Sunday, January 29, 2012

What Canada's Pipeline Policy Should Be

The problem with the government deferring to the pro-business logic of "the market" is that it ignores the truth that Albertans, as the owners of the resource, and Canadians, who own the land through which energy is transported, constitute an important part of the market; and the federal government, as the representative of all Canadians, has an obligation to consider obligations to First Nations and the Environment that the rest of the market ignores.  The idea that waiting a few years to approve the most direct pipeline to China could be profitable (because of long-term increases in energy prices) is admittedly, a speculative gamble; but no more so than the idea that shipping as much as possible out quickly will generate the most long-term economic benefits.  If we insist upon an effective carbon capture and storage system in the tar sands, the negotiation of treaties along the Gateway corridor, and the banning of anything less than double-hulled tankers as necessary conditions for the approval of the pipeline, then we create powerful economic incentives for each of these things to happen. But if we  ram through a pipeline approval without securing those three conditions first, then we create powerful economic incentives for not putting in place effective carbon capture, for not  concluding treaties, and for not banning all but the safest oil tankers.

Of course, viewing Gateway as a long-term project need not mean placing a moratorium on all pipelines. Consider the following:
"The only way to get that world price is to give Alberta oilsands products easy access to overseas markets, says Frank McKenna, former ambassador to the U.S. and former premier of New Brunswick.  Even if the western Gateway pipeline, the fastest route to the Coast and on to China, gets approved, Canada also needs new pipeline capacity to Eastern Canada to truly diversify its markets and get the best price, he says.  He points out that Canada's largest refinery, the Irving refinery in Saint John, N.B., already handles heavy oil and could be modified to upgrade bitumen from the oilsands."
Read it on Global News: Eastern Canada could be gateway for Alberta oil if Keystone pipeline gets nixed 

Canada's policy on pipeline construction should be: (1) If the industry wants to build a pipeline in the short run, consider a pipeline to eastern Canada to improve our self-sufficiency and reduce imports and east cost tanker traffic and related pollution.  (2) The Keystone pipeline should be considered a medium-term project proposal that awaits American regulatory approval--and which, if possible, should also seize the opportunity to process the bitumen here instead of in 30 year old refineries in Texas.  (3) There are several alternative routes that could also transport oil and gas--such as a port in Churchill, Manitoba, which could take advantage of the opening up of the Northwest Passage  as well as having the virtue of switching between eastern and western destinations; twinning the McKenzie Pipeline route; or changing the route to Prince Rupert. Another possibility would be to process the bitumen in Alberta, thereby increasing jobs in Canada and possibly lessening First Nations opposition to a (gas or oil) pipeline. (4) The Gateway proposal should be considered a long-term project that should wait for the implementation of an actual functioning system of carbon capture in Alberta and the the actual completion of treaties with First Nations along the pipeline route--to say nothing of an iron-clad legal obligation of double-hulled  ( and not just double-bottomed) tankers on the West Coast. Besides, some very serious analysts have questioned the  economic wisdom of  the Enbridge  proposal, based on its effects on Canadian oil prices. Robyn Allan's report to the National Energy Board concludes that   "[a]s a consequence, the project will raise the price of oil with no commensurate change in production or efficiency; it will enrich a few global oil companies such as Sinopec and it will increase inflationary pressures in Canada for decades."

"Unfortunately, there are environmental and other radical groups that would seek to block this opportunity to diversify our trade."---- Joe Oliver

PM Stephen Harper and Resources Minister  Joe Oliver have both blasted environmentalist protestors for being "radical" (Oliver) and  "Publicly Funded"(Harper).  By framing this issue as environmental radicals versus Canada's future prosperity, the government has once again illustrated its general communications strategy of both dividing and conquering through false dichotomies.  That is disingenuous and incredible and it is not good public policy.

I can't recall a government  being this hypocritical and biased at the outset of an (ostensibly neutral, open-minded?)  regulatory hearing. All the government has to do is set time limits on public submissions if it is worried about finishing the hearings--instead of villifying environmentalists and "people like George Soros".  Joe Oliver and Stephen Harper should re-read Mill's discussion of the marketplace of ideas in On Liberty ---assuming they  ever read it in the first place.

Can you believe it?

While it is true that  many environmentalists are bent on delaying the project for as long as possible, that is not a reflection of some ""foreign" or especially "radical" interest.  And while it is hard to say no to  $270 billion worth of economic activity, why not delay the pipeline until  (1) carbon capture technology has been successfully implemented; and  (2) First nations rights and interests have been clarified; and (3) the whole issue of the tanker moratorium can also be revisited?  Delaying  the McKenzie Valley Pipeline until First nations and environmental concerns could be more fully addressed was one of the wisest decisions the federal government made in the 1970s.  Former Alberta premier Peter Lougheed has spoken of a planned growth strategy that puts Canada first; why shouldn't we? It is very likely that waiting until the environmental costs are lower would also mean waiting until a time when energy prices are very much higher. That could be a win-win for the economy , the environment , and for future generations.  Unfortunately, it seems that nowadays even Peter Lougheed  and Frank McKenna are  too "radical" for this government.

No comments: