When it comes to the Trans Mountain Pipeline Expansion, Canadian Prime Minister Justin Trudeau finds himself on the proverbial horns of a dilemma.
There are serious political consequences for his Liberal federal government if he now allows the project to proceed. There are likewise serious political consequences if he doesn’t.
Thanks to the work done by Alberta Premier Rachel Notley, a New Democrat, support for the TMX in Canada has probably reached its high-water mark. It has nowhere to go but down.
Thanks to the loss by Ms. Notley’s NDP Government of the April 16 Alberta election to the United Conservative Party led by Jason Kenney, support for the TMX outside the Prairie Provinces is almost certain to fall.
This is because Mr. Kenney, a former senior cabinet minister in the petrostatic Conservative federal government of Stephen Harper, has made it clear he will immediately repeal Alberta’s carbon tax, lift the cap on oilsands carbon emissions and return to the Harper Government’s strategy of belligerent bullying of Canadians who have their doubts about converting the country into a petro-state, especially now.
What Will Justin Do? (WWJD?)
Back on Nov. 29, 2016, when a confident Mr. Trudeau announced the approval of the TMX and two other large energy infrastructure projects, he reminded Canadians that during the previous year’s election campaign, “we said that major pipelines could only get built if we had a price on carbon and strong environmental protection in place.”
“Aside from the many and obvious economic benefits, we approved this project because it meets the strictest of environmental standards and fits within our national climate plan,” he said at that news conference.
“And let me say this definitely. We could not have approved this project without the leadership of Premier Notley and Alberta’s climate leadership plan, a plan that commits to pricing carbon and capping oilsands emissions at 100 megatonnes per year. We want to be clear on this point because it is important and sometimes not well understood.” (Emphasis added.)
“Alberta’s climate plan is a vital contributor to our national strategy. It has been rightly celebrated as a major step forward both by industry and by the environmental community,” Mr. Trudeau continued. “The Alberta plan provides a cap on emissions from oilsands over the mid-term, but allows for production to increase from present levels.”
In five days, Mr. Kenney will be sworn in an premier of Alberta and his first act, he has vowed, will be to tear up Alberta’s climate leadership plan, specifically the carbon tax and the oilsands emissions cap.
As has been predicted in this space, Mr. Kenney’s belligerent brand of TMX advocacy is likely to send fence-sitting British Columbians back to the anti-pipeline camp. It already seems to have had that effect in Quebec.
If Mr. Trudeau hopes to retain or increase seats in B.C. or Quebec, he will need to stand up to Mr. Kenney’s bluster – which the prime minister understands very well is part of a Republican-style co-ordinated national campaign by the Conservative Party and its provincial chapters to box him on the economy.
He surely also understands that if he fails to move forward on the TMX program he will look like a prat for having spent $4.5 billion of our collective money to by the existing line from Kinder Morgan Inc. of Houston, Tex., only to pull the plug on it. But no matter what he does, there are very few votes in Alberta for him.
It doesn’t help that the business case for more pipelines is a shaky one, which is why Kinder Morgan got the heck outta Dodge when it found a likely buyer for its depreciating 60-year-old asset.
It’s very hard to predict what the Liberals will do about this in the long run, but it’s obvious that their first instinct – and probably the right one in the political vise they now find themselves – will be to sniff the wind.
Last Thursday, federal Natural Resources Minister Amarjeet Sohi – an Edmonton MP whose re-election in the fall is, shall we say, problematic – announced Ottawa was extending its own deadline for a decision to approve the TMX from mid-May to June 18 to allow more time for consultations with First Nations as required by the courts.
Inquiring minds wondered at the time if that was a shot across the bow of the new Alberta government. Mr. Trudeau owes Mr. Kenney no favours.
Mr. Kenney understands this, presumably, and took a conciliatory tone in his response, although with a little bit of spin on it.
“I agreed with the prime minister that they need to make sure that they cross every t and dot every i when it comes to discharging the federal government’s duty to consult,” he told an impromptu news conference at Government House in Edmonton, where he had been discussing the transition with outgoing Premier Notley. “We certainly don’t want them to have to go back to the drawing board a third time on this.”
“We will continue on our part to build an alliance across the country that supports TMX and other pipelines,” he said. “We will continue to communicate the urgency of this to all Canadians.”
Well, no doubt he will try.
If the federal government decides to allow the project to proceed – perhaps with some First Nations ownership – that will expose Mr. Trudeau’s environmental posturing in 2015 and 2016 as an outright fraud.
If he doesn’t, at the very least he will stand accused of having made an extremely bad investment in a White Elephant pipeline.
Yesterday, Mr. Sohi said Ottawa can’t guarantee there will be a decision on the TMX before the next election, although he added that there probably will be.
“Each province is expected to have their own climate change plan in place and the cap on emissions from oilsands development is part of that plan and we look forward to working with the new government to understand how they will continue to either support that plan or have a new plan,” Mr. Sohi told reporters after a clean-energy announcement in Calgary.
“We understand the amount of emissions that are generated in Alberta are significant,” he added. D’ya think?
With record floods for the last three years in Eastern Canada, maybe the twittish attitude of Alberta that what we all really, really need is to shovel more dilbit on the market to burn, generate more CO2, increase climate change and hurry along the environmental disaster facing us all, is “for the good of Canada”. Sure it is. It’s downright wonderful! But Alberta prefers to think of itself as an island unaffected by all the chaos experienced elsewhere.
The biggest hypocrite is of course Premier Higgins of New Brunswick, an ex-Irving Oil office manager who “thinks” the cancelled Energy East pipeline should be resurrected as he stands in hipwaders directing matters in a flooded Fredericton Street, babbling nonsense about the carbon tax being an imposition. But Irving wants to make more money, so the poor bugger has to utter these inanities as if they made sense – it’s his primary job in a province where Irving owns virtually everything and hoards profits offshore. You have to hand it to the Conservative mini-minds across this land who bark defiance at carbon taxes, even as evidence of climate change rises around them. Cognitive dissonance that we are all supposed to cheer. “Let’s commit suicide!” yell the Conservatives, eager to keep corporate interests happy. “We’re OPEN for business and don’t care if we ruin our country making extra bucks for foreign and elitist interests by ripping off public resources for private interests for jobs with a lifetime of five years!”
Apparently millions of Canadians are happy to vote for these charlatans, and none more so than Albertans. When the sparkling Rockies’ glaciers are completely melted away and Alberta’s freshwater fades into nothingness leaving bitumen processing gasping for water, maybe Albertans will wake up. But on the basis of past performances, probably not. They’ll just blame it on someone else.
I see it a little differently. It appears to me that Rachel Notley made many deals with Justin Trudeau behind closed doors. I think the federal Liberal’s had much more to do with the developement of the NDP’s climate leadership plan than the NDP ever let on. One example is that it appears if the 100 megatonne cap is removed that the approval and regulation of new SAGD oilsands facilities will fall under the yet to be approved bill C-69.
It also appears that Justin Trudeau intends to use the Transmountain expansion as a political football in his re-election campaign. When Rachel Notley confidently predicted during the campaign that shovels will be in the ground by fall I am afraid she was absolutely wrong. As Amarjeet Sohi stated there is no guarantee of a decision before the election. I have always believed Trudeau had no intention of expanding Transmountain and my opinion hasn’t changed. What really baffles me though is why John Horgan continues to talk out of both sides of his mouth, on one hand he is lobbying the Feds over high gas prices in the lower mainland, that something needs to be done and on ther other lobbying against new pipelines! He wants new refineries built in BC on one hand and on the other is going to outlaw the sale of gas powered cars by 2040. If Transmountain was expanded more refined gasoline could travel through the existing line as BC’s only sources of regular gasoline are Alberta and Washington state.
There is no doubt very little will be accomplished before the upcoming federal election on any file that benefits Alberta. Enjoy your day.
I think what Mr. Trudeau will do will depend on circumstances. Yes, the Federal Liberals have invested a lot in this pipeline both financially and politically, so the default would probably be for it to move ahead. However, there are many different fingers in the pipeline pot and for it to move ahead many things need to go smoothly. There are things the Feds or Alberta can’t totally control, like court challenges and the actions of other provinces. Then there is Mr. Kenney himself, who has been and can be belligerent and to whom the Federal Liberals owe no favours.
If things are to move ahead, two things need to happen. First, the post election conciliatory sounding Kenney needs to remain that way regardless of what he promised his base about fighting. The rest of Canada will not put up with a belligerent Alberta Premier at this point and it will be the surest way for support for the pipeline to plummet. If that happens then the Liberals conditional support for the problem will probably quietly or not so quietly go away. The second thing, is Mr. Kenney needs to come up with something on the emissions cap. Alberta can have a pipeline or coal fired plants, but not both. Again, another promise Mr. Kenney made that will need to be quickly disposed of. Can Kenney do that? I suspect he can, I grassroots guarantee he is fully capable of forgetting, or ignoring any promises he made when convenient or necessary.
I think what Mr. Sohi was trying to say nicely is we need something like what the Feds agreed to with Premier Notley. It doesn’t need to be exactly the same, but pretty darn close. I also noticed the Ontario Environment Minister so helpfully recently pointed out that his province did a lot to reduce emissions by 20% (ahem .. mainly under the previous Liberal government of course, but I think he left that part out), so don’t expect Ontario to do more now. Ontario now expects the west to do more, and by that I don’t think he means BC. There is this portrayal of this grand Conservative alliance against Trudeau, but there are significant regional differences that will limit or maybe negate this. The Conservative leaning Premier of Quebec has already said non merci to Mr. Kenney’s ask for another eastern pipeline. Premier Notley probably knew better than to ever ask.
If Mr. Kenney does not want to be flexible, one of two things will happen, the pipeline will be delayed although probably not cancelled. As Mr. Sohi pointed out the decision rests with cabinet and they will determine when and how they decide. There is not as much of an urgent deadline for the Feds on this as for Alberta. Alternatively, the Feds may just impose more stringent limits on Alberta’s carbon emissions than the Notley plan. If Mr. Kenney doesn’t want to play ball, there will be a price to pay, the Liberals have little to lose politically by being tough on Alberta. I don’t know if Mr. Kenney’s apparent personal animosity to Mr. Trudeau is reciprocated, I think probably not entirely, but I am sure it exacerbates the lack of trust the Federal Liberals have with Kenney, so coming to any deal could be difficult.
re: TMX a White Elephant…
Trudeau Lib’s have committed all Canadians to subsidize the billions we’re going to lose on it. See the explanation with data in the links below.
Robyn Allan has studied TMX, made submissions on its sketchy economics, to the NEB hearing, to the federal gov’t, and generally reported for years now on the boondoggle that TMX has fully become. Links below. Robyn Allan has held executive positions in the private and public sectors including President and CEO of the Insurance Corporation of British Columbia,
Note that reporters from publications other than Postmedia have regularly interviewed Allan.
Robyn Allan: An open letter to Rachel Notley and Jason Kenney
March 5th 2019
https://www.nationalobserver.com/2019/03/05/opinion/robyn-allan-open-letter-rachel-notley-and-jason-kenney
The Myth of The Asian Market for Alberta’s Oil
https://thenarwhal.ca/myth-asian-market-alberta-oil/
Kinder Morgan bailout to cost north of $15 billion
By Robyn Allan in Analysis, Energy | May 29th 2018
https://www.nationalobserver.com/2018/05/29/analysis/kinder-morgan-bailout-cost-north-15-billion
How Kinder Morgan won a billion-dollar bailout on Canada pipeline
https://www.reuters.com/article/us-kinder-morgan-cn-strategy-insight/how-kinder-morgan-won-a-billion-dollar-bailout-on-canada-pipeline-idUSKCN1IV1B5
Note: Amazing how all the RW Postmedia cheerleaders for TMX/oilsands that write zillions of columns supporting it, and will no doubt lose their minds if Trudeau Lib’s don’t go deeper into the TMX boondoggle, yet these same oilsands cheerleaders can also do columns ad nauseum attacking NDP gov’ts for intervening in markets with ‘taxpayer’s hard earned dollars’,’picking winners and losers’, e.g. setting targets for developing an AB renewable energy industry, putting a floor under the price they’ll be paid with carbon tax funds, and thus bringing in wind/solar to replace coal.
It’s pretty clear that Justin is not going to do any favours for Kenney, and visa versa. So, no pipeline approvals before a federal election unless there is something in it for Justin’s future.
As discussed yesterday, reality will prevail despite the Kenney Konservatives resistance or inability to perceive reality. The facts, or the reality of facts, is that there is nothing Kenney can do to increase employment in the petro-industry, there is nothing he can do to increase prices paid for Alberta petro-product nor is there anything he can do to increase petro-production. He could, but he won’t, re-envision the Alberta petro-industry as a source for wealth generation for the state and people of Alberta. As such, he and the rest of the conservative brain-trust are left with their fantasy economics and fantasy development plans. Of course, their un-real and un-founded arguments will continue to rely on a kaleidoscope of blame-shifting that is now conservative and republican stock-in-trade. We will see how the Kenney Konservatives spin some (black) gold out of their straw man arguments.
If and when the petro-industry finds it profitable to ship another million bpd to the US west coast refiners they will ensure the twinned pipe is built. But they won’t find any such analysis.
It may turn out that Trudeau did Canadians a great service in buying TMP, basically nationalizing the western leg of the pipeline system. It keeps it out of the hands of reckless and irresponsible foreign operators. And it might just form the basis of a new reconstituted National Energy Program. Something that the Kenney and his handful of conservative collaborators are calling for, in substance, if not in name.
DC, very good points re Trudeau’s comments at the time TMX was approved. He left himself an escape pod. Why wouldn’t he use it now? The Liberals won four seats in Alberta (all of which are in trouble whatever he decides) and 17 in BC (almost all of which would be in trouble if he approves TMX). Seats elsewhere in the country would also be jeopardized. Surely we have by now learned that the answer to the question WWJD is: whatever is most politically expedient. We can draw our own conclusions.
If Trudeau approves TMX, the Liberals will get no votes from pipeline-manic conservatives, but will be abandoned by progressives in key ridings demanding real climate action.
The oil industry (CAPP) is going all out to unthrone the prince. Trudeau has nothing to gain by throwing right-wing attack dogs a bone. Nothing he can do will satisfy them. Same for Notley.
That is why Trudeau should implement the tax if Jason goes ahead with scrapping the carbon tax. He should have approved a pipeline when the company pulled out.
Another analyst’s recent take on pipeline debate.
AB/Cdn media have failed to properly examine the need for pipeline claims. Mostly just went along with industry/gov’t/RW commentators propaganda.
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Belot: Albertans have been fooled by a myth about pipelines and the oilsands
By Ross Belot in Opinion, former industry exec.
Energy | April 23rd 2019
https://www.nationalobserver.com/2019/04/23/opinion/belot-albertans-have-been-fooled-myth-about-pipelines-and-oilsands
excerpt: Albertans have been had. But it isn’t by special interests outside this country. It’s by Canadian politicians of all stripes who continue to sell a myth, a myth that the reason the oilsands have stopped seeing major new investment is that we don’t have enough pipelines.
excerpt: No. It’s that other thing Kenney mentioned: an unprecedented oil boom south of the border. Fracked U.S. oil is attracting the capital. And that is because it is a much better resource to exploit. A review of investment trends in oilsands and fracked oil so far this century explains this.
excerpt: ‘U.S. crude oil production in July 2011 was 5.6 million barrels per day (MBD). By January 2015 it was 9.3 MBD. By October of last year production was up to 12 MBD and counting. ‘
excerpt: ‘…we don’t need all the pipelines under consideration. The combination of Enbridge Line 3, Trans Mountain Expansion and Keystone XL adds close to two million barrels per day (MBD) in pipeline capacity, almost twice as much as CAPP’s forecasted growth in production by 2030. That’s a forecast where industry assumes pipelines are available.
excerpt: ‘Canadians, especially Albertans, are being played.
A good example is Kenney’s crusade for Energy East, a pipeline from Alberta to New Brunswick via Quebec. The economics don’t exist. And the Quebec government doesn’t want it. There isn’t enough new crude to fill such a large line and the refinery hardware in Eastern Canada for diluted bitumen is close to non-existent. Still, Kenney and his base love the idea. Economic reality is not a problem for them. ‘
That was an interesting article, Sam, thanks for posting the link. What I found most interesting was Mr. Belot’s response to commenters after the article, in which he discussed the break-even point for fracking and other oil sources. I also really liked his point that most of the revenue from fracking comes in the first three years of the project, whereas oilsands development is very much a long haul project.
Any long haul energy investment consideration has to factor in the eventual appearance of an electric car.
The UCP have made political hay about how there is much more energy investment in the US than here, blaming the NDP for it, but the brief reading of Mr. Belot’s article has me thinking that if I were investing in energy right now I would be more inclined to look at a fracking operation than an oilsands one. In 3 years I can have my investment pay out, and it is unlikely the electric car will have an impact in that time line. People thinking about investing in an oilsands project, however, might be wise to think about how their great grandfather bought a franchise in Blacksmiths-R-Us in 1900 (those horseless carriages are just a fad) or how their father invested in a (camera) film company in 1990.
I hope that the carbon tax takes into effect because we need to have a tool to discourage bad behaviour. He can’t not implement a carbon tax in Alberta and in Saskatchewan, Manitoba, Ontario, and New Brunswick who don’t have a carbon tax. If Albertans want other provinces and the federal government concerning the plight of workers here, then we have to not behave with a sense of entitlement. I also think that there has to some reality when it comes to our expectations. The oil industry is not coming back the way it was before the collapse in 2014. Automation has been many of those jobs and it might be possible that electric cars and other innovations could have an impact on the industry. This is the focus of all levels of government.
The “let the world burn” party, led by Saskatchewanian Andrew Scheer, could win each and every vote here in Oilberta, and still not win the next election. From a federal electoral perspective, the key battlegrounds are those parts of the country that are more skeptical about the value of expanding oil & gas infrastructure like pipelines, and others that are quite firmly opposed to it. The Notley government tried to have its cake and eat it too, by supporting both pipeline construction and some modest action on climate change, and look how far that got it … not that I’m criticizing them, that was the approach I supported, as it was the one most likely—had the chips fallen just a bit differently, like the Federal Court not throwing a monkey wrench into the works last August—to keep them in office where they could do a lot of good on files not connected to energy & the environment. But for pipeline advocates, the NDP simply didn’t do enough, although what else they could have done remained a mystery right up until E-Day; meanwhile, for hard-core environmentalists, they didn’t do enough on the climate, even though they clearly made the decision to embrace the art of the politically possible rather than take a radical position that could never be supported here at home.
So, Albertans turned out in record numbers to vote out the NDP government and bring in the “knuckle-draggers” of the UCP—in my own constituency, Grande Prairie-Wapiti, the official turnout was the highest in the province, at just over 80%, in a place where 49% is considered high—to take more aggressively ineffective action on pipelines, and to reverse, we suspect, virtually every positive, progressive measure the NDP took in its four year mandate. How all of this will get a pipeline to “tidewater” built is still a mystery, and in fact it just gives the Liberals cover, in conjunction with the Federal NDP, Federal Greens, and even the Bloc in Quebec, to stall and dither and block TMX until after we all go to the polls in October.
On the climate front, only the ScheerCons oppose the federal backstop carbon tax, although the Greens probably think it doesn’t go far enough. That will lose them votes in those places where people are worried about climate change, and win them even more votes in places like Alberta where they already get more than they need to win every seat.
“they clearly made the decision to embrace the art of the politically possible rather than take a radical position that could never be supported here at home”
What did embracing the “politically possible” get the NDP? A landslide victory for the UCP. NDP extirpation in rural AB with huge losses in Calgary.
What would have been the result if the NDP had stood up to Big Oil instead of kowtowing?
A landslide victory for the UCP. NDP extirpation in rural AB with huge losses in Calgary.
Not much difference.
The NDP had nothing to lose. Notley was always a one-term premier. So why not be fearless?
Retain your principles, govern with integrity, base your policies on the best available science, and tell the truth. Don’t deceive Canadians.
Set out a roadmap for AB’s sustainable long-term future. Show Albertans what a progressive govt looks like at its best.
P.S. Policies based on the best available science are “radical”?
If that’s what the “progressive” party believes, it becomes a self-fulfilling prophecy.
Science becomes “radical” only when the “progressive” party rejects it.
If progressives stand up for science, the govt may still go down to defeat — but we still have a party that champions science. The integrity of progressive leaders remains intact.
Notley now embraces Vivian Krause’s conspiracy theories. Under her “radical” leadership, the NDP have done significant damage to the progressive brand in AB. Repair will take years.
I hope and trust that the Government of Canada will impose a C tax on those Provinces so perverse as to refuse to do so on their own.
I for one am tired of hearing about Alberta’s Rage ™, and think it critical that the federal government call their bluff. The electorate rejected any compromise with the rest of Canada, and mocks the notion of social license? Then cancel the TMX…that’s what they voted for. I’ve strongly defended the pipelines in social media, but never again.
I did not expect that the NDP would win, but I was appalled that their proportion of the popular vote decreased. DECREASED! The place is a lost cause, as far as I am concerned. At this point, with Kenney’s sights firmly fixed on Ottawa, I would not regard Alberta’s departure from Confederation as the worst thing in the world. Quite the reverse, frankly.
Note that this is posted more than a week after the election, so not in the heat of the moment. It’s my home Province, I’ve lived there more than half my life, even returned for 8 years after 15 years on the coast. But in all sober earnest, I am done with the place.
Adieu.
“…again.I did not expect that the NDP would win, but I was appalled that their proportion of the popular vote decreased. DECREASED!…” True, but in fact, their raw total vote actually increased from 2015 … see Dave Cornoyer’s excellent blog for details: http://daveberta.ca/2019/04/alberta-election-2019-by-the-numbers/
Sadly, both the voter turnout, and the combined conservative popular vote both increased more than the NDP’s did …