Pipeline politics and the 2015 election

October 8, 2015

In early 2012, then Minister of Natural Resources Joe Oliver warned that "environmental and other radical groups" were undermining Enbridge’s proposed Northern Gateway Pipeline and other efforts to diversify Canada's export markets.

If anything, Oliver's letter only inflamed opposition to the pipeline. In the months that followed, mass protests dogged National Energy Board (NEB) hearings, reflecting deep concerns about spills on land and at sea.

Flash forward three years and pipelines are facing major hurdles in every direction. Just in the latest news cycle, consider the following:

Case 1: Eight BC First Nations began a court challenge against the federal government's 2014 decision to approve Northern Gateway. The case will be fundamental to the future of pipelines in the context of First Nations rights and title.

Case 2: Democratic presidential hopeful Hillary Clinton came out against TransCanada's Keystone XL pipeline. After years of delay and widespread protest along the pipeline route, President Obama is anticipated to officially rule against KXL.

Case 3: Quebec Premier Couillard stated that he is yet to be convinced that the economic benefits of TransCanada's Energy East pipeline project outweigh the substantial environmental risks.

Case 4: Alberta Premier Notley called for a change in the terminus of Kinder Morgan's proposed Trans Mountain pipeline expansion, from Burrard Inlet in the heart of Metro Vancouver to Roberts Bank just outside the city. An NEB decision is still pending, but last year protests erupted on Burnaby Mountain in response to site testing and drilling.

Surprisingly, Election 2015 has failed to give expression to these concerns about pipelines at the federal level. None of the main three parties has ruled out new bitumen pipelines. Prime Minister Harper backs all pipeline projects, and has deployed considerable government resources to advance them.

The Liberals and NDP are unified in opposition to Northern Gateway, while being publicly open to other options. Both have argued that the Conservatives' shredding of environmental regulations is to blame for failure to get new pipelines online. This presumes that restoration of environmental regulation would build the "social license" to proceed.

In 2015, it is clear that no one wants a bitumen pipeline running through their backyard. And given the terrible safety record of the industry, with thousands of spills over the past decade, why would they?

The nature of pipeline and tanker operations over rugged terrain and ocean conditions means it is not a question of if there will be a spill, but when and how bad it will be. One recent estimate from Simon Fraser University put the potential economic damages from a major spill in Metro Vancouver from the Trans Mountain pipeline at $2-5 billion.

Even absent a spill, hundreds of oil tankers plying the BC coast would be disruptive to already existing fishing and tourism jobs. Meanwhile, local benefits in the form of new jobs tend to be miniscule, once the construction phase is over.

While provincial governments have not rejected pipelines outright, they have responded to protest by stating conditions for approving them. The BC government has five conditions, including safety and spill response measures, addressing First Nations legal rights and title, and receiving a fair share of the fiscal and economic benefits.

Beyond spills, addressing climate change must also shape our decision-making. The world is marching towards a new climate agreement in Paris later this year, while scientists have warned that most of the world's proven fossil fuel reserves (and Canada's oil sands) will need to stay underground. If greenhouse gas impacts were considered in NEB hearings, as recommended by the NDP, any serious review would likely reject them as inconsistent with climate action.

In the end, all the pipeline delays may turn out to be a blessing in disguise for investors. As former Bank of Canada Governor Mark Carney has warned, multi-billion-dollar fossil fuel infrastructure risks becoming a “stranded asset” as the world transitions to clean energy sources.

Marc Lee is a Senior Economist in the BC Office of the Canadian Centre for Policy Alternatives, and Co-Director of the Climate Justice Project, a multi-year research project funded by the Social Sciences and Humanities Research Council of Canada.