Trudeau fails to get optimal compromise between economy and the environment

For the past decade, Canada has lost $117 billion of economic value (about $ 30-40 million per day) simply because Alberta tar sands oil has not been readily exportable to Asia and we have been captive to the American market.

That money has simply flowed into the pockets of American oil execs, shareholders and consumers at our expense.

The only way to stop this hemorrhaging of economic value in the foreseeable future was to build the Trans Mountain pipeline, but legal and political delays from B.C. were going to make Kinder Morgan walk away from the project, damaging investor confidence in Canada even further.

That  is why a lot of people supported the federal government’s recent decision to buy Trans Mountain from Kinder Morgan for $4.5 billion —and remember, that doesn’t even include the costs of constructing the pipeline, which will be at least another $7.4 billion, and possibly much more.
But all of this makes me wonder: What if all of this legal and financial muscle had been used a couple of years earlier, in order to avoid being painted into this corner in the first place?

If the bottom line for environmentalists is avoiding the shipping of diluted bitumen along the B.C. coast, and the bottom line for Alberta and the energy industry is to get oil to tidewater, then the best solution is one that respects both of those bottom lines, by shipping something other than bitumen through a less congested route.

It is to the credit of B.C. newspaper publisher David Black and B.C. Green Party leader Andrew Weaver that they understood the importance of getting Alberta oil to tidewater.

Five to six years ago, (when China was more anxious to get an equity stake in the Canadian oil sector) a major Chinese company was lined up to invest in a refinery in Kitimat to go along with the Enbridge Northern Gateway pipeline.

Northern Gateway could have worked, created jobs, and reduced the need for the KM pipeline expansion.

Sending refined oil on a route with more open water would have been less risky environmentally; I believe that on balance it was the socially optimal compromise—and every First Nations group or environmentalist or opportunistic politician who opposed it should have realized that by blocking the Northern Gateway, they would be creating pressure for a $10-15 billion per year zero-sum game over the KM expansion.

So thank you, Adrian Dix, Elizabeth May, Justin Trudeau and David Suzuki, for helping to ensure a tripling of bitumen shipments along the B.C. coast!

Perhaps it is too late, and Trudeau’s nationalization of the Trans Mountain pipeline was the only remaining option.

But surely we could have done better.

Chalk it all up to too many professional political hacks gathering support from Nimbyist communities, and too few true leaders with long-term vision.

Mark Crawford teaches political science at Athabasca University