Environmentalists are determined to stop this pipeline project. They see any further development of the Alberta oil fields as a serious threat to the efforts to address climate change and avert further warming of the planet. They also contend that because the world is turning away from carbon-based energy, there will be no need, or future, for the shipment of oil, and that investing in new oil pipelines is throwing money away.
There is also opposition from Native groups who claim that their consent is required to develop their lands and that any federal government effort to force through the pipeline could lead to another dangerous stand-off such as occurred in 1990 with Mohawk people and the Town of Oka Quebec over a land dispute.
The British Columbia Government is also opposed to the new pipeline, not only on environmental grounds but also – and perhaps moreso – because the minority NDP Government needs the support of the Green Party to stay in power.
The Case For
Canada established a review and approval process for projects such as the Trans Mountain pipeline. That process was followed and the result was approval of the project. Those who are determined to block a legally-approved project are signaling that investing in Canada is a risky venture. The response of Kinder Morgan, which had invested more than $1 billion in the planned $7.4 billion project, was to announce on April 10 that it would pull the plug on the investment unless the project is cleared to proceed by June 1.
Investment in Canada’s energy sector has been declining for four years. A 2017 study by Philip Cross, former Chief Analyst at Statistics Canada, ranked Canada 16th out of 17 countries for business investment between 2015 and 2017 and there is nothing in the current climate that will arrest that downward trend. In contrast, investment is booming in the welcoming environment south of the border, especially with the recent deregulation initiatives and the cuts to corporate taxes. There are growing warnings, including from the heads of major Canadian banks, that unless the Trans Mountain pipeline is allowed to proceed, the oil industry and the Canadian economy in general will be adversely affected.
The Case for Compromise
Striking a balance between environmental protection and a growing economy has always been a challenge. Extremists on both sides usually take the position that no balance is possible – that environmental protection will stifle economic growth or that economic growth will degrade the environment.
The current federal government made an effort to find that elusive balance with a two-pronged approach that involves the introduction of a carbon tax and the approval of a new pipeline (Trans Mountain). A carbon tax has proven effective in some jurisdictions (including California and British Columbia). The new pipeline would run alongside an existing pipeline that is at capacity and would revive the stagnant energy industry in Western Canada.
Those determined to save the environment might bear in mind that conversion to a zero carbon system of energy is filled with its own conflicts and lack of compromise. Wind power, for example, faces an uphill battle from groups opposed to wind turbines because they cause the death of birds. The Ontario Government’s commendable efforts to close coal-fired power plants and convert to natural gas, wind, and solar power plants involved extensive underwriting of that conversion in the form of increased electricity costs – one of the major issues contributing to the probable defeat of the government in the election this June. One is tempted to suggest that environmental purity is rather like chastity. One favours it in theory, but prefers in practice that it apply to someone else.
The federal government has jurisdiction in this matter and needs to resolve the issue without delay – not only because of the June 1st deadline from Kinder Morgan but also, and more importantly, to reassure prospective investors in Canada. As suggested in the April 15 emergency meeting between the federal government and Alberta and B.C., this will likely mean federal and Alberta financial involvement in the project to eliminate investor risk and allow it to proceed. How quickly that will happen will depend on how willing the pipeline opponents are to contemplate compromise.