If you listen closely, you can hear the sound of desperation in the voice of Alberta Premier Jim Prentice when he talks about the Energy East pipeline. One doesn't have to concentrate quite as hard to detect the same anxiety in the words of Saskatchewan Premier Brad Wall.
Both were taken aback when Ontario and Quebec announced seven conditions for granting approval to the pipeline. One of those includes an assessment of the project's upstream greenhouse gas emissions – which would appear to take into account the source of the crude moving through the pipeline. In Alberta's case, that would be the oil sands, a high GHG emitter.
The conditions are similar to ones the B.C. government set out for pipeline projects, including a requirement to consult with First Nations. And we all know how that's been going for pipeline companies trying to reach tidewater on the West Coast.
Despite conditional approval from the National Energy Board, most believe the Northern Gateway pipeline will never get built because of opposition to it. The courts have given First Nations new powers to fight developments that encroach on their land. Outside of aboriginal communities, public opinion regarding pipelines is at best divided – although there seems to be a growing societal angst about climate change that is palpable.
Kinder Morgan, which also wants to add a pipeline to the West Coast, is encountering that sentiment now. Protests at Burnaby Mountain, where the company is trying to do some exploratory work, have become daily events and have spawned arrests and ugly international headlines. Once upon a time, the odds of the Kinder Morgan pipeline going ahead were considered extremely good. Not any more.
Mr. Prentice knows this. So does Mr. Wall.
That leaves Energy East as the most viable immediate option to get landlocked Canadian oil to overseas markets. Which brings us back to the nervousness evident in the voices of the two premiers.
The price of oil has plunged in recent months and there is no sign of that reversing itself any time soon. OPEC just announced that it won't cut output, despite a surfeit of oil on the market. That has sent prices tumbling, which has had an immediate impact on provincial budgets, especially in Alberta. Mr. Prentice has said his province could be in a real financial jam unless it can access tidewater, and new markets, soon. He's noted that the federal government will also realize a significant financial hit if this predicament isn't resolved within a few years.
In that case, I would urge everyone to brace themselves.
Despite the billions at stake, politicians must ultimately listen to the people. That's precisely what happened in B.C., where Premier Christy Clark understood that if she rubber-stamped Northern Gateway she'd be sealing her own fate. Ontario Premier Kathleen Wynne and Quebec Premier Philippe Couillard are doing precisely the same thing: listening to their constituencies. To do otherwise would be political folly.
Mr. Wall and Mr. Prentice can stamp their feet all they want about the apparent unfairness of it all, but this is the new reality. At the same time, we will soon have to have a grownup conversation about oil and pipelines and their future in Canada. That discussion will obviously have to weigh very legitimate concerns about our climate with very legitimate worries about saying no to resource development and the bearing that will have on the country's bottom line.
Meantime, oil production is not going to stop any day soon. It is going to move to U.S. markets by existing pipeline and by rail, which is, by many people's estimation, a far riskier mode of transportation.
This issue is important enough to be on the national agenda, and potentially the subject of debate in a federal election. The next national vote could become a referendum on pipelines, a subject as hotly contested as the North American free trade agreement once was.
It's stating the obvious to say the world has changed when it comes to the topic of oil and its impact on the planet. Despite the obvious economic benefits that would flow from Energy East, the political class is waking up to the fact not everyone is enthused about such endeavours. How this conflict ultimately gets resolved remains to be seen.
Gary Mason