[A very long read and research resource on the Trans Mountain tarsands pipeline project.]
They came out in force last Saturday in Metro Vancouver, to send a message to the world about the depth of British Columbians’ and Indigenous peoples’ opposition to Kinder Morgan’s planned $7.4 billion Trans Mountain pipeline project.
The pictures of Saturday’s perfectly peaceful and massive march in Burnaby were impressive. Thousands upon thousands rallied for the #ProtectTheInlet protest—easily the largest demonstration to date against that project.
Meanwhile, in Markham, Ontario, the national news networks were preoccupied with another more “newsworthy” story: the Ontario Conservative leadership “gong show”.
For the entire day, Canada’s “Mother Corp” devoted its TV broadcast coverage to that Sienfeldian show about nothing, talking for hours and hours about all that was not unfolding.
It chose not to cover the equally significant live event on Canada’s West Coast, led by Indigenous peoples from across Canada and the United States, including Tsleil-Waututh member Will George and Grand Chief Stewart Phillip.
Ground Zero, as it were, for the 150 First Nations and U.S. tribes that have signed the Treaty Alliance Against Tar Sands Expansion in opposition to that project, to Keystone XL, and to the Enbridge Line 3 pipeline project.
It was an event of enormous national and even international significance.
One that literally put the boots to Canada’s bitumen bullies in Alberta and Ottawa, with a march that fought back against prime minister Justin Trudeau’s vow to impose his unwanted pet tarsands pipeline on British Columbians.
Those thousands who turned out made it very clear: British Columbians and Aboriginal peoples won’t be cowed into silence or meek acceptance of that ill-conceived and mislocated pipeline project.
They will fight it tooth and nail. For the dire threat it poses to our environment. For the damage it stands to cause our Coastal economy. For the harm it stands to suffer upon Aboriginal people, in flagrant contempt of Indigenous rights and title. And for the unacceptable intrusion it represents to British Columbia’s provincial autonomy.
As Trudeau himself once said about such projects, “governments grant permits, communities grant permission.”
Saturday’s protest marked a new milestone in the escalating protest effort.
It served notice that quite apart from the ongoing legal challenges in the Federal Court of Appeal to the Trans Mountain project, that pipeline will not proceed without a fight on a scale that is unprecedented in Canada.
B.C.’s coastal communities and First Nations have spoken. Permission is denied.
The National Energy Board has even gone so far as to authorize Kinder Morgan to bypass Burnaby’s bylaws and immediately begin construction work in expanding its marine terminals. The City of Burnaby and the B.C. government are now asking to appeal that decision at the Federal Court of Appeal.
It is a project predicated on a mountain of lies our leaders have told us—our prime minister especially.
Prime minister's words weren't matched by actions
Trudeau vowed to subject the Trans Mountain project to a new environmental review process before putting it cabinet for approval.
He promised not to rely on the horribly flawed National Energy Board review, which he said in the election was wholly inadequate.
Instead, he embraced that sham process in giving the new heavy oil pipeline his government’s blessing.
He also promised to properly protect Aboriginal rights and title, consistent with the United Nations Declaration on the Rights of Indigenous Peoples and its principle of “free, prior, and informed consent".
Again, he lied.
Six impacted First Nations are now challenging his government on that point in the Federal Court of Appeal. The Coast Protectors have now also built a “watch house” in the path of a pipeline construction site, reminiscent of Standing Rock, because they cannot trust Canada’s prime minister to do the right thing.
Time will tell whether Trudeau follows through on his threat to “do whatever it takes” to push that pipeline through, with all the physical confrontations, arrests, and even potential use of military force that that prospect might entail.
He has vowed to act as necessary to ram through that project that is opposed by the B.C. government and by its key “host” communities in Canada’s largest metropolitan area west of Toronto.
Shame on him.
Trudeau would never dream of doing that for any commercial venture in his party’s seat-rich bastions in Ontario or Quebec, least of all, in Toronto or Montreal.
It is untenable and should be unthinkable that he would treat Canada’s third largest city—Metro Vancouver—and Canada’s third most populous province—British Columbia—and Canada’s alienated First Nations—all with such wanton disrespect.
No one should trust his supposed commitment to protect our Pacific coast and the Salish Sea, including its endangered salmon stocks and its remaining 76 resident orca whales.
That new pipeline would triple the flow of refined oil products and unrefined, diluted bitumen from Alberta to Pacific tidewater, from 300,000 to 890,000 barrels per day—all to be shipped across more than 500 streams and over 1,000 watercourses, across some of the world’s most ecologically sensitive terrain, in Super, Natural, British Columbia.
Virtually all of those additional 540,000 barrels a day of heavy crude would be shipped to Northeast Asia and elsewhere.
Dubious economics dog project
The NEB reported that “Trans Mountain said that future cargoes would be crude oil, primarily diluted bitumen. Of the 890,000 b/d capacity of the expanded system, up to 630,000 b/d could be delivered to the (Westridge Marine Terminal).”
It was the first refinery to be built in that province in the last 30 years. But even that limited scheme to create more value-added refinery jobs in Canada is now in limbo.
Those jobs, too, will effectively be shipped offshore, as they continue to be sent south to the U.S. refineries that can handle Canada’s chemically diluted tarry goop and “upgraded” synthetic crude.
It is a heavy crude feedstock that neither of B.C.’s two refineries can process, be it the Parkland/Chevron refinery in Burnaby, or Husky’s much smaller, land-locked light oil refinery in Prince George.
The Trans Mountain project would see some 3.9 million barrels of that toxic tarsands crud stored in 14 new holding tanks, at Kinder Morgan’s expanded Westridge Marine Terminal in Burnaby.
That stored oil would be loaded at three tanker berths instead of only one.
All to “liberate” a seven-fold increase in oil tanker traffic with as many as 408 Aframax supertankers plying the Burrard Inlet each year.
Instead of five tankers on average per month loading heavy oil in the heart of Metro Vancouver, there would be 34 tankers per month.
Those tankers would all traverse the treacherous waters of the Strait of Juan de Fuca and the Strait of Georgia, each loaded with up to 120,000 metric tonnes—or as much as 750,000 barrels—of mostly heavy oil.
Why on Earth would Trudeau ever embrace suck risks?
Ostensibly, to command higher prices and increased corporate profits for that low-grade, high-cost, expensive to refine, filthy heavy crude known as diluted bitumen (“dilbit”).
To increase Alberta’s tarsands production and curry favour with Albertan voters, with sugar-plum visions of dollar signs, oilsands jobs, and pipeline construction jobs dancing in their heads.
To chase Big Oil’s cherished dream of sending more of its least wanted oil products to new Asian markets that are already awash with other cheaper, higher value oil options, in an attempt to diversify its markets and reduce its price exposure to North American markets.
As noted economist Robyn Allan has so cogently argued in her analysis for the Tsleil-Waututh Nation, the markets and metrics for that discounted product are at best dubious. They were never properly considered or verified through the NEB review process.
At the end of the day, this entire project is mainly being driven as a market diversification hedge for inferior heavy oil products that simply can’t profitably compete at current prices with the “sweeter”, lighter, more easily refinable oil now pouring out of the ground in America.
It is being driven by the rush to find more potential buyers for Canada’s dirty oilsands products that are being suppressed by North American pipeline capacity bottlenecks and by limited refinery options.
All of which has contributed to the related $34 per barrel current discount for heavy Western Canada Select relative to lighter West Texas Intermediate oil.
As it is, the volume of oil produced for export last year in Canada exceeded the available takeaway pipeline capacity by about 310,000 barrels per day, which largely explains the steep discounts for Alberta’s heavy crude.
The International Energy Agency (IEA) recently forecast that capacity will rise by 450,000 b/d by the end of 2019, assuming that Enbridge’s Line 3 expansion from Hardisty, Alberta to Superior, Wisconsin is completed.
It’s no sure thing, considering that project is still awaiting permits from Minnesota.
The Keystone XL pipeline is also still facing hurdles at the state level in Nebraska, where it was only approved as an alternative route. A decision that opened that project up to new potential legal challenges, delays, and uncertainty.
Neither of those state-level challenges sparked a retaliatory trade war from Alberta, such as its NDP premier, Rachel Notley launched and threatened against B.C.
She launched an interprovincial “wine war”, simply because the B.C. government suggested it would consult with its own citizens on strengthening oil spill protection, including possibly restricting the increased transportation of diluted bitumen in some unspecified way.
The B.C. government only suggested that such restrictions might be environmentally warranted pending a scientific review to fill in the gaps identified by the Royal Society of Canada’s expert panel on how diluted bitumen behaves in Pacific sea water.
Be that as it may, even with that added capacity from Line 3 and/or Keystone XL, the IEA predicts that Canadian heavy oil output will exceed the available North American pipeline capacity through 2020.
Hence the argument for Trans Mountain, to provide another pipeline option to flow that product directly for export through Canada’s existing Pacific oil terminal.
Because without that pipeline, the theory goes, oil producers will be obliged to ship even more of their product by rail, which is more expensive. Available rail loading capacity is already limited and has little room to grow.
The IEA projects oil-by-rail shipments to peak at 590,000 b/d in 2019—again, assuming those other pipelines come on-stream as anticipated.
But here’s the problem.
No one wants to move more of that stuff by rail, especially in the wake of the Lac-Mégantic train disaster and oil spill.
So increased rail capacity isn’t really much of an option, as things stand.
Without Trans Mountain, Alberta’s oilsands producers will be effectively limited in how much dirty oil they can profitably extract and sell, because of pipeline capacity challenges that are creating surpluses which are in turn lowering product prices.
Trouble is, the International Energy Agency now predicts that the United States will account for 80 percent of the increase in global oil supply to 2025, when it will also be a net exporter, mostly of light crude and refined products.
The IEA further noted that “Since the (USA’s) ban on exporting crude oil was lifted at the end of 2015, volumes have increased sharply…As Canadian shipments to the United States grow, this frees up lighter US crude for export, particularly to meet Asian demand for petrochemical feedstocks.”
That will almost certainly drive down Asian demand and prices for Canada’s tarsands crude.
Particularly, since Trans Mountain’s shippers have not yet locked down contracted buyers in China or elsewhere in Asia for anything close to its planned export volumes.
Trans Mountain does have binding 15 to 20 year “take-or-pay” transportation service agreements with 13 oil shippers for a total of 707,500 b/d, or approximately 80 percent of the expanded system’s nominal capacity.
But how much of that capacity will be utilized or ultimately exported overseas is anyone’s guess.
The targeted Asian markets also lack refining capacity for Alberta’s tarry crude, for the same reason that Canada does: it is enormously expensive and complex to upgrade and process into refined products.
It makes little sense when the world is awash in lighter oil and refined products that are all vying for China’s “love and affection” as cheaper, less dirty alternatives.
In short, much of the economic rationale cited by Trudeau and Notley for Trans Mountain is also a mug’s game at best, to the extent that it is not altogether fallacious or fraudulent.
Environmental risks are profound
Economics aside, however, the vision of massively increased oil sand production made possible by the Trans Mountain pipeline is an environmental disaster; one that can never be justified by Big Oil’s pursuit of higher profits.
Already, that industry has dumped 340 billion gallons of toxic sludge in tarsands waste pools, euphemistically known as “tailings ponds”. It is disgusting and alarming.
The further threat that the Trans Mountain project represents to our terrestrial ecosystems, to our oceans and marine ecosystems, and to our atmosphere in facilitating more tarsands development is unconscionable.
It is yet another grand lie that Trudeau is peddling.
His much ballyhooed $1.5-billion, five-year oceans protection plan is actually predicated on unleashing that threat to the Pacific Ocean from the Kinder Morgan project.
He now warns that both that “protection” plan and his climate action plan will only go forward if the Kinder Morgan project gets built.
This is what he actually said on February 2:
“First of all, we need to have a world-class oceans protection plan in place, which is why we put over $1 billion in the biggest investment in protecting the B.C. coast that there’s ever been. Second, we have to have an ambitious plan to fight carbon emissions, to reduce carbon emissions, right across the country, which we’ve brought in with the pan-Canadian framework, reducing carbon emissions and putting a price on carbon right across the country. And third, we need to make sure that we are getting our resources to market overseas, safely and securely.
“The only way we can get any of those things is if we do all three of those things together.”
No new pipeline, Trudeau threatens, no oceans protection plan.
No Trans Mountain, no $80-million commitment to “help mitigate and prevent marine incidents such as oil spills”—a research effort that will be headquartered in Halifax, not even in Vancouver.
Never mind that dilbit has much higher levels of sulfur, total acid, nickel, and vanadium than conventional crude or lighter oils, and also contains significant concentrations of carcinogenic BTEX chemicals, such as benzene, toluene, ethylbenzene and xylene.
Or that the new and expanded pipeline would have the equivalent capacity to transport over 56 Olympic-sized swimming pools of noxious tarsands oil each day. Across 1,150 kilometres of fish and wildlife habitats that would be about as secure as the still reeling Kalamazoo River.
Fact is, no one truly understands the added risks that diluted bitumen poses for oil spill clean-up and environmental remediation, especially as it “weathers” and sinks in sea water, despite the scientific research that has been done in Canada and the United States.
No matter. It is of insufficient consequence to Canada’s eco-flexible prime minister.
He has determined that the material gains of that pipeline for Big Oil and for government treasuries should trump the material risks and costs it compounds for our environment.
Without that heavy oil pipeline project, he warns, his climate action plan will also effectively go up in smoke.
No Trans Mountain, he now argues, no national price on carbon emissions.
Incredibly, Trudeau is now peddling the line that the only way Canada might conceivably make good on its Paris agreement commitment to cut its national emissions by 30 percent by 2030 is if the Kinder Morgan project goes through.
"So in order to get the national climate change plan—to get Alberta to be part of it, and we need Alberta to be part of it—we agreed to twin an existing pipeline in order to get to work," he recently told the National Observer.
“It was always a question of, if we could move forward responsibly on the Kinder Morgan pipeline, then Alberta would be able to be as ambitious as we needed Alberta to be and get on with the national climate change plan... Yes, they were linked to each other."
His “solution” to cut greenhouse gas emissions is to first add at least an estimated 13.5-million to 17-million tonnes of carbon emissions each year to our national emissions stack from the upstream activities associated with the Trans Mountain project. A lowball estimate, no doubt.
His uniquely Canadian “contribution” to combating global warming is to further add an estimated 100 million tonnes of greenhouse gases—each year—in downstream emissions from exported tarsands oil that will be burned to power many of the world’s most polluted cities in Asia.
There’s a reason Californian refineries are not keen on processing Canada’s tarsands oil.
As the NEB noted in review of the Trans Mountain project, “the economics of processing most grades of Canadian synthetic and heavy crude oil in California are hampered by the state’s Low Carbon Fuel Standards, which impose a relatively high CO2 emission rating to Canadian synthetic and heavy crude oils.”
Trudeau’s “solution” to Canada’s carbon emissions problem is to avoid aggressively embracing the low carbon fuel standards that B.C. adopted in partnership with California almost a decade ago.
Far be it from him to go further, and adopt even tougher standards that would make Canada an international leader in lowering the carbon content of its filthy fuel stocks.
Instead, his “solution” is to increase Western Canadian total crude oil production by some 72 percent over the next 23 years, from 4.0 million b/d in 2015 to 6.9 million b/d in 2038—largely predicated on the Trans Mountain pipeline.
His “solution” is to dangle that carrot to tantalize Big Oil and to beg Alberta’s “participation” in a national carbon pricing strategy.
By promising to ram through an unwanted, dirty oil pipeline across B.C.—the first jurisdiction in North America to embrace its own carbon tax, in 2008, to cut its own emissions.
“We need to build that pipeline to ‘earn’ social license in Alberta for the national price on carbon”, Trudeau basically argues.
As if any such deal with the devil will achieve that end in Alberta—which it clearly has not and never will. Albertans still have not accepted Notley’s widely hated carbon tax and her would-be successor has vowed to scrap it.
By extension, Trudeau is also effectively arguing that Alberta’s social license for carbon pricing trumps B.C.’s social licence for a new carbon polluting project that saddles that province with all the risk and minimal benefits.
The Trans Mountain project does not have, and never will have, social license in B.C.—but that is not a “deal breaker” for Trudeau. Because he’s really all about the oil, social license and the environment be damned.
Alberta will ramp up tarsands production
Trudeau’s “solution” to Canada’s carbon woes is to double-down on a tarsands industry that Alberta’s NDP government hopes to dramatically expand, while feigning to do the opposite by “capping” oil sand emissions.
Notley’s “climate action” plan is at best a bad joke.
“Dishonest” is more like it.
Far from cutting tarsands emissions, her plan proposes to increase Alberta’s oilsands emissions by some 30 megatonnes a year – or by more than 42 percent—from 70Mt annually to a maximum of 100Mt a year.
By the stroke of a future premier’s pen, that supposed “cap” can be instantly eliminated. And it will be, if premier-in-waiting Jason Kenney is elected as expected, or if oilsands production can ever be profitably ramped up to make that distant emissions ceiling even remotely material.
It is a duplicitous, disingenuous “climate action” scheme that Trudeau is foisting on all Canadians at the expense of our environment, our economy, and reconciliation with Indigenous peoples by building the Trans Mountain pipeline project.
And it is all predicated on a political premise that he cannot hope to control or honour. Certainly, not after that pipeline is in place, as future governments are elected.
It is a deceitful plan to dramatically increase carbon emissions while pretending to do the opposite, in return for agreeing to Notley’s demand that all Canadians should effectively pay more for Big Oil’s incremental pollution through the national carbon tax.
To be clear, I strongly support the goal of putting a national price on carbon.
But I reject having to pay more than I should through that type of tax, so as to theoretically offset the added emissions that that tax is being deceitfully used to justify.
I resent having the national carbon tax held up by Trudeau as a key argument for imposing the Trans Mountain pipeline, supposedly, by “agreement” with Notley as the quid pro quo for getting that new heavy oil outlet to Pacific tidewater.
British Columbia rejects that agreement. That unwanted project should not be determinative of Canada’s welcome plan for a national carbon tax.
Moreover, why should B.C.’s missing “buy-in” on that pipeline be any less important than Alberta’s buy-in on a national carbon pricing scheme?
In any case, Trudeau is in no position to make good on that dishonest carbon pricing “deal”, which is further compromised by the unfolding political reality that threatens to make it a moot point.
Which brings me back to Ontario’s new Progressive Conservative leader, Doug Ford—Canada’s newest arch enemy of serious climate action.
The polls suggest he is the odds-on favourite to win the upcoming Ontario election and will soon form the government.
Ford has vowed to not introduce a carbon tax and to fight Trudeau’s national plan for carbon pricing:
“If the prime minister wants to try to make us [impose a carbon tax], I’ll tell the prime minister, just the same way his father said it, ‘just watch me,” he boasted.
Barring a miracle in Alberta, United Conservative leader Jason Kenney will also soon enough form the next government in that province.
He has pledged to repeal NDP premier Rachel Notley’s carbon tax and to join with Saskatchewan premier Scott Moe and would-be Ontario premier Doug Ford in fighting Trudeau’s national carbon pricing “plan”.
Plus, there’s federal Conservative leader Andrew Scheer.
His party is now running neck-and-neck with Trudeau’s Liberals, according to the latest polls. He may well form the next government in Canada.
Even if he doesn’t become the next prime minister, it would still leave Ontario, Alberta, and Saskatchewan all fighting Trudeau’s troubled carbon tax. Which his environment minister, Catherine McKenna, now swears will be imposed on Saskatchewan, come what may.
She recently said this in a letter to her provincial counterpart in Saskatchewan:
“To be clear, we cannot accept your request not to price carbon in Saskatchewan…Among other reasons, it would be patently unfair for one jurisdiction to avoid participating in this important national effort to support clean growth and cut pollution.
“In the event that your government does not adopt a price on pollution that meets our standard, we would have no choice but to ensure that a price on pollution applies in Saskatchewan, just as we would anywhere else in the country.”
True enough. Yet Trudeau has said that the only way he can get Alberta to accept his national carbon price is to give it a heavy oil pipeline and a Pacific terminus that B.C. ardently opposes.
Apart from the egregious double-standard at the root of his pipeline-for-carbon-tax “deal” with Alberta, as compared to his “suck it, Saskatchewan” message, I wouldn’t bet a plug nickel on the survival of his national carbon pricing “strategy”.
Especially with rising gasoline prices.
Does anyone honestly think Trudeau will try to fight a federal election that hitches the Liberals’ political wagon to a national carbon tax that is opposed by Ontario?
Does anyone seriously imagine he will run on a carbon tax that is opposed by most voters in Canada’s largest and third largest provincial economies, by the newly elected premiers of Ontario and Alberta, and by his chief political opponent, the guy who hopes to replace him as Canada’s prime minister?
Does anyone really believe that on top of that, he is willing to impose a national carbon price on Saskatchewan, over the objections of its premier and most of its citizens?
Since when did Trudeau grow a spine?
Sadly, when push comes to shove, he always takes the politically expedient way out.
Which in this case suggests that he probably will not follow through on his carbon pricing strategy as he would have the world believe, at least not before the next federal election.
Yet even if he grows a pair and sticks to his guns, there is no guarantee that Trudeau will win that election.
What if Andrew Scheer’s Conservatives form the next government?
I’ll tell you what: B.C. will be stuck with a new dirty oil pipeline that delivers all of the ecological risks and environmental downsides without even the supposed “benefit” of Trudeau’s national carbon pricing “plan”.
Once the pipeline is in place, its polluting product will flow at triple the volume.
And that’s the only point that really matters.
Worse, Trudeau has joined with Notley in trying to bully B.C. into accepting that project without imposing any “new environmental obstacles” that might delay it or test its constitutional limits.
First, Notley launched her unlawful wine war, which Trudeau effectively supported in response to B.C. premier John Horgan’s five-point regulatory review on strengthening environmental protection from heavy oil spills.
She suspended that action when Horgan agreed to refer the most contentious point to the courts, to test the limits of B.C.’s constitutional rights in defending against the risks of a bitumen spill.
Truth is, Alberta is now afraid British Columbia will succeed in that constitutional reference.
As I have previously argued, John Horgan’s government has a very good case, if it is smartly framed and expertly presented, grounded as well in fostering reconciliation and at embracing shared decision-making with Aboriginal people, to protect their rights and title.
B.C.’s new review of the environmental assessment process seems to be decidedly headed in that direction.
It, too, stands to substantially strengthen the government’s legal hand in regulating the transportation of heavy oil across the province and as it effects B.C.’s Coastal marine environment.
I suspect that Notley is really afraid the courts will give B.C. new legally supported regulatory tools to protect the environment in ways that inhibit the federal government’s jurisdiction over interprovincial pipelines, without actually usurping its constitutional power.
She is worried that Horgan will use that legal process and whatever comes of it—as well as his related new regulatory review on oil spill prevention, response, clean-up, remediation, and compensation—to strengthen environmental protection in ways that create new regulatory challenges for the Trans Mountain project.
Indeed, Trans Mountain’s shareholders should be worried about that, precisely because it is only about doing what is legal, prudent, and environmentally responsible.
Equally, Notley doesn’t want Kenney to steal her political thunder, as Alberta’s resident B.C.-basher-in-chief in fighting for Big Oil.
Kenney was first out of the gate in threatening to stop shipments of Alberta oil to B.C. through the existing Trans Mountain line. “If the NDP in Victoria breaks the law, and blocks the export of our major product, we have to respond," he railed in a recent visit to Vancouver.
The only province that actually broke the law and that is once again threatening to break the law is Alberta – not B.C.
Quite the opposite, in fact.
Premier Horgan is now seeking legal guidance on how to uphold the law in exercising B.C.’s constitutional authority.
He has never threatened to do anything illegal. He has only offered an intentions paper to help guide public debate and stakeholder engagement on how to legally strengthen B.C.’s shared constitutional authority for protecting the environment from oil spills.
For days now, the mainstream media has been feasting on Alberta’s empty threat to cut off oil shipments to British Columbia, if the Trans Mountain pipeline project is somehow blocked or delayed.
“British Columbians could be facing gas at $2 to $3 per litre without Alberta oil,” Global News dutifully speculated. “If you think British Columbians have it bad at the pumps now, imagine if Alberta shuts off the oil tap.”
That threat hit a fever pitch after the Notley government tabled its throne speech.
“Some people have asked how far we are willing to go,” it said. “Today, we reaffirm we will do whatever it takes.
“In the past, when workers in our energy industry were attacked and when the resources we own were threatened, Premier Peter Lougheed took bold action. Your government has been clear: Every option is on the table. We will not hesitate to invoke similar legislation if it becomes necessary owing to extreme and illegal actions on the part of the B.C. government to stop the pipeline.”
Notley amplified that threat in subsequent media interviews.
It never dawned on the media at the time to ask the most basic question: would that even be legal?
The answer is, no. Period.
Shutting off oil or refined petroleum products to specifically punish B.C. would not be at all legal. In fact, it would be unconstitutional.
Along with the Charter of Rights and Freedoms and the new constitutional protections afforded to Aboriginal peoples, a new section was added to the Constitution Act, 1867 distribution of powers—section 92A.
It says this [with emphasis added]:
“(2) In each province, the legislature may make laws in relation to the export from the province to another part of Canada of the primary production from non-renewable natural resources…in the province…but such laws may not authorize or provide for discrimination in prices or in supplies exported to another part of Canada.”
“(3) Nothing in subsection (2) derogates from the authority of Parliament to enact laws in relation to the matters referred to in that subsection and, where such a law of Parliament and a law of a province conflict, the law of Parliament prevails to the extent of the conflict.
“(4) In each province, the legislature may make laws in relation to the raising of money by any mode or system of taxation in respect of (a) non-renewable natural resources…in the province and the primary production therefrom, and…whether or not such production is exported in whole or in part from the province, but such laws may not authorize or provide for taxation that differentiates between production exported to another part of Canada and production not exported from the province.”
In other words, it would be clearly unconstitutional for Alberta to shut off the oil taps specifically to B.C. in the ways that both Kenney and Notley have threatened.
Yet Trudeau has been too timid to utter that truth, let alone admonish his unlikely political allies for once again suggesting they might embrace such an illegal action.
Like Notley’s threatened trade war, it is bully-boy threat that is as unlawful as it is harmful to Canada’s true national interest—neither of which appears to trouble our week-kneed prime minister.
It is effectively an empty threat, given the incalculable damage and cost that alternately imposing a pan-Canadian oil embargo of any degree would disproportionately impose on Alberta, especially on its tarsands companies.
If Notley and Kenney are seriously threatening to scale back oilsands production or legislate production restrictions on Alberta’s light oil producers and their associated refined products, they would soon find their would-be “allies” all against them—and how.
If either of them tried to do that, there would be pandemonium. Like the movie, there would be blood.
Their government would be instantly subject to no end of legal challenges from the oil companies, to say nothing of pipeline operators, who would be suing for immediate relief and incalculable compensation.
The reality is, Notley cannot control what products flow through the existing Trans Mountain pipeline or any other pipeline.
The National Energy Board—not the Alberta government—determines what flows through each common carrier pipeline.
If the oil companies’ shipper demands exceed the capacity of any such pipeline, those shippers must nominate the number of barrels they propose to transport and the NEB decides who gets to ship what and how much of each product. Not the premier.
The government of Alberta would have very few options indeed to coordinate the collusion that would be required involving producers, refiners, shippers, the pipeline owners and operators, the Alberta Energy Regulator, and the Alberta Petroleum Marketing Commission to hurt any specific market, especially British Columbia.
Beyond that, over half of the product that now flows through the existing Trans Mountain pipeline goes to refineries in Washington State, which in turn supply their refined products to mostly American customers.
That pipeline supplies about 84 percent of the synthetic and heavy crude feedstock for those Puget Sound refineries, either directly or indirectly, via barged shipments from Burnaby’s Westridge Marine Terminal.
If Alberta were to ever try to use the Trans Mountain pipeline to somehow hold B.C. as its oil hostage, it would be also holding those customers who rely on that same pipeline hostage.
It would be tantamount to a declaration of energy war on the United States.
Are Notley and Kenney—tacitly supported by Trudeau—really suggesting that they would turn off the oil taps to those buyers of Alberta crude?
Are they really willing to start an oil trade war with America, or risk adding to the impression that Canadian oil suppliers are unreliable?
Not a chance.
Even the speculation of such nonsense scenarios is probably right now giving the opponents of Line 3 and Keystone XL new political ammunition to resist those pipeline projects.
Dumb, dumb, dumb, however “smart” the politics of such threats might be in the short term for Notley and Kenney.
But again, where is Canada’s prime minister?
Hiding out in the shadows, chirping in only occasionally, mostly to suggest his government’s solidarity with Alberta.
Pipeline will likely bring higher gas prices
A better question that the media really should be probing is the actual cost in higher gasoline prices that the Trans Mountain project will necessarily entail.
Far from reducing the price of gasoline for B.C. motorists, that pipeline will add about 2.2 cents per litre.
It will cost British Columbians an extra $100 million a year in higher gas prices.
Why? Because the capital costs of the $7.4 billion project will be largely financed through higher tolls on all the oil products flowing through new pipeline.
Those toll costs on shippers will rise by 156 percent, from $2.20 per barrel currently to $5.64 once the proposed new pipeline is operative. And those costs will naturally be flowed through to the end buyers of those crude and refined products.
It is a sweet deal for Trans Mountain.
Its capital costs and construction cost risks will be largely transferred to the shippers and B.C. consumers who will effectively finance them through higher tolls authorized by the NEB.
Trans Mountain gets the profits. The oil companies, British Columbians and other end-product consumers get to largely foot the bill.
Without that $7.4-billion pipeline project, those particular higher gas prices from higher shipping tolls would not be required.
Has anyone seriously investigated the potential cost implication of that prospective scenario for B.C. gasoline and diesel?
Also worth noting is that the expanded Trans Mountain pipeline will not decrease British Columbia’s reliance on Alberta’s limited and oversubscribed supplies of light oil and refined products, or on Washington State refineries.
There is no provision in the plan for any increased volumes of the light and medium crude and refined products that British Columbians actually need and can locally refine and utilize.
Trans Mountain testified to the NEB that Western Canadian total light oil supply is forecast to grow from 1.6 million b/d in 2015 to 2.1 million b/d in 2038—or by 600,000 b/d.
To my knowledge, none of that additional volume is specifically earmarked for Trans Mountain’s expanded pipeline for British Columbians.
Meanwhile, Western Canada’s total heavy oil supply is projected to rise from 2.4 million b/d in 2015 to 4.8 million b/d in 2038. It will double in volume.
As such, that heavy tarsands crude represents almost 83 percent of the total projected growth in Western Canadian oil produced over that next quarter-century.
Almost all the new capacity from Trans Mountain’s expanded pipeline will be dedicated to exporting unrefined diluted bitumen or synthetic crude. Primarily, to the five refineries Washington State’s Burnaby/Puget Sound area and Northeast Asia, and secondarily to markets in California and Hawaii.
It will not increase British Columbia’s gasoline supplies.
If anything, it stands to displace some of the existing pipeline capacity for such refined or locally refinable products with more unrefined, heavy crude that oil companies hope to ship to Asia.
Especially if the price for that heavy oil goes up and it becomes more profitable to export, according to plan, supported as well by increased pipeline capacity to U.S. refineries.
The NEB reported that Trans Mountain itself projected that “in the early years of the forecast period, the improved market access provided by the Project is predicted to increase the prices of both Canadian light and heavy crude oils significantly.” [Emphasis added.]
It further explained that “in the initial years of the Project’s operation, the need for more expensive rail transportation would be largely eliminated and transportation savings would flow back to the Canadian crude oil producers in the form of higher prices.”
Isn’t that special?
The oil companies get a double benefit in the form of lower transportation costs and higher oil prices, while Canadian consumers get a whopping whammy in the form of higher gas prices.
According to the NEB, Trans Mountain estimated “total producer benefits of $73.5 billion on an undiscounted basis, and a present value of approximately $38 billion attributable to the market access provided by the Project (CAD$2012) for the forecast period 2017–2037.”
That ain’t pocket change. It’s tens of billions of dollars that will go straight into the oil industry’s already obscenely rich bank accounts.
Canadians will largely pay for that “benefit”, including at the pumps.
A “significant” increase in the price of Canadian light oil will mean significantly higher prices for the Parkland/Chevron refinery in Burnaby. The Chevron gas stations throughout B.C. account for some 85 percent of its refined products.
The balance of that facility’s refined products also get sold to British Columbian customers.
Plus, as the price of Canadian light and heavy crude goes up “significantly” from the improved market access that Trans Mountain aims to provide, you can bet that the price of Alberta’s refined products sold to British Columbians will also go up.
How much will the price of gasoline, diesel, and jet fuel rise for British Columbians and other Canadians because of the Trans Mountain pipeline project?
It is yet another issue that the NEB review did not contemplate, determine, or allow any intervenor to cross examine under oath.
All in the “national interest”, according to Trudeau.
I can only conclude that he would rather Canadians not know the true costs of his pet pipeline project—the true nature and extent of which were never contemplated by the NEB review that he once condemned before embracing its findings in approving that project.
Regrettably, Canada’s prime minister does not want the world to know how widely the Trans Mountain project is opposed in British Columbia and across Canada, or why so many citizens are so upset about it.
He does not want the global community to ask the questions that his government failed to either ask or answer about that proposed pipeline’s negative impacts on the environment and on Canada’s own citizens.
He does not want the world to question his half-hearted commitment to reconciliation with Canada’s Indigenous peoples, or to wonder why it is that so many of their leaders and members are now “warrioring up”, as one First Nations leader extolled them to do.
If this exhausting review helps in the slightest to prompt new questions for investigation, or to suggest new avenues for inspection, or to provide some handy links for further research, it will have served its purpose.More