: Calculating the winners and losers in yesterday’s Trans Mountain Pipeline debacle

  1. Jerrymacgp

    August 31st, 2018

    I’m sure the environmental absolutists among us—folks like Geoffrey Pounder, Scotty on Denman, and a few others— are jumping for joy over this ruling. But people with a more balanced perspective realize that this decision will make no difference on how much CO2 or other GHGs are emitted today, tomorrow, next week or next year. They understand that it took us decades to get into this situation, and we won’t get out of it overnight. Instead, we need to take small steps, on an ongoing basis over time, just like someone addressing health and lifestyle behaviours to manage a chronic health condition like obesity, cardiovascular disease or diabetes.

    The Notley government knew this, which is why they supported the pipeline while also taking small, incremental steps—like the carbon tax and the coal phase-out—towards addressing climate change. The rationale is that the government still needs revenue, and the economy still needs jobs, and transitioning to a fossil-fuel-free economy won’t be a quick or easy process. The world market isn’t yet ready to ditch oil in the short term, so the question isn’t should we produce it or not, but whether we should allow every other producing jurisdiction but our own to sell into that market. The absolutists want us to be more Catholic than the Pope, but the rest of us know how economically foolhardy that is.

    This decision has simply torpedoed the Notley government’s chances of re-election, and all we will get after next year’s election is a reactionary government that will undo everything the NDP has done so far on this file. Of course, there isn’t a single solitary thing Jason Kenney and the UCP could have done differently that would have changed the outcome of this court case. But the right-leaning media—i.e. all of them—and the voters will blame the NDP and vote them out after just one term.

    • Geoffrey Pounder

      September 1st, 2018

      RE: “environmental absolutists”

      If you refer to people who accept that rapid climate action and drawdown of emissions is an economic, ecological, and public health (read “survival”) imperative, I am happy to wear that hat.
      Yes, many people accept the climate science that dictates a rapid decrease in emissions. The shift must start now, not decades from now.
      The oil industry’s masterplan, which Notley is faithfully carrying out, is to ramp up production and emissions for decades.
      That’s what Albertans sign up for when they vote for Notley or Kenney in 2019.
      When you’re in a hole, stop digging.

      When will Alberta reduce emissions? When will Canada meet its targets? When will we stop expanding fossil fuel infrastructure? When will we put the full true price on greenhouse gas pollution? When will we price energy properly?
      Just name the date, Premier Notley.

      The house is on fire, and Notley wants to throw more fuel on the fire before calling the fire department.

  2. St Albertan

    August 31st, 2018

    What a tragic end to our story. The kind and gentle wellspring of energy laid low. Where in Shakespeare do you find the true spirit defeated? For all of you who wanted? Tough luck! For all of you who wanted this? Enjoy! It’s a poison chalice!

  3. Pogo

    August 31st, 2018

    David; Please be reminded. The biggest losers are you and me and likely give or ten percent of the AB government workforce. The next biggest losers are are pretty much everyone who counts themselves as Canadian, regardless of their opinion on this issue. The winners? A veritable bounty of interests. Railways? American refineries? Foreign crude tankers? Right wing politicians? Left wing politicians? Parasites of all varieties? Egad! Rachel was right! This was the hill to die on! How sad the best politician you and I have seen in the last thirty odd years has to face this. I mean that!

    • Gerald Landry

      September 2nd, 2018

      Oil runs downhill just like runaway trains! The NEB failed by NoT Issuing De-Commision Orders decades ago. Why have only the Jasper Park Loops been Replaced 10 years ago? In the 157 Requirements the NEB should have required that Y-Trap Loading & Un-Loading Portals be installed at all the eexisting Mainline Valves to verify the integrity of the 65 year’s old Pipedream! Buying a Pig in a Poke without any Ultra-Sonic-Pigging Data is a failure of the Precautionary Principle and Due Diligence!l

  4. Geoffrey Pounder

    August 31st, 2018

    David Climenhaga: “There are certainly grounds for appeal to the Supreme Court of Canada.”

    What, namely?
    Were the Federal Court of Appeal’s findings flawed and unreasonable? How?
    What possible objections to the judgment could be raised?
    The decision was unanimous.
    Does the oil industry / the AB Govt / Ottawa have anything resembling a case?

    I think Mr. Climenhaga answers the question:
    “The court’s decision was quite reasonable.”

    • David Climenhaga

      August 31st, 2018

      Good lawyers can always find grounds for appeal, and sometimes they can succeed. Politics will drive the decision for an appeal to be made, and for the reasons you point to, the appeal grounds will probably quite technical – for example, as one piece I read on this topic suggested, administrative law questions such as the degree to which shipping related to the project must be taken into account. Remember, regardless of how serious the impact of shipping could turn out to be (common sense says very), appelants will argue the judges are limited by the law to what they can do about it. The same article suggested there are grounds related to the amount and nature of the consultation with First Nations that are required. If your assertion is right, though, that such grounds just won’t make the cut, we’ll know when the Supreme Court refuses to hear them. I think it’s always a mistake to second guess, the legal system, as this case proves, as a matter of fact. DJC

  5. Geoffrey Pounder

    August 31st, 2018

    What about the NDP’s gross miscalculations? What about Notley’s irrational anger and colossal sense of entitlement?
    The NDP had no plan or response prepared in case the judgment went against them. How much more out of touch can they be? How bloody arrogant?!
    Notley response to the court decision was completely unstatesmanlike: “Alberta has done everything right and we have been let down.”
    “Alberta Party Leader Stephen Mandel said Notley’s government has shown ‘incredible smugness’.”
    Don’t count your leaky pipelines before they spill, Rachel.

  6. Geoffrey Pounder

    August 31st, 2018

    David Climenhaga: “This project got as far as it did and may yet be completed is a direct result of Ms. Notley’s social license approach.”

    Governments cannot award themselves social licence. Only affected communities can provide social licence for projects.
    Notley and Trudeau claimed social licence without consulting local communities or obtaining their permission.
    How could a failed climate change plan (rising emissions) in one province (AB) buy social licence for pipelines in another? It’s absurd.
    As Notley herself has pointed out, Trudeau doesn’t need the provinces’ permission to enact a national price on carbon.

  7. Geoffrey Pounder

    August 31st, 2018

    The following passage appears to be garbled:
    “Environmental groups [fear the pipeline] can count yesterday’s decision as a significant victory, as they will see any delay as making it less likely ever to be completed – and as a continued fundraising opportunity.”

    I suspect that environmental groups would be happy to stop fighting pipeline campaigns so that they can devote their limited resources more profitably to urgent issues elsewhere. These endless pipeline campaigns are a huge drain on manpower, energy, and resources.

    • David Climenhaga

      August 31st, 2018

      Thanks, Geoffrey, I have recast the sentence for clarity. DJC

    • Jim

      September 1st, 2018

      You do realize most professional environmental groups are businesses right? Follow the money an interesting trail, it is all a show. The anti-pipeline campaign is quite profitable, check the US filings by large foundations and the number of grants heading north of the border. Like most businesses environmentalism enriches the top the most but there is some trickle down.

  8. Paul

    August 31st, 2018

    For those who remember, the Trudeau govt failure to fulfill the election promise of reforming the NEB should weigh heavily against them in this matter.

    Your reference to environmentalists in this piece as, at least inferentially, a special-pleading fundraising cohort, grates, in light of recent fire seasons, floods, droughts, forest infestations. As an Albertan with property in BC, I see the two provinces beginning to part company in perhaps fundamental ways–greatly abetted by Ms. Notley’s escalatory “nation building” rhetoric.

    In BC, one can at least see the vast range of life modes being degraded by catastrophic climate disruption, making the urgency of our energy descent more apparent here. (Technorapturous notions of two-electric cars in every garage are admittedly ridiculous, but at least the need for deep change is seen.)

    Notwithstanding the real diversity that Alberta contains, it’s self image is of a petro-state. For as long as this is the case, Alberta will likely resist every opportunity to adapt, preferring reaction to innovation.

    I have considerable regard for Rachel Notley, and wish she had committed to transformational leadership and not the third-way incrementalism largely discredited wherever it’s been tried.

    The forces of reaction–Trumpism, business as usual denialism–seem to be defeating the triangulations of third-way incrementalism at every turn. For them, generalized breakdown is their native element. Perhaps in Canada we begin to seriously explore nationalizing, ratcheting down energy consumption in general, fossil fuels in particular, rationing, building resilience–not just market mechanisms like consumption taxes, and refining our own energy essentials for domestic energy security. Likely won’t happen, but we may be better for having tried it, rather than simply driving off the cliff and attempting to destroy whomever tries to turn the wheel,,,

    • Bedoich

      September 5th, 2018

      I agree. That would be a nice “Perhaps”. There is hope (At least for me) this new populist worm turns on itself, and we start to see some real progress.

  9. Farmer Brian

    September 1st, 2018

    Two planks of Justin Trudeau’s election platform were to fix the NEB process that he said Stephen Harper had broken and reconciliation with Indigenous people’s. One of the reasons that the court cited in the decision was lack of real consultation with the affected Indigenous groups. The failure of this application is on Justin Trudeau’s government. One has to remember that they so badly mishandled the whole file that it became clear to Kinder Morgan that a private company could not and cannot get a major energy project approved in Canada, forcing the Trudeau government to buy the pipeline to keep it alive. I believe this failure will weigh heavily on Canadian’s minds come next election!

    As for Premier Notley, when she brought in the climate leadership plan she heralded it as the pathway to receiving social licence to build pipelines. Recently as it appeared construction would begin she bragged that an NDP government had done what no Conservative government had been able to do, get a pipeline to tidewater. Well as I watched her on TV Thursday night responding to the federal court of appeal ruling, I could see in her eyes that she knows this ruling will push the start of construction past when she goes to the polls and she knows actual construction on this pipeline was the only chance she had for re-election. I did have to laugh a little when she said she was pulling out of the national climate plan, the raise to $40 a tonne doesn’t happen until 2021, it is the carbon tax that exists today that the majority of Albertan’s including myself don’t like. I certainly do admit Rachel Notley is a very competent politician, I simply don’t agree with a lot of NDP policy. If she was leading the Alberta Party, I would probably vote for her.

    One other thought, environmentalists seem to think this is a great victory, they should realize in the long run they will lose because of it. Albertan’s are fed up with the resource developement stalemate. Jason Kenney as Alberta Premier will be much less sympathetic. Federally this decision will greatly improve the chances of the federal Conservative’s! Justin Trudeau has preached that the economy and the environment go hand in hand. That is why we need a carbon tax. Well I think this arguement is wearing a little thin and Albertan’s and the rest of Canada have had enough! Enjoy your day.

  10. Rocky

    September 1st, 2018

    Farmer Brian: Environmentalists are right to think this is a great victory, because it is, for them and for Canada. It shows the rule of law still functions in this country. It slows and may stop a destructive project which does not make economic sense and is based on false premises. If it results in the election of Jason Kenney as AB premier, from the environmental perspective that is better. He will not be tougher than Ms. Notley. He will be just as tough. But he will be far stupider. This means he is far less likely to succeed. As for the chance the Conservatives will form the federal government under the pathetic weakling Andrew Scheer and the vicious racist clowns that surround him, it’s possible, but it would spell the end of Confederation. Say goodbye to the West Coast. Say goodbye to the St. Lawrence as a navigable Canadian passage. Soon after that, Say goodbye to the East Coast.

  11. David

    September 1st, 2018

    While I don’t think Kenney is a loser from this turn of events, I doubt that he wins much either. It is easier and more politically rewarding as a politician to rail against Trudeau and the BC premier than judges. It was never very clear how Kenney was going to change the mind of the BC premier although hes aid it with a straight face which kept if from seeming totally ridiculous, but claiming he will somehow change the ruling of judges would be a ridiculous statement even for him.

    While I do agree the whole thing has been a source of enormous frustration for many Albertan’s, I actually disagree with the conventional wisdom that this pipeline will be a significant issue in the Alberta election next year. I think the Federal government will respond to the ruling in some fashion and events will continue to unfold, although probably not at a fast pace and likely not in a very public and high profile way unlike the confrontation with BC earlier in the year. Therefore, soon people’s attention will soon start to shift to other issues.

    I know Kenney has tried hard to demonize Trudeau to Albertans, but for all his effort Trudeau’s popularity in Alberta seems to be about the same as it was in the last election. The Federal Conservatives will likely take the bait and continue to be the rabidly pro all pipelines party, but if they become to strident in that it will turn off voters in places like the lower mainland where there are close races. Ironically, the political winners could end up being the Greens (for those Conservative environmentalists that can not bring themselves to vote for the Liberals or the NDP) and more ironically maybe even the Liberals due to the decline of the Conservative vote in some close races there. I don’t think being to stridently pro pipelines will help the Conservatives in Quebec either and might serve to remind voters there and elsewhere that while the Liberals have what some consider a questionable climate change strategy, the Conservatives have none at all. I do suspect there will be some modest benefit to the Federal NDP also, but overall I think the political impact of the court decision will be not the significant.

    Now, if this court decision happened next spring or next fall, it might have had a more immediate political impact, but fortunately for the Alberta NDP and the Federal Liberals, the next election is coming, but still a number of months away and as the saying goes, a week is an eternity in politics.

  12. TommyB

    September 2nd, 2018

    As the saying goes, “In our efforts to be perfect we sometimes prevent doing something good.” In other words, I’m in total agreement with Jerrymacgp and Pogo that the body blow dealt Rachel Notley’s government makes us all losers. Economically, because there is a strong case to make that we are losing one of our shields holding back strong global economic winds. And environmentally, because the narrative in fighting climate change has been lost to those without a plan and away from those who actually made it seem like something could happen. The whole things become a proxy war for other grievances over resource development. For all the environmental degradation and all the shortcomings of the oil business. The halting of the TMP is not integral to the fight against climate change and may, in fact, hurt by adding fuel to politicians who either deny or have any interest in finding a path away from a carbon based future.

    After winning the previous seventeen rulings I think it’s fair to say a lot of observers along with the Premier did not see this coming. Yet, as both Davids pointed out, ‘the court decision was quite reasonable’ and it did contain clues as to how the project could find its way out of this rabbit hole. But I couldn’t help but notice a bit too much glee from Burnaby and some over the top angry reactions from here. All I could do was give it the old slow clap standing ovation and say ‘Nice job Everyone’. Enjoy the Trumpian guy.


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