So what really happened to the Teck Frontier oilsands mine?
Hint: It wasn’t anything Justin Trudeau did or didn’t do. That’s pure United Conservative Party gas lighting, a game a career politician like Alberta Premier Jason Kenney just can’t make himself stop playing.
It probably didn’t have had all that much to do with the Kenney Government’s abandonment of the preceding government’s social license strategy either, although tearing up Rachel Notley’s Climate Leadership Plan certainly didn’t help.
That was the former NDP premier’s argument yesterday, in the wake of Teck Resources Ltd. President Don Lindsay’s Sunday announcement his Vancouver-based corporation was pulling the plug on the project Mr. Kenney wants us all to think was the lynchpin to Alberta’s future economic prosperity, the better to undermine Prime Minister Trudeau’s Liberals in Ottawa.
No, it’s the market, stupid!
Teck Resources Ltd. has understood this for at least a couple of years now, probably longer. The market for fossil fuels is in decline, and all the War Rooms in Alberta and all of Premier Jason Kenney’s public tantrums and bizarre conspiracy theories can’t do much to change that reality.
Concern about earth’s rising temperatures, and bankers’ and insurers’ inevitable responses to that, just makes the market that much worse.
Everything else considered, the price of oil is just too low, and too likely to stay that way, for the Frontier mine to make any sense to develop, now or later — as the company has been hinting for weeks with talk that even if the $20-billion development was approved by Ottawa as had been expected this week, they might never get around to actually building it.
As energy economist Andrew Leach and environmental law professor Martin Olszynski wrote for the CBC earlier this month, “while some have argued that the investment could be viable if average oil prices are above $65 WTI (assuming very small discounts on heavy crude oil), that still positions the project as a multibillion-dollar bet on pipelines being built and oil prices being much higher than we see today for most of the next 50 years.”
So if you were really paying attention, you knew the only real question was when Teck would tell Alberta the news — right away, after the company saw what the federal government would do about approving the project, or in a couple of years.
They had to know they had little hope of a deal like the trick Kinder Morgan Inc. pulled off when it managed to sell its aging pipeline through to the Pacific to the federal government for $4.5 billion, far more than it was worth, in 2018.
Teck’s political problem, it’s said here, was that Mr. Kenney had used his bully pulpit* as premier to make the proposed mine a cause célèbre, thus making it potentially risky for the company just to walk away from a plan beloved by a politician known to keep a long enemies list.
So, for Teck’s top executives, arguably, the hyperbolic national “crisis” of the past couple of weeks was a wonderful opportunity to get out of Dodge with their corporate reputation largely intact.
“Global capital markets are changing rapidly and investors and customers are increasingly looking for jurisdictions to have a framework in place that reconciles resource development and climate change, in order to produce the cleanest possible products,” Mr. Lindsay said in his letter to federal Environment Minister Jonathan Wilkinson, accurately enough. Significantly, and also accurately, he added, “this does not exist here today.”
“It is our hope that withdrawing from the process will allow Canadians to shift to a larger and more positive discussion about the path forward,” Mr. Lindsay or a skilled PR person in his employ wrote, making the only sensible business decision available to a company that’s already sunk more than $1 billion into the scheme out to be an act of national altruism. “Ultimately, that should take place without a looming regulatory deadline.” (So don’t expect us to be back with this anytime soon, he might as well have added.)
Mr. Kenney and Andrew Scheer, his lame duck sock puppet in Parliament, made outraged noises, but this was mostly canned heat, directed at the prime minister — who increasingly looks like a deer caught in the headlights as he endures the relentless barrage of Conservative trollery.
But that, as the Bard of Avon reminds us, “is a tale told by an idiot, full of sound and fury signifying nothing.”
Still, while Canadians owe Mr. Trudeau a debt of national gratitude for toppling Stephen Harper, the time may soon be coming when he decides to make way for someone tougher in the Liberal party’s leadership. The name most often heard in this regard is that of Deputy Prime Minister and Intergovernmental Affairs Minister Chrystia Freeland.
The dice roll Jason Kenney’s way in the Alberta Court of Appeal
The best news for Premier Kenney yesterday was the decision of the Alberta Court of Appeal that Ottawa’s carbon tax does not fall within the federal government’s power to legislate on matters of national concern.
If the state of the environment in a world rapidly heating up isn’t a matter of national concern, it’s hard to imagine what the court thinks would be, but this is a question for legal scholars, not a humble blogger who sort of wondered if Ottawa’s lawyers weren’t hanging their powdered wigs on the wrong constitutional argument anyway.
Since two other courts of appeal in Saskatchewan and Ontario have ruled to the contrary, one also has to wonder if there’s something in the water here in Alberta. With appeals flying hither and yon, the matter is destined to come before the Supreme Court of Canada soon.
The Globe and Mail quoted Ottawa law professor Amir Attaran, who represented the Athabasca Chipewyan First Nation in the case, saying that when it does he doesn’t expect the Alberta court’s reasoning to be well received by the Supremes.
“In law school you’re taught to avoid slippery slope arguments and this is the paradigm of a slippery slope (argument),” Dr. Attaran told the Globe’s reporter. “It’s unserious and that will be to Alberta’s detriment at the Supreme Court.”
That said, as any seasoned trial lawyer will tell you if you ask nicely, it’s almost always a crapshoot when you come before a judge, which is why it’s always prudent to try to bludgeon your opponent into an out-of-court settlement. So we shall see.
* A bully pulpit is a position or office that commands attention. The term is said to have been coined by Theodore Roosevelt, 26th president of the United States. It does not have anything to do with bullying, notwithstanding the conduct of the current occupant of that office or the occupants of some others.