Canada: Energy, environment & pipelines 2018

Written by  //  July 27, 2018  //  Canada, Environment & Energy  //  No comments

The environmentalist’s quandary on pipelines

Matthew Lau: If Trudeau’s climate policy seems absurd, that’s because it’s not actually about climate
The fastest increases in prosperity and cleanliness in human history were supported by private industry, not corporate welfare and green subsidies
(Financial Post Opinion) Economists prefer taxation over subsidies and regulation because a carbon tax, for example pegged at $20 per tonne, incentivizes people to reduce emissions when, and only when, the cost of doing so is below $20 per tonne. This means the private market has the flexibility to find the cheapest ways to reduce emissions, rather than have the government decide.
But allowing more flexibility for the private sector isn’t something Liberal politicians can go along with
billions of dollars in spending announcements allow politicians to hold press conferences to burnish their green credentials and repeat tired slogans about how government spending improves both the economy and the environment. Such slogans ignore that the fastest increases in prosperity and cleanliness in human history were supported by private industry, not corporate welfare and green subsidies.
The Liberals remain big supporters of the carbon tax, of course. But that has nothing to do with taxes being cheaper and more efficient than regulations and subsidies. Liberals just like the carbon tax because it’s a tax. And they will find ways to spend it even if the policy evidence says it’s a costly mistake.


22 July
Ottawa fails to secure new buyer for Trans Mountain pipeline by deadline
(CTV news) The federal government is set to become the official owner of the Trans Mountain pipeline expansion after failing to quickly flip the project to another private-sector buyer.
Pipeline owner Kinder Morgan had been working with the government to identify another buyer before July 22.
But with that date set to pass without a deal, it was expected the pipeline company will now take Ottawa’s $4.5-billion offer to purchase the project to its shareholders.
Pending their approval, the sale, which includes the existing pipeline, the pumping stations and rights of way, and the Westridge marine terminal in Burnaby, B.C., will be approved sometime in August or September.
The $4.5-billion purchase price does not cover the construction costs of building the new pipeline, which previous estimates have pegged at around $7.4 billion.

16 July
Don’t buy Kinder Morgan, members of PM’s youth council urge feds
(iPolitics) Sixteen past and present members of Justin Trudeau’s youth council are urging the federal government to bail out of the Kinder Morgan buy-out.
Finance Minister Bill Morneau announced in May the federal government was prepared to pay $4.5 billion to buy the Trans Mountain pipeline and all of Kinder Morgan Canada’s core assets.
In a letter made public Monday, 16 of the youth council’s past and present members say the move betrays the young people who helped elect the Liberal government in 2015 in part because of the party’s commitment to the environment and battling climate change. A Nanos poll conducted after the 2015 federal election indicated that the Trudeau Liberals had the support of 38 per cent young people, compared to 24 per cent for the New Democrats and 23 per cent for the federal Conservatives.
“It is youth who will be disproportionately affected by the devastating consequences of a warming world,” the letter said.
The Prime Minister’s Youth Council advises the prime minister (who is also the Minister of Youth) on issues affecting young people. It is made up of 30 young Canadians between 16 and 24. According to the council, this is the first time members of the council have directly confronted a decision made by the federal governmen

30 June
Justin Trudeau’s Pipeline Purchase Isn’t Just Hypocritical, It’s Bad Economics
(Fortune) The Canadian government’s decision to buy the Trans Mountain Pipeline and expansion project for 4.5 billion Canadian dollars has left many wondering: What is Prime Minister Justin Trudeau thinking?
All around the world, decisions to drill new oil wells; frack for gas; mine new coal; and build pipelines, ports, and fossil-fueled power stations are attracting determined opposition from scores of ordinary citizens.
People are mobilizing to protect local land, water, and air from pollutants and demand good governance in the face of opaque processes and corrupt corporate-government deals. They are increasingly invoking an emerging principle that connects these projects to climate change: In a world facing catastrophic global warming, new fossil fuel projects are morally wrong. To this moral message is added a prudential one: As the transition away from fossil fuels gathers pace, new fossil fuel projects become economically risky propositions.
The Trudeau government thinks it can manage these project risks and turn a profit, or at least break even, from the expanded pipeline. If the Canadian government profits, it will be at the expense of trampling on First Nations’ land rights and exposing communities to oil spills. (The recent Kinder Morgan spill in British Columbia was 48 times larger than first reported.) Even if the government successfully finds a buyer for the pipeline, it will more than likely need to sell it at a steep discount, leaving Canadian taxpayers on the hook. …
Richard Denniss is the chief economist at the Australia Institute. Fergus Green is a researcher at the London School of Economics and Political Science. They co-authored “Cutting With Both Arms of the Scissors: the Economic and Political Case for Restrictive Supply-Side Climate Policies,” published in the academic journal Climatic Change

26 June
Trans Mountain Pipeline Sale To Feds Netted Kinder Morgan A 637% Return: Report
Meanwhile, Canadian taxpayers could be saddled with a larger budget deficit, IEEFA predicts
(HuffPost) The report comes from the Institute for Energy Economics and Financial Analysis (IEEFA), which is funded by a variety of philanthropic groups dedicated to climate and energy issues, including the Rockefeller Family Fund.

15 June
Brookfield CEO Says He May Consider Trans Mountain Investment
(Bloomberg) Ottawa’s financial advisers, New York-based Greenhill & Co., have already begun marketing the pipeline project to potential buyers, including several pipeline companies, pension funds and asset managers, according to people familiar with the matter. The most likely outcome of a sales process at this point would be a Canadian-led consortium buying the system from the federal government, said the people who asked not to be identified because the matter is private.

10 June
(Globe & Mail) Washington state is raising concerns about the capacity to clean up an oil spill off Canada’s west coast. The state’s governor opposes the Trans Mountain pipeline expansion, and his government has specifically pointed to the ability to clean up a heavy crude spill.
Meanwhile, Trans Mountain is confirming that recent oil spill was 48 times larger than initially reported. The spill in May, near Kamloops, was immediately seized upon by environmentalists, who said the incident shows the pipeline is too dangerous.

1 June
Washington State slams Canada’s Trans Mountain pipeline bailout
Washington State already boasts one of the lowest oil-spill rates in the United States and under the Democratic Governor, regulations have been tightened around the transportation of oil, including a tax on pipelines to help pay for increased safety measures. His administration is battling the Trump administration to stop expanded offshore oil drilling.
Washington State has long argued it has better marine spill-response capacity. Now, it is well ahead of B.C. in reporting spills and tracking the movement of oil. Since 2016, the state has provided quarterly reports of crude-oil shipments to emergency responders, local governments, Indigenous groups and other members of the public. Meanwhile, the B.C. Ministry of Environment can only estimate the amount of crude oil that is being shipped by rail or pipeline across the province, although it promises to release an initial report on crude-oil transport by the fall.
The great Canadian climate delusion
By Thomas Homer-Dixon and Yonatan Strauch
(Globe & Mail Opinion) It’s not entirely about climate change, of course. Many people in British Columbia oppose the Trans Mountain pipeline because of the risk of ruptures along the pipeline’s route or of bitumen spills from tankers in coastal waters. Many Indigenous peoples don’t want the pipeline crossing their lands. But most opponents also find the project’s implications for global warming to be a deal breaker in and of itself.
Continued investment in the oil sands generally, and in the Trans Mountain pipeline specifically, means Canada is doubling down on a no-win bet. We’re betting that the world will fail to meet the reduction targets in the Paris Climate Agreement, thus needing more and more oil, including our expensive and polluting bitumen. We’re betting, in other words, on climate disaster. If, however, the world finally gets its act together and significantly cuts emissions, then Canada will lose much of its investment in the oil sands and the Trans Mountain pipeline expansion, because the first oil to be cut will be higher-cost oil such as ours. …
We’ve already put a lot of precious chips down on this climate-disaster bet. We’ve given up, or seem prepared to give up, the environmental health of the waters and lands of Northern Alberta, reconciliation with many B.C. First Nations and genuine democratic practice in oil-infrastructure approval processes. More fundamentally, we’ve given up being honest with ourselves. We’re increasingly living in a delusional fantasy land in which our oil sands policies make environmental and economic sense.

29 May
Here is everything you need to know about Ottawa’s plan to (maybe) buy the Kinder Morgan pipeline
(Global) After months of trade wars, threats and backroom wrangling, Finance Minister Bill Morneau on Tuesday announced the government’s plan to get the Kinder Morgan pipeline built.
Or, to be more accurate, he announced part of the plan.
An hour later, senior officials tried to clarify the parts of the plan he left unanswered.
Morneau told a press conference of assembled journalists in the National Press Theatre that the government will spend $4.5 billion to buy Trans Mountain and core Canadian assets of Kinder Morgan related to the expansion project, including the terminal.
Kinder Morgan will, in exchange, use what Morneau described as a “loan” from Export Development Canada to immediately resume construction on its plan to twin the existing pipeline over the summer.
But what Morneau left out is that the plan to buy the pipeline project from Kinder Morgan is Plan B
(Globe & Mail morning brief)  The federal Liberal government is outright buying the Trans Mountain pipeline expansion project from energy company Kinder Morgan for $4.5-billion. The extraordinary move that amounts to a nationalization of the pipeline is sure to face strong opposition from politicians, environmentalists and First Nations in British Columbia. Trudeau cabinet ministers Bill Morneau and Jim Carr said this morning that the move is necessary to save jobs. The ministers also said the government does not want to be in the project for the long term and plans to flip the pipeline to a new owner once a potential buyer emerges.
Ottawa has no one to blame but itself for the Trans Mountain saga

Bill Morneau to announce whether feds will buy Trans Mountain pipeline
(Global news) There are three options on the table, which include the government buying and building the expansion, then selling it once it’s complete; and buying it on an interim basis, then selling it to investors and leaving them to handle the construction.

16 May
Morneau says government willing to compensate Kinder Morgan against political delays
Finance minister points the finger of blame at B.C. Premier John Horgan
Morneau’s comments ​came just hours before Kinder Morgan Canada’s stakeholders met in Calgary, and offers the company an incentive to proceed with the project just weeks ahead of its potential drop-dead date. Kinder Morgan has threatened to abandon the project if a clear path forward isn’t reached by May 31.

14 May
Liberal MPs suggest more than 100 amendments to government’s environmental impact assessment bill
But opposition MPs are up in arms over the tight timeline set by the Liberals on the House Environment Committee for reviewing hundreds of proposed changes to the bill.
(The Hill Times) Liberal MPs have proposed more than 100 changes to the government’s wide-ranging Impact Assessment Bill, including to the role of energy regulators in the new environmental assessment process.
The amendments put forward by Liberal members of the House Environment Committee respond to problems with the bill, C-69, raised by those who testified to the committee, said Liberal and Conservative MPs on the committee.
They include a proposal to change the way the minister and federal cabinet make decisions about whether resource projects are ultimately in the public interest.
Right now, C-69 requires that the environment minister consider five factors as she makes that decision: whether the project “contributes to sustainability;” how harmful any “adverse effects” of the project are; what measures would be taken to mitigate that harm; adverse effects on Indigenous people; and how it affects the government’s ability to meet its climate change commitments.
Liberal MP Will Amos (Pontiac, Que.) said he plans to propose an amendment to require that the minister’s decision be “based on” those factors, instead of just taking them to “consideration,” and another to clarify and enhance the importance of climate change commitments in cabinet decisions.

2 May
Justin Trudeau’s Two-Faced Climate Game
By Damien Gillis, documentary filmmaker and journalist in British Columbia
(NYT Opinion) Within a year of committing in Paris to ambitious targets, Mr. Trudeau and his federal Liberal Party had rendered his pledge meaningless. The government approved a pair of heavy-oil pipelines and a liquefied natural gas plant. Its members secretly cheered as Donald Trump was elected, and moved toward resurrecting the Keystone XL pipeline. (Two other pipeline projects were terminated earlier in Mr. Trudeau’s term, but he can’t take credit; one was quashed in court and the other was canceled by the company.)
Hanging in the balance now is the Trans Mountain pipeline expansion
Canadians largely wouldn’t benefit under this scheme because most oil revenues don’t flow to public coffers, rather, increasingly to foreign companies. Even the supposed Asian demand has been vastly exaggerated. Exporting raw bitumen also would ship away potential refinery jobs. And legal experts argue that so-called national interest doesn’t trump Aboriginal rights that are equally enshrined in the Constitution.

19 April
The Myth of The Asian Market for Alberta’s Oil
(Desmog Canada) For years, we’ve been told again and again (and again) that Kinder Morgan’s proposed expansion of the Trans Mountain pipeline is desperately needed for producers to export oil to Asian countries and get much higher returns.
The way it’s been framed makes it seem like it’s the only thing standing between Alberta and fields of gold.
Small problem: Canadian producers already have the ability to ship their heavy oil to Asia via the existing 300,000 barrel per day Trans Mountain pipeline — but they’re not using it.
“Virtually no exports go to any markets other than the U.S.,” economist Robyn Allan told DeSmog Canada. “The entire narrative perpetrated by Prime Minister Trudeau and Alberta Premier Notley is fabricated.”
In 2017, the Port of Vancouver only shipped 600 barrels of oil to China. That’s less than a tanker load. That same year, the port shipped almost 13 million barrels of oil, or about 24 Aframax tanker loads, to the U.S.
In other words: oil tankers are being loaded in Vancouver, but instead of heading to vaunted Asian markets, they’re heading south to California.

15-17 April
Canadians back Ottawa on energy projects, but seek balance
Monica Gattinger and Nik Nanos
(Globe & Mail) New survey data confirm that Canadians are behind him. In a study undertaken by Nanos Research on behalf of the University of Ottawa’s Positive Energy initiative, a majority of respondents say the federal government should have the final say on major national energy projects. They also support long-term development of the country’s oil and gas sector if it’s done in an environmentally responsible way.
But the Prime Minister should not take this to mean it’s smooth sailing ahead. Canadians also say the country is doing a remarkably poor job of making balanced decisions – whether in terms of the interests of local or Indigenous communities, the interests of investors, or the distribution of benefits of energy projects across the country. The Trudeau government has its work cut out for it on that front.
The key for Mr. Trudeau, Mr. Horgan and Ms. Notley, is to resolve the current impasse on the Trans Mountain pipeline in a way that demonstrates governments can strike the kind of balance Canadians are looking for on energy projects. Perhaps for Canadians who are in a dour mood when it comes to the country’s ability to balance local concerns with a broader public interest, the current pipeline firestorm could be an opportunity to find a pragmatic balanced path forward where Canadians can reconcile their environmental aspirations with economic priorities.

Trudeau says pipeline will be built over B.C.’s wishes
(Globe & Mail Politics Briefing) Prime Minister Justin Trudeau is promising Kinder Morgan’s Trans Mountain pipeline expansion will be built — over the objections of B.C.
A weekend meeting between Mr. Trudeau, Alberta Premier Rachel Notley and B.C. Premier John Horgan had a predictable result:: Ms. Notley continues to insist the pipeline must be built, while Mr. Horgan maintains that it must not. After the meeting, both sides remain as entrenched as ever. Mr. Trudeau says the pipeline is strategically important to the country, and the Liberal government will do what it can — through financial support and legislation — to assert its authority to push the pipeline through. But he’s not saying what exactly those measures might look like, other than to say Ottawa and Alberta are negotiating with Kinder Morgan. Mr. Horgan says his government will continue to use every tool at its disposal to block the project, though he acknowledged that he will stand down if the province loses in court.
Nationalizing Kinder Morgan’s Trans Mountain pipeline is a terrible idea
Is the Kinder Morgan Trans Mountain pipeline in the ‘national interest?’
Prime Minister Justin Trudeau has insisted the Trans Mountain pipeline is in the “national interest,” but there’s no doubt that it has put a strain on national unity.
An emergency meeting on Sunday ended without consensus, and the B.C. and Alberta premiers are still at loggerheads over environmental concerns versus provincial prosperity.
Opinion: Despite politicians musing about ‘de-risking’ Trans Mountain’s pipeline, there are a slew of reasons why government shouldn’t get involved

Canada will take financial and legislative action to make pipeline happen: Trudeau
Alta., federal government have entered talks with Kinder Morgan to mitigate financial risks of pipeline
(CBC) Prime Minister Justin Trudeau met Sunday with Alberta Premier Rachel Notley and B.C. Premier John Horgan to discuss the pipeline issue. Trudeau said he arranged the last-minute meeting because the ‘level of polarization around this debate required significant measures.’
‘Who asked you?’ Why Quebec waded into the Trans Mountain spat
For the pipeline’s backers, Quebec’s contribution to the controversy was hardly welcome. It has helped turbo charge an already sensitive issue; few can claim now its just a local spat between two provinces.
On Saturday, Quebec’s minister for Canadian relations, Jean-Marc Fournier, circulated an open letter, arguing Ottawa was sending the wrong message to the oil industry by backing Trans Mountain so fervently.
The federal government was encouraging “developers to ignore provincial environmental rules which were adopted in the interest of citizens who are concerned or impacted by the implementation of these projects,” Fournier wrote.

13 April
Éric Grenier: Trudeau’s pipeline dilemma: lose seats in B.C., or lose a lot more elsewhere
British Columbians aren’t the only ones watching to see how the PM handles this standoff

25 February
Michael Harris: Will the real Justin Trudeau please stand up?
(iPolitics) At a minimum, the trip to India suggests Trudeau and his handlers have a lot to learn — and that they’re learning too slowly.
That is a dangerous space to be in with the gravest issue Trudeau has faced as prime minister bearing down like a winter storm: Kinder Morgan and the Trans Mountain pipeline expansion.
The Trudeau government has boxed itself into a losing position on this one, and perhaps a tragic one.
[David Schindler] points out that science was ignored in the Trans Mountain approval. No one knows, for example, how to get bitumen out from under ice should a spill occur in winter months.
Trudeau famously promised that his government’s policies would be based on science. Where is the science to back Trans Mountain, or for that matter, the government’s extravagant claims that by expanding the tar sands, they will still somehow bring down emission rates as promised in Paris?
While the government may be able to dodge inconvenient facts on the economic and scientific fronts, there is one place where their rhetoric will meet a brick wall: Burnaby Mountain.

22 February
Alberta and B.C. agree to a truce in pipeline dispute
(Globe & Mail) The Alberta government said it will resume imports of B.C. wine, ending a short-lived policy designed to punish British Columbia for its attempt to block Kinder Morgan’s $7.4-billion Trans Mountain pipeline expansion.
Alberta Premier Rachel Notley announced the change Thursday afternoon, shortly after B.C. Premier John Horgan said his government will ask the courts if it has the authority to limit the expansion of oil transportation. Mr. Horgan’s announcement was viewed by Alberta as an indirect tactic intended to cool the trade war.
Gary Mason: A blink from B.C. and a victory for Alberta, but pipeline battle continues

20 February
Scotia Economics Report: Pipeline Approval Delays: the Costs of Inaction
• Canada’s oil patch once again finds itself with too much crude and too few pipelines, depressing the value of Canadian crude relative to US and global benchmarks.
• The mid-November service suspension on the Keystone pipeline hastened the arrival of takeaway capacity tightness and sparked the latest flare-up in Canada oil discounts.
• We anticipate that discounts will remain elevated until Line 3 enters service in the latter half of 2019, though it will likely take the completion of either TMX or KXL by 2020 or later before differentials return to a state reflective of adequate takeaway capacity.
• Given the excess of production over takeaway capacity through this period, the price received for Western Canadian oil will remain vulnerable to service disruptions in current transportation channels.
• Pipeline approval delays have imposed clear, demonstrable and substantial economic costs on the Canadian economy. If maintained at current levels, the discount on Western Canadian oil would shave C$15.6 billion in revenue annually from the sector.
• An expected shift from pipeline to oil-by-rail will mitigate some of this impact, reducing foregone revenues in 2018 to a still-high C$10.8 billion.
Link to Full Report

19 February
‘Science is being ignored:’ prominent Alberta professor sides with B.C. on pipeline
Ecology professor argues the interprovincial dispute is being driven by politics, not science
[David Schindler] mentioned a Royal Society of Canada study from 2015 that lays out the unknowns when it comes to the transport of bitumen and said that many of the issues raised then have still not been addressed.
In particular, he said, he is concerned with oil spills during colder months.
“We still don’t know how to get bitumen out from under the ice,” he said. “If it goes in to one of the major salmon rivers crossing B.C., we will just sit by and helplessly watch it go downstream.”

18 February
Elizabeth May: Is the pipeline really in our best interests?
(Times Colonist) The term “national interest” is showered around the Kinder Morgan pipeline like confetti. It is received wisdom that it must be so; everyone says it is so. On that fact hinges the outrage against a B.C. government that has the audacity to represent its citizens’ interests.
Few people have noticed that the National Energy Board’s use of the term “national interest” has no similarity to a common-sense understanding. The expert panel on the NEB commissioned by the Trudeau government made this point. “National interest” in NEB-land means that the pipeline ships stuff and they like it.
Unifor attempted to enter evidence that building Kinder Morgan would cost jobs. The Alberta Federation of Labour represents 170,000 workers in Alberta. The AFL is also against Trans Mountain’s expansion because of the jobs and economic wealth lost down the pipeline.
Shipping out unprocessed solid bitumen to refineries in other countries ships out Canadian jobs at the same time. And it increases the carbon footprint of the product. In 1953, when the Trans Mountain pipeline was first built, it was not for export. It shipped crude to four refineries on the Lower Mainland.
Shipping solid bitumen diluted with toxic fossil-fuel condensate for export bypasses the last remaining refinery. That refinery cannot process bitumen. It has already cut its workforce by 30 per cent, and if Kinder Morgan goes ahead, it will likely close.
The NEB refused to accept the evidence. It ruled that its mandate did not include jobs, or climate, or upstream or downstream impacts.

7 February
Varcoe: Kinder Morgan growing frustrated, but ‘not close to pulling the pin’ on pipeline
(Calgary Herald) Somewhere between a bitumen blockade and a wine embargo, an energy company is trying to get a pipeline built.
Despite the tit-for-tat trade actions between Alberta and British Columbia, the president of Kinder Morgan Canada Ltd. insists the company is moving ahead, committed to building the project at the centre of a national firestorm.
But Ian Anderson acknowledges he’s discouraged by the B.C. government’s latest attempts to sidetrack the $7.4-billion Trans Mountain pipeline expansion with proposed regulations and restrictions on transporting oil.
He wants the federal government to assert its authority in a morass that’s become as sticky as bitumen itself.

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