Government sits idle as pipeline obstructionists wage war
Once again, a small group of anti-pipeline activists have thrown another roadblock at the proposed Trans Mountain Pipeline Expansion. Lest anyone has been living in a cave or out of the country for a few years, the Trans Mountain Pipeline Expansion twins the original Trans Mountain pipeline built (and successfully operated) in 1953. The proposed project would expand oil transport capacity from Alberta to British Columbia from 300,000 barrels per day to 890,000 barrels per day (and of course, this is the pipeline system Ottawa bought on our behalf in May 2018 for a cool $4.5 billion).
Last week, the Federal Court of Appeal allowed six new legal challenges to the pipeline to proceed, once again, over the claims that the federal government’s consultation with Indigenous communities was insufficient. The appeals were made by the Coldwater Indian Band, Squamish Nation, Tsleil-Waututh Nation, Upper Nicola Band, the Stk’emlupsemc Te Secwepemc and a coalition of First Nations in B.C.’s Fraser Valley.
Six other challenges on environmental grounds were rejected, although environmental groups such as Ecojustice, the Raincoast Conservation Foundation and Living Oceans Society are considering an appeal to the Supreme Court of Canada. Over a pipeline.
Perhaps most outrageous of all, the Trudeau government declined to provide evidence or challenge the law suits. As Rex Murphy writes in the National Post, “The biggest horror of this latest kick in the teeth to the oil industry, this gazillionth suspension and delay, is that the government of our Canada didn’t even so much as show up to watch the proceedings. It didn’t intervene. It didn’t submit arguments. It wasn’t even there as a casual bystander.”
As researchers for the Fraser Institute point out, Canada continues to pay a heavy price for the relentless opposition to pipelines. In The Cost of Pipeline Constraints in Canada, 2019, researchers Elmira Aliakbari and Ashley Stedman put some numbers to the losses.
They show, for example, that in October 2018, Canadian heavy crude (WCS) traded at only about 40 per cent of the U.S. West Texas Intermediary (WTI) price, which represented a discount of 60 per cent. In November, the price differential widened to reach almost 70 per cent, meaning WCS was sold at only 30 per cent of WTI.
And the cost of that discount? In 2018, after accounting for quality differences and transportation costs, the depressed prices for Canadian heavy crude oil resulted in C$20.6 billion in foregone revenues for the Canadian energy industry. This significant loss is equivalent to approximately one per cent of Canada’s national GDP.
The oil price discount has dropped some due to the Notley government’s decision to curtail oil production by some 8.7 per cent, but the curtailment was to end at the end of 2019 when Enbridge brings its new Line 3 pipeline online.
The continued obstruction of pipelines is bad for Alberta’s economy and bad for the environment since more and more oil is transported by rail, a slightly less-safe way to transport.
These latest appeals are not expected to stop work on the pipeline entirely nor significantly reduce oil company share prices. As Dwight Newman of the University of Saskatchewan notes, ““There’s no tools-down requirement” in the courts decision. A slim reed of hope for sanity to prevail.
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