By: Robert Roach
At first blush, the challenge created by a pipeline that would ship oil from Alberta to the BC coast seems quite simple: figure out how to address the environmental impact so we can unlock the economic benefits that the pipeline will bring.
If only it were this simple.
Opposition to a new pipeline from Alberta to BC is like a Russian doll. Just when you think you understand the situation, another source of opposition emerges.
On the economic side of the ledger, the benefits are very clear. A pipeline means jobs, spin-off economic activity in the service sector and manufacturing, government revenue through royalties and taxes and returns on investment for oil companies and other investors including many RRSP holders. In addition, a pipeline would provide the Canadian oil sector with a major customer other than United States and, in turn, allow us to get a better price for our oil and ensure that we have customers who will buy it.
On the opposition side of the ledger, the first of the Russian dolls is a pipeline’s direct environmental impact. Although pipelines are extremely reliable, a spill is still a possibility and the construction will have an impact on natural areas. Arguably, these risks are manageable and are not the main driver of the opposition to the project.
The second doll is climate change. Some argue that the challenge of climate change is so pressing that we need to stop burning all fossil fuels as fast as possible regardless of the economic pain this may cause. Because the pipeline would bring more oil to market, it is automatically a bad idea. While many feel this way, there is a rough consensus around the world that fossil fuels are going to remain a critical source of energy for some time so servicing this demand is legitimate.
The third doll is specific opposition to the oil sands. This is rooted in concern about the direct environmental impacts of oil sands projects encapsulated in the phrase “dirty oil.” The oil sands industry is working hard to address these concerns through improved environmental performance and has had many successes, but the dirty oil label is a hard one to remove.
The fourth doll is concern over tanker traffic off the BC coast. The specter of another Exxon Valdez is a rallying point for opposition to the pipeline. There is not much that can be done to address this fear as the possibility of an oil spill cannot be eliminated. It comes down to a trade-off between this risk and the economic benefits of selling oil to Asia.
The fifth doll is the interests of the First Nations communities that the pipeline will traverse. This is a complex mix of grievances and aspirations that go well beyond any specific pipeline project. It remains to be seen if the benefits of a pipeline to these communities can find a path through this complex political terrain.
The sixth doll is a “what’s in it for me?” attitude. There are some who feel that if a pipeline is going to be built through BC, that BC should get a cut of the profits that result from selling the oil that flows through it. This is akin to asking truckers to pay a toll to go through the BC section of the Trans-Canada Highway. While this line of thinking is a fast track to the balkanization of the Canadian economy, it is nonetheless operating just below the surface of the West Coast access debate.
So where does this leave us? Do the economic benefits outweigh the sources of opposition? Unfortunately, there is no objective way to answer this for even if we calculate the billions of dollars of economic benefit that will be generated by the pipeline, it is still a subjective matter whether the economic boost is more important than the concerns about the environment and the claims of First Nations.
Clearly, industry has to do the best possible job it can addressing the environmental impacts of the oil sands and new pipelines, governments have to ensure high standards are met and all stakeholders have to work in good faith with First Nations communities.
But ultimately, it is Canadians and the people we elect to represent us who will have to weigh the pros and cons of this and all the other thorny matters related to Canada’s energy resources.
To this end, we are fortunate in Canada that we have open processes for assessing projects like the proposed Northern Gateway project. The National Energy Board—an agency respected for its independence and expertise—is examining the project and will make a decision after conducting public hearings and conducting extensive research. The NEB process and the process under the Canadian Environmental Assessment Act are being conducted simultaneously under a joint panel, thereby bringing the economic and environmental issues forward for examination together. Some may see flaws in the process but it is one of the soundest such processes in the world and it is far, far better than a propaganda war among misinformed celebrities and angry politicians. .
Let’s give the panel a chance to do its work helping us to unpack the dolls and find a way forward with regard to West Coast access. The alternative is to become paralyzed in the face of the complexity or to make arbitrary decisions that undermine the faith of Canadians in the system. The questions are many and the answers will not make everyone happy, but this is the reality we face.