A new opponent of pipelines has announced its existence – the Treaty Alliance against Tar Sands Expansion. It consists of more than 50 Canadian First Nations, mostly from Quebec and British Columbia, plus a handful from other provinces and a few from the United States.
The timing of the announcement was probably intended to upstage the meeting in Calgary starting on Monday of the Indian Resource Council, representing 174 First Nations that are open-minded about resource development. Significantly, the new anti-oil sands Treaty Alliance claims no signatories from Alberta and Saskatchewan, where many First Nations have an economic stake in the production and transmission of hydrocarbons.
The Treaty Alliance is absolutely opposed to further oil sands developments, citing "Indigenous Law prohibiting the pipelines/trains/tankers that will feed the expansion of the Alberta Tar Sands." They want prohibition, not consultations or social licence. The statements on their website depict the oil sands as needing to be shut down, preparatory to phasing out the entire oil industry in favour of renewable energy. It is not surprising that the members of the Treaty Alliance come mainly from Quebec and British Columbia, which have chosen to generate power by flooding wild river valleys rather than taking hydrocarbons out of the ground.
The economic stakes for oil sands producers and for federal and provincial governments are enormous. Greater capacity to reach U.S. refiners via pipelines would increase the profitability of producers by reducing dependence on higher-cost transportation alternatives such as rail and truck. With pipeline access to ports, Canadian-based companies could sell crude oil at higher prices in overseas markets than in the U.S. mid-continent region where oil prices are under pressure from increasing production. That would mean more production, more jobs for Canadians and greater benefit to Canada's economy.
If Canada were able to export, say, an additional one million barrels of conventional heavy oil and oil sands bitumen a day to markets accessible from ocean ports – with the lion's share of exports continuing to flow to U.S. oil markets – substantial incremental revenues could be realized. At an average price of $60 (U.S.) a barrel, we estimate that these additional revenues could reach $4.2-billion (Canadian) annually.
If higher returns from markets accessed via tidewater were realized by all Western Canada heavy oil production at $60 (U.S.), the annual benefit could exceed $18-billion (Canadian). And these earnings would benefit Canadians not only in Alberta and Saskatchewan, but across the country, from pipeline operators, to builders, to port-operators, to East Coast refiners, to pension funds and to government coffers in royalties and taxes.
Beyond these immediate economic issues lie incalculable consequences for Canada. The signatories of the Treaty Alliance claim rights superseding Canadian sovereignty. They pledge to "resist the use of our respective territories and coasts in connection with the expansion of the production of the Alberta Tar Sands," regardless of what the government of Canada decides. This is directly contrary to the decisions of the Supreme Court of Canada, which has stated repeatedly that the right to be consulted and accommodated is not a right to veto.
Will this stop with opposition to bitumen? The environmental movement has many other products in its sights. What about wood chips manufactured from forests on First Nations' traditional territories? Or genetically modified grains and oil seeds, which now constitute most of Canada's agricultural production for export? The Treaty Alliance claims the right to block not only pipelines, but also other infrastructure such as railways and harbours.
Or what about the hydroelectricity from the Site C dam, which will flood a good part of the Peace River Valley and is opposed by First Nations in the area? According to the logic of the Treaty Alliance, those First Nations would have an equal right to block power lines, even though British Columbia and Canada have approved the project.
Is Canada a sovereign nation or not? The Treaty Alliance says no.
Kenneth Green is senior director, Natural Resource Studies, and Tom Flanagan is a senior fellow, of the Fraser Institute.