Trudeau On Pipelines: Maybe

Last week Justin Trudeau walked into the lion’s den—a boardroom filled with the country’s top oilpatch executives—and got it half right.

Luckily he had the good sense to take Premier Notley with him.

Mr Trudeau, Ms Notley and Big Oil discussed low oil prices, the lack of pipelines to move product to tidewater and the impact all this has on employment and the economy for Alberta and Canada.


The Prime Minister and the Premier smiling in the lion’s den

Big Oil said the meetings were very encouraging, which is curious given that Big Oil did not get the one thing it was looking for—assurance that Cabinet would approve the Energy East and Trans Mountain pipelines, both of which are before the National Energy Board (NEB) right now.

Mr Trudeau said he would not “politicize” the NEB process by prejudging or short cutting it.  He would allow the NEB to do its job without political interference.

With that he slid into the gray zone.


Mr Trudeau is right.  He cannot guarantee approval.  He’s also correct that signalling the “right answer” to the NEB would preempt its process;  however as a result of the changes put in place by ex-PM, Stephen Harper, the only way to further politicize the NEB would be to move it into the PMO’s office.

When John Diefenbaker created the NEB in 1959 he gave it authority over interprovincial pipelines. For 53 years the NEB required Cabinet approval to approve a pipeline but didn’t require Cabinet approval to reject one.

When Stephen Harper cottoned on to this glitch he amended the NEB Act. He made the NEB submit recommendations for refusal as well as approval to Cabinet and gave Cabinet the power to send the NEB’s recommendation back twice for reconsideration. The reconsideration order could require the NEB to take into account any factors specified by Cabinet.

In other words Harper gave Cabinet the power to second guess the NEB and force it to come up with the “right answer”.


Natural Resources Minister Carr

Mr Trudeau inherited Mr Harper’s NEB. He and his Cabinet are free to decide whether a pipeline goes ahead or not for whatever reason they please. If that isn’t a politicized process I don’t know what is.

Perhaps the real reason Mr Trudeau doesn’t want to signal “yea” or “nay” for Energy East and Trans Mountain is that he doesn’t want to violate his commitment to a leadership style that respects the independence of his cabinet ministers.

A recent example of this non-Harper style is Mr Trudeau’s reluctance to wring Natural Resources minister, Jim Carr’s neck for saying “of course” pipeline approval is a political process when Mr Trudeau says it’s not.

A new GHG review process

Having declared his support for an unpoliticized NEB process and the independence of his cabinet ministers one has to wonder about the government’s decision to overlay the NEB process with a new process.

The process is based on five principles:

  1. No NEB project applications will be required to go back to square one
  2. Decisions will be based on science (isn’t this an NEB requirement?) and the traditional knowledge of indigenous people
  3. The views of the public will be sought (ditto?)
  4. There will be greater consultation with First Nations (existing law requires consultation)
  5. Direct and indirect greenhouse gas emissions from a project will be considered (the NEB does not consider upstream and downstream GHG effects because a pipeline has no impact on them. Producers are governed by the environmental regulations of the province within which they operate. If Cabinet rejects a province’s environmental oversight of upstream or downstream emissions it risks violating the federal/provincial division of powers enshrined in the Constitution)

Principles 2, 3, and 4 are an attempt to strengthen existing NEB processes, principle 5 is overreaching and this is a concern.

Trudeau could learn from Notley

Mr Trudeau, like Ms Notley, believes that a healthy environment and a strong economy are two sides of the same coin.

However Mr Trudeau appears to place a heavier emphasis on addressing climate change than supporting the energy industry.  Ms Notley tries to balance the two while at the same time transitioning Canada to renewables.


Premier Notley

Yes, we should cut Mr Trudeau some slack. It takes time to round up the premiers and hammer out a national energy policy and a national climate change policy, but in the interim Mr Trudeau should take a page from Ms Notley’s book (she supported Energy East and Trans Mountain; Deron Bilous, her minister of economic development wrote an op-ed lauding the benefits of “a thriving energy sector, managed in an environmentally responsible way”).

And yes, these are just words, but the next time Mr Trudeau is asked whether he’d support Energy East/Trans Mountain, would it kill him to say: IF the NEB recommends approval AND Cabinet is satisfied the requirements of the new GHG review process are met, then Cabinet MAY be favourably disposed towards them.”

Or are we in the twilight zone and is Orange the new Red and Red the new Green?

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14 Responses to Trudeau On Pipelines: Maybe

  1. ABCanuck says:

    Astute observations, Ms. Soapbox.

    It does seem that the federal Liberals under Justin Trudeau, particularly in regard to environmental issues, are to the left of the federal NDP and the Alberta NDP.

    This is what did considerable damage to the federal NDP in the last election when they were outflanked on the left by the Liberals, and did not recognize, or respond, to the challenge after early polls showed Mulcair’s NDP with a big lead.

    • Indeed ABCanuck. It’s hard to get a read on where the federal Liberals are going on the energy/environment file. Trudeau spoke out in favour of Keystone XL when he went to Washington in Oct 2013. Jim Carr, his natural resources minister, was on the board of the Canada West Foundation (which is described as a non-partisan think tank but has a distinctly centre right reputation). Carr’s chief of staff is Janet Annesley, former VP of the Canadian Association of Pipeline Producers, a pipeline lobby group. And yet, Carr and environment minister McKenna introduced the new GHG review overlay. Confusing.

  2. GoinFawr says:

    Calgary’s mayor was on public radio over the weekend talking about pipelines, and, as usual, his observations were poignant and his suggestions constructive; once again he demonstrated an understanding of the relevant (and irrelevant) issues that was comprehensive,.

    Mr.Nenshi noted several important points:

    1. Barring something politically dramatic, the stuff in Alberta is coming out of the ground regardless of any new pipelines.

    2. Pipelines are by far the safest way to transport the stuff Alberta produces, but if those currently in place can’t handle the volume, and no more are constructed, the existing railway infrastructure is going to be used, regardless of its higher risk.

    3. Mr.Nenshi points out that right now Alberta gets nothing close to West Texas Intermediate (WTI-the “price of oil” according to every North American financial reporter), or Brent prices for her efforts; most Alberta producers receive Western Canadian Select (WCS), which is roughly half (or less) of WTI right now. This is because the only customer that Alberta has been set up to service is now her biggest competitor: the US.

    4. He too has observed that a lot of people all over Eastern Canada seem to be operating under the misapprehension that the gasoline they put in their tanks comes from Alberta, when in fact it is refined from the contents of tankers from overseas, chugging up the St. Lawrence. How safe is that?

    Regarding #1 the current price doldrums are a matter of supply temporarily outpacing demand, but the fact is global demand for oil products is still increasing, despite anything the Rockefellers may have implied during their massive divestment from oil.

    I will also add that #3 has some aggravating factors, specifically NAFTA’s proportionality clause and the (in my opinion) treasonous political will that facilitated that onerous agreement. But on the whole I have to say that, for a pol, once again Mr.Nenshi has succeeded in impressing the hell out of me with his ability to outline an issue pragmatically rather than emotionally.

    Mr.Bilous seems to have a decent handle on things too.

    And that’s not to mention your fine work, Susan, of course.

    • GoinFawr, thanks for sharing the Nenshi interview. It sounds like our esteemed mayor nailed it. If I could turn the discussion to the new GHG review, I was troubled by the inconsistency between Principle #2–decisions will be based in science–and Mr Trudeau’s direction to the Transport Minister to work with the ministers of Fisheries and Environment to “formalize” a moratorium on crude oil tanker traffic on BC’s North Coast. I’m not saying that we should allow more tankers, in fact a moratorium may be exactly what we need, however I’m not aware of any science evidence backing Mr Trudeau’s call for a moratorium. I worry that this direction springs from Mr Trudeau’s belief rather than evidence that tankers are bad, which is based, no doubt, on his long held belief that Northern Gateway, which requires such tankers, is bad. If the standard for decision making is scientific evidence, then it must be applied in all circumstances. It’s the only way to figure out which decisions are based on scientific evidence and which are based on politics.

  3. ronmac says:

    Lol. In the top pic it looks Justin has been brought in for questioning by the (oil industry) cops and he was bringing along Ms. Notley, his lawyer, just in case. The crime: the murder of Alberta’s oil industry in the early 1980’s via the infamous NEP brought in by a Liberal gov’t headed by Pierrie Trudeau.

    Ms. Notley pointed out there was a statue of limitations in this case and, even if there wasn’t, she could have argued her client was only 10 years old at the time and so he couldn’t possible be held accountable for this crime, allegedly committed by his father. (of course, a more reasonable defense could have been Alberta’s oil industry was killed by plunging oil prices and not the NEP but never mind)

    • Ronmac, very creative, I wish I’d thought of it! There’s an old saw in legal circles about how to set up a good defense. It uses the dog bite scenario. The defense is (1) you antagonized my dog, (2) my dog did not bite you and finally (3) I don’t own a dog. Oddly enough it fits the Trudeau case (1) Alberta, you brought the NEP upon yourselves, (2) I (Justin) didn’t do it, my dad did, and (3) what NEP? It was plunging global oil prices. Unlike the dog bite defenses which are mutually exclusive, the NEP defenses are all true at the same time. 🙂

  4. Carlos Beca says:

    I am a bit surprised with the comments about Justin Trudeau position’s on the environment. It sounds a bit like the status quo of either the economy or the environment. Being left of the NDP on the environment is meaningless because the NDP has never been a defender of anything but more economic growth no matter what. In fact even the true socialist parties were never dedicated to protecting the environment. Russia and any of the so called Communist countries were 20 times worse than any capitalist society we know, including the horrible ones in the third world where corporations owned the country. Just because protecting the environment is seen as a progressive idea, does not mean that it is. The only reason why countries like Germany and Denmark are way ahead of the rest of us is purely because their proportional representation systems have allowed Green parties into their parliaments which of course forced their governments to slowly introduce measures that slowly became mainstream. Denmark, this year used an average of 50% of energy from renewable energy due to a very windy year.

    There is nothing without a healthy environment and so criticizing anyone that protects the environment at any rate is to me irresponsible. The example of the tankers is clearly a bad choice in my view because it is not just the spills, which happened way more frequently than we know, bit especially because of the traffic that is disrupting the migration of whales and is also causing serious issues with the noise from their engines which interfere on the communication of mammals in the ocean. This may not sound important to many people but considering that we have already taken 95% of all great fish from the oceans, and most whales are in the endangered species, I do not think we can continue playing games. On top of all this we are dumping raw sewage in Victoria and Halifax with consequences that are very clear. It is time to look at the oceans as an amazing resource rather than a garbage dump. According to researchers by 2050 we will have more plastics than fish in the ocean. We already have a pile of garbage the size of Texas circling in the Pacific Ocean. Just Google ‘Pacific Garbage Patch’ and you will be amazed.

    We cannot continue using excuses of jobs over the environment because if you think about it, soon we have no choice but face a tremendous crisis in many fronts including food production and air quality. There will be no choice at that time. We can no longer think in dualities. We are the environment, we are all part of one Universal reality and if we do not change, we will perish.

    I can tell you that if I was making a decision right now, I would allow this present bust to lower the level of employment and dependence on oil and invest heavily of wind and solar. It is now that we have to create a new industry here. Investing 12 billion dollars in the pipeline is going to be a very bad waste of money. With that money we could probably make Alberta almost self sufficient on wind energy. We are allowing ourselves to continue our addiction to an economy that is not sustainable and it never was.

    My modest opinion.

    • Carlos, I don’t think your opinion is modest, it’s actually very bold, but let me give you my modest response anyway. 🙂

      I believe pipeline decisions, including those related to the tankers required to transport bitumen (which should be upgraded, not shipped laced with diluent by the way) must be based on scientific evidence because that’s the only way we can understand the risk we’re being asked to assume in return for the reward of a strong economy. (I recognize that the “strong” economy assumption is open to challenge). When the Committee on the Status of Endangered Wildlife presented evidence that the beluga whale population at Cacouna Quebec dropped from 10,000 to 1,000 and recommended beluga whales be put on the endangered species list, TCPL decided to move its delivery point somewhere else. No doubt because it realized that the public was not prepared to trade the risk to beluga habitat for an uptick in the local employment. If TCPL hadn’t moved the delivery point I would expect the regulator to force it to do so by refusing to accept the application with the delivery point at Cacouna.

      If the provincial or federal governments reject projects without the scientific evidence to demonstrate how damaging they will be, they’ll simply push the population back into the arms of the opposition parties and we’ll be even worse off.

      The other thing we need to recognize is that renewable energy isn’t always an environmentally friendly solution. For example, wind turbines kill between 600,000 to 900,000 bats a year. That doesn’t mean we should give up on wind power but we need to learn a lot more about bats’ migratory patterns, whether changing blade speed makes a difference, etc.

      Your comment that Germany and Denmark are farther ahead on protecting the environment because of the PR system was very insightful.

      In my humble opinion.

      • Carlos Beca says:

        I agree with you the difference being investing on a dying industry versus one that is very promising and way cheaper and with consequences that are possible to alleviate.
        Here are some interesting facts:

        Wind turbines kill between 214,000 and 368,000 birds annually — a small fraction compared with the estimated 6.8 million fatalities from collisions with cell and radio towers and the 1.4 billion to 3.7 billion deaths from cats, according to the peer-reviewed study by two federal scientists and the environmental consulting firm West Inc.

        “We estimate that on an annual basis, less than 0.1% … of songbird and other small passerine species populations in North America perish from collisions with turbines,” says lead author Wallace Erickson of Wyoming-based West.

        For those who don’t have an envelope nearby to do the math, that’s about 10,000x more deaths from just house cats than from wind turbines.

        And that’s not even looking at some of the other biggest bird killers out there: building and vehicles. That’s probably millions, if not hundreds of millions or billions, of other birds right there. In the grand scheme of things, wind turbines are probably lost in the margin of error.

        It is definitely still an enormous issue especially if one is a bird lover like myself. 🙂

  5. Carlos Beca says:

    Well I tried hard to contain myself but it did not work. Jim Prentice is writing a book on energy and including climate change. I was so excited because I can see him asking for help from our other extreme guru Stephen Harper. I immediately phoned the Institute to let them know that I would sleep outside for days to be the very first Albertan to have the privilege of reading this historical book. It is so inspiring because I also heard the rumours that Alison Redford is writing a guide on how to travel by plane for free and stay in penthouses at very affordable costs. 🙂
    It is not only Donald Trump after all. Even his son is now showing the close genetics with his Dad by saying that waterboarding is just like hazing experienced in Universities in the US. Gosh I would love to hire him for 2 seconds of waterboarding for the You Tube.
    Susan forget about your incremental political change! the patient is dead. 🙂

    • Carlos, they say great minds think alike. When I saw the “news” in the Calgary Herald that Mr Prentice had become a fellow of the Wilson Center (a Washington based think tank) and would use his time there to write a book on energy and the environment including climate change and pipelines, my first thought was that Post Media had run out of reporters and was now cutting and pasting press releases from the think tank into its pages. Then I saw the story pop up on CBC and Global on line. Why does anyone consider this news? At best it’s gossip along the lines of hey, did you hear what Jimmy’s doing now?

      I hadn’t heard the waterboarding is akin to college hazing thing yet. I liked your suggestion that in this case a picture is worth a thousand words and a YouTube demonstration might be in order.

      PS I love birds too. 🙂

      • Carlos Beca says:

        Birds are amazing. All animals are of course but birds have been underestimated for a long time. Now scientists are finally smelling the roses.
        Watch the document by Terra Mater titled ‘Bird Brain’ – so interesting.

  6. political ranger says:

    “Mr Trudeau, like Ms Notley, believes that a healthy environment and a strong economy are two sides of the same coin.”
    Beliefs are fine, if you’re so inclined but like the tooth-fairy, Santa Claus and endless economic growth they have absolutely nothing to do with reality.
    This particular belief system, as groundless and widespread as it is, is largely why we have neither a strong economy nor a healthy environment. We cannot continue to take, and take from the natural world, which is literally, finite without system-wide repercussions. Nor can we continue to subsidize poorly managed companies nor un-profitable sectors while watching the foreign shareholders run off with our profits and hope for a “strong economy”.
    “a thriving energy sector, managed in an environmentally responsible way” – no such animal exists Susan. Petroleum energy produced “in an environmentally responsible way” would be prohibitively expensive. No one would use it.
    If you are referring to so-called renewables you should say so. It is also, as of this date prohibitively expensive to produce on an industrial scale, at least compared to subsidized petro-production, but at least stands a chance of minimizing the toxic and long-lasting harm to the environment.

    • Carlos Beca says:

      Political Ranger – I agree with you that infinite growth is not compatible with an healthy environment. Material growth will have to stop if we do not want to transform this great planet into barren land.

      Quality growth, on the other hand, should be our choice if we want to survive. The problem is that we created an economy that is based 100% on permanent growth. This is our number one number problem because we do not know if we can change it on time to avoid total destruction. The other problem is that in order to create this economy unsustainable economical model we developed our sense of greed and competition to an extreme level. In order to change the economy we have to be way more cooperative and more creative.

      We are now reaching 7 billion people and we cannot provide a high standard of living to everyone even if we had a non-growth economy. It has been estimated that to provide the standard of living we have in Canada today to everyone on the planet the population would have to be reduced to 2.5 billion in order not to damage the planet. Population is a very important issue to a possible solution but one that is impossible to approach with the strong religious control they have on people. It is not even discussed. Here in Canada we want more people to feed the economic system we have but no thought is ever given to our quality of life at all. The country is enormous but we do not even know our carrying capacity which of course with the climate we have is way smaller than most people think. We also have to realize that population in numbers alone is not the correct way to measure our needs. We consume 10 times more per person than in most of the world and so our real population is not 30 million but 300 million.

      We can build a fairer society and with higher standards of living but it has to be planned, cannot be at the mercy of markets and permanent growth.
      I doubt we can turn what we have around in a peaceful way. One just has to look at what is happening in Syria to realize how far we are still from anything but maniacal – egocentric behaviour from leaders everywhere. We tend to look at Putin and Bashar but what about George Bush. Where is the difference? We are still socially and politically at the Paleolithic era.

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