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SNAPSHOT: Pipeline Politics Dominate Canada’s 2018 Climate and Energy Landscape

Lenny K Photography/Flickr

The nation called Blockadia [1] made the fight against pipelines and other new fossil fuel infrastructure a central part of the climate change story in 2018, across North America and around the world. The Energy Mix’s coverage was limited almost exclusively to Canada, where the Trudeau government’s extraordinary decision to buy out Kinder Morgan’s Trans Mountain pipeline with C$4.5 billion in taxpayers’ money made pipeline politics a dominant theme for the year.

Trans Mountain Ultimatum Triggers Massive Protests, Government Buyout

From Kinder Morgan’s ultimatum to federal and provincial governments, to British Columbia’s court reference [2] on its authority to protect coastal waters from a devastating tanker spill, to the Trudeau government’s decision to buy taxpayers a pipeline, to the Federal Court of Appeal’s stunning rebuke of the pipeline approval process, the continuing drama of the Trans Mountain project consumed enough virtual printer’s ink in 2018 to fill an 890,000-barrel-per-day pipeline. (At least metaphorically.)

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One of a half-dozen or so catalysts for the epic showdown was the May 2017 provincial election in British Columbia that produced a minority legislature [4], meaning that one of the larger parties would need the support of the three-member Green Party caucus to hold power. In the end, climate scientist and B.C. Green leader Andrew Weaver and his two colleagues threw their support to John Horgan’s New Democrats, citing [5] environmental issues as the deal breaker that drove their choice. In late January, B.C. Environment Minister George Heyman announced [6] an independent scientific advisory panel “to determine whether diluted bitumen can be effectively cleaned up [7] after being spilled in water,” as the Globe and Mail reported at the time. “Until that committee reports, the government will impose a regulation prohibiting any expansion, either by pipeline or rail, of heavy oil sands crude.”

If the science showed no plausible way to clean up diluted bitumen once it leaked into waterways, the Globe added, “the province would likely move to make the regulation permanent.” That prospect “elicited howls of outrage from the oil patch, probably because they recognize that the B.C. government has found the Achilles’ heel of the federal approval: our inability to clean up bitumen spills,” wrote [8] Greenpeace Canada’s Keith Stewart.

Alberta Premier Rachel Notley responded [9] with escalating rhetoric and a boycott of B.C. wines, prompting a “buycott [10]” that led to shortages of B.C. wine in some parts of Canada. By mid-April, the political fault lines between the NDP governments in Canada’s two western provinces were widening, as Prime Minister Justin Trudeau summoned [11] Horgan and Notley to a weekend negotiation in Ottawa, and Energy Mix subscriber and former Unitarian Universalist minister Frances Deverell lauded [12] Horgan for standing up for the national interest.

In March, 10,000 protesters joined [13] an Indigenous-led march against the pipeline expansion, and 172 were arrested on Burnaby Mountain. Coverage [14] of the controversy hit international media.

It was all too much for the corporate offspring of the epically corrupt Enron empire [15]. On April 8, Kinder Morgan suspended [16] “all non-essential activities and related spending” on Trans Mountain and gave the democratically elected governments in Victoria, Edmonton, and Ottawa until May 31 to deliver “clarity on the path forward, particularly with respect to the ability to construct through B.C.; and, adequate protection” for the company’s shareholders.

Within days, the Trudeau government announced [17] it had opened negotiations with Kinder Morgan to “remove the uncertainty” surrounding the pipeline and would soon table legislation to “reassert and reinforce” federal authority over the project. Finance Minister Bill Morneau confirmed [18] the bailout in mid-May, in what 350 Canada’s Aurore Fauret called a “desperate, dangerous, and delusional” move and a “blank cheque, backed by public money, to a Texas oil company” that ultimately transformed [19] Trudeau into a “Big Oil CEO.” Energy Mix publisher Mitchell Beer said [20] Morneau’s “extraordinary announcement” may have “permanently shredded his government’s reputation on climate action, Indigenous rights and reconciliation, and the transition to green jobs.” Beer penned [21] the speech Trudeau never gave but could have delivered in lieu of Morneau’s announcement, and later came back with a 13-point to-stop list [22] Trudeau could use to replace his current to-do list on pipeline expansion.

An excerpt from Justin Trudeau: The speech he never gave [21]

Any private sector entity is fully entitled to make decisions in what it understands to be the best interest of its shareholders. Indeed, it is a corporate executive’s fiduciary duty to do just that.

But Kinder Morgan’s purpose with its April 8 announcement was not to give notice that it was abandoning a project it quite clearly and understandably no longer wished to complete.

It was an attempt to hold us to ransom.

Honourable Members, I rise today to tell you that Canada will not be bullied. We will not be cowed. We will not be manipulated or maneuvered into abandoning the core principles that make us Canadians and responsible global citizens.

I rise to tell you that there will be no deal. No buyout. If Kinder Morgan elects to abandon the Trans Mountain pipeline expansion when its deadline expires this Thursday, we wish them well.

In this case, we were on a trajectory to acquire a pipeline expansion with no viable business plan [23]. No realistic demand [24] for its output over the life of the project. No [25] chance [26] at achieving free, prior and informed consent of all the individual First Nations in its path. No plan to forestall the extinction of a magnificent and cherished whale population [27], nor any science-based understanding [28] of how to avert the devastating impacts of a possible diluted bitumen spill in coastal waters. No pathway to avoiding the dire climate consequences of pumping an extra 27 megatonnes per year of greenhouse gas emissions into the atmosphere. No chance even to avoid death and devastation at a nearby institution of higher learning in the event of a tank farm fire [29] on Burnaby Mountain.

These were ramifications we could not accept. That Canadians could not, would not, and should not accept.

When a tough decision looms on the horizon, it has become commonplace to say it’s time for a grown-up conversation. So, let’s have one.

Buyout Talks Began Before Kinder Morgan Ultimatum

National Observer investigative ace Mike De Souza later revealed [30] that then-natural resources minister Jim Carr [31] and Chief of Staff Zoë Caron [32] had travelled to Houston to begin mapping out the federal bailout a month before Kinder issued its extraordinary ultimatum. Reuters carried [33] the inside story of how a Houston pipeliner outmanoeuvred the Canadian government, and Canadian journalist Bruce Livesey said [34] the deal may have been driven by the Trudeau government’s interest in good trade relations with China.

Federal officials talked [35] to National Observer’s De Souza about a rigged federal approval process for the pipeline, Trudeau essentially admitted [36] the buyout constitutes a fossil fuel subsidy as he watched [37] tens of thousands of votes walk out the door, and the Institute for Energy Economics and Financial Analysis showed [38] that the project would drive up the federal deficit by 36% while giving Kinder Morgan shareholders a 637% windfall. IEEFA calculated that Canada would have to spend another $11.6 billion to complete “a pipeline project that is unnecessary.” Former Alberta Liberal leader Kevin Taft said [39] the Trudeau government had alternatives to buying the pipeline, and political scientist Thomas Homer Dixon said [40] Trudeau’s double-speak could break Canada apart.

‘Bluster and Blackmail’

While Ottawa negotiated, accommodated, and caved, the critical analysis and evidence poured in. Conservation ecologist Thomas Sisk revealed [28] the Prime Minister’s Office and Natural Resources Canada glossed over peer-reviewed science they had in hand when they announced approval of the Trans Mountain and Line 3 pipelines in November 2016. The Tyee’s Andrew Nikiforuk said [41] Kinder Morgan’s “bluster and blackmail” masked the massive risks in going ahead with the project, and award-winning investigative journalist Paul McKay wrote [42] that Canadian media were mostly missing in action in their coverage of the story. Senior economist Robyn Allan said [43] Kinder had misled investors by promising an impossibly early start date for the expanded pipeline, then later contended [44] the project would never have survived so long without siphoning billions in government subsidies. An investment blog concluded [45] that walking away from the project was a good deal for Kinder Morgan shareholders. West Coast Environmental Law noted [46] that the project still has years of complicated land purchases and route approvals ahead of it, undercutting the trumped-up urgency in Kinder’s early-April ultimatum.

Folk singing legend Bob Bossin warned in graphic detail [29] that an explosion and fire at Kinder Morgan’s expanded tank farm would incinerate the Burnaby, British Columbia, campus of Simon Fraser University, and doctors asked [47] Trudeau for an independent health assessment of the project. Environmental icon David Suzuki said [48] the recent history of severe oil spills gave British Columbia cause for concern, while the National Energy Board (NEB) saw [49] no immediate danger in the presence of hundreds of faulty fittings on pipelines that are currently in operation.

Salish Sea communities [50] and 42 Order of Canada recipients [51] led by British Columbia’s Bonnie Sherr Klein urged Trudeau to withdraw support for the pipeline. The communities described the heartbreaking death of a killer whale calf off the coast as “our canary in a coal mine,” adding that the “plan to transform our waters into an export corridor for nearly a million barrels of toxic bitumen per day for the next 50 or more years exposes us to unacceptable levels of risk.” The Dogwood Initiative pointed [52] to the coastal jobs that would be endangered by a pipeline expansion, and a study showed [53] that even brief exposure to diluted bitumen doesn’t end well for sockeye salmon eggs.

Climate scientist Simon Donner said [54] Trans Mountain would never pass a reasonable climate test, Stockholm Environment Institute Senior Scientist Peter Erickson agreed [55] the project imperiled domestic and international climate goals, and the Globe and Mail said [56] the deal would compromise Ottawa’s responsibility to protect endangered orcas off the B.C. coast. Energy economist Jeff Rubin declared [57] Kinder Morgan the winner and Canadian taxpayers the losers in the buyout deal, and sustainability economist Jeff Sachs said [58] Canada’s energy future shouldn’t include pipelines. Oil Change International’s Adam Scott cited [59] the buyout as proof that all new pipeline projects are now precarious, and a spoof on Craigslist hawked [60] Trans Mountain as a “great fixer-upper.”

Amid a summer of protest on Burnaby Mountain, a flotilla paddled [61] to the Kinder Morgan tanker terminal, a human drawbridge blocked [62] tankers attempting to leave the terminal area, and 17 of the 21 members of Trudeau’s youth council signed [63] a letter opposing the buyout. National Observer revealed [64] Kinder Morgan had paid informants to thwart public protest—prompting critics to ask whether Canadian taxpayers will now be paying to spy on themselves—and a shadowy private intelligence firm was monitoring [65] pipeline activists.

Fossil media focused most of their protest coverage on whatever grassroot support the industry was able to muster.

Appeal Court Blocks Trans Mountain Construction

In mid-April, the former government lawyer who drafted the initial foundation for section 35, the portion of the Canadian constitution that affirms Indigenous rights, told [66] DeSmog Canada (now publishing and winning online media awards [67] as The Narwhal) that Rachel Notley and Justin Trudeau don’t seem to understand how the constitution works. In late August, the Federal Court of Appeal reached its own conclusion on that point, ordering [68] an immediate halt to construction in a scathing rebuke of the NEB’s shoddy approval process. Apparently not one to recognize the authority of the courts, Notley reacted [69] by pulling her province out of the pan-Canadian climate plan. Notley later took aim [70] at the “jaw-dropping hypocrisy” in the treatment she said Trans Mountain was receiving, while federal Natural Resources Minister Amarjeet Sohi announced [71] the Canadian government would accept the ruling and appointed retired Supreme Court judge Frank Iacobucci to run a new pipeline consultation with Indigenous communities. “We’re going to take our time to get this right,” Sohi said, adding that Ottawa would approach the consultations with an “open mind” and without a “stop clock” or time limit.

The NEB was all about stop clocks, though, as parties on all sides of the never-ending TMX drama geared up [72] for another 22-week review process. Conservation biologist Misty MacDuffee of British Columbia’s Rainforest Conservation Foundation said [73] the 12-mile limit in the NEB’s assessment of offshore tanker traffic impacts could put the discredited regulatory body on another collision course with the courts, and West Coast Environmental Law attorney Eugene Kung saw [74] the same potential in the limited scope of the overall process. “From the get-go it looks like a political exercise, not an environmental one,” MacDuffee said.

The NEB’s “ludicrously” short deadline gave [75] communities less than a week to apply for intervenor status, forcing at least one group to return $25,000 in funding because it couldn’t find an analyst to do the work on such short notice. Opponents clogged the NEB’s fax line with more than 64,000 messages (the NEB accepted comments only by fax or in person, noted Kung, “because it’s 2018”), and Conservatives in the House of Commons tried to duck responsibility [76] for the Harper-era regulatory rollback that ultimately triggered the fraught review process for Trans Mountain.

Keystone XL Strikes Out in Court

North America’s other zombie pipeline megaproject was no better off than Trans Mountain after a Montana judge halted [77] construction of the Keystone XL line in November. Critics scorched [78] Notley for a “bailout pledge” that had her province promising to ship 50,000 barrels per day through the pipeline, after TransCanada Corporation claimed it had enough buyers to get on with the project. Analysts at GMP FirstEnergy blamed [79] a closure resulting from a 2017 spill along the existing Keystone line—not capacity constraints—for limiting Canada’s oil exports. And a farm couple returned [80] 1.6 acres of land to the Ponca Tribe in a bid to block Keystone XL in what Bold Nebraska called an “historic first.”

With Keystone in limbo, TransCanada announced [81] a C$2.4-billion expansion of an unrelated natural gas pipeline system in mid-February, then bragged [82] about its development plans in Mexico in mid-August. By late November, Indigenous opposition had put a major crimp [83] in two of the Calgary-based pipeliner’s projects.

No Pipeline Left Unchallenged

With big pipelines losing ground [84] through 2017 and pipeline protests proliferating, fossil industry media reported [85] early in the year that the majority of proposed gas lines had encountered sustained community opposition. Nowhere was that pushback more fierce than in Minnesota, where opponents warned [86] that the next Standing Rock protest was looming after the state Public Utility Commission approved the Line 3 pipeline expansion. That was after a judge advised [87] against Enbridge’s proposed route for the project, and Indigenous representatives told [88] the Houston Chronicle the project would never be built.

The Line 5 pipeline faced [89] deadline pressure, and the possibility of years of legal limbo, as a supportive Michigan Governor Rick Snyder prepared to leave office. The Standing Rock Sioux Tribe reported [90] that the Dakota Access pipeline could spill 12,000 barrels of crude per day without triggering automatic leak detection systems, and South Portland, Maine, won [91] a landmark case upholding a city ordinance blocking a local pipeline project. Canada and Donald Trump found [92] common ground in their opposition to the intensely controversial Nord Stream 2 natural gas pipeline from Russia to Germany, though quite possibly for different reasons.

The rate of pipeline spills in the United States increased [93] 60% in less than a decade as the cost of pipeline corrosion hit US$2.5 trillion. Self-described “chart geek” Barry Saxifrage calculated [94] that the world’s oceans already hold three billion barrels of tar sands/oil sands bitumen. Fossil fuel infrastructure in western Canada drove [95] demand for large hydroelectric dams like British Columbia’s Site C, and a review by the U.S. Federal Energy Regulatory Commission held the potential to upend [96] the country’s pipeline approval process. Canadian railways logged [97] an increase in hazardous substance spills in 2017, then went [98] on a minor hiring spree earlier this year as oil-by-rail shipments hit a new record, before Rachel Notley bought [99] a fleet of rail tanker cars to move 120,000 barrels per day of Alberta oil to market.