Canada's government bails out controversial Kinder Morgan oil pipeline
June 4, 2018 9:46 AM   Subscribe

A large number of demonstrations are scheduled across Canada today to protest the Trudeau government's purchase of the Trans Mountain pipeline from Kinder Morgan for $4.5 billion. The company was losing interest in the controversial project after fierce opposition from environmentalists, Indigenous groups and the BC government. Economist Robyn Allan details the economic consequences of the government's proposed purchase. posted by hurdy gurdy girl (62 comments total) 14 users marked this as a favorite
 
I'm actually finishing a two-part podcast episode about this for publication tomorrow -- the first half on the legal basis for provincial opposition, the second half on Aboriginal law issues related to the pipeline. This thing's got more issues than a lifetime subscription to Maclean's.*

*name of mediocre centre-right magazine used only to facilitate joke and is not intended as an endorsement.
posted by Shepherd at 9:49 AM on June 4, 2018 [10 favorites]


Previously : Big Oil Has Never Been Cheaper, Let’s Buy It
posted by No Robots at 9:55 AM on June 4, 2018




It's amazing how quickly Trudeau managed to turn himself from the world's Canadian Boyfriend into just another asshole politician.
posted by tobascodagama at 10:13 AM on June 4, 2018 [13 favorites]


People keep mentioning the full range of opposition that led to this decision, but I don't believe that any of it mattered nearly as much as what the BC provincial government was doing. Protests have become a fixture of pipelines (and a lot of major energy infrastructure, including hydro) of late, but there were court injunctions protecting construction. The FN consultation was among the conditions on the NEB approval being finalized, and the court challenges on the the basis of insufficient consultation have been failing. KM could have rode that out and if they bailed with only those threats, there was no possibility of a NAFTA suit against Canada.

However, what BC did was unique and threatened to override the national approval process. I firmly believe that the buy out was primarily to avoid what would have been an easy NAFTA process for KM in order to recoup their costs and avoid the remaining regulatory work. Hell, I wouldn't be surprised if KM themselves buys back the pipes after construction is complete. However, I'd be much happier to see a consortium of government and FN investors keeping it long term and collecting the tolls.
posted by Kurichina at 10:20 AM on June 4, 2018 [5 favorites]


Also, this effectively removes the need to enact Bill 12, which I don't believe the Alberta government actually wanted to do, so thank Trudeau for not have $3/litre gas this summer, British Columbians.
posted by Kurichina at 10:23 AM on June 4, 2018


Did Canada buy an oil pipeline in fear of being sued by China? The logic to Trudeau’s action may lie in an obscure and overlooked 2014 agreement to ensure China got a pipeline built.
posted by Rumple at 10:39 AM on June 4, 2018 [3 favorites]


The FN consultation was among the conditions on the NEB approval being finalized

Lemme guess: KM was dragging its heels in its consultation devolved from the Crown duty to consult? This has never happened before! (NB: this is rote sarkastikul). At least with Crown ownership, the duty to consult is right there with the owner now. Having worked with energy folks in Canada, some of them still believe that FN consultation means "here's your fucking letter, we're building"
posted by scruss at 10:44 AM on June 4, 2018 [2 favorites]


Trudeau may also have wanted to keep Alberta from buying out Kinder Morgan. Premier of Alberta Rachel Notley may have used that cudgel on both B.C. and the federal government.
posted by No Robots at 10:44 AM on June 4, 2018 [1 favorite]


Trudeau may also have wanted to keep Alberta from buying out Kinder Morgan.

This account supports that - analysis had been undertaken on the possibility of the GoA buying it.

Part of the reason the federal government led the negotiation, rather than both governments trying to negotiate, was so that Alberta wouldn’t bid up a possible purchase price for Trans Mountain, or vice versa, a source told the Post.
posted by Kurichina at 10:51 AM on June 4, 2018


I'm starting to have conspiracy-theory esque thoughts that a major reason the electoral reform Trudeau campaigned on was walked back was because they knew they'd do something likely to hand a good chunk of seats to the Greens if proportional representation went through. Hopefully I'm wrong, but this is the second major disappointment for me in this government.
posted by Jon Mitchell at 11:02 AM on June 4, 2018 [2 favorites]




Walking Eagle News:

Trudeau wins over First Nations opposed to Kinder Morgan project with deal to move drinking water through pipeline

It's amazing how quickly Trudeau managed to turn himself from the world's Canadian Boyfriend into just another asshole politician.

See also: Trudeau’s raven tattoo trying desperately to tear itself from his body, escape, witnesses say
posted by mandolin conspiracy at 11:09 AM on June 4, 2018 [13 favorites]


I honestly wonder what the Liberals are going to run on next year. "I'm not Stephen Harper" worked out great for Trudeau last time, and while he continues to not be Stephen Harper I'm having a hard time thinking of a signature positive and/or popular accomplishment from his government aside from legalizing marijuana (which hasn't even happened yet).
posted by The Card Cheat at 11:22 AM on June 4, 2018 [3 favorites]


In this and previous threads on the topic, I've seen a lot of anger towards Justin Trudeau re: 'environmental betrayal'.

But this seems more about the national government having to answer BC's unilateral threat to destroy a long-running cross-province project, for treaty/business/legitimacy reasons. It couldn't just sit there and do nothing. People above have raised the spectre of NAFTA/treaty with China challenges. But, more generally, how inspiring is it to any entity building a long-running infrastructure project when a provincial government changes and suddenly you're getting stop-work orders? Sitting by and letting that happen would have really damaged Canada's reputation, and probably would have cost Trudeau voters across Canada.

To me, BC is really the bad guy in this situation. This is a national project. If BC had concerns, it should have levied them in a national debate. In fact, we did have that debate last election. And a guy promising to expand a pipeline west won. Sometimes, provinces have to make sacrifices. As a `have' province, taxes have left Alberta for decades to fund other provinces, to no benefit for Alberta. That's a sacrifice Alberta has made, without which Alberta would have been better able to build a slush fund and prepare for oil busts. Now that there's a (small) bust, I think Albertans are angry that other provinces don't seem to be ready to make sacrifices in return.

Now, I'm an Albertan, which definitely colours my perspective here. I hate the oil industry, and personally I think we should move radically and quickly to an oil-free Canada. But I think the way we do that is to make consistent national policy change, not by defeating one pipeline and buying oil from America instead of Alberta. If anything, this pipeline fight has pushed that battle backward. Albertans were finally buying into a (too) gradual move off of oil. Now the antipathy from BC has pushed many back into the mentality of 'the other provinces hate us, so up yours'.

By the way, BC might be the bad guy today, but I do agree that Albertans have been the shorter sighted in the long run. We had a lot of vision in the 70s and 80s, under Lougheed, who had the idea of diversifying and setting up a slush fund for when oil went bad. Norway basically used that plan, so we know how successful it could have been. But after Lougheed, Albertans voted consistently for low taxes and little infrastructure spending, preferring money in their pocket today. There was no appetite at the provincial level to even really talk about diversification and the environmental costs of oil.

Even today, a large portion of voters in Alberta sometimes seem to oppose talk of diversification or mentions of environmentalism as 'attacks on oil', for oil has become something of a good in Alberta through decades of propaganda, perpetuated by oil companies and the conservative political establishment. (Seriously: When I was in elementary school, we spent a lot of time in social studies class going over the glorious history of the Albertan oil industry. In science, we learned about all the different useful things you can do with the different parts of oil sands. At movie theatres, alongside trailers for new flicks are feel-good advertisements about oil drilling and how great it is.)

So: I'm not really defending Alberta's view on oil. It's wrong and crazy, oil is wrong, and Albertans really need to do the work to get ourselves out of this crazy oil love before we crash and burn hard. And-- it really is on us. The rest of the country has tried to help and we haven't really been that accepting.

But! In this one case, I do think that the reality of the national debate, the promises previously made, and the unilateral nature of BC's action, mean the federal government was right to step in in the way they did.

I hope people who are angry about this pipeline, and angry about the way that this country treats the environment in general, step up in strength next election and really push the national discourse on environment way further.
posted by sidek at 11:25 AM on June 4, 2018 [12 favorites]


Faced with several bad choices, Trudeau chose the worst, most expensive one. Incredible.

I live on Vancouver Island. I'm ten minutes by foot from the southernmost tip of the island, and can watch tanker and freighter traffic traveling to and from Vancouver, Annacortes and Cherry Point.

With that in mind, my biggest concern isn't spills, it's not C02 and GHG, and it's not provincial juridistiction.

What I care the most about is aboriginal land title. Once again, First Nations land rights have been either virtually ignored by everyone, or co-opted for a particular point of view. And this is Canada -- including Canada governed by a supposedly FN-friendly Trudeau -- in a nutshell.

I can guarantee neither pro- nor anti-pipeline people would ever support primacy of FN land claims on unceded territory.

As well, nobody seems to give a shit about the massive amount of thermal coal Jimmy Pattison and Glen Clark ship from Westshore Terminals.
posted by JamesBay at 11:26 AM on June 4, 2018 [10 favorites]


Sidek is right, Trudeau made a difficult adult decision, even if unpopular. The opponents and BC government bear the stigma of crying like petulant babies when the scenario is more complex than "we don't want tankers hitting whales." If the situation devolved into a Nafta fight or Chinese lawsuit we'd all be looking at our leadership wondering why they weren't proactive and we are in a worse bind.
posted by Keith Talent at 11:46 AM on June 4, 2018 [1 favorite]


taxes have left Alberta for decades to fund other provinces, to no benefit for Alberta

Disagree; I'm sure a not-insignificant number of inter-provincial employees in Alberta received training/education in their home provinces that was in part funded by transfer payments, and now those people are contributing to Alberta's success, such as it is. It's sort of like someone without kids complaining about having to pay school taxes because what do they get out of it, other than generations of educated people who will be supporting them literally and figuratively in the future?
posted by Alvy Ampersand at 11:51 AM on June 4, 2018 [10 favorites]


"we don't want tankers hitting whales."

Actually, at the risk of sounding like a petulant baby, the issue is noise. Killer whales are an endangered species in the Georgia Basin / Salish Sea. They are at risk of extinction.
posted by JamesBay at 12:05 PM on June 4, 2018 [9 favorites]


taxes have left Alberta for decades to fund other provinces, to no benefit for Alberta

Seems questionable, but I do recall following the oil bust in 2012 or so, Alberta relied on transfer payments. As a Canadian taxpayer, I'm happy to ensure Albertans can continue to buy F-350s, Boxters, snowmobiles, power boats, and gold-plated vacation properties, and otherwise piss their oil wealth away.

Do wish Alberta would raise its taxes. Every problem Alberta is complaining about would vanish if Alberta simply increased its taxes to fall in line with the rest of Canada.
posted by JamesBay at 12:07 PM on June 4, 2018 [10 favorites]


^Well, we do prefer to piss it all away in B.C.
posted by No Robots at 12:16 PM on June 4, 2018 [1 favorite]


By the way, BC might be the bad guy today, but I do agree that Albertans have been the shorter sighted in the long run. We had a lot of vision in the 70s and 80s, under Lougheed, who had the idea of diversifying and setting up a slush fund for when oil went bad. Norway basically used that plan, so we know how successful it could have been. But after Lougheed, Albertans voted consistently for low taxes and little infrastructure spending, preferring money in their pocket today. There was no appetite at the provincial level to even really talk about diversification and the environmental costs of oil.

This is a pretty key part of the discussion. I mean, heck, even the Fraser Institute says Alberta shat the bed on the Heritage Fund.

The treatment of the Lubicon Cree in Alberta is one narrative that's consistently not cited in these debates - and to be clear, similar situations exist in every province and territory, so it's not a made-in-Alberta thing. The situation the Lubicon Cree are in just happens to revolve around oil and gas specifically. Quebec? Hydro-electric projects. Ontario? Grassy Narrows, mercury poisoning, and the pulp and paper industry. On and on and on.

What I care the most about is aboriginal land title. Once again, First Nations land rights have been either virtually ignored by everyone, or co-opted for a particular point of view. And this is Canada -- including Canada governed by a supposedly FN-friendly Trudeau -- in a nutshell.

Here's a screen grab of two Canadian MPs (on from SK, one from AB) high-fiving over their votes against UNDRIP the other day - a.k.a. Bill C-262.
posted by mandolin conspiracy at 12:21 PM on June 4, 2018 [1 favorite]


That's a sacrifice Alberta has made, without which Alberta would have been better able to build a slush fund and prepare for oil busts

OMG such nonsense. Alberta made the Alberta decision to have stupidly low Alberta taxes and spent the Alberta Heritage Fund (currently about 17 billion) at the first sign of Alberta trouble. The idea that without transfer payments Alberta would have a massive resilience fund goes against everything that Province stands for. Similar to the UK, they pissed that oil wealth away on lower taxes. And it isn't coming back - the tar sands are literally scraping the bottom of the barrel.

Norway's Sovereign Wealth Fund stands at 1.2 trillion dollars (Canadian) in a country of 5 million people, compared to Alberta's 4 million. But sure, it's probably Newfoundland's fault. Or Ottawa's. Whatever.

Anyway, it's a federal system and Provinces have a lot of sovereignty, governments change, the world is changing, and Trudeau could spend the 4.5 billion from KM on a National Wind Farm or geothermal or free LEDs or something.

And I totally agree with JamesBay -- it's a fucking miracle First Nations haven't started bombing infrastructure yet.
posted by Rumple at 12:23 PM on June 4, 2018 [24 favorites]


@Alvy Ampersand, @JamesBay, I absolutely agree that Alberta receives second-order benefits to transfer payments, from having richer and more able partners in confederation. The same second-order benefits BC would receive from a pipeline enriching Alberta.

My remark about taxes was about first-order benefits, in response to the argument a lot of people have made on MeFi, and in the media, that if BC doesn't receive any first-order benefits from the pipeline, then BC should reject the pipeline.

@JamesBay, I can't find a good source for long-term data on equalization payments and I'm very possibly wrong about history. I believe Alberta has been a have province at least in almost every year over the past two decades. Specifically in the year 2012, this source suggests that Alberta was a have province. (If anyone has this data year-by-year, please link it -- I'm curious now about exact stats!)

@Rumple, I think you didn't read the rest of my comment. I go on to agree that Alberta largely pissed away its Heritage fund, and that was absolutely Alberta's fault.
posted by sidek at 12:26 PM on June 4, 2018 [3 favorites]


it's a fucking miracle First Nations haven't started bombing infrastructure yet.

As noted above, FN are considering owning this pipeline. As one FN leader put it, "[t]here are no bad pipelines from our perspective. There are bad operators. So from our perspective, it is not just about buying in to become fiscally sustainable. It's so we can be environmentally sustainable."
posted by No Robots at 12:31 PM on June 4, 2018 [1 favorite]


Wouldn't bombing (or otherwise tampering with) energy infrastructure instantly create exactly the kind of large-scale environmental destruction that those opposed to the pipeline profess to care about?
posted by Kurichina at 12:34 PM on June 4, 2018


Wouldn't bombing (or otherwise tampering with) energy infrastructure instantly create exactly the kind of large-scale environmental destruction that those opposed to the pipeline profess to care about?

His name was Wiebo Ludwig and he was a white guy.
posted by mandolin conspiracy at 12:37 PM on June 4, 2018 [2 favorites]


Can someone lay out what tangible benefits BC will receive from the pipeline?

From the articles I've seen this is a case where they are bearing the majority of the costs and risk while getting minimal return. Studies describing Alberta getting 32% of the economic benefit compared to BC's 2% share don't help any pro-pipeline arguments. Long-term employment impacts will be minimal. Spills should be expected over the life of the project. It's not like BC will get any federal equalization payments any time soon. Would BC ever be allowed to independently tax the pipeline revenues to build up their own remediation/heritage fund?

I'm also puzzled as to why it would be considered inappropriate for the BC government to treat this as a BC issue rather than a national issue. The NDP/Greens coalition had this on their agenda as soon as they took charge last year and have done what they could in the time available to stop the pipeline. A change in government will always lead to a change on dialog and policies. If long term BC gets more benefit from stopping the pipeline than allowing it (who knows on that, I don't think either side could be conclusively proven) then I sure hope they will fight for what they believe in. Just because the previous government did not fully participate in the national negotiations doesn't mean this government should roll over.
posted by N-stoff at 12:38 PM on June 4, 2018 [7 favorites]


Yep, the Ludwigs are still somewhat infamous in the Peace region.
posted by Kurichina at 12:40 PM on June 4, 2018 [1 favorite]


Just to be sure we're not using the words of individual natives who have diverse perspectives to talk over the open concerns and LITERAL TREATY RIGHTS involved in a lot of these pipeline issues, here's another tribal voice to keep in mind relating to First Nations buying into pipelines:

"For Alice Rigney, an Athabascan Chipewyan First Nation elder, the news was a surprise.
"It hurt," she said. Rigney, 66, said that most elders in the community don't want a pipeline and that they weren't adequately consulted."
posted by xarnop at 12:44 PM on June 4, 2018 [3 favorites]


I can't find a good source for long-term data on equalization payments and I'm very possibly wrong about history. I believe Alberta has been a have province at least in almost every year over the past two decades. Specifically in the year 2012, this source suggests that Alberta was a have province. (If anyone has this data year-by-year, please link it -- I'm curious now about exact stats!)

You're right, and I was wrong for which I apologize: Alberta has never been a have-not province, and was a net source of equalization payments even following the collapse of oil. More on equalization here.

Still, I have a couple of problems with the "Alberta contributes more than it gets" train of thought. For one thing, Canada is supposed to be one country. The "equalization payments" are actually revenues collected by the federal government, not a lump sum that "Alberta" is supposed to fork over.

Certainly, economic activity in Alberta has helped the rest of Canada. But when Albertans and others state this, they conveniently forget how Alberta's oil-based economy has distorted Canada's economy as a whole.

For a good, long time, the oil sands hoovered up trades from all over Canada. Good if you're from Newfoundland or Vancouver Island, but bad if you're trying to build or maintain infrastructure.

On top of that, Alberta's traditional focus on low, low taxes has really impacted British Columbia. In order to compete for workers, we've had to lower our taxes as well. I am not at all fond of paying money to the government (I'm self-employed and sometimes it feels like the more I make it rain, the more I'll have to hand over), but taxes are essentially good -- we need taxes to pay for things like hospitals and schools and teachers and so on.

The massive, massive operating deficit the Alberta government has could be solved in part by simply instituting a sales tax. The stupid pipeline will not do that, and I don't know why BC is being bullied about it.

Raise your taxes!
posted by JamesBay at 1:00 PM on June 4, 2018 [7 favorites]


I published the podcast a day early! Here it is:

http://www.certificate.queenslaw.ca/2018/06/04/unpacking-pipeline-challenges-fundamentals-of-canadian-law-episode-11/


There are two parts:
a) Professor Cherie Metcalf, on how provincial/federal responsibility is split and the parameters under which B.C. can challenge the pipeline;
b) Professor Hugo Choquette on Aboriginal land title, Indigenous law, the duty to consult and how duty to consult works in the context of the pipeline.

It's a bit 101 for those of you who are already immersed in these issues, but a good overview for people who want to get familiar with some of the legal principles underlying the pipeline.
posted by Shepherd at 1:14 PM on June 4, 2018 [8 favorites]


Anyone here get the sense that this was Kinder Morgans game plan all along; to squeeze billions of dollars out of the Canadian government for an aging asset that wasn't really economically viable after the latest oil crash?
posted by Phlegmco(tm) at 1:23 PM on June 4, 2018 [4 favorites]


It's amazing how quickly Trudeau managed to turn himself from the world's Canadian Boyfriend into just another asshole politician.

At the risk of derailment, I'd argue that it happened a couple of years back when he decided that maybe first-past-the-post was a good thing after all. He did an interview with Le Devoir around the first anniversary of his winning the election where he said:
“Under Stephen Harper, there were so many people unhappy with the government and their approach that people were saying, ‘It will take electoral reform to no longer have a government we don’t like’. But under the current system, they now have a government they’re more satisfied with and the motivation to change the electoral system is less compelling.”
Good news on that first front. I think we can rustle up people unhappy with the government again.
posted by ricochet biscuit at 2:32 PM on June 4, 2018 [3 favorites]


I doubt any party in Canada will change first-past-the-post, because winning a majority with about 36% of the vote is the goal that all of their strategies are based on.
posted by The Card Cheat at 3:17 PM on June 4, 2018 [4 favorites]


It's amazing how quickly Trudeau managed to turn himself from the world's Canadian Boyfriend into just another asshole politician.

He was always an hypocritical liberal (the Canadian party I mean), all talk no substance, this has always been clear and should have been crystal clear to all once he walked back on electoral reform. Flabbergasted anybody is surprised, maybe it's the Qc perspective.

And once again we're socializing risk and will privatize profits. If there was money in this KM would still own it. I hate the idea of the pipeline because of the environmental risks and long term CO2 issues, plus it seems there are still FN issues, but if we frigging build this maybe we should operate it diligently and keep the profits for once.
posted by WaterAndPixels at 3:46 PM on June 4, 2018 [3 favorites]


I had a bit more hope that the competent Liberal party of Paul Martin, Ralph Goodale, John Manley and, yes, Bob Rae and Ujjal Dosanjh would have been re-elected.

I'm just hoping Chrystia Freeland gets a chance to be prime minister sometime soon. Besides a couple of veterans and maybe Jane Philpott, really the only person of serious substance in cabinet.
posted by JamesBay at 4:01 PM on June 4, 2018 [2 favorites]


Has Jagmeet Singh said anything about this yet?
posted by clawsoon at 4:21 PM on June 4, 2018 [1 favorite]


Did I hear correctly that Kinder Morgan has spent $1 billion so far and is getting $4.5 billion from the government for their trouble?
posted by clawsoon at 4:22 PM on June 4, 2018 [1 favorite]


The $4.5B figure includes "all of Kinder Morgan's core assets" (not just the pipeline) and presumably includes compensation for future lost revenue? I've taken a look around and there is no clear breakdown of the 4.5B figure (go journalism!), but it would not be surprising if the Trudeau government took a bath on this stupid thing.

I don't want to not like PMJT, but he is such a disappointment.
posted by JamesBay at 4:32 PM on June 4, 2018 [1 favorite]


It's funny; for the first time in decades we get good old fashioned nationalize-the-industries socialism, and it has to be this.
posted by clawsoon at 4:39 PM on June 4, 2018 [5 favorites]


Looks like Singh came out firmly against the pipeline a few days before the deal was announced:
Jagmeet Singh planted the federal NDP flag firmly on British Columbia’s side of the Trans Mountain dispute Wednesday after months of trying to stay neutral in the bitter feud between his Alberta and B.C. counterparts over energy and environmental policy.

In fact Singh said he hasn’t even had a conversation with Alberta Premier Rachel Notley in months – not since Notley called him and his position on the pipeline “irrelevant” last fall, nor since.

...

Until recently, Singh had called for a more thorough environmental review process on the proposal to twin an existing pipeline that runs between Edmonton and Burnaby, B.C. He now says he is 100 per cent opposed, since Ottawa wants to put money on the table to cover any cost overruns caused by political interference – largely from a court challenge by the NDP government in B.C.

posted by clawsoon at 4:44 PM on June 4, 2018


I honestly wonder what the Liberals are going to run on next year.

#Wynne-ing
posted by Sys Rq at 4:44 PM on June 4, 2018 [1 favorite]


Just last night I was reading this George Monbiot essay from the Guardian in 2007 - which made me think of the Canadian government's purchase of the KM pipeline. In particular, this section (emphasis mine):

Most of the governments of the rich world now exhort their citizens to use less carbon. They encourage us to change our lightbulbs, insulate our lofts, turn our televisions off at the wall. In other words, they have a demand-side policy for tackling climate change. But as far as I can determine, not one of them has a supply-side policy. None seeks to reduce the supply of fossil fuel. So the demand-side policy will fail. Every barrel of oil and tonne of coal that comes to the surface will be burned.

Or perhaps I should say that they do have a supply-side policy: to extract as much as they can. Since 2000, the UK government has given coal firms £220m to help them open new mines or to keep existing mines working. According to the energy white paper, the government intends to "maximise economic recovery ... from remaining coal reserves".

posted by piyushnz at 5:14 PM on June 4, 2018 [3 favorites]




piyushnz: Whoa, I don't understand the Monbiot essay at all. I would argue that it's entirely backwards! Of course we should focus on reducing demand for fossil fuels. As long as there's demand, governments and companies will continue to invest in supply-side projects to pull fossil fuels out of the ground.

As someone who's extremely concerned about climate change and wants to see stringent demand-side policies (like BC's carbon tax, now being extended nationwide by the Trudeau government), I don't understand what attacking supply-side projects is supposed to do, besides mobilizing people against a scapegoat. If you don't reduce demand, trying to fight climate change by blocking a supply-side project is like trying to fight obesity by blockading a McDonald's.

In fact if we know that fossil fuel demand will decline over time, then we also know that fossil fuel reserves will be worthless at some point in the future. Therefore it makes sense to sell them now, while people still want them.

Trudeau and Notley are taking a compromise position: use carbon pricing to reduce Canadian demand for - and consumption of - fossil fuels, while continuing to supply fossil fuels rather than leaving money on the table.

I can understand why climate-change activists are fighting Trudeau and Notley, but it still feels to me like that by disregarding what the federal and Alberta governments are doing on the demand side, they're refusing to take yes for an answer. In particular, Alberta taking action on climate change is something of a political miracle, unlikely to be repeated.

Of course there's the entirely separate legal question of First Nations consultation. First Nations in BC, unlike the rest of Canada, never ceded their territory by treaty. I think of them as our landlords; naturally there's friction at times. Both Kinder Morgan and the federal government were well aware of Enbridge's failure on Northern Gateway, which was overturned by the courts. So far there's only been one court decision on this question.

JamesBay: Kinder Morgan's stock price didn't move much after the deal was announced, so it seems that the price was reasonable.

N-stoff: Can someone lay out what tangible benefits BC will receive from the pipeline?

Ironically, it looks like lower gas prices will be a major win for BC. Right now the Trans Mountain pipeline is full, so BC has to import some of its gasoline from the US. The expansion will add 50,000 barrels/day of capacity to the existing line, which can carry refined products like gasoline.
But [Dan] McTeague points out that there is, on average, an $0.18-per-litre difference in rack prices (the price wholesalers pay refineries) between Alberta and B.C.

So even if tolls added $0.04 per litre, McTeague said B.C. wholesalers would be getting refined fuels at about $0.14 per litre less than they pay now.
That translates to more then $600 million each year.
posted by russilwvong at 10:12 PM on June 4, 2018 [2 favorites]


russilwvong: As someone who's extremely concerned about climate change and wants to see stringent demand-side policies (like BC's carbon tax, now being extended nationwide by the Trudeau government), I don't understand what attacking supply-side projects is supposed to do

Does the carbon tax apply to exported fossil fuels?

Because if it doesn't, and we're exporting just as much oil as we use in-country to jurisdictions which don't have a carbon tax, demand-side controls are going to have a limited effect on global greenhouse gas production compared to supply-side controls.

We will use less fossil fuels as a result of the carbon tax, but we'll ship more fossil fuels to countries which don't have carbon taxes.

Net climate impact? Ehn.
posted by clawsoon at 5:12 AM on June 5, 2018 [2 favorites]


clawsoon: Does the carbon tax apply to exported fossil fuels?

It does not. Your argument would make total sense if Canada were the only supplier of fossil fuels in the world. In that case, not exporting a million barrels of oil to China would force China to reduce its consumption of oil by a million barrels.

But of course Canada is not in fact the world's only supplier of fossil fuels, and China would simply import the oil from somewhere else. Net effect on worldwide emissions: zero.

Again, if we fail to cut worldwide demand - the IEA has helpfully worked out the carbon price path needed to stabilize CO2 at 450 ppm - trying to reduce supply isn't going to work.

The acerbic Andrew Leach, chief architect of Alberta's climate change plan, arguing against Alberta's threat to cut off BC's supply of gasoline (during the BC-Alberta trade war): "I buy all my groceries from my local Safeway, so if they close I'll starve to death."
posted by russilwvong at 6:51 AM on June 5, 2018 [1 favorite]


russilwvong: It does not. Your argument would make total sense if Canada were the only supplier of fossil fuels in the world. In that case, not exporting a million barrels of oil to China would force China to reduce its consumption of oil by a million barrels.

Lowered supply would drive the price up a bit; in other words, it would act in a way very similar to a carbon tax, except that it would apply globally.
posted by clawsoon at 6:55 AM on June 5, 2018 [1 favorite]


Ironically, it looks like lower gas prices will be a major win for BC. Right now the Trans Mountain pipeline is full, so BC has to import some of its gasoline from the US. The expansion will add 50,000 barrels/day of capacity to the existing line, which can carry refined products like gasoline.

Not a huge fan of Dan McTeague.

Anyway, to a layman (or Dan McTeague) while it might seem intuitive and a matter of common sense that twinning the pipeline will lead to lower gas prices in British Columbia, twinning the pipeline may actually increase fuel costs here.

Never underestimate the ability of the oil companies to rip off consumers -- or taxpayers.
posted by JamesBay at 7:30 AM on June 5, 2018 [1 favorite]


clawsoon: If the reasoning is that reducing supply will push up the price of oil, I would argue that a far better approach is to use carbon pricing to raise the price directly.

JamesBay: I think Robyn Allan is the only economist making that argument! More detailed discussion.
posted by russilwvong at 8:02 AM on June 5, 2018 [1 favorite]


russilwvong: If the reasoning is that reducing supply will push up the price of oil, I would argue that a far better approach is to use carbon pricing to raise the price directly.

That would be great, but how do you get China and Saudi Arabia and Russia and Venezuela to agree to that?
posted by clawsoon at 8:21 AM on June 5, 2018 [1 favorite]


I think the reasoning is that reducing supply results in less oil being pulled out of the ground, less oil being spilled from pipelines, less carbon being burned transporting the oil from the production point or pipeline terminal to refineries, less carbon being burned transporting refined oil products to market, less oil and refined oil products being spilled during transport, and just as a pleasant knock-on effect at the end the price goes up and reduces consumption as well.
posted by tobascodagama at 8:24 AM on June 5, 2018


clawsoon: Diplomacy. Diplomacy is all about getting another country to do something it doesn't want to do. The three elements of diplomacy are persuasion, compromise, and threats, and they work best in combination.

tobascodagama: I would argue that carbon pricing is the fairest way to coordinate action on climate change and distribute the costs across provinces. Oil sands workers argue that the oil sands are being made a scapegoat for climate change, and from here in Vancouver, I can see their point: I commute to work by electric bike myself, but we have a huge fleet of gasoline-burning vehicles on our roads! The carbon price floor forces all Canadian consumers of fossil fuels to pay when dumping fossil CO2 into the atmosphere, whether we're talking about Vancouver drivers or Alberta oil sands operations.

By the way, for anyone interested in climate change and the oil sands, I would strongly recommend The Patch, by Metafilter's own gompa.
posted by russilwvong at 9:01 AM on June 5, 2018 [1 favorite]


I think Robyn Allan is the only economist making that argument!

Yeah, well I haven't seen any actual economists claiming that twinning TML will somehow reduce fuel costs, especially when there will be no increase in native, local refinery capacity anyway -- any increased fuel supply for Vancouver and the Island will come mostly from Cherry Point and Annacortes anyway.

As we have seen with the lack of analysis of the $4.5B number, there is not a lot of detailed reporting going on, anyway, with most of the energy spent on documenting the play-by-play of the "fight" between Horgan and Notley.

Dan McTeague is not an economist. He has an undergrad liberal arts degree. Besides his committee work, which included 9 months on an O&G committee a decade ago, McTeague has no particular expertise in the petroleum industry.

What made me question his pronouncements was when he claimed that Alberta would somehow "turn off the taps" to Vancouver, causing our economy to implode. Just pure moronic drivel, with absolutely none of the nuance and informed commentary I would expect from an "analyst."

Robyn Allan, on the other hand, is an economist and was a "qualified expert intervener at the Trans Mountain Expansion Project review."
posted by JamesBay at 11:11 AM on June 5, 2018 [1 favorite]


Posting from Vancouver, in case anyone wonders. This is long. Sorry, but it’s a long story. Feel free to skip it if you’re not inclined.

Unless people are reading beyond the mainstream Canadian media on this issue, they literally have no idea what’s going on here. It’s been frankly disturbing how little of the story any of the networks or major dailies are actually covering, and as for opinion pieces, it’s been hard for pipeline opponents to get the occasional word in edgewise. CBC lets it pass without comment when they publish a Calgary “pundit” stating that there’s never been a spill from the Trans Mountain pipeline, when 5 minutes online would have revealed 69 oil spills reported to the feds since 1961, along with more than dozen leaks of natural gas, jet fuel, diesel, solvents and contaminated water.

There are exceptions, and they’re exceptional. A local publication that went national a few years ago, the National Observer, is winning newspaper awards right now for their coverage, which is stellar, but most Canadians haven’t even heard of them. Without them, the Tyee, The Dogwood Foundation, The Narwhal (the artist formerly known as De Smog Blog), and a few others, you’re getting a deeply dishonest and biased view of the issue, and I don’t know what to do about that, when most people are still getting their information from the centralized Canadian corporate news squid.

Mind you, for all their lassitude when it comes to duty to inform on this issue, the media’s zeal to find First Nations pipeline supporters has been impressive, especially since they’re so rare. A few groups have inked deals with the company, but most are also fighting it like hell in court at the same time. They’re just trying to limit the damage if injustice once again prevails. Watching Canadian courts over the course of the past winter, that strikes me as eminently practical.

People assume that an environmental review means science, not knowing that the only “science” the NEB deigned to consider was a non-peer reviewed or published study done by KM in Gainford, Alberta. They filled various sizes of tanks (including, apparently, a bucket) with water, mixed in salt to match ocean salinity, then added bitumen and some diluent. On the basis of that, they claimed that bitumen floats, and the NEB said, “Seems legit.” End of story.

The NEB declined to consider contradictory evidence (—I mean the actual thing, now) from the Royal Society here and the US National Academy of Sciences. The best part was why. They said it would be “unfair to the company for it to be accepted so late in the process.”

This is part of the larger, old colonial pattern of kicking Canadians to the curb for the benefit of shareholders. Whether you’re talking about the abject lack of protection for workers in the event of corporate bankruptcy, or letting BP keep the capping stack for their new Aspy D-11 exploration well off Nova Scotia 12 to 19 goddamn days away in Norway, Canadian governments are all about making things nice for business by getting rid of the obstacles. Whatever they are.

That deference to corporate interests is transparent in BC at the moment, perfectly embodied in the person of BC Supreme Court Justice Kenneth Affleck, who has gone above and beyond the call of duty in defending poor, beleaguered (—Jesus, I practically wept, myself, reading his words) Kinder Morgan. We’re sitting on top of 16 years of BC Liberal judge picking here, and it shows.

The whole time KM was blaming and criticizing the province of BC and municipality of Burnaby for holding them up, the real reason they couldn’t proceed was because they were broke, having been fleeced by their US parent. Houston-based KM International spun off the Canadian corporate entity in 2017, which promptly sold of 30% of its Canadian assets, netting $1.75B. The Canadian entity, we know from economist Robyn Allan, was by its structure and governance obliged to fork that over to KMI in Houston, to pay down the parent company’s debt. The perfect emblem of our economy, I figure.

When you study the numbers, this planned expansion of oilsands production represents so much of Canada’s share of the global emissions budget set in Paris, that the rest of the economy would virtually have to shut down. Not sure how that squares with our Environment Minister going about chiding other countries about their Paris commitments, but it’s a shitty look.

Trudeau’s Liberals promised an end to the oil and gas industry subsidy while campaigning in 2015. Another broken promise, this one worth $3.3B annually. While they rail against the “unhealthy culture of dependence in Atlantic Canada,” it is an irrefutable fact that Alberta’s economy has been propped up by the whole country for years, via those subsidies and others.

So, again, Alberta bungled an oil boom, but before they did that, they let Ralph Klein take the province’s rainy day fund, and buy their undead loyalty to the Conservative Party with it. The money’s all gone, and now they’re looking at clean-up costs that are calculated to be so high that it could bankrupt the province. So they need to ship more bitumen, only they can’t sell it unless they’re practically giving it away (1.4% royalty rate), because, and here’s the part no one’s wanted to talk about since the beginning of oilsands development in the ’70s, IT’S LOW-GRADE OIL.

It’s also incredibly expensive to produce, hence the subsidies. The Alberta government has actually earned more from liquor sales and gambling than from selling almost 3 million barrels of bitumen a day to big oil companies in the past two years.

My Tsleil-Waututh neighbours remember that, in the past, when the tide went out in the inlet, their supper table was set. No one so much as asked what they thought when the Westridge Terminal was built was in ’52. Now, their traditional lands are home to a pipeline and its terminal, and a tank farm that Burnaby fire and safety officials consider a disaster waiting to happen, warning that there is no way of evacuating people in the event of a fire in the area. You have to understand that this tank farm is pretty much literally in peoples’ back yards. I’ve spent time up around the terminal and tank farm, and find the proximity of residents deeply unsettling, so I can see why the BFD has been so vocal in its opposition.

I’m not at all clear on why people here seem to think that the remaining legal challenges are a slam-dunk for the Crown. The Tsilhqot’in decision was clear that aboriginal title, which extends to activities on the land, could be overridden for only pretty compelling reasons. The national interest argument I’ve heard advanced isn’t persuasive. Also, the Tsilhqot’in decision substantially changed the playing field in terms of jurisdiction and responsibility, shifting from the feds to the province.

Many legal analysts are quietly appalled by the BC Supreme’s recent summary dismissal of the Squamish Nation’s legal action based on that principle. The Squamish are appealing, of course. Maybe it will another of those cases where a crappy BC Supreme decision is upheld by the provincial appellate court, only for the SOC to overrule them both hard. We have a lousy record in this regard.

That’s, in fact, exactly how the critical Tsilhqot’in decision came to exist. When Christy Clark passed the cup on environmental review, she was trying to sneak the project around the implications of the Tsilhqot’in decision, while shifting any political fallout to Ottawa. That could be the stone on which First Nations break the “adequate consent” argument, because I don’t believe the province can hand off their jurisdiction and responsibility like that. Horgan, I think, realizes it, and his recent address to Victoria business leaders calling for recognition that our economy can only move forward by embracing our relationship with First Nations was born of the realization.

At this point, the media won’t shut up about how nearly half of Canadians support the pipeline. You can almost hear the petulant tone, as they get angrier and angrier at the province, Burnaby, First Nations, scientists, BC high school students and small business owners, religious people, and the growing number of groups being drawn into resistance, for not doing what they’re told like good little Canucks.

If there’s anything you can depend on Canadians for, it’s feeling clever for letting Bay Street convince them that kicking themselves in the arse repeatedly with spurs on is somehow in their own interest, so I guess you can't blame them for being frustrated.

I was surprised by someone upthread’s enthusiastic endorsement of LPC stalwart John Manley. John Manley says things like, and this is verbatim, “You may think we can have a medical devices technology sector or an alternative energy technology sector, but 30% of our economy is natural resources,” and thinks he said something. OK, he did, but not what he thought. Having studied the LPC since 1968, I can tell you definitively that, translated, it means, “get back to work in those extractive industries, because we have no intention of you doing much else. That and call centres.”

Saturday, I stood in the woods around the Watch House listening to birdsong. So much birdsong. I found myself remembering a little interview I read recently with an indigenous guy from Alaska, talking about the Exxon Valdez, and the “zone of silence” on the waters of Prince William Sound. I remembered watching the returning salmon fight their way up the Seymour River in North Vancouver a couple of years ago, and how I suddenly understood in my bones the centrality of this fish to local cultures.

The Liberals expect everyone to believe that we can somehow curb our emissions while tripling the output of the oilsands. It’s bullshit, pure and simple. It is, in its essence, an incredibly expensive welfare scheme for Alberta, at horrific cost to everything from the environment and national unity, to reconciliation and credibility on the international scene. It chooses for us a future just like the past, of exploitation on behalf of corporations and rentiers, and it’s not bloody good enough.

Warrior up, as my neighbours say.
posted by Steller's Jay at 1:20 PM on June 5, 2018 [13 favorites]


the media’s zeal to find First Nations pipeline supporters has been impressive, especially since they’re so rare. A few groups have inked deals with the company, but most are also fighting it like hell in court at the same time.

Either way, I'd rather hear from indigenous voices about this. Too often, mainstream media / dominant culture claims to speak for indigenous people.
posted by JamesBay at 2:52 PM on June 5, 2018 [2 favorites]


Steller's Jay, awesome comment and now I'm even madder.
posted by WaterAndPixels at 5:17 PM on June 5, 2018


From Canadian folk icon Bob Bossin, and what I'm singing at the demos these days: We don't want your pipeline. I think people may underestimate how vehemently opposed the west coast is to this pipeline (I'm in Victoria). I know there are polls that say otherwise about BC but I keep talking to neighbours and relatives who have no activist background and they are absolutely livid about the bailout.

I also attended a local MP's impromptu information night on the buy out on June 1. It was a packed house on short notice, and boy were people angry, informed, and ready to fight.

And I'm with WaterAndPixels ... props to you on that comment, Stellar Jay. "centralized Canadian corporate news squid" has now entered my permanent lexicon.
posted by chapps at 10:59 PM on June 5, 2018


[I posted the Bossin on the last KM post, but was too late to the game so posted again here for your listening enjoyment]
posted by chapps at 11:00 PM on June 5, 2018


I think people may underestimate how vehemently opposed the west coast is to this pipeline (I'm in Victoria).

I already know two people who've been arrested, neither of whom I'd call activists -- more like concerned neighbours. Many years ago, I predicted (rather drunkenly) that the next province to threaten separation wouldn't be Quebec, but Alberta. I was wrong. It looks like it's going to be BC, certainly the coast. We've already got the legislature, and most of the wealth.

interesting times.
posted by philip-random at 12:31 AM on June 6, 2018 [1 favorite]


JamesBay: "we need taxes to pay for things like hospitals and schools and teachers and so on.
"

It's amazing how many Albertans persist in living in BC despite how much lower taxes are in AB and then rail and evangelize about it endlessly. Why not move back? Maybe because taxes and unionization and paying attention to environmental issues enables nice things?

Steller's Jay: "We’re sitting on top of 16 years of BC Liberal judge picking here, and it shows.
"

For those not from BC: BC Liberals = the province's Conservative party (politics is pretty weird here).
posted by Mitheral at 9:57 PM on June 6, 2018 [1 favorite]


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