Leadnow’s Top-5 Reasons to Stop Kinder Morgan

First, to clarify: by “Kinder Morgan,” here, I take this to mean the Trans-Mountain Expansion (TMX) project, including the upgrade of their Westridge terminal in Burnaby to accomodate more ships.

This project remains in the news, of course, particularly in the BC lower-mainland, and will continue to be a hot issue for some time to come, for there is a great deal of passion around this question with many people deeply entrenched on both sides of it.

Feeding into this passion is much myth and misinformation. The accompanying graphic is a case in point, asserting a number of extraordinary claims:

Claim 1: It will add 100 million tonnes of greenhouse gases to Canada’s emissions every year, making Canada unlikely to fulfil the Paris agreement.

No.  Not only is this claim flat out wrong, but it is egregiously so.

First, some context: part and parcel with the federal approval for TMX, came a commitment from the government of Alberta to cap oilsands GHG emissions at 100 Mt/year CO2-equivalent.

The question has been asked about whether a cap at 100 Mt/year is low enough, given that current oilsands emissions are in the vicinity of 70 Mt/year;  nevertheless, it remains that because of the TMX agreement there is now an emissions cap where before there was none at all.

This claim falsely attributes the entirety of that cap on oilsands emissions — as projected emissions by TMX itself, or insinuates that they wouldn’t occur without TMX  (wrong, again).

But even if you do choose, bizarrely, to attribute the emissions, not to the actual emitters, the oilsands producers, but to the particular means of transporting their output, one should also recognize that the Trans Mountain pipeline is not the only such transport.

There is Line-3, for instance, which runs eastward to Wisconsin (and is being upgraded and modernized), and Keystone XL, taking oil south, and others, and a considerable capacity by rail in addition to what is consumed locally. (Rail transport has increased in recent years — impacting the capacity to ship grain and other products — due to insufficiant pipeline capacity.)

The current Trans Mountain pipeline already carries up to about 300,000 barrels a day. TMX will add about 600,000 to this — so to attribute the whole of the oilsands GHG footprint to shipping this extra 600,000 barrels is simply absurd.

Some say that we have to stop TMX because it encourages oilsands production. Not so. Oilsands investment and production are driven by price and by demand — not pipelines.

As long as Alberta can sell it, they will ship all the oil that they can produce, right up to that 100 Mt/year cap (if it remains, and beyond, if it doesn’t). And if they can’t ship by pipeline, they’ll ship by rail.

If for some reason the TMX approval gets set aside, it’s fair to suppose that the 100 Mt/Year cap would be repudiated as well, as well as putting Alberta’s now-willing participation in the Pan-Canadian Framework on Climate Change and Clean Growth, and other aspects of our national climate-change strategy, at risk.

In the final analysis, TMX itself will contribute nothing of any consequence to our GHG footprint. There will of course be GHGs emitted during construction, and perhaps negligible amounts to operate it — but even here the GHG overhead from transport by pipeline is less than by rail.

What happens if we take TMX out of the picture?  Do the oilsands close down, or slow down?  No — It will simply be business as usual; they’ll just ship the product a different way, or along a different route.

What happens to the problem of climate change if we take TMX entirely out of the picture?  Again, nothing — The oilsands keep working, the oil keeps flowing; they’ll just ship it a different way, or along a different route, though perhaps not at the best price.

Ultimately, TMX itself doesn’t move the dial on climate change one way or the other, and therefore doesn’t put our Paris commitment at risk in any way.  In a very real sense, however, in helping to get buy-in on our overall climate-change goals, it will help us to achieve them.

Would it be easier to meet our Paris commitments without oilsands production?  Of course — but that’s a problem of oilsands production, which originates in a continuing worldwide thirst for oil, and is not fairly attributable to TMX.

If we want to shut down the oilsands, we need to reduce the demand for oil; we need to to reduce our dependence upon it.

The world is moving away from oil as a fuel, as it must, and this trend is picking up steam. But it can’t change overnight.

You can help:  buy an electric car, or a hybrid, next time you buy a car;  convert your home-heating from oil (or natural gas) to a heat-pump or solar or geothermal, if you can, next time you have to replace your furnace. It will all help, but that, too, takes time. You, too, if you are in any way a consumer of oil, or goods or services fueled by oil, are part of the problem — and the solution.

And as we, and the rest of the world phase-out our gas- and diesel-guzzling cars and trucks, and find other ways to heat our homes, cook our food, and power our factories, the market for oil, particularly oilsands oil, which is expensive to produce, will diminish.

As we and the world wean ourselves off oil, Alberta, too, will wean itself off its dependence on the oil industry.

There’s money to be made and many livelihoods to be had in the evolving and emerging developments in sustainable and renewable energy, and that’s where we’re investing public funds.

Claim 2: It violates Canada’s commitment to the United Nations Declaration on Indigenous Rights and will damage relations with indigenous peoples.

In addition to a long preamble, the United Nations Declaration on the Rights of Indigenous People (UNDRIP) has 46 Articles (with sub-articles).

To say we’re violating UNDRIP is a rather broad claim, and hard to evaluate fairly if we don’t know what argument is actually being put forward.

In what way or ways does this project violate Canada’s commitments to UNDRIP?

Perhaps the claim relates to one or both of these Articles?

Article 18:  Indigenous peoples have the right to participate in decision-making in matters which would affect their rights, through representatives chosen by themselves in accordance with their own procedures, as well as to maintain and develop their own indigenous decision making institutions.

Article 19:  States shall consult and cooperate in good faith with the indigenous peoples concerned through their own representative institutions in order to obtain their free, prior and informed consent before adopting and implementing legislative or administrative measures that may affect them.

Both of these Articles would seem to have relevance, and I’ve heard them cited before in this debate. But are either violated by this project or its approval?

Whatever one thinks of the National Energy Board (NEB) process in this case, within a few months of taking office in 2015 the new government augmented the decision process with a Ministerial panel that traversed the pipeline route hearing from the general public, as well as indigenous communities specifically, who felt that they had been unreasonably or unfairly excluded from the NEB process.

While it is clear that not all indigenous people agree with the decision, neither are all opposed. Over 40 First Nations support the project and many have negotiated economic benefit agreements, and others not, and are on the front lines of the protest against it.

Does “free, prior and informed consent” require unanimity?  Doubtful, for that would render UNDRIP ultimately unworkable.

This would all seem to argue, however, that affected First Nations indeed had “the right to participate in this decision-making” in this matter “through representatives chosen by themselves,” and indeed many did so.

Was the right to participate, and the consultation sufficient?  These are fair questions — and indeed the very ones that caused, in June, 2016, the former federal government’s 2014 approval of the Northern Gateway pipeline to be set aside by the Federal Court of Appeal.

Or, perhaps, what is meant is a breach of Article 26:

Article 26:

  1. Indigenous peoples have the right to the lands, territories and resources which they have traditionally owned, occupied or otherwise used or acquired.
  2. Indigenous peoples have the right to own, use, develop and control the lands, territories and resources that they possess by reason of traditional ownership or other traditional occupation or use, as well as those which they have otherwise acquired.
  3. States shall give legal recognition and protection to these lands, territories and resources. Such recognition shall be conducted with due respect to the customs, traditions and land tenure systems of the indigenous peoples concerned.

It is well known that most of southern BC was not ceded by any treaty;  it was just taken.  In the wave of colonial conquest that flooded the new world with new people looking for new land and new opportunities, the notion that the existing inhabitants of such lands had any rights to them wasn’t seriously entertained.  From our vantage point in history the arrogance and wrongness of this is clear;  but the harm is already done, generations ago, long preceding UNDRIP, and long preceding TMX as well.

Upon this regretable foundation millions of people and generation after generation poured their lives, heart and soul, into the land;  they raised towns and cities, built ports, punched roads through mountains and wilderness, harvested the forests, created schools, hospitals, mines, factories, farms, and homes.  They invested their lives here, worked hard here, and died here, believing in good faith in the title granted them by the Crown and the system of law that then prevailed, however precariously anchored in history.

While the original wrong cannot be ignored, neither can the life labours and legacy of the newcomers, themselves innocent of the original wrongdoing.  How do we find justice here?

Our commitment to UNDRIP means that we accept the principles and protocols that define what was wrongly done, back in the day.  It also guides us in how to move-on:

Article 27:  States shall establish and implement, in conjunction with indigenous peoples concerned, a fair, independent, impartial, open and transparent process, giving due recognition to indigenous peoples’ laws, traditions, customs and land tenure systems, to recognize and adjudicate the rights of indigenous peoples pertaining to their lands, territories and resources, including those which were traditionally owned or otherwise occupied or used. Indigenous peoples shall have the right to participate in this process.

Article 28:

  1. Indigenous peoples have the right to redress, by means that can include restitution or, when this is not possible, just, fair and equitable compensation, for the lands, territories and resources which they have traditionally owned or otherwise occupied or used, and which have been confiscated, taken, occupied, used or damaged without their free, prior and informed consent.
  2. Unless otherwise freely agreed upon by the peoples concerned, compensation shall take the form of lands, territories and resources equal in quality, size and legal status or of monetary compensation or other appropriate redress.

This is all about reconcilliation, which we are advancing on many fronts, and there are appropriate systems and processes in place for recognizing and resolving such rights, as required. It’s also about conscientiously negotiating fair settlements, which have, sadly, dragged out much too long, by decades, and we have to do much better.

TMX has, in my view, become a pawn in this struggle, as we work toward understanding and a fulsome application of UNDRIP, but is not itself a breach of it.

In addition, going forward:

The Indigenous Advisory and Monitoring Committee (IAMC) and the Economic Pathways Partnership are two initiatives being advanced by the federal government to respond to environmental and economic interests expressed during consultations. Both initiatives were announced at the time of federal decision, in November 2016…

These measures are being designed to address impacts to rights and respond to broader issues raised during consultation — namely, Indigenous communities’ role in project governance, oil spill response, and economic benefits. — TMX Aboriginal Consultation Report; 2017-06

Ultimately these are legal questions to be adjudicated by a court of competent jurisdiction, but the matter is nowhere near as cut-and-dried as the claim asserts.

Indigenous Relations

The other significant part of this narrative is the allegation that the approval “will damage our relationship with indigenous groups“. In this regard, I draw your attention to this Vancouver Sun (2018-04-13) item:

Cancellation of the Trans Mountain pipeline would cost B.C. First Nations hundreds of millions of dollars in benefits, job training, and employment and business opportunities, according to Cheam Chief Ernie Crey.

Crey has emerged as a leading voice for the First Nations that stand to benefit from the project, calling out environmentalists for “red-washing” their fight against the $7.4 billion expansion of the pipeline between Edmonton and Burnaby.

“We have a vigorous environmental movement in B.C. and they have learned that they can use aboriginal communities to advance their agenda,” he said.

… The Cheam are one of 43 First Nations that have mutual benefit agreements with Trans Mountain — reportedly worth more than $300 million — that offer skills training for employment, business and procurement opportunities and improvements to local infrastructure…

“If this project doesn’t go through it will hurt our people,” Crey said on Facebook. …

Crey is a co-chair of the indigenous advisory and monitoring committee, a 13-member group funded by $64 million in federal money to monitor construction of the pipeline.
Environmentalists ‘Red-wash’ their fight against pipeline, First Nation chief says

Again, we see that 43 First Nations have proactively negotiated and signed economic benefit agreements amounting to more than $300 million. The piece then goes on to mention some of the groups that oppose the project:

Seven First Nations — led by the Squamish and the Tsleil-Waututh on Burrard Inlet — have legal challenges to the pipeline approval making their way though the Federal Appeal Court and the Supreme Court of B.C Environmentalists ‘Red-wash’ their fight against pipeline, First Nation chief says

These challenges will hopefully be decided soon, and we’ll know then where we’ll land. But it is important to recognize that there are indeed indigenous voices on both sides of the question, and some in-between — just like for everyone else. Unfortunately, TMX opponents tend to ignore this, and portray only those voices that shore up their own narrative.

On balance, the whole matter of indigenous relations is broad and complex, and is in fact being engaged meaningfully across a wide spectrum of issues, including, but not limited to TMX. It is unreasonable and unrealistic to hold TMX as the sole issue defining this relationship.

Claim 3: It will increase tanker traffic by seven times. This will likely wipe out BC’s endangered Orca whales.

Westridge Terminal

2013 © Moffat & Nichol

Seven times! — Sounds like a lot!

Let us first note that what matters regarding the well-being of the Orca population is not tankers, specifically, but overall shipping in their range.

So right from the outset this claim is dramatically out of context, for it looks only at tanker traffic, and only at traffic calling at Westridge terminal itself — where we’re going from typically five a month to around 34 a month, depending on market conditions.

Remember that there is a great deal of other major shipping through the port, as well, whether loading sulfer in Port Moody, oil in Burnaby, grain in east Vancouver, bauxite in North Vancouver, unloading cars, or loading and unloading containers at the various container terminals, cruise ships, and many others. And then there are the many and sundry barges and smaller tankers moving fuel and heating oil and all manner of goods to and from the Island and our many BC-coastal communities.

While the annual number of vessels destined for Vancouver’s port is just over 3,000, the Strait of Georgia is transited tens of thousands of times each year by ferries, tugs, fishing vessels, whale watching boats and recreational boaters. …

Each of these vessels may not be particularly problematic on its own, but collectively and in context of the consequences of historic activities such as live captures and hunting, vessel activity could present significant challenges for the future recovery of southern resident killer whales. — Shipping and marine mammals

Let us also not forget the considerable US shipping that plys the southern portions of the Orcas’ range, for this will affect them as well.

This includes tankers from Alaska — not escorted by tugs, tethered or otherwise, and all manner of ocean-going freighters, cruise ships, and navy vessels coming and going through Puget Sound and the Strait of Juan de Fuca, as well as ferries, coast guard vessels, fishing boats, barges and tugs, and thousands of private vessels that transit back and forth throughout the area.

So, realistically, looking at the increase in traffic due to TMX in terms of potential impact upon the Southern Resident Orca population:

  • If you consider only major Port of Vancouver traffic, the increase is more like 10% — NOT seven times; and, more reasonably
  • If you consider all traffic consequential to their environment, it will be nowhere near as much as 10%.
That the risk to the Orca population is nowhere near the magnitude proposed in the claim, does not in any way mean that we should neglect it. This, absent the hyperbole, is recognized in the NEB report itself:

The Board finds that the operation of Project-related marine vessels would likely result in significant adverse effects to the Southern resident killer whale.

Although the effects from Project-related marine vessels on the Southern resident killer whale would be a small fraction of the total cumulative effects, the Board recognizes that the increase in Project related marine vessels would further contribute to cumulative effects that are already jeopardizing the recovery of the Southern resident killer whale.

The bottom line here is: yes, of course, we do need to be concerned about the survival, the rejuvination, and the sustainability of this population, but to do so we need to get at the real data, and identify and address the real problems:


In 2008, Fisheries and Oceans Canada issued a recovery strategy under the Species at Risk Act (SARA) for both the northern and southern resident killer whales.

The strategy identifies underwater noise and physical disturbance, from sources such as military or navigation sonar and vessels, as key threats to killer whales.

The killer whale population is also under pressure from a range of other human-related threats, such as increased levels of environmental contaminants and reductions in the availability of salmon prey. — Shipping and marine mammals

In this context it should be noted that these threats are already being addressed, through measures such as additional funding for cetacean and salmon research and habitat restoration (e.g.: through the Oceans Protection Plan (OPP)), and particularly through the port’s own Enhancing Cetacean Habitat and Observation (ECHO) program:


… a collaborative research and management initiative … established with government agencies, First Nations individuals, marine industry users, environmental and conservation organizations and scientific experts to better understand the cumulative impacts of all shipping activities on whales throughout the southern coast of British Columbia and inform mitigation solutions.

Our long-term goal is to develop mitigation measures that will lead to a quantifiable reduction in potential threats to whales as a result of shipping activities.

Mitigation measures may include incentives for the use of green vessel technology, changes to operational activities of ocean-going vessels, a certification program for quiet vessels, and/or the development of noise criteria for vessels entering the port. — Shipping and marine mammals

It’s important to note that these initiatives will involve not only tankers, but, more significantly, all shipping that transits the area.

In short, the impact on the Orca population from this expansion is nowhere near “seven times” higher, as the claim proposes, nor is it in any way “likely” to wipe them out.

Claim 4: A spill will happen. When it does, it could destroy some of the most fragile ecosystems in the world, forever.

Pipeline Map

The Trans Mountain pipeline has been operating for over 60 years, delivering diluted bitumen, in fact, for the past thirty, and, yes, in this time, along its route, there have indeed been spills. And, sure, it’s not unreasonable to expect occasional similar such spills going forward.

So what about that catastrophic devastation that “could destroy some of the most fragile ecosystems, forever?”  We just don’t see that.

We don’t see that, because even with an over-sixty-year history, it’s just not happening.  It’s not happening because the pipeline is well monitored, well managed, and well maintained.

Such spills as do happen, happen in places that are designed for such possibilities, such as bermed pumping stations and tank sites, and the like, or, if they happen elsewhere, they are proactively detected, stopped, and the given site remediated.

The more engaging concern in my mind, however, has always been the possibility of a spill — not from the pipeline itself — but a spill in the harbour involving the tankers that transport the various grades of oil through our coastal waters.

But here, too, we have history. In their over sixty years (thirty years of diluted bitumen) of moving loaded tankers through our waters, there has not been a single incident involving transportation by sea.

There are reasons for that, of course, such as competent, well trained, and professional personnel. Such as practices and processes designed to reduce or eliminate dangers, and to deal effectively and efficiently with such circumstances as might still arise.

The only incident of any consequence was in 2007 and involved the terminal itself, but, significantly, no tankers:

An excavator working on a sewage line pierced a pipeline in July 2007, releasing more than 250,000 litres of crude oil.  About 70,000 litres flowed into Burrard Inlet, sparking a $15-million cleanup.  — CBC

So, not from shipping — but, in any case, successfully cleaned up.

This is the worst-case scenario that I hear expressed most often: “what about a spill in the inlet, or the strait?“, and particularly involving diluted bitumen: “we don’t know how to clean it up!

But we do know, and this knowledge was factored into the decision to approve the expansion. We know that diluted bitumen behaves similarly to other forms of crude oil and that existing spill response methods are effective in recovering it.

And, while we continue to have confidence in these existing processes and technologies, we continue to strengthen our preparedness, requiring, before the expansion begins operation, that existing legally-required response capabilites be doubled, and we continue to conduct wide-ranging research into the behaviour of diluted bitumen and how different petroleum products behave in varied marine and freshwater environments.

The following excerpt summarizes some of the further enhancements to marine safety and emergency response capability that we are achieving through the five-year, $1.5 billion, Oceans Protection Plan (OPP):

  • Boost marine emergency prevention and response capacity — the Canadian Coast Guard will establish four new radar stations on the West Coast, including one in Victoria, and modernize emergency response equipment.
  • 24/7 emergency management and response capacity within the Coast Guard’s three existing Regional Operations Centres across Canada, to better plan and coordinate effective response during an incident.
  • Two large tow vessels will soon be on-call on the BC coast, and several Coast Guard vessels will be equipped with specialized tow kits, which means improved ability to respond to situations where tow is necessary.
  • Primary Environmental Response Teams composed of dedicated, specially trained personnel will further strengthen the Coast Guard’s existing on-scene operations.
  • Reopened the Kitsilano Coast Guard Station with new rescue boats and specialized pollution response capabilities.
  • Strengthen the polluter-pay principle, to ensure that adequate industry-funded compensation is available for those affected by oil spills. Canadians should not be responsible for cleaning up spills in our oceans.

In addition, from the industry itself:

The industry-funded Western Canada Marine Response Corporation is investing $150 million in enhancements to respond to increased tanker traffic — doubling capacity and halving response time, adding six new bases, 120 new employees, 43 new vessels and response resources along the shipping route. — Jonathan Wilkinson MP, Parliamentary Secretary to Minister of Environment and Climate Change

Still, it’s better to avoid a spill in the first place. To that end, in addition to improved coast guard traffic surveillance, and improved support and resources as noted above:

  • Ship movements in the port are traffic-controlled.
  • Within the port, and indeed within Canadian waters, the vessels will be under the control of qualified, experienced BC Pilots, who know the waters, are familiar with traffic control procedures, speed and channel constraints, and the appropriate notices and regulations, and who will not allow any vessel to leave the dock if it is not fully correct.
  • Tankers must be double-hulled — so that if they’re holed, such as by a grounding or a collision, there is very little chance of a spill.
  • In the inlet, loaded tankers will move at slow speed, further reducing the potential for collision, as well as further reducing the likelihood of vessel damage in the event of a grounding or collision that could result in a spill.
  • Loaded tankers will transit the narrows in daylight hours only, and only at the correct state of the tide.
  • At least two tethered tugs will accompany loaded tankers from the terminal, through the narrows, and past the port boundaries.
  • And, instead of leaving tankers to navigate the rest of the way through the Strait of Juan de Fuca on their own, tugs will escort ships through the strait and out to sea.

All the above notwithstanding, it should give further comfort to know that a competent, comprehensive, and thorough risk evaluation was in fact done for this project.

It’s a large report, with a lot of engineering detail, and a hard slog for the non-engineering-inclined. It’s well summarized, however, by (local) blogger “A Chemist in Langley“:

Now unlike the Port, the fuel barges or the BC Ferries, the NEB required a detailed risk analysis of the TMX. The critical document on this topic is the report Termpol 3.15 – General Risk Analysis and intended methods of reducing risk which evaluated the risks of the project.  It concluded that “with effective implementation of risk reducing measures most of the incremental risk resulting from the project can be eliminated“.

To put a number on it:

  • Without the project the risk of a credible worst case oil spill is estimated in 1 in every 3093 years…. If all the risk reducing measures discussed in this report are implemented the frequency will be one in every 2366 years.
  • This means that after the Project is implemented, provided all current and future proposed risk control measures are implemented, the increased risk of a credible worst case oil spill in the study area from the Trans Mountain tanker traffic will be only 30% higher than the risk of such an occurrence if the Project did not take place.

By increasing the number of tankers by 7 times, but also implementing the changes that were ultimately mandated by the NEB, the risk of a spill is less than one event every 2000 years.

So no, the risk does not increase by 7 times, it increases by barely 30% and 30% more of almost zero remains almost zero.

Essentially they are saying that the project provides no significant increase in risk over those risks we accept every day— “A Blogger in Langley”

The bottom line, then, is that we’re taking an already-small risk and further reducing and managing any potential harm that could flow from it.

Nevertheless, some still say “But wait — the risk is still there; our pristine coasts are too important; we cannot tolerate any risk! It’s not safe!

So lets talk about what it means to be safe:  we know, for example, that people die on our roads and highways in terrifying, horrific, violent ways. We know that despite our utmost care the risks are always there. We know that what’s at stake is crucially important — lives. Often, indeed, the lives of our own loved-ones hang in the balance. We know that for each of us, there could be nothing more catastrophic, more devastating, than the loss of a child or other loved-one. Yet, still, we put our children in cars and buses and send them off into the world.

We do this because it’s how we must, as reasonable, practical, caring people, living our lives on a day to day basis. We do this because we know that through law, regulation, and enforcement, through evolutions in engineering and design in our vehicles and roads, and through education, experience, and proper training, that we have striven to eliminate risks, and otherwise keep them small and well managed.

We do this because we recognize these systems as safe, even with a non-zero level of risk; we know, even with something as ultimately important as the lives of our children and loved ones, that “no risk whatsoever” is not a reasonable, practical, standard.

It’s not a reasonble, practical, standard for TMX, either.

“Safe”  does not mean the absence of all risk. It means taking conscientious and reasonable care to minimize risk, and to manage whatever risk remains. As we have done, and as we will keep doing.

Claim 5: It puts tens of thousands of jobs at risk, but will only create 90 jobs in a dying industry.

As to the risk to jobs, this concern typically relates to the potential loss of jobs in the coastal fisheries, both commercial and recreational, as well as tourism-related jobs in general that might conceivably be at risk in the event of a catastrophic major spill in coastal waters.

I’ll refer you back to Claim 4, above, however, regardng how such risks are mitigated and brought as close to zero as is reasonably possible.

For the other part of the claim…

I cite here remarks from the Minister of the Environment and Climate Change, the Hon. Catherine McKenna, to the Vancouver Board of Trade (2018-03-15):

As everyone here knows, the Trans Mountain pipeline already exists.  It has been delivering oil to and through the Port of Vancouver safely for over 60 years, and carrying diluted bitumen for three decades.

The current expansion project would simply add capacity to the existing pipeline.  And doing that comes with significant benefits for the economy and jobs here in BC, and nationally:

  • During construction, and for the first 20 years of expanded operations, the project is expected to generate nearly $47 billion in government revenue.
  • BC’s share — roughly $5.7 billion — would go a long way to help pay for hospitals and health care programs, schools, and other priority issues here in BC.
  • Kinder Morgan’s $7.4 billion in capital investments will spur economic activity and create thousands of well-paying jobs in BC — in fact, a quarter of the employment benefits of this project would go to BC.

So it’s really not as simple as “us” versus “them” — in Canada, we’re all in this together, and we need to avoid any kind of zero-sum thinking.

As to whether the industry is dying, we of course intend to join with the world in the coming years to help it to do so, by promoting the phase-out of our dependence on oil, and by putting public funds into the advancement of and conversion to sustainable industries and technologies, and renewable energy.

That is part of the context in which Kinder Morgan and Trans Mountain must evaluate their own business case for the project. Note that when we speak of “the” business case, we have to consider:  the business case for whom?

It is strictly up to Kinder Morgan and Trans Mountain to evaluate their own business risk, and whether they believe the likelihood of success, and the utility of the venture will be of sufficient duration to realize a satisfactory return on their considerable investment.

So for those who look at the expected $7.4 billion construction cost and worry that we shouldn’t invest in a “dying industry” — “we” are not;  it’s not our money;  it’s not our financial risk;  and it’s not up to us to decide whether the expected return is worth that risk.

Similarly, for those who say we should instead invest this $7.4 billion in wind energy, or geothermal, or… whatever — again, it’s not our money, and the choice of how to use it is not ours to make.

Though the previous BC government approved the project as well (subject to 37 conditions), the new BC government, which must honour the previous government’s approval or incur very expensive liabilities, is opposed to it.

As such, they’ve expressed intent to restrict what the pipeline can carry, citing concerns over the ability to clean-up diluted bitumen, and asserting local jurisdiction regarding environmental matters.

This puts them in a position of challenging exclusive federal jurisdiction over an interprovincial energy project. They have said, however, that they’ll refer the question to the Supreme Court, and abide by their decision.

But governments squabbling about jurisdiction introduce a whole new dimension of risk that, in a country of law, due process, and rule of law, no business should have to face.

Consequently, Kinder Morgan declared (2018-04-08) that they cannot proceed until the jurisdictional question is resolved — so that they can know fairly what are the rules by which they are required to operate, and be able to properly evaluate their business case. They identified May 31st as their go/no-go date.

… A company cannot resolve differences between governments. While we have succeeded in all legal challenges to date, a company cannot litigate its way to an in-service pipeline amidst jurisdictional differences between governments…

While we are prepared to accept the many risks traditionally presented by large construction projects, extraordinary political risks that are completely outside of our control and that could prevent completion of the project are risks to which we simply cannot expose our shareholders… — Kinder Morgan Announcement

Given the imminence of construction season, and the prospect of transitioning from a project spend on the order of $20 million per month to $250 million per month, this is an understandable and prudent business decision.

After a face-to-face meeting (2018-04-14) in Ottawa with the two involved Premiers, and considering that a Supreme Court reference will take longer than the time remaining intil the go/no-go date, the Prime Minister has instructed the Minister of Finance to engage with the proponent to propose measures to obviate this unusual impediment so that the project can continue without this inordinate uncertainty.

Such measures, in my view, are unlikely to be any form if subsidy or a “bail out,” but some form of limited indemnity to cover circumstances where this juridictional squabble puts the proponent’s on-going investment unfairly at risk. In any event, we await developments…

All in all, these “top-5” reasons don’t hold up very well, and they do not well serve the serious conversation. As I said in my previous statement on TMX:

…it is Cabinet’s job to act on behalf of Canada as a whole. … in approving TMX, they determined that, subject to 157 conditions, including environmental protections, emissions limits, and safety provisions, among others, this project is in the best interests of the nation.

There is nothing here that counters that decision, though it still behoves us to remain active and aware in ensuring that the project adheres rigourously to all the 157 conditions of the federal approval (plus BC’s additional 37), and to be ever receptive to better approaches to address concerns raised.

In doing this, we can continue to protect our environment, including our coastal waters, and engineer and promote our transition into a twenty-first-century green economy — while still achieving the necessary economic and environmental balance both here in BC, and in Alberta.

Further Reading

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