Apr. 25 - Financial Post
VICTORIA — During the past few months, the main front in the fight against development of the Alberta-based oil sands has moved to British Columbia. It’s a situation the western-most province is uncomfortable with and an expansion it’s unmotivated to defend.
The aggressive push by the oil sands industry and the Alberta and federal governments to open a new market for Canadian oil through shipments from the West Coast has been met by equally forceful resistance starting at the Alberta-B.C. border.
Anger has escalated since the start of public hearings in January into the Northern Gateway pipeline, proposed by Calgary-based Enbridge Inc., interrupting years of friendly relations between the neighbouring provinces, particularly on energy development.
Indeed, condemnation of the pipeline through B.C.’s rugged north and its associated oil tanker traffic has erupted into the type of popular revolt that is becoming a B.C. mainstay — from the campaign against the harmonized sales tax to the fight to preserve the Great Bear Rainforest and the moratorium on oil tanker traffic and offshore drilling.
First Nations and environmental organizations have been leading the Northern Gateway shakedown, but other stakeholders — from provincial politicians to the business community — have stayed on the sidelines, depriving the debate of much-needed even-handed voices.
Critics are milking a big weakness of Northern Gateway — the benefits of diversifying the market for Canadian oil accrue almost exclusively to Alberta and the rest of Canada through corporate profits, taxes, royalties and employment, while British Columbia’s environment bears the risk of a spill.
As one Vancouver-based business community leader put it: “This is the way it’s played out in B.C.: We are putting a pipeline through the province, triggering massive opposition from environmentalists and First Nations, in order to give Alberta an opportunity to sell energy into Asian markets, and we get essentially nothing out of it. That is why even those who will be sympathetic to the project aren’t as focused or as enthusiastic about it as people outside B.C. seem to believe should be the case.”
There is also worry in the B.C. business community that the protests, the expected litigation and the influx of money from international sources to support the campaign will complicate the operating environment for B.C. business.
“We have been able to get things done in B.C. over the last number of years,” said the business leader, who asked not to be named while the Northern Gateway regulatory review is underway.
Condemnation of Enbridge's Northern Gateway pipeline through B.C.’s rugged north and its associated oil tanker traffic has erupted into the type of popular revolt that is becoming a B.C. mainstay.
“It’s a very challenging place to do business for a lot of companies because of the unresolved aboriginal claims, which means we don’t have treaties, so the legal context is more complex, and we have a much more powerful environmental movement in our politics than you tend to have in other parts of the country. But this project has the potential to see a rallying of not just local but global environmental forces who have their shorts in a knot over oil sands to focus on B.C. as ground zero to save the planet.”
So far, the $5.5-billion Northern Gateway has taken the brunt of the anti-pipeline, anti-oil sands campaign. It’s unclear whether opposition will broaden to a rival plan proposed by Kinder Morgan Energy Partners on April 13 for a $5-billion expansion of its Trans Mountain line.
NIMBYs in B.C.’s Lower Mainland have started mobilizing against increased tanker traffic, even though the pipeline has been safely moving oil and loading it on tankers for 62 years. Vancouver Mayor Greegor Robertson said this week he has a moral obligation to oppose the pipeline.
Recognition that there is inequitable distribution of risks and benefits has started discussion about what could be done to make oil export pipelines more acceptable to British Columbians — particularly First Nations, who are seen as the groups most affected.
The Alberta government, for example, has been musing about offering benefits to British Columbia from oil sands development. With Alison Redford’s Conservatives getting re-elected by a wide margin on Monday, those efforts are likely to continue.
The Alberta government, for example, has been musing about offering benefits to British Columbia from oil sands development. With Alison Redford’s Conservatives getting re-elected by a wide margin on Monday, those efforts are likely to continue. Ms. Redford has talked during her campaign about building bridges and promoting understanding of how all of Canada benefits from Alberta’s resources.
The federal government has also broached the subject. In an interview, Joe Oliver, the federal Natural Resources Minister, said he has had a number of conversations about it with B.C. Premier Christy Clark.
So far, Ottawa has used primarily the stick to keep the proposed pipelines on track. It is shortening the time required for regulatory reviews and is making it harder for environmental organizations to oppose projects, making them even madder.
For his part, Rich Coleman, B.C.’s Energy Minister, said he welcomes the debate and doesn’t have a problem with the protests. He also said he welcomes Ottawa’s move to shorten regulatory reviews, harmonizing timelines with B.C.’s own.
In an interview, he said it’s too soon to discuss additional benefits from oil pipelines because the regulatory review now underway into Northern Gateway needs to be completed. After that, Mr. Coleman said, B.C. would have a discussion with Ottawa and with First Nations about next steps.
Resource exports are important for Canada, he said, but “solutions have to be worked out by parties to find a way to do it that is environmentally safe, and in such a way that people’s concerns are dealt with. I think that’s what this process is trying to do, and if it’s successful, it is; and if it isn’t, we will have to see what else we can do.”
Observers say there are ways to increase acceptance of oil pipelines, particularly among British Colombians — perhaps a majority — who are quietly supportive of the project, of Stephen Harper’s Conservative government and of the push to increase Canadian trade ties with Asia. Indeed, there are three main areas with potential to appease opposition: Make pipelines and tanker operations both safer and seen-to-be safer, embrace First Nations as partners and increase benefits to the province.
Barb Justason, principal of Vancouver-based Justason Market Intelligence, said pipeline backers need to get the message out that pipelines and oil tankers are safe.
Ms. Justason’s own polling suggests British Columbians are relatively tolerant of Northern Gateway, but are largely opposed to introducing large tankers in the inside coastal passage, an area that is now off limits. “I think it’s going to be about information,” she said. “The B.C. public would have to be convinced that it’s safe, and it’s as simple as that.”
She believes that Enbridge’s main pitch, that its pipeline would create jobs and economic benefits, isn’t enough.
“The thing about B.C. and particularly Vancouver, where half the population is, is most of us are here by choice. Money isn’t the currency it used to be. They want the safety and security of the coast.”
Proponents need to take a step back and engage the province differently, she suggests.
“The idea that this is going to happen to them, rather than with them, is the most worrying thing,” she said. “It’s never worked well here, for someone from the outside to come in and decide what is going to happen.”
What’s missing is a middle ground between the boosters and the detractors that provides a perspective on the true risks of pipelines, said Nathan Elliott, president of Insightwest Research, a Regina-based research firm that works with First Nations on resource development.
“Canada is a pipeline nation,” he said. “When protesters focus on the environmental problems that take place, it overshadows the fact that the environmental record of pipeline in this country is second to none in the world.”
Mr. Elliott said a re-engagement of First Nations — provided their view of Northern Gateway can be turned around this late in the process — needs to focus on environmental protection and sustainability while ensuring vitality of their economy.
“First Nations were this nation’s first entrepreneurs,” said Mr. Elliott, who recently co-wrote The Future Starts Now, a report advocating greater First Nations involvement in the resource economy. “First Nations peoples are assets and they have to assume an equity stake. For far too long these people have been looked upon as liabilities rather than assets.”
There are plenty of successful examples of First Nations that are fully engaged, he said, from the Fort MacKay band near Fort McMurray, Alta., to the Haisla Nation in British Columbia, to the Inuvialuit in the Northwest Territories. Problems arise when they are invited to the table too late, aren’t offered an adequate equity stake or project proponents fail to understand that pipeline politics involves more than the resource, he said.
“It involves the people, the land, the nation and, most importantly, the First Nationhood,” he said.
Enbridge can start by increasing the 10% equity stake in Northern Gateway it has offered to affected First Nations and come closer to the 33% stake offered in the Mackenzie gas pipeline that set a precedent and raised expectations, he said.
Nikki Skuce, a senior energy campaigner with Forest Ethics based in Smithers, B.C., said opposition to Northern Gateway is too strong to salvage the proposal. If Enbridge “had done their aboriginal engagement and public outreach properly at the beginning, they would have realized early on that it was unlikely to get acceptance and they would have proposed a different project altogether,” she said.
She said British Columbians are still making up their minds about TransMountain, which is not as well known.
“As awareness increases, so does opposition, but support as well,” she said. “We’ll see.”
For both projects, major breakthroughs are unlikely while the province gears up for a contentious provincial election, expected in the spring of 2013.
Ms. Clark’s Liberals are trailing in the polls and could well be replaced by an NDP government led by Adrian Dix, who opposes Northern Gateway.
“It is going to be one of the hot-potato issues,” in the campaign, Ms. Justason said. “If [Ms. Clark] knows in her heart she is losing, it would be better for Adrian Dix to get this wrong, and for her to have moved past it, and not be the one holding this hugely broken issue.”