Kinder Morgan is the hot button issue in the Lower Mainland these days and on August 30th, the company lost a ruling the Federal Court of Appeal which has now postponed any further construction indefinitely. In its decision, the FCA found that the NEB had erred in not considering marine traffic effects and also that the government failed to properly consult the indigenous population with regards to the project and its impact.
The reactions have been interesting, with environmentalists and indigenous leaders claiming total victory while Alberta and the federal government and business association insist either the pipeline has to be built, will be built or that we are sending the message that Canada is closed for business.
This issue causes blood to boil on both sides and the polarization is ultimately a loss for both sides, but I think particularly for the side most recently claiming victory. Alberta’s reaction informs this. After the last Federal Election the Trudeau government astutely reached out Rachel Notley’s NDP government for buy in on a national carbon tax plan. In Notley, Trudeau seemed to have found the improbable, if not the impossible: an Alberta Premier willing to work on carbon pricing. How quaint that now seems. After the August 30th decision Notley withdrew from the proposed plan and called on the federal government, in no uncertain terms, to get the project back on track and start building.
I can’t help but view that reaction as a long term loss for the environmentalists and indigenous groups currently claiming so large a victory. This is a long, long term project with a projected cash flow of $1 billion per year. On a 50 year asset, that’s pretty good money for anyone interested. TD analysts predicted recently the even if the costs rose to $9 billion, the project would still be worth $126 million. The construction is now delayed by the FCA ruling, but governments can afford to be patient and the world isn’t getting off oil any time soon. Demand forecasts remain strong.
The larger issue of polarization and the zero development message coming from environmental camps is that it does not seem to be holding water with the public as support for Kinder Morgan has grown since the fight began. Politicians too will have a tough time explaining to their constituents how, even after the latest victory, opponents still have only won 1 of the 18 court challenges they brought forward yet claim total victory and righteous moral superiority over those in favour of the project. Proponents of the project too have done themselves harm by all too often drifting towards the camps claiming anyone with environmental concerns wants Canada to be a business backwater.
Where is the middle ground here? The federal government tried to find it by cancelling Energy East and Northern Gateway but had only ended up pummeled by environmentalist and indigenous leaders in the media for breaking every promise under the sun and acting in bad faith. Concerns of Alberta workers are brushed aside and the economic concerns are dismissed seemingly without thought “because of our children’s future”. Future environmental concerns are valid, but if our children don’t have an economy, I doubt environmentalism is going to be top of mind; more likely job searching and concern for their prosperity will trump green initiatives. I find this most sad of all. Like so many British Columbians (and one who grew up on the coast) I am concerned about the environment and the dangers more tankers will have on the resident killer whales which swim past the Gulf Islands, but the zero compromise, absolutist environmental message currently in use has lost me as I think data are showing it has lost British Columbians in general. I look to examples like Norway who are able to subsidize EVs and a green shift with help from oil revenues. We could do this too, but in the current state of polarized affairs that seems highly unlikely.