Canada on Downstroke by Impeding Pipelines
Canadian leaders cannot despise oil and pipelines and maintain high living standards. Without the goose, there will be no golden eggs.
It’s that simple.
This week’s cancellation of another oil pipeline – from Alberta to New Brunswick – should not be a cause for celebration as it is in some minds. It represents Canada’s Peak Oil Divide moment as well as a tipping point in terms of the country’s future prosperity.
Without new markets, Canada’s engine of economic growth will slow and never regain momentum.
It’s a known fact that the world lumbers toward a fossil-free future, due to exponential technologies such as solar. But to rush toward that as a nation – without anything to replace it – is foolish. Only countries without fossil fuels are well-advised to do this. Not Canada.
Canada should be doubling down on its resource potential in order to afford the transition to a fossil free future a generation or two from now.
It’s irrational for politicians to support restrictions on resources and those that do must first provide an alternative economic model for a country whose population is very dependent upon government benefits.
Canada cannot subsidize itself into prosperity by plunging billions into Bombardier factories, dairy farms, bridges to nowhere, or by sprinkling a few grants to tech start-up entrepreneurs in the hopes one may turn out to be Steven Jobs.
The fact is that Canada’s only current world-class innovation and investment clusters are oil and mining, both of which are under attack by politicians at all levels. These sectors provide the highest salaries in the country because they are world-class and their workers are high-tech trained in science, engineering, technology, and IT.
Everyone knows that fossil fuels will be phased out eventually, so it’s simply a matter of timing. The King of Saudi Arabia estimates the last drop of oil from his kingdom will be produced in 2050 (as though he knows for sure). Others maintain the transition will happen sooner, but whatever the guess, the only strategy for an energy-based economy like Canada is to simply pump out as much oil as possible to as many customers as possible then invest in other ways to make a living.
Why can’t Canada’s leaders get this?
They won’t due to petty politics, said an angered Saskatchewan Premier Brad Wall this week. He framed the pipeline struggle as a regional war with Ottawa and the east and blamed politicians for not understanding the importance of the west’s economic contribution. He stated in a press conference that the project’s failure on the National Energy Board’s August decision to ask for the impact of upstream and downstream emissions from potential increased consumption of oil.
“TransCanada made the decision to cancel Energy East – but make no mistake, the reasons for it fall at the feet of Prime Minister Justin Trudeau and the federal government. They have been, at best, ambivalent about the project and then moved the goalposts at the last moment by asking the regulator to consider the impact of upstream greenhouse gas emissions.”
But Ottawa Natural Resources Minister Jim Carr was firm Thursday that the cancellation was a “business decision.” “Ultimately, it’s not up to me to explain why TransCanada made this decision on the basis of what’s in its interest. I respect that. Nothing has changed in the government’s decision-making process.”
Wall rebutted that the company made 700 changes in good faith to its original proposal to meet changing conditions imposed by regulations before finally giving up. He also took aim at Montreal Mayor Denis Coderre who called the pipeline abandonment “a major victory” for municipalities and Indigenous groups.
“Coderre cheers the cancellation of this pipeline,” said Wall. “He who leads a city that, just two years ago, used a pipeline to dump 4.9 billion liters, or nearly 2,000 Olympic-sized swimming pools, of raw sewage into the St. Lawrence Seaway.”
Certainly, there’s enough hypocrisy to go all around.
New Brunswick, Atlantic Canada, and Quebec will continue to import millions of barrels of fossil fuels via ship and rail, mostly from the U.S. and Saudi Arabia.
And if politicians are committed to environmental purity then they should target and shut down gas-guzzling automobiles, trucks, railways, and airlines. Instead, they want to put the brakes on energy itself which kills the national golden geese Saskatchewan and Alberta that ship about $2.5 billion in equalization payments a year. By contrast, most of the rest are have-not provinces. Quebec receives $11 billion in equalization per year and Ontario $1.4 billion.
That is why this week was about more than just another energy project nixed. It reveals that Canada is a divided nation without a mechanism to unite itself to serve the best interests of its populace.
As Wall said this was not a good week for Canada.
And, frankly, it won’t be a good generation for Canada either.
First published National Post Oct. 6