OTTAWA - The Harper government, which never foresaw that pipelines would become the battleground in a frenzied struggle over climate change, is contending with a continentwide wave of political opposition that has imperilled plans to sell more Canadian petroleum in foreign markets.
In British Columbia, a few thousand people in the small coastal town of Kitimat have given powerful symbolic momentum to the movement against pipelines designed to carry oilsands-derived crude for export.
In one of the first soundings of voter attitude toward the proposed Northern Gateway pipeline planned for B.C., the citizens of Kitimat turned out to reject the project in a referendum.
The result of the unusual April 12 plebiscite, though non-binding, was seen as a serious blow to Enbridge Inc., the company behind the planned $6.5-billion conduit to carry oil from Alberta across the Rockies to an export terminal in Kitimat.
Less than a week later, U.S. President Barack Obama delivered a setback to another major Canadian pipeline proposal, the Keystone XL project designed to move petroleum from the oilsands to the United States.
Obama, whose supporters are bitterly divided over Keystone, again put off a final decision on whether to allow the pipeline. Some had expected a yes-or-no answer on the project by mid-year. But Obama’s April 18 announcement means no ruling is likely until after the Nov. 4 U.S. congressional elections and possibly not until well into 2015.
These are the latest in a series of developments that have called into question the Harper government’s strategy of tapping oilsands-derived crude to cement Canada as a global energy superpower for decades to come.
With the future of multibillion-dollar projects hanging in the balance, the issues surrounding energy development are becoming more heated by the day.
In Canada, Enbridge is under fierce pressure to find ways to reduce the widespread opposition from aboriginals, greens and others in B.C. to Northern Gateway. So the company had launched an extensive campaign promoting the project in Kitimat before the local vote. The project would provide the town with 180 direct jobs worth $17 million, plus more spinoff employment for suppliers and builders, Enbridge had said.
But it was not enough to convince a majority of the town’s voters.
The Kitimat experience shows how hard it has become for Enbridge to address opposition to this pipeline, says Ben West, oilsands campaign director at ForestEthics Advocacy in Vancouver.
“Frankly, I was actually surprised by the outcome,” he said, adding that Enbridge’s pro-pipeline campaign in Kitimat in advance of the plebiscite greatly outgunned the opposition.
“It really was a grassroots response in Kitimat,” West said. “This is an area that is pretty desperately in need of economic development opportunities, but this project is already so tarred and feathered in the minds of many people in that part of the province that the idea that there is really anything the company could do to reverse that — at this point, it really doesn’t reflect reality.”
The Kitimat vote was a small skirmish in the clash over new pipelines and oilsands production that has grown to global dimensions and has the potential to shape economic trends, energy supplies, environmental approaches, political fortunes and even diplomatic relations between Canada and the United States.
Prime Minister Stephen Harper has linked Canada’s future prosperity to natural resource development, particularly from the huge oilsands deposits in Alberta. But the new pipelines that are key to this strategy have become a prime target of the environmental movement, which fears petroleum spills but also sees reining in oilsands production as a defining struggle in the effort to slow global warming.
Just a day before the Kitimat referendum, federal government officials sent out to hold consultations with aboriginals on Northern Gateway were told by an influential group of First Nations leaders in B.C. that the pipeline was a no-go. “Their pipeline is now a pipe dream,” Chief Peter Erickson said.
At the same time, hundreds of protesters marched through a suburb of Vancouver in the latest expression of opposition to another proposal to bring crude from Alberta to the B.C. coast — Kinder Morgan’s planned expansion of the 1,150-kilometre, 60-year-old Trans Mountain pipeline.
And in the U.S., former president Jimmy Carter took the unusual step of publicly calling on Obama to reject TransCanada Corp.’s proposed $5.5-billion Keystone project. Carter pointedly referenced Obama’s recent state of the union pledge to tackle global warming, saying that putting a stop to Keystone would usher in a “new era” of environmental awareness.
Two days later, Obama moved to delay a final decision. Keystone now looms as one of the legacy moments of his administration and no one seems to know how, or when, he will decide.
With Keystone up in the air and Northern Gateway facing broad public hostility and possibly years of lawsuits from aboriginals, the federal government’s determination to tap into new foreign markets for oil exports is looking increasingly problematic.
“How’s that energy superpower thing working out for you?” quips New Democrat MP Nathan Cullen, who represents the northern B.C. riding of Skeena—Bulkley Valley. “The strategy has completely backfired,” he told the Star.
But Enbridge vowed after the Kitimat referendum to continue its efforts to win public acceptance of the project. “As a longtime resident of northwestern B.C., I passionately believe that Northern Gateway is the right choice for Kitimat and for the future of our community,” Donny van Dyk, Northern Gateway’s Kitimat-based manager of coastal aboriginal and community relations, said in a statement issued after the vote.
And newly appointed federal Natural Resources Minister Greg Rickford said the Conservatives remain committed to opening up new markets for resource exports.
“Our government is focused on the responsible development of our natural resources in a way that protects the environment and creates jobs and economic growth,” Rickford said. “We have been clear that projects will only proceed if they are found to be safe for Canadians after an independent, science-based environmental and regulatory review.”
But watching these energy debates unfold, many observers have concluded the federal government and industry failed to anticipate the depth of opposition to new oil pipelines and completely mishandled attempts to seek aboriginal co-operation on Northern Gateway.
“The energy companies made a fundamental mistake,” TD Bank chief economist Craig Alexander said in an interview. “They felt that selling the public on these projects was going to be far easier than it actually turned out to be. There were mistakes made about how to get buy-in from the public and from some governments on the merits of these projects. And they may not have fully incorporated some of the environmental issues into their planning process.”
The Harper government appears to have been impatient with a range of issues around the creation of energy megaprojects. It has streamlined approval processes, narrowed the qualifications for intervenors in regulatory hearings and given the federal cabinet the final say on approving construction.
Among environmentalists, then natural resources minister Joe Oliver’s 2012 suggestion that greens were trying to “hijack” the regulatory process to achieve their “radical ideological agenda” is seen as a spark that contributed to the explosion of opposition to West Coast pipelines and more oil tankers.
Canada has also not shied away from lecturing Obama on Keystone, regardless of the cost to bilateral relations. Harper has said approving Keystone is a “complete no-brainer” and Ottawa would not take “no for an answer” from the White House.
And when Jimmy Carter came out against Keystone, the Canadian government shot back that he shouldn’t forget the gasoline shortages that plagued Americans while he was president.
After the latest Keystone postponement, Jason MacDonald, a Prime Minister’s Office spokesperson, said the Canadian government is disappointed that “politics” seems to trump all else in Washington.
Now that Keystone is on hold, Harper will be under more pressure to give a final thumbs-up to Northern Gateway. A decision is expected from the federal cabinet by June. But some observers believe opposition to the pipeline across B.C. is so pronounced that the Conservatives will provide only a provisional approval, with more regulatory scrutiny before construction could actually begin. Doing so might delay a possible political backlash in B.C. beyond the next federal election in 2015.
All of this uncertainty has increased interest in other means of getting oilsands-derived crude to deep-water ports for export. Besides the possibility of moving more petroleum by rail, there is growing interest in TransCanada’s $12-billion Energy East pipeline. The 4,600-kilometre line would carry oil from Alberta to export terminals and refineries in Eastern Canada. Much of it would be done by converting an existing natural gas conduit, with new sections of pipeline being built in parts of eastern Ontario and from Quebec to New Brunswick.
After witnessing the outpouring of opposition to other proposals, TransCanada has gone out its way to discuss the project with communities and native groups along the pipeline route in advance of filing a full application for Energy East to federal regulators.
But this option is also being scrutinized carefully. The Ontario Energy Board has been holding hearings as part of an independent assessment of the project’s impact on consumers, the economy, aboriginals and environmental safety.
The Council of Canadians, along with other groups, is mounting a community-based campaign against Energy East under the banner: “Our Risk, Their Reward.”
“Almost all of the oil is expected to be exported, with benefits flowing to the oil industry,” says Maude Barlow, the council’s national chairperson.
“In Ontario, TransCanada will attempt to use a converted 40-year-old natural gas pipeline to carry tarsands oil, including diluted bitumen, over some of the province’s most important waterways, such as Nipigon River, which flows into Lake Superior.”
But TransCanada says it will conduct extensive studies in advance of any construction to minimize the project’s impact on wildlife, land and the environment. The fact that much of the pipeline is already in the ground should lessen potential environmental problems, the company says.
- With files from The Canadian Press