Remember Northern Gateway?
That was the pipeline that was supposed to feed tankers who would navigate through some pretty challenging terrain so they could then brave Hecate Strait, one of the more dangerous places to move a ship on our coast. It was also Stephen Harper's pipeline to lose. And lose it he did.
Kinder Morgan is Justin Trudeau's pipeline to lose. British Columbia is preparing to stand at the line and stare across it. And I think that it will be Ottawa that blinks.
The first reason is political.
The Liberals took 17 seats in British Columbia in 2015 and won the recent by-election in South Surrey-White Rock. But their share of the popular vote in 2015 was lower in B.C. than in any other province, save Alberta and Saskatchewan. Those seats, and that support could be a lot shakier than it looks. Having those seats at risk over an issue that will come to a head before the next election may cause the Liberals to blink, especially if the Conservatives in Ontario come back into power.
British Columbia is also the greenest province in Canada when considering popular support for the Green party. With one MP and three MLAs, the Greens appear to be up and coming. One need only look at how badly Liberal support dried up in Saanich-Gulf Islands between the 2008 and 2011 federal elections to see the possibilities for the Greens, and the peril for the Liberals, especially given the environmental sensibilities that lie at the core of the opposition to the pipeline.
The Greens, both federally and provincially, oppose this project based on the inevitable environmental impacts on the Salish Sea and the cultural and economic impacts a spill would have on British Columbia's First Nations. They are certainly prepared to make whatever political hay they can out of this issue in the run-up to the 2019 federal election.
The next reason is social. We have a history in British Columbia of standing up for our natural environments. We protest. We write letters, we sign petitions, we stand in the rain on muddy logging roads. And we even manage to win a few. It is these few examples of protest actually working that is a bit of a problem for people pushing their own agendas on us. People here know that if the issue matters enough, we can get things done.
In the 1950s it was the Fraser River and its wild salmon that we stood up for. The last time the NDP was in power here it was Clayoquot Sound. We have seen people stand up and speak for those who cannot and be heard. Don't forget that it was less than a decade ago that 80% of British Columbians were in opposition to an expansion of tanker traffic on our coast. That is an extraordinary number, even for a limited sample size poll. There are several high profile environmental advocacy groups who cut their teeth running "Save Our Coast" campaigns in decades past who are busily executing another campaign.
Another reason is the provincial government. Usually, in British Columbia, they are the ones on the authoritarian side of the protests. Not this time. Even though the project had been rubber-stamped by the former B.C. Liberal government, the current government has decided to play for time. And time is not on Kinder Morgan's side. Asking questions, pursuing science, testing the courts; this is an approach that I support in a government, and I would support this approach no matter which party is in power.
Economics is the nail in the coffin for this project. Bitumen is caught in a bit of a trap. The market for it is bounded by the price for oil and the impact that price has on our economy. When oil prices are low, the economy does well. Growth is natural, and interest rates allow people to invest conservatively for income. When oil prices are high, the economy sputters. Growth is forced by debt, and interest rates are manipulated to allow that. The knock-on effects of that manipulation include the variety of asset bubbles we are currently experiencing.
It is the opposite for oil producers. When the price is low, it is difficult to maintain budgets for exploration and innovation. When the price is high enough to fund these things and book a decent return for the shareholders, the economy sputters, demand falls, prices crater. This forces companies and countries that are being squeezed by low prices to pump more oil to maintain their cash flows, further depressing prices. Companies who cannot make their payments go bankrupt. Countries who can't keep their people in the style they have become accustomed fall to war and revolution.
For higher cost producers, like the tar sands and the shales in the U.S., this fluctuation puts their entire industry on shaky ground. The tar sands have seen capital fleeing already, even in these times of unnaturally cheap money. The ability of operators being able to increase production enough to fill all of the new pipe is in question. The idea that there will be a market for the product in a world currently awash in plentiful, cheap, high-quality oil is also questionable.
It reminds me of the snow job the B.C. Liberals gave us over LNG.
The clock is ticking. Elections are coming in Ottawa and in Edmonton. And the markets are working out their own solutions to our oil predicament. Those solutions do not seem to include a stable price where high-cost producers can make a buck. We will always have oil, both in our economy and in the ground. What we are lacking is affordable oil, both for producers and the rest of us in the general economy.
Trudeau couldn't sell the idea that cutting emissions in the rest of the economy was dependent on allowing a small industry to increase theirs. He did nothing to procure the much vaunted "social licence" to build this pipeline. This project is dead.
— Chris George believes one measure of a just society is found in how well it balances fiscally conservative economics with social responsibility and environmental soundness in all of its living arrangements.
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