Oilpatch Journalist Debunks Krause’s Conspiracy Theories About Anti-Pipeline Campaigners
Opinion & Analysis
This post by oilpatch journalist Markham Hislop originally appeared on Energi Media. Republished in full with permission.
Jason Kenney was all smiles, waving at the crowd and shaking hands through the passenger window of his trusty blue Dodge Ram pickup, as he rode triumphantly onto a Calgary stage on election night, April 16. But as he stood at the podium addressing his followers, some of his words were less jovial. “[W]e have been targeted by a foreign-funded campaign of special interests seeking to landlock Canadian energy,” he told jubilant supporters in his victory speech. “In other words, we’ve been had.”
Vivian Krause could have written his speech. The Vancouver blogger, who for a decade has been documenting the flow of money from American charitable foundations to the anti-pipeline/oil sands Tar Sands Campaign, is the muse of the “Alberta as victim” crowd. Kenney is their champion.
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“And now I have a message to those foreign-funded special interests who have been leading a campaign of economic sabotage against this great province,” he said. “To the Rockefeller Brothers Fund, the Tides Foundation, LeadNow, the David Suzuki Foundation, and all of the others: Your days of pushing around Albertans with impunity just ended.”
The crowd nearly blew the roof off the Big Four Roadhouse at that line.
Part of Kenney’s “pushback strategy” is a C$2.5-million public inquiry into “the foreign source of funds behind the campaign to landlock Alberta energy.” Another is a $30-million-per-year “energy war room” that will “tell the truth assertively,” presumably tweet for tweet. Further funds will be available to support pro-pipeline development First Nations’ legal challenges against the activists who are supposedly pushing around Alberta with impunity.
Kenney has said in speeches and press releases that his pushback strategy is based upon Krause’s work. What if she’s wrong?
Krause is a nutritionist and former constituency office worker for a Conservative MP, not an academic researcher or journalist, even though Kenney has incorrectly called her a reporter. Given her lack of credentials, did Kenney or the United Conservative Party vet or validate her decade of research before embracing it? A request to the Premier’s office for comment was not answered.
The Canadian Association of Petroleum Producers (CAPP) has used some of the same information in speeches by CEO Tim McMillan and in outreach campaigns. When asked by email if the industry’s biggest lobby group verified Krause’s research, CAPP refused to comment or make McMillan available for an interview.
It seems neither Kenney nor CAPP bothered to check the validity of her work.
Well, the Premier and CAPP have been too hasty with their endorsement. Interviews with the organizers of the Tar Sands Campaign, many of the environmental non-government organizations (ENGOs) that received funding through the campaign, and social movement researchers reveal a very different story.
Krause was asked to be interviewed for this investigative report. Instead, she requested questions and promised a written reply. As of publication she has not provided the written reply nor has she responded to subsequent emails, despite her criticisms of ENGOs and foundations for being uncommunicative.
Ecojustice and Dogwood Initiative also declined interview requests. The Tides Foundation, the Rockefeller Brothers Foundation, and the Hewlett Foundation did not respond to interview requests.
The Tar Sands Campaign Conspiracy Narrative
Vivian Krause’s story is simple: the good guys (oil producers, pipeline companies) want to invest in Canada to create wealth and jobs, while the bad guys (U.S. foundations and Canadian environmental groups organized as the Tar Sands Campaign) want to stop them.
The bad guys, according Krause, don’t play fair. They employ “exaggeration and outright falsehoods,” they have “deliberately sabotaged” every interprovincial pipeline project of the last decade, and their strategy is to “landlock” Western Canadian oil, preventing it from accessing tidewater and markets other than the United States. The short-term objective is to stop Alberta oil and gas from expanding. The ultimate goal is to kill the Alberta oil sands.
The Tar Sands Campaign was supposedly organized and funded by shadowy U.S. charities like the Tides Foundation and the Rockefeller Brothers Foundation, possibly to force Canadian oil producers to continue selling cheap oil to American refineries, a form of “economic protectionism,” according to Krause.
That message sells in Alberta. Oh boy, does it sell, as Kenney demonstrated during the recent election campaign.
Albertans are mad as hell. They understand that oil and gas busts are unavoidable, but they firmly believe that booms are a birthright and that they have been cheated out of the latest one. The 2009 to 2014 oil sands construction boom drove profits and wages to dizzying heights, then came the inevitable bust of 2015 and 2016, followed by a recovery that withered in 2018 thanks to pipeline shipping shortages that drove the differential between Western Canadian Select and West Texas Intermediate sky high, meaning lower real prices for Alberta producers.
A recent PetroLMI study estimates that 12,500 direct Canadian oil patch jobs will be lost in 2019 because of reduced capital spending tied to market access problems.
Not all factions of the oil patch suffered equally. The big, integrated producers with refineries in Canada and the United States, or enough contracted pipeline capacity, weathered the storm reasonably well. The juniors and midcaps, and the small service companies that support conventional oil production, did not. Conventional oil may account for only 20% of Alberta production, but the sector spends upwards of $20 billion annually on capital expenditures, creating a lot of business revenue and plenty of good-paying jobs in the process, especially in rural Alberta. This part of the oilpatch still bleeds red ink.
Someone had to be held responsible by frustrated Albertans and Krause provides a ready villain—the Tar Sands Campaign, which she claims is a “demarketing” exercise.
“Whereas marketing aims to increase demand, demarketing aims to reduce it,” she wrote. “Demarketing is done by instilling fear, uncertainty, and doubt, not only in the minds of consumers, the broader public, policy-makers, and investors but most insidiously, within the mind of industry itself.” Is demarketing so powerful it can make oil and gas executives or roughnecks dislike oil and gas? Skeptical readers may want to discount that bit of hyperbole, which is typical of Krause’s prose style.
That said, Krause isn’t entirely wrong.
When she says that the goal of the Tar Sands Campaign “seeks nothing short of stopping altogether the growth of the Alberta oil industry,” she is correct. Almost every one of the 15 ENGOs—except for the Pembina Institute, which argues for environmentally responsible development—I interviewed for this report agree with Krause on that point. And as far as I can tell, based upon information provided by the ENGOs, her estimates of money provided by U.S. foundations to the Tars Sands Campaign are mostly right.
Nevertheless, Krause’s conspiracy narrative is deeply flawed and she makes critical mistakes that essentially invalidate her argument. Six important ones are discussed in this deep dive.
One, American foundations like Tides are not the drivers of the Tar Sands Campaign. Two, Krause leaves the impression that the U.S. funding was quite large, when the opposite is true. Three, campaign leadership was provided by Canadians, particularly First Nations, who are almost absent from her narrative. Four, she minimizes the impact of funding from Canadian foundations, governments, corporations, and individual donors, which appears to be far and away the biggest source of money for anti-pipeline ENGOs. Five, many of her conclusions are simply not supported by her data. Six, the Tar Sands Campaign essentially collapsed after Rachel Notley’s government introduced the Alberta Climate Leadership Plan in late 2015, but Krause conveniently ignores this fact, perhaps because she doesn’t know or maybe because making that information public might affect bookings for the speaking engagements that generate the bulk of her income.
Even though the Tar Sands Campaign is a shadow of its former self, her conspiracy narrative deserves scrutiny because taxpayer dollars will be spent fighting a boogeyman of Krause’s creation, which makes her allegations of significant public interest.
Who’s Really Driving the Tar Sands Campaign Bus?
The first organizing meeting for the Tar Sands Campaign took place in 2006 between Canadian environmental leaders, scientists, and communities concerned about the rapid growth of the oil sands and the potential cumulative effects on the environment. At that time, much of the oil sands’ heavy, diluted bitumen, and the lighter synthetic crude produced by the upgraders, had a carbon intensity that ranged from around 560 kilograms of CO2 equivalent per barrel to around 520 kilograms of CO2e (for comparison’s sake, the U.S. average crude is 510 kilograms of CO2e, while the light sweet crude of the Eagle Ford basin in south Texas is around 455 kilograms of CO2e), according to IHS MarkIt.
Make no mistake, the oil sands produced “dirty oil.”
“It was a two-day-long meeting. We came up with what we called the upstream working group strategy,” says activist Tzeporah Berman, who is a central figure in this story. Canadians first heard of her during the early 1990s “War of the Woods” conflict between logging companies and protesters in the Clayoquot Sound in British Columbia. Outside Alberta, she enjoys a reputation as an environmentalist who can find common ground with resource industries. Within Alberta, she has been demonized as anti-oil and gas and anti-pipeline, despite working closely with oil sands CEOs during 2014 and 2015 to negotiate a package of climate policies acceptable to the companies and the ENGOs at the table.
Two years after the initial meeting, 50 or so Canadian ENGOs and a small number of First Nations entered into a loose coalition they named the Tar Sands Campaign. “We all needed to work together to design a strategy. So the groups got together and once the strategy was put together, then we started going out together to talk to philanthropic foundations, both in Canada and around the world,” said Berman in an interview.
Her account of the Tar Sands Campaign’s origins was corroborated by all of the ENGOs interviewed for this deep dive.
Krause’s account of the origin of the Tar Sands Campaign, however, is quite different. In a post on her blog, Fair Questions, she claims the Tar Sands Campaign was “[l]aunched in 2008 by the Rockefeller Brothers Fund, the William and Flora Hewlett Foundation, and the Tides Foundation.” From her point of view, the campaign evolved out of 2004 funding “to develop a strategic plan to address oil and gas development in British Columbia,” further evidence that American foundations instigated and exerted considerable control over anti-pipeline/oil sands activism in Canada.
In the same post, Krause argues that while the various organizations involved in the Tar Sands Campaign appear to be acting independently, “that is not how the campaign actually works.” Her evidence for that claim? “More than 60 groups receive behind-the-scenes support, including ghostwriting, from NetChange, a private company that is funded to ‘support and amplify’ the Tar Sands Campaign,” she writes. How logistical support counts as proof of a centrally-coordinated campaign isn’t clear.
American campaign strategist Michael Marx, who served as grant advisor to the campaign from 2008 to 2011, takes issue with Krause’s characterization of the Tar Sands Campaign. He is quite emphatic that Canadians were in charge.
“To be clear, during that time the strategy was designed in Canada by Canadians,” he told Energi Media in an email.
Marx was responsible for working with campaign members to draft grant applications that were then submitted to the American foundations. Once approved by the charity, cheques were sent directly to the successful applicants, who were responsible for delivering the campaign. According to the ENGOs, this kind of informal coalition is common in their world.
“It was always a ground-up rather than a top-down network. Various organizations came together with their own priorities and strategies, then there were conversations around how we can work collaboratively and seek resources collaboratively,” says Catherine Abreu, executive director of Climate Action Network Canada, whose ENGO was part of the Tar Sands Campaign from 2010 to 2013. “But the initiative was always directed by the organizations and the communities that they worked with.”
This is an important point because Krause alleges the American foundations sought out the ENGOs, not the other way around. Most of the “U.S. funders of the Tar Sands Campaign do not accept unsolicited proposals. What this means is that these funders have an agenda and that they seek organizations to implement their strategy and reach their goals,” she writes.
This view oversimplifies the relationship and attributes far too much agency to the American foundations.
“Foundations don’t come hunting for people to tell them to do things,” explains Tim Gray, CEO of Environmental Defence Canada. “It’s the exact opposite of that.”
Of course the funders have strategies and objectives. For instance, Berman credits former prime minister Stephen Harper’s now infamous 2008 “Canada becoming an energy superpower” comments for spurring higher interest in the oil sands by the American foundations.
“He made this speech about how Canada was going to become an energy superpower and he was going to triple the size of the oil sands,” she said. “That’s really when a number of funders internationally got concerned because of the size.”
Harper’s remarks may have made the foundations more receptive to Canadian-organized Tar Sands Campaign applications, but that doesn’t mean the foundations were steering the bus. Karen Wristen of the Living Oceans Society describes how her ENGO operated at arm’s length from the charities and the Tar Sands Campaign while applying for funding.
“We would outline a proposal and the [Tar Sands Campaign] grant advisor would say ‘yea’ or ‘nay’ as to whether it fit the parameters that the campaign was looking for. And then we would submit this proposal directly to the foundation,” she said in an interview. “So it was just that first level of scrutiny that the grant advisor was involved in. And then we dealt directly with the foundation, and the money came directly to us from the foundation.”
The grant advisors were actually called coordinators, and keeping in touch with all the ENGOs in the Tar Sands Campaign was part of their part-time jobs. The objective was to avoid duplication and share information where possible. While the Tar Sands Campaign and its Canadian ENGOs may have been involved in a “global effort,” according to Krause, the day-to-day relationship between ENGOs and the Tar Sands Campaign was not centrally directed, as she claims.
“You had Greenpeace doing stuff, Pembina Institute, Indigenous groups, there were a lot of groups. As happens when a bunch of people are working on the same topic, you usually sort of say, ‘hey, let’s have a call’ or ‘let’s have a meeting, compare notes, let’s not hire consultants to do the same report for the environmental assessment hearing.’” says Greenpeace Senior Energy Strategist Keith Stewart. “Groups don’t always agree on strategy, on tactics, on what’s the best solution. We usually try and at least talk it out first, explain our various positions, even if we’re going to end up disagreeing in the end. The idea is you talk about it first so you don’t find out then in newspapers that you’re at odds.”
“It’s a movement, a civil society movement,” says Berman. “You can’t track it all, and no one controls it.”
Was Tar Sands Campaign a Big or Little Player in Anti-Pipeline/Oil Sands Activism?
Berman’s description of the Tar Sands Campaign as a movement presents a problem for anyone trying to understand Canadian opposition to pipelines and the oil sands, including Krause.
Was the Tar Sands Campaign the umbrella under which all opposition occurs? If this is the case, then the Tar Sands Campaign is the major player in the anti-pipelines/oil sands movement and U.S. foundation funding looms large, because those greenbacks comprised most of the activism funding, thus strengthening Krause’s case.
Or, was the Tar Sands Campaign one small, discrete effort among dozens, perhaps hundreds, by other Canadian ENGOs anti-pipeline/oil sands and First Nations campaigns, with the bulk of the money coming from Canadian donors? From this point of view, the Tar Sands Campaign was a minor player whose time has come and gone, not worth spending millions fighting with an “energy war room” or a public inquiry.
According to Berman, ENGOs and activists have wrestled with this issue for years. How do you draw an org chart for a movement? How do you count funding for anti-pipeline/oil sands activism when a grant may be labelled one thing in a covering letter and used for a project that arguably is not activism? Or one grant supports multiple projects, some activism, some clearly not? Do you count climate change campaigning as anti-oil?
After many interviews and conversations with ENGOs and their supporters, I’ve concluded the Tar Sands Campaign is a minor player in anti-pipeline/oil sands activism. For most ENGOs, the American cash was a small part of their annual budget. When the funding dried up post-2015, the activism didn’t diminish, which suggests volunteers shouldered more of the load or replacement money was found in Canada or from international donors.
Which raises the question: just how much U.S. funding did the Tar Sands Campaign receive?
A Pittance No Matter How You Look at It
While Krause points to a 2008 slide presentation by Michael Northrup of the Rockefeller Brothers Fund as proof that the initial Tar Sands Campaign budget was $7 million, Berman recalls the number being $6 million the first year and approximately $40 million over 10 years.
Keep in mind that this money was distributed among many different groups. A few of the bigger ones, like Greenpeace Canada, received several hundred thousand dollars a year, but most received much smaller disbursements in the tens of thousands.
Berman says that in the past, campaign members were reluctant to release the funding numbers because she and the ENGOs like the idea that industry and its political boosters think the Tar Sands Campaign is much bigger than it really is. Increasingly bellicose attacks from Krause and her supporters over the past few years, however, persuaded Berman the time had finally arrived “to pull back the curtain and tell Canadians what’s going on.”
Based upon Energi Media’s interviews, U.S. funding typically contributed eight to 10% of total annual budgets for smaller ENGOs and a much smaller percentage for larger organizations.
For instance, financial data supplied to Energi Media by Sierra Club BC shows the ENGO raised $1,252,000 annually over the past five years. American funding for energy and climate change activities averaged 7.5% of the budget over that period, but declined sharply in 2018 and 2019.
Greenpeace Canada received 2.2% of its $9- to $11-million annual budget from American foundations at the height of the Tar Sands Campaign, but that has declined to its current level of 0.4%, according to Stewart.
“At the beginning there was more money available because the foundations invested heavily in the front end to enable us to get going,” says Environmental Defence Canada’s Trim Gray. “For the first three or four years, it was around $300,000 a year, but that’s tapered off. I think the last time we got any money was last year, $50,000.”
Not all Tar Sands campaign funding supported activism.
The Pembina Institute, for instance, is a 35-year-old energy think tank focused on research and policy that advocates for more environmentally responsible development of oil and gas, including the oil sands. Pembina joined the Tar Sands Campaign because a decade ago there was little effective climate policy, at the same time that government and industry were ramping up emissions-intensive bitumen production.
“At the time you were seeing no climate policy in Canada related to oil and gas, no land use planning, no enforcement of tailings pond rules,” Executive Director Simon Dyer said in an interview. “There was interest in a counterpoint to the industry and government perspectives on that. Pembina was happy to seek funding for our research and policy work in that space.”
Dyer says that since 2006, 85% of Pembina’s revenue comes from Canadian sources and 15% from international. A perusal of its financial statements finds several of Krause’s supposed masterminding U.S. foundations—for instance, the Gordon and Betty Moore Foundation—but the overwhelming majority seems to be Canadian individuals, foundations, and even oil sands companies like Suncor.
In 2008, 41% of Pembina’s $5 million in revenue—the number is closer to $8 million now—came from consulting services, and 48% from grants for specific projects. The organization does not receive core funding from any source. According to Dyer, half of Pembina’s expenditures are for non-oil and gas-related policy research.
Climate Action Network Canada—an umbrella organization with more than 100 members in Canada affiliated with 120 international branches of the network—had a similar focus, according to Abreu. “There has only been one point in our history where we had an explicit tar sands campaign,” which was to “do the number crunching” around greenhouse gas emissions from the oil sands, she said. “The effort there was to think through the implications of those emissions, Canada’s overall greenhouse gas emissions inventory, and what level of ambition we would need to undertake to mitigate this huge amount of emissions coming from the tar sands. Then communicate about this huge carbon liability to the rest of the world.”
Pembina and Climate Action Network demonstrate that the Tar Sands Campaign was not a monolith; not every ENGO was engaged in direct activism against the Alberta oil and gas industry. Even if we conclude, however, that the majority of ENGOs in the campaign and the majority of the funds granted to campaign members was used to actively oppose pipelines to the West Coast and the expansion of the oil sands, we should also acknowledge the complexity and variety of those activities.
Canadian Money, Not American, Fueling Anti-Pipeline/Oil Sands Activism
One reason the Tar Sands Campaign punched above its weight is that the American funding only augmented contributions from Canadian donors—individuals, corporations, and foundations.
“One thing that’s really missing in Krause’s analysis is what percentage of these organizations’ overall budgets is the U.S. funding,” says Martin Olszynski, associate professor of law at the University of Calgary. “The David Suzuki Foundation, for instance, is on the record for suggesting that it’s roughly 10%, and that the vast majority of its funding is from Canadians. I think it speaks loudly that Vivian hasn’t thought to provide those numbers as well. That would provide us with much-needed context.”
West Coast Environmental Law (WCEL) receives a bit over 80% of its funding from Canadian sources, according to Executive Director and Senior Counsel Jessica Clogg, providing “environmental legal aid” to communities and Indigenous groups. A sampling of WCEL annual reports from 2008 to 2017 suggests budgets ranged from $1.2 to $2.8 million. Projects included supporting Bill C-48, the federal legislation to create an oil tanker ban off B.C.’s northern coast, but also other projects unrelated to pipelines and energy.
“It’s really time to stop blaming foreign-funded environmentalists for the oil industry’s problems,” Clogg said in an interview. “These donations are just starting to, in a tiny way, right the imbalance of power between citizen groups and the oil and gas sector.”
Raincoast Conservation Foundation was the ENGO that challenged the National Energy Board’s refusal to consider the impact of increased marine traffic on the southern resident killer whales caused by building the Trans Mountain pipeline expansion, according to Executive Director Chris Genovali.
The case “was substantially based on the work Raincoast scientists and our academic partners produced on killer whales and marine environment impacts, for both our submission to the NEB process and our subsequent killer whale population viability analysis paper published in the journal Scientific Reports,” he said in an interview, estimating that eight to 10% of Raincoast’s annual budget comes from American funders.
Genovali also points out that the foundation’s work is “primarily species-based, either focused on terrestrial/marine predator research and conservation or salmon research and conservation,” and opposing pipelines is not its main focus. The fact Raincoast’s research led to the Federal Court of Appeal overturning the Trans Mountain expansion’s approval may seem like vindication of Krause’s conspiracy narrative, but can we really argue that scientific investigation is tantamount to pipeline sabotage?
The examples provided above are typical of the ENGO interviews.
Krause Thinks Paid Activism is Illegitimate Activism. Ok, What About CAPP?
“All of the major pipeline proposals put forward today face staunch anti-pipeline activism, but this is not 1990s activism organized by unpaid volunteers,” Krause told Canadian senators in 2016. “Today’s anti-pipeline movement is a professionally staged effort designed and executed to grab the headlines and dominate the news.”
Krause disparages paid activists in other posts and op-eds, which is odd given that the Alberta-based oil and gas industry has any number of trade associations with multi-million-dollar budgets and dozens of very well-paid staff.
CAPP’s annual revenue is rumoured to be in the $50-million range. The reason Energi Media can’t provide an exact number is that CAPP refuses to release its budget. Krause complaining about the lack of transparency from the U.S. foundations and Canadian ENGOs—whose financial statements are posted online and available to anyone who looks for them—while industry keeps lobbying and communications budgets secret is pretty thick irony.
We should also point out that Krause appears to have found much of her information about funding for the Tar Sands Campaign in searchable online databases. Again, irony.
Let’s not forget the Alberta government’s 2018 pro-pipeline and -oil sands advertising campaign for $23 million.
All of the ENGO executives expressed frustration about Krause’s conspiracy narrative casting their organizations as Goliath and the oil and gas industry as David, a symbolism Berman dismisses.
“We’re facing a multi-billion-dollar industry, we’re trying to raise concerns that are difficult to talk about, yet somehow this narrative around foreign funding and the backwards David and Goliath narrative has gotten so huge,” she said.
Krause’s narrative has consequences for ENGOs out in the real world. When Kenney was a cabinet minister in the Stephen Harper government, Krause’s research was used in part as a pretext in 2015 for Canada Revenue Agency (CRA) audits on a number of ENGOs involved in the Tar Sands Campaign. The audits were lengthy (up to five years), time-consuming for the organizations, and very expensive.
Krause continues to make serious allegations about the audits, as she claimed in testimony before the Canadian Senate in 2016: “It’s important to get to the bottom of the CRA audits because—and I’ll speak plainly here—as far as I can tell, there’s corruption there. There’s a tax scam. There’s fraud. The same people who have been running roughshod over our economy have been gaming the system…”
The same year that Krause made those allegations to the Senate, Tides Canada Foundation’s audit was completed “after an exhaustive five-year process with a compliance agreement, which is the typical outcome of any charity audit. The audit confirmed Tides Canada’s status as a charity in good standing with the CRA,” according to an email from the organization. Tides Canada Initiatives Society—which provides shared governance, operations, human resources, and financial support to 60 community-led projects across Canada—is close to completing its audit.
This is important because Krause often appears to conflate the U.S. charity Tides Foundation with Tides Canada, according to Tides Canada President and CEO Joanna Kerr. The two entities are entirely separate and share only a name. More importantly, Tides Canada was never part of the Tar Sands Campaign. Nevertheless, since 2005, Tides Canada estimates 43% of its funding comes from international—not just American—sources, while 1% of its grants have gone toward pipeline- and oil sands-related initiatives, mainly to Indigenous communities and environmental organizations. A sampling of Tides Canada financial statements between 2011 and 2018 suggests that funding ranged between $200,000 and $250,000 annually.
“We would characterize those projects as pipeline-related activities, grants to communities that are being affected by [oil and gas] extraction projects or pipeline projects,” Kerr said in an interview. “ For instance, in 2011 there were activities funded on public outreach and education about the potential effects on wild salmon ecosystems of proposed oil pipelines, or to support a community-led engagement around conservation issues in the Sacred Headwaters in B.C. So it’s really more about dealing with the impacts of development, as opposed to funding anti-pipeline campaigns.”
I asked the ENGOs if Krause had contacted them to get their side of the story. In most cases the answer was no. Tides Canada media contact Alison Henning’s description of her organization’s contact with Krause was typical: “Although in one email I found she asked a question about where the funding went, for the overwhelming majority, she would simply list a whole bunch of info she had collected, and then ask for us to reply and confirm it was correct.”
In other words, no attempt to obtain the ENGO said of the story.
Did Rachel Notley Kill the Tar Sands Campaign with Climate Policy?
“Relentless attacks on our oil and gas industry have costs us tens of thousands of jobs, impacting families from every region of our province. Albertans rightly expect their government to take the initiative and stand up for Alberta’s interests,” then-aspiring premier Jason Kenney said during the recent election campaign. “Premier Notley has not done nearly enough to fight back against the misinformation these groups spread, and has taken no meaningful action to cut off the foreign funding flowing into our country to kill Alberta jobs.”
The UCP release praised “the intrepid reporting of journalist Vivian Krause” and claimed that “Albertans now have proof that provincial interests are being challenged by well-funded foreign actors who have been waging a decade-long campaign to landlock Alberta’s oil.”
The problem with Kenney’s claim is that at the very time he was making it, the Tar Sands Campaign had for all intents and purposes petered out thanks to Notley’s Climate Leadership Plan, released in late 2015. Carbon pricing, the 100-megatonne-a-year oil sands emissions cap, and the pledge to reduce fugitive methane emissions by 45% essentially fulfilled the American foundations’ objective, which was to convince the provincial government to adopt more aggressive climate policy.
“After Premier Notley and Prime Minister Justin Trudeau were elected [in 2015] and they promised new climate plans, funder interest dropped off as [foundations] turned their attention to other regions,” said Berman. “I would say after 2016, it was probably more like $2 million a year, and now it’s $1 million a year.”
Is it a delicious irony that if Kenney follows through with his threat to hold a $2.5-million inquiry, there is a good chance the inquiry will cost more than the campaign is spending each year?
What Have Activists Actually Achieved?
“This campaign has been devastating. Every single pipeline project has been sabotaged by this campaign,” Krause told CBC host Wendy Mesley during a January 20, 2019 interview.
This is where Krause’s conspiracy narrative really falls apart.
Trans Mountain Expansion, as I have argued in columns and videos, is the victim of the First Nation-led legal challenge at the Federal Court of Appeal, Premier John Horgan’s clever obstructionist tactics, and Trudeau government mistakes, not activist public relations campaigns.
The Line 3 in-service date is pushed back until late 2020 because the Minnesota Public Utilities Commission delayed issuing permits. Keystone XL is bogged down in U.S. litigation and TC Energy (formerly TransCanada) recently announced the 2019 construction window had closed, pushing in-service back another year. Energy East was withdrawn in late 2017 because of a combination of President Donald Trump putting KXL back in play with an executive order—proponent TC Energy didn’t have enough customer supply to fill two large pipelines and the American route is more profitable—and the NEB’s decision to require the project review to include downstream emissions.
If ENGO activism played even a minor role in any of the pipeline projects, it was the 2016 decision by Trudeau to cancel Enbridge’s Northern Gateway project to Kitimat on the West Coast. Opposition from environmental groups was loud and well-organized. But that doesn’t mean it was the most important issue. Enbridge made a hash of Indigenous consultations in British Columbia and, as a consequence, faced a thicket of legal challenges that promised to be daunting. Thanks to the Harper government’s changes in Canadian Environmental Assessment Act, 2012, the federal cabinet was given the final approval for pipeline projects, and it’s not hard to see why Trudeau’s political calculations concluded he couldn’t approve two pipelines from Alberta to western tidewater.
“I would agree with that assessment. Even if you were to remove the environmental groups from the picture, we would be more or less in the same place that we are now,” says Professor Olszynski. “Since 2004, when the Supreme Court issued the Haida Nation decision, there are hundreds and hundreds of cases where First Nations are challenging a report on the basis that there was inadequate consultation.”
Unfortunately, evidence-based analysis doesn’t sell in today’s polarized political environment, especially during an election campaign. Krause’s conspiracy narrative, on the other hand, works beautifully.
“Thank you Jane Fonda, thank you Tzeporah Berman. You’ve cost us tens of thousands of jobs. We’ve been selling our resources at a steep discount with devastating effects,” CAPP CEO Tim McMillan told the Edmonton Chamber of Commerce in late February. This claim by the former Saskatchewan minister of energy and oilfield service company owner is not accurate, so let’s review the real explanation for oilpatch job losses.
The Canadian oil and gas industry lost 52,000 jobs because beginning in late 2014, oil prices dropped from over $US80 to less than $20 per barrel. The differential between Western Canadian Select and West Texas Intermediate was within the historic range of $10 to $15 barrel throughout 2016 and didn’t increase until late 2017, after a leak was discovered in the Keystone pipeline that caused a shutdown and then several months of reduced capacity. The differential fell early in 2018 after Keystone resumed full service and didn’t rise again until later in 2018, as growing oil sands production finally overwhelmed Canadian pipeline capabilities.
The real reason Alberta oilpatch jobs didn’t return after prices began to rise in 2017 is the drive by producers for greater efficiency, lower operating costs, and the accelerating adoption of new technologies, like artificial intelligence, that are boosting labour productivity. Since the same trend affected Texas, why should Alberta be any different?
Now, arguing that ENGO activism didn’t destroy jobs doesn’t mean that activism had no effect at all. Of course it did, just not the effect claimed by Krause, Kenney, and McMillan.
The ENGOs’ most significant triumph was the campaign against the National Energy Board’s environmental assessment of the Northern Gateway and Trans Mountain expansion pipeline projects. Years of protests and obstruction tactics eroded Canadians’ trust in the NEB, even if they didn’t understand what the national energy regulator actually did or how it functioned. Then activists persuaded Justin Trudeau and the Liberals that the NEB had been captured by industry and was so corrupt it needed to be replaced, not reformed. I interviewed then-natural resources minister Jim Carr in mid-2016 and he made it clear the Trudeau government agreed with environmental groups and major changes were on the way. An NEB “modernization” process was undertaken the following year that resulted in Bill C-69, legislation that would remove assessment of pipeline projects from the regulator and completely revamp the assessment process.
The bill—still in the Senate, which is considering significant amendments—is hugely controversial, partly because the oil and gas industry claims it will ensure not a single new pipeline will ever be proposed for Canada. “If the goal is to curtail oil and gas production and to have no more pipelines built, this legislation may have hit the mark,” Canadian Energy Pipelines Association CEO Chris Bloomer told the Standing Committee on the Environment and Sustainable Development of the House of Commons on March 29, 2018.
If Tar Sands Campaign members can point to one clear victory versus the oil industry, this is it.
But C-69’s changes will affect future pipeline proposals—and possibly environmental assessments of in situ projects, as the bill now stands—not current or past projects. Even if one acknowledges that C-69 has seriously eroded investor confidence in Canada’s regulatory system over the past few years, none of the pipelines in the queue now or in the recent past would have been affected.
Nowhere in Krause’s writing have I found a solid evidence-based analysis that demonstrates a cause-and-effect relationship between the Tar Sands Campaign and pipeline project delays and cancellations. The effect of the ENGOs’ activism is assumed to be self-evident, which even a college freshman recognizes as a reasoning error.
Research? What Research?
Krause commits what is called a syllogistic fallacy. A syllogism looks like this: A equals B, B equals C, therefore A also equals C. The syllogism becomes a fallacy when A is assumed to equal C but the relationship isn’t proved by evidence.
Krause’s syllogistic fallacy looks like this: 1) American foundations fund Canadian anti-pipeline activism; 2) pipeline projects are indeed being obstructed, delayed and sometimes cancelled; 3) therefore, the U.S. funding must be to blame. This reasoning is fallacious because Krause never makes the causal link between U.S. foundation funding and pipeline project delays and cancellations; she simply assumes it, and her readers follow along because they want it to be true.
Many, if not most, of her conclusions are a priori. That is, they are based upon reasoning that proceeds from deduction rather than observation or direct research, like interviews with the ENGOs funded by the Tar Sands Campaign that form the basis for this deep dive.
For example, consider this Krause tweet of April 19, 2019 in which she attaches a $225,000 grant approval covering letter from the U.S.-based Tides Foundation to the Pembina Institute, the cover of a Pembina book about the oil sands, and concludes that “Pembina did what it was funded to do.” Where is the evidence the Tides money paid for the report to be written? Where is the evidence the report is even anti-oil sands?
In fact, “Booms, Busts, and Bitumen” is a rather nerdy study by economists challenging some of the conventional economic analysis that views growing oil sands production as a net positive for Canadian GDP without considering environmental costs. Recommendations include sensible policy prescriptions for Canadian governments to better manage wealth created by non-renewable resources, and to consider the full costs and benefits of rapid oil sands development during project reviews.
The report clearly does not “advance narratives about NEGATIVE economic impacts of the oil sands industry ($%@&???!!!),” as Krause claims in her tweet. Unless, of course, one assumes that raising legitimate issues and concerns about oil sands development is anti-Alberta and anti-oil and gas.
This is a great example of Krause’s syllogism fallacy approach to research: 1) a cover letter from the Tides Foundation says Pembina is being paid to create negative narrative around the oil sands; 2) Pembina wrote a study about the oil sands; 3) therefore the study must be part of that negative narrative desired by Tides.
This narrow, biased world view is exactly how Krause and her supporters explain the conspiracy narrative around the oil sands and pipelines.
Take the example of Brett Wilson, the wealthy oil and gas investment banker turned reality TV star who has several times called for ENGOs that oppose Alberta pipeline projects to be charged with treason. Or hanged.
Wilson’s inflammatory tweets illustrate a great irony of the Tar Sands Campaign conspiracy narrative: Krause and her allies accuse the ENGOs of stooping to lies and biased claims, but their own claims are not always sterling examples of rational discourse, either.
“The flaw in the Tar Sands Campaign is that it provides slanted, selective information and does not tell the whole truth about oil from western Canada,” Krause writes in The Tar Sands Campaign Against Overseas Exports of Canadian Oil: Activism or Economic Sabotage? “While there is a grain of truth to some of the claims that are made, other claims are exaggerations and some are outright falsehoods.”
Krause has made many errors of fact in her blog posts, newspaper op-eds—she’s a favourite of the right-leaning Postmedia papers—and on social media. Ever since I wrote my first piece about her in 2016 for Alberta Oil, my primary criticism has been that her conclusions are not supported by her research.
For instance, in a blog post titled Activism or Economic Sabotage?, she made this claim: “The Sands Campaign also aimed to achieve a national carbon policy as a framework for curtailing the development of the Canadian oil sands. With the Alberta government’s announcement that it will limit the industry’s carbon emissions to 100 million MT [sic], this objective has been achieved.”
This misleading comment suggests the Tar Sands Campaign was responsible for Alberta implementing the 100-megatonne emissions cap. Not even close to being true.
The reality is the cap was negotiated between five oil sands CEOs and a small group of ENGO executive directors in a series of private meetings from September 2014 to mid-2015 as part of a “carbon policy for no production cap” agreement that was enshrined in the Climate Leadership Campaign by Notley and her environment and climate change minister, Shannon Phillips. The companies agreed to the cap because they believe their ability to innovate and develop new emissions-reducing technology will enable them to increase production while keeping greenhouse gas emissions well under 100 megatonnes a year.
“A limit on emissions is an expression of our faith in technology and innovation,” Suncor’s VP of sustainability, Arlene Strom, told me during an interview for my book, The New Alberta Advantage: Technology, policy, and the future of the oil sands.
The emissions cap is not a capitulation to pressure from the “foreign-funded” Tar Sands Campaign but a rational and strategic response by companies actively decarbonizing their heavy crude oil in order to make it cost- and carbon-competitive in Asian markets. Context is important.
Another example is Krause’s oft-repeated claim that Texans would never allow their pipeline projects to be obstructed in the way we overly polite Canadians are pushed around by activists. But that’s exactly what happens in the United States. Every major oil and natural gas pipeline that crosses a state border is protested and litigated, according to Prof. Victor Flatt, an energy law scholar with the University of Houston, who adds that the U.S. National Environment Protection Act (NEPA) is actually more onerous than Canadian legislation, despite the efforts of President Donald Trump to undermine it.
“We have a massive and still growing political resistance within the United States to the production, transportation, and consumption of fossil fuels of any kind,” Energy Ventures Analysis Inc. President Seth Schwartz said at the recent Eastern Fuel Buyers Conference in Orlando, as reported by S&P Global. “As a result, you have opposition to virtually every energy infrastructure project in the United States.”
And then there’s the small detail of 590 kilometres of U.S. Gulf Coast that Texas can access with pipelines any time it wants because intra-state pipe is the purview of the Railroad Commission of Texas, not the federal government, just as the Alberta Energy Regulator approves and regulates intra-provincial pipelines.
Another favourite argument of Krause is that American-financed opposition to Canadian pipeline projects is a form of “economic protectionism” by the United States energy industry. “The U.S. now jostles with Saudi Arabia and Russia for top spot as the world’s number one oil producer. Last year, the U.S. began exporting oil to China, Japan, France, Italy and elsewhere but there is no campaign against exporting U.S. oil,” Krause wrote in an October 3, 2016 Financial Post article entitled, The cash pipeline opposing Canadian oil pipelines.
“The Tar Sands Campaign is keeping Canadian oil landlocked within North America, stopping it from reaching overseas buyers and allowing the U.S. to dominate the market. Anti-pipeline activism claims to be about the carbon emissions and the climate but what it amounts to is economic protectionism.”
Not so, says University of Houston energy economist Ed Hirs, who is also a veteran oilman and the managing director of Hillhouse Resources, an oil and gas company in the Niobrara shale play in northeast Colorado.
“Her conclusion that [anti-pipeline activism] is economic protectionism for the benefit of the U.S. is wrong,” Hirs said in an interview. “The Canadian crudes compete head-to-head with Venezuela and some of the other heavy crude resources from around the world, like Saudi Arabia and Mexico. If there are interests unhappy with Canadian crude coming down to the United States, you have to look at the head-to-head competitors, and that would include Saudi Arabia.”
These examples—and there are many others—illustrate how viewing Alberta climate policy and federal pipeline approval through the lens of Tar Sands Campaign activism leads Krause to arrive at her fair share of inaccurate conclusions.
“Honestly, her facts are wrong, and she has no idea what she’s talking about,” said Berman. “I think what’s important for your readers to know is that she’s adding up apples and oranges. She’s trying to make it appear as though there’s this conspiracy.”
Kenney claimed in a March 22 press release that “a single enterprising reporter—Vivian Krause—has done more to expose the ‘landlock’ campaign than the entire NDP government.” He also called her research “intrepid reporting.” Krause is not a journalist, at least not in the sense of a reporter who gathers information from on-the-record interviews with sources, verifies the information, then organizes it into a coherent story.
Importantly, she doesn’t interview expert sources to provide context for her research into Canadian and American tax records. Her “research” stops once the grants and donations from American charities to Canadian ENGOs are uncovered. According to the sources interviewed for this story, Krause doesn’t follow through with the ENGOs to determine how the U.S. money was used, nor does she account for the impact of Canadian donations, which are usually far more than foreign funds.
If all you have is a hammer, every funding grant from a U.S. foundation to a Tar Sands Campaign member looks like a nail, apparently.
The Case of the Invisible Indigenous Leaders
“The Tar Sands Campaign has been led for over a decade by Canadians and by Indigenous leaders, many of whom are volunteers and don’t even get paid. And this story makes them invisible. It wipes them out,” says Tzeporah Berman. “Especially considering most of the campaigns, especially on pipelines, have been Indigenous-led, it’s a form of racism. It’s a form of making them invisible yet again.”
My original intent was to write a section of this investigative report—accompanied by a video of interviews with Indigenous leaders—about First Nations involvement in the Tar Sands Campaign and protest movements against Canadian pipelines. Berman’s comment, however, made me realize that if I treated First Nations as just another type of ENGO, I would be doing what she accuses Krause of, rendering Indigenous leaders invisible.
Frankly, Albertans don’t understand B.C. Indigenous communities, their politics, their legal relationship to the Crown, or their opposition to pipelines to tidewater. They see them as just another special interest group, another roadblock to be swept out of the way. Witness Premier Kenney’s promise to fund pro-development First Nations’ legal challenges against anti-development First Nations.
That said, the pro-development Indigenous peoples also have a story and a legitimate argument for supporting pipeline projects. To do justice to the story, both sides need to be reported, as well as the rich and complex context in which the two sets of communities have arrived at their positions.
Therefore, I have decided to write and record a separate deep dive on B.C. Indigenous peoples and pipeline projects, tentatively scheduled for publication in June.
Why Haven’t Media Challenged Krause?
Journalists have trended from the kid gloves treatment (think Mesley’s fawning CBC interview) to the outright sycophantic (think Licia Corbella of the Calgary Herald). Even my columns challenging the inaccurate conclusions Krause drew from her “research” avoided challenging the research itself because it was simply too daunting to retrace her steps through the IRS databases where she finds her information.
Once Jason Kenney and the UCP—ably abetted by CAPP, industry trolls like Brett Wilson, old oilpatch mouthpieces like former Encana CEO Gwyn Morgan, and astroturf organizations like Canada Action—weaponized her conspiracy narrative, no mainstream journalists were even remotely interested in challenging Krause.
This is not a good look for Canadian journalism. Unfortunately, it gets worse.
When I asked Berman why the relatively small amount of U.S. funding for the Tar Sands Campaign had never been made public over the course of 10 years, she told me, “You’re the first journalist who ever asked, Markham.”
“Quite frankly, we didn’t want the industry to know that we didn’t have a $100-million budget. But honestly, it’s just this narrative around foreign funding and the backwards David and Goliath narrative has gotten so huge. We just decided, you know, let’s just pull back the curtain and tell them what’s going on.”
As Krause herself points out, “The success of The Tar Sands Campaign hinges on its ability to get ‘earned media,’ publicity gained by getting into the news cycle.”
Turns out, the same can be said of her.
Why Vivian Krause’s Conspiracy Narrative Has Run its Course
What have we learned about Krause’s conspiracy narrative?
One, from 2009 to 2015, the American funding behind the Tar Sands Campaign was never the “funding juggernaut” claimed by Krause. U.S. money played a minor role in Canadian activism against pipeline projects and the Alberta oil sands. After the Alberta Climate Leadership Plan was announced, U.S. money dried up, and now is only $1 million a year. The real driver of that activism is Canadian donations, combined with Canadian ENGO leadership. If the Canadian industry has a bone to pick with Tar Sands Campaign funders, it should look to its fellow citizens, not American foundations.
Two, the Tar Sands Campaign never had the effects claimed by Krause. When she claims that “it is clear that the Northern Gateway pipeline and other proposed pipelines for the overseas export of oil from western Canada have been deliberately sabotaged,” her conclusion is not clear at all because it is not supported by evidence or expert analysis. Lists of foundation grants and excerpts from cover letters are evidence that U.S. foundation funding supported anti-pipeline activism, not that the activism was successful. Energi Media has reported many times on the evidence-based explanations for why Canadian pipeline projects have stalled or been cancelled, and they have little to do with the Tar Sands Campaign.
A fair question would be, if the oil and gas industry is being decimated by anti-pipeline activism, why doesn’t it fight back?
Krause provided one explanation to the Senate: “Too many times I’ve heard industry executives say they don’t want to dignify activists by acknowledging what they are saying.” This line of reasoning is inadequate. Resolving the market access issue is top of mind for oil executives like Suncor’s Steve Williams and CNRL’s Murray Edwards, and they would never blithely dismiss an existential threat to their business. If they believed anti-pipeline/oil sands activism was an obstacle to achieving corporate goals, they would act.
In fact, they did, with the 2015 “climate policy for no production cap” deal they struck with the ENGOs, which demonstrates that the CEOs’ concern is that activism could limit expansion of supply, not expansion of shipping capacity.
Consider the market access issue from the CEOs’ point of view. The three existing pipeline projects are sufficient for supply growth until 2030. Keystone XL and Line 3 are held up by American litigation and regulatory issues, which the producers and their trade associations are powerless to influence. The only pipeline that is exclusively in Canadian jurisdiction, the Trans Mountain expansion, is dogged by B.C. government obstructionism and First Nations litigation, not issues the producers can do much about. Ottawa has assured industry TMX will be built. All the companies can do now is hope Prime Minister Justin Trudeau delivers on his promise.
In this March 28 video, I argued that a CAPP manager’s admission to an Alberta chamber of commerce that CAPP members refuse to match funding “on a dollar-for-dollar basis” to counter activists on their own turf is really a message from the CEOs that the activists are not the threat Krause claims. Follow the money, right? Speaking of money, several of the ENGOs I interviewed suggested that Kenney’s pushback strategy might persuade the foundations—Canadian, American, and international—to renew funding for the Tar Sands Campaign.
Ultimately, starting a political and public relations war with anti-pipeline/oil sands activists could lead to unintended consequences for Alberta, like making nervous investors a lot more nervous.
Now that Vivian Krause’s conspiracy narrative has been debunked, is Kenney’s costly pushback strategy really such a good idea?
Reprinted in full with the author’s permission.