Big Green blocks oil sands
If Americans don't want more oil sands oil, the Chinese would be more than happy to take it. The problem is getting it to them, since green activists are as keen to prevent a new pipeline from going to the West Coast as they are to hold up one heading for the Gulf of Mexico.
The issue of Chinese enthusiasm for Canadian oil was raised on Monday by U.S. Republican Representative Fred Upton, who chairs the House energy and commerce committee. Mr. Upton was speaking at hearings over a new bill to set a November 1 deadline for the State Department's decision on TransCanada Corp.'s proposed US$7-billion Keystone XL line, which would take 700,000 barrels per day of oil sands oil to the Gulf Coast.
"We need to act soon," said Mr. Upton, "as China is very interested in pursuing the same resources."
However, the same well-funded green groups who are trying to bog down Keystone XL in misinformation and legal trench warfare are also staunchly opposed to rival Enbridge's Northern Gateway project to take 525,000 barrels per day to Kitimat, BC. That's because oil sands oil causes more greenhouse gas emissions and is thus claimed to be morally "dirty." Unfortunately for new pipeline proponents, the industry has suffered a number of embarrassing breaks and leaks in the past year, which also saw the BP Gulf oil spill.
The oil sands -which present convenient images of environmental devastation -have become a big fundraiser for environmental NGOs, and a major target for Big Foundation campaigns. Researcher Vivian Krause has pointed out that much of the opposition to the oil sands is funded by U.S. foundations built on the fortunes of American capitalists including, ironically, oil magnate John D. Rockefeller and the Pew family, who pioneered the commercial operation of the oil sands.
The State Department has come under attack for allegedly showing favour to the 2,750-kilometre Keystone XL project, even though it caters to U.S. concerns about energy security, would create 20,000 jobs, and inject an estimated US$20-billion into the U.S. economy. The line has already undergone three years of intensive study, and the Republican move to hurry up the State Department follows a similar call last week from Alberta Energy Minister Ron Liepert.
Anti-pipeline activists have received a sympathetic hearing within the Obama administration, particularly from the Environmental Protection Agency. When
Prime Minister Harper visited Washington in February, he sought support for Keystone. However, the President stayed mum on the issue. Mr. Obama is conflicted because while he recognizes Keystone's role in providing jobs and security, he is a devout believer in anti-fossil fuel green industrial policy.
Undoubtedly, Canada's long-term bargaining position would be improved, and its vulnerability to offoil policies reduced, if it had alternative outlets for its production. This is one of the arguments being used by Enbridge in support of Northern Gateway. The project is not only attractive to producers as opening up an alternative market. Enbridge projects that it would pay them up to US$3 a barrel more than the U.S. market. The US$5.5-billion line would also be another big generator of construction jobs.
Northern Gateway is being ostensibly opposed by native groups. The question is how far those groups are being manipulated -and paid -by the green movement. Two weeks ago, aboriginal protestors ululated and banged on their drums outside the Enbridge annual meting. They have also appeared at bank meetings, including that a few weeks ago of the Royal Bank of Scotland in Edinburgh. They are a permanent fixture at UN climate meetings.
Ms. Krause has noted that some of the biggest beneficiaries of foundation money -which is mostly funnelled through the Tides organization -include antipipeline protestors from the B.C. coast.
Outside Enbridge's meeting natives read a statement that confirmed that TransCanada and Enbridge are seen as being in the same bitumen boat. "Enbridge ... as well as other fossil-fuel development projects including Keystone XL, must not proceed without obtaining the free, prior and informed consent of all affected First Nations," read the statement.
Valid sentiments indeed, but the key word is "informed." And just how many informed natives do the protestors represent? One loud group, the Yinka Dene Alliance, has asserted its unyielding opposition to Northern Gateway, no matter how much training, and how many benefits and jobs, are provided to often desperately poor native communities. However, some observers suggest that the alliance represents only 150 people. According to Enbridge, some support the line, although the company is reluctant to identify them because it doesn't want to stir potential conflict. This reflects the usual situation in which project proponents find themselves silenced while opponents are free to conspicuously drum their moral outrage.
On Monday, TransCanada executive Alex Pourbaix told the U.S. House committee that environmental groups' claims about the extraordinary dangers of Keystone XL are "completely false." Last week, Stephen J. Wuori, an Enbridge executive, said that most of what people tended to hear about Northern Gateway too was "alarmist, inaccurate and didn't tell the whole story." Mr. Wuori also noted the bizarre fact that "opposition to business and development is, itself, big business."
Ottawa isn't the oil sands' enemy
There's an old adage in Alberta politics that when all else fails, bash Ottawa. Well, Alberta's Tory government must feel itself at risk of failure, because it has begun making far-fetched claims about how its federal cousins -Stephen Harper's new Tory majority -have suddenly turned into antioil sands hypocrites bent on hobbling the project's development with new environmental regulations just to win favour with central Canadian voters.
"The federal government has sat on the sidelines for years and years and years. Now they see their little golden goose is under attack and they want to be the voice for Canada on the world stage and we respect that," Alberta Finance Minister Lloyd Snelgrove told Postmedia News this week. "We have tried to be team players on this. They're saying Alberta should have been all over the world defending the oil sands, but only as long as they are holding the leash."
These claims are overwrought. The Canadian government has rightly defended the oil patch on the world stage. And to the extent that excessive regulation might hobble the oil sands, it is Ed Stelmach's government in Alberta that poses the greatest risk.
In the past, it is true that Alberta has had every right to be wary of federal intervention. Pierre Trudeau famously imposed his National Energy Program (NEP) on the resource-rich province, and in just over six years drained more than $70-billion out of its economy and sent the province into an economic tailspin that took 10 years to pull out of. At present, Alberta still annually contributes over $5,000 more toward Confederation than its residents receive in return for every man, woman and child in the province.
Even former Tory prime minister Brian Mulroney became unpopular in Alberta for failing to end the NEP for 2½ years after assuming office, for foisting the GST on a province that had previously had no sales tax, and for attempting to amend the Constitution in such a way that would have appeased many of Quebec's concerns, while also giving Quebec a veto over future change requested by other provinces.
But the current Alberta government has nothing similar to gripe about. It's true that after being reappointed federal Environment Minister last week, Toronto MP Peter Kent announced Ottawa would soon introduce en-vironmental regulations that would reduce the oil sands' carbon footprint. But it is unlikely these regulations will devastate Alberta's economy. This is the same federal government that in its first term proposed ignoring the UN's Kyoto accords in favour of more sensible quotas that tied growth in carbon dioxide emission to growth in the economy. Moreover, the same week as he let it be known that oil sands regulations are pending, Mr. Kent also announced that a cap-and-trade scheme to cut carbon emissions was "off the table," a very pro-oil sands move.
Indeed, in the past five years, the Alberta government under Premier Stelmach has done more to discourage oil sands development than anything done or proposed by the Harper Tories.
In 2009, Mr. Stelmach's government announced a 50% rise in oil royalties -a policy it had to renege on when the move noticeably reduced investment in the province's energy sector. It also implemented its own in-province cap-and-trade scheme and took oil sands companies by surprise when it announced last month that it would abrogate hundreds of millions of dollars worth of oillease contracts, so it could take back privately operated lands and include them in hundreds of thousands of acres set aside for nature preserves.
The federal Tories have proven themselves so oil sands-friendly that their opponents in the recent national election frequently used their alleged coziness with oil sands firms to harangue them at every turn. It's unlikely that Mr. Harper and his ministers have, since the May 2 election, become attracted to some new, bright, "green" light that will cause them to cast aside reason and economic pragmatism. What is more likely is that the Alberta Tories, seeing the threat from the new, right-of-centre Wildrose Alliance, are looking to scapegoat Ottawa in hopes of preserving their dwindling support base. They aren't truly fearful of new federal regulations. Instead they are attempting to whip up animus against an Ottawa bogeyman in order to distract Alberta voters from their own poor record.
It won't work. On the oil sands file, Albertans have seen that the Harper Tories are more faithful to Alberta's best interests than is their own provincial government.
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