Prime Minister Justin Trudeau finally described Alberta as a province in a crisis as Albertian oil continued to trade at a record discount of about $45 a barrel.
United Conservative Party leader Jason Kenney has gone so far as to call on the feds to declare the Trans Mountain as being “for the common advantage, using a special constitutional power, Section 92.10c of the constitution. I’m calling on the federal government to impose sanctions on BC for standing in the way”
Virtually every centre-right, centrist, and centre-left politician can agree, the insane discount that currently exists for Canadian crude oil is a problem of national importance.
This is because the lack of Canadian oil pipelines drastically hinder the wealth of provinces like Alberta, and in turn, this lowered wealth reduces the overall cash available for programs like equalization transfers.
There really is no understating the colossal economic loss here.
Just got out of a meeting with senior energy industry leaders.
Latest estimate is that today’s record price discount on our oil & gas represents an annualized loss of $46.6 billion to the Canadian economy, and $13.9 billion to Canadian governments.
— Jason Kenney (@jkenney) October 13, 2018
According to Kenney, the lacking pipeline infrastructure and the associated costs that come with them are sucking close to $14 billion from the nation’s tax pool annually.
NDP Premier Rachel Notley has said the price gap between Canadian and U.S. crude is costing the Canadian economy $80 million a day.
To put that into perspective, Canada’s entire employment insurance program costs $21 billion per year.
Lasting effects of Canada’s oil discount
Perhaps most stunning, the cost of Canada’s oil discount is one that could realistically continue for generations. According to an article in Bloomberg News, “Despite consistent emphasis on renewables—such as solar and wind power—global demand for fossil fuels as a source of energy is expected to increase until 2040 and beyond, constituting roughly 80 per cent of the total. Cold, winter countries such as Canada will continue to rely on consistent supplies of oil and gas to heat their homes and industries.”
With so much on the line, it is almost astounding to see the nation so bitterly divided.
Except that it isn’t.
According to an Ipsos poll, 56 percent of respondents say they support the expansion of the pipeline from Alberta to B.C.’s coast, while 24 percent of respondents oppose it. Twenty per cent of Canadians aren’t sure whether or not they should support it.
Even in the holdout province of B.C., 55 per cent of British Columbian respondents support it, with 37 per cent of them opposing it.
For the most part, the opposition is occurring from two radically different places.
Oil sands impact on the Canadian environment
Firstly, some indigenous groups are understandably angry that repeat governments have refused to actually do their jobs when it comes properly reviewing pipeline developments.
This group won a major victory in the Federal Court of Appeal, forcing the National Energy Board to redo its review of Kinder Morgan Canada’s project. In a unanimous decision by a panel of judges, the court said the “National Energy Board’s review of the proposal was so flawed that the federal government could not rely on it as a basis for its decision to approve the expansion.
The fatal flaw, the court said, was that it excluded the project’s impact on marine shipping. That, in turn, meant that the energy board did not assess the potential impact of increased tanker traffic on the endangered southern resident killer whale population.”
While this segment of the Canadian population shares incredibly important points, they are not the actual reason behind the blocking and destabilizing of the overall development of pipeline infrastructure.
Had the Trudeau government or the Harper government before them focused on conducting a proper national review of the project it would likely have been approved.
There is a far more dangerous group involved which deserves serious consideration, namely the many wealthy American business interests which have rapidly entered and destabilized the Canadian political realm.
According to an article by Danielle Smith, with a citation from Vivan Krause, “Environmental groups—backed by the U.S.-based Tides Foundation, the Rockefeller Foundation and other well-endowed U.S. funds—met in 2008 to hatch a strategy, called the Tarsands Campaign, to landlock Alberta oil and prevent it from reaching international markets to fetch international prices.”
“The most recent manifestation of the anti-tarsands campaign was the green movement’s interference in the 2015 federal election, in a coordinated effort to defeat Conservatives in 25 out of 29 targeted ridings. It was spearheaded and bragged about by LeadNow.“
In addition, American groups like 350.org with funding from just four donors (each donating more than six figures) have recently declared that they will take on the Trans Mountain.
This truly worrying plan aims to ensure Canadian crude can only sell to one customer—the United States—in turn forcing an ever increasing discount to the benefit of U.S. consumers.
Perhaps most hypocritically, these groups are funding the radical section of Canada’s green movement, while actively ensuring that all excess Canadian crude is shipped through rail and trucks, a far more dangerous method of transport.
There really is no underestimating the power of foreign third-party intervention within Canadian political discourse.
In early 2008, Canada had the potential to develop a diversified network to carry and refine crude oil. The Trans Mountain, the Northern Gateway, and the Energy East project were all in potential development.
Canada was in many ways positioning itself to be the moral and environmental leader in fossil fuels.
Fast forward to 2018, and Northern Gateway is closed, Energy Easy is almost beaten to death, and Trans Mountain has reached such a level of political toxicity that the Trudeau government buys it in order to make sure all investment faith is not lost within the country.
This extreme change has by no means occurred naturally and brings up a genuinely important question.
Who should be involved in discussions like these concerning one of Canada’s most valuable natural resources?
There is room for dialogue when it comes to building pipelines. There is certainly room for every Canadian citizen to voice their opinion.
However, the continued involvement of foreign entities hell-bent on interfering with Canadian affairs?
I think for the most part we can all agree they have no place in the discussion.
Interested in oil, and Canada’s other natural resources? Here are some hand-picked articles from our editors.
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