Hugh Mackenzie
Huntsville Doppler
It’s a Matter of Balance
As much as I have criticized from time to time the policies of Prime Minister Justin Trudeau and his government, I do not envy the position he is in, as he must come head to head with a decision that pits serious environmental issues against economic realities for a major region of our country, if not for all of Canada. In many ways it is a lose-lose situation and it will be a significant test of his leadership, his backbone, and a lasting mark on his legacy.
The Trudeau cabinet has until the end of this month to decide whether or not to accept the recommendation of a joint federal-Alberta expert panel to approve an application by oil giant Teck Resources for a mega-project in northeastern Alberta. The plant would produce about 250,000 barrels of oil every day. As currently planned, it would not eliminate significant carbon emissions until 2050. It would provide 7,000 jobs and bring extensive benefits, royalties and taxes to a struggling Alberta economy. The joint task force has concluded that in spite of the negative environmental risks, it is in the public interest for the project to proceed.
The Trudeau Government has made climate change its mantra. They have politicized it to the point that it transcends every other issue. Whether or not they have made actual definable progress in addressing climate change is debatable but there can be no doubt that they have cloaked themselves in the phenomena. How then do they address an issue where the environment is definitely a problem but where other factors, including the reality that Canada is a resource-based economy, are also a huge and life-changing factor?
Now before someone starts yelling and screaming that I am a climate change denier, let me say as emphatically as I can that I am not. Neither, however, am I a catastrophist. Climate change is real. It has been real since the beginning of time and there is no question that it is now accelerating at an alarming rate. Nor is there any question that this acceleration is due largely because of humankind.
The immediate question facing us, however, is how to effectively address climate change. I confess to serious doubts, for example, as to whether a carbon tax really works or if it is just an excuse for politicians to convince the masses that they are really fighting climate change while they actually sit on their hands and avoid the anger of their corporate friends. Why haven’t we seen hard data related to how much carbon emissions have actually been reduced since the introduction of the carbon tax? And where are the stiff fines and prison sentences to mega corporations that do not use the latest technology to minimize all pollutants including carbon in our atmosphere? Premier Ford reportedly wants to loosen emission rules for industry. I say tighten them. That will force corporate giants who want to stay in business to spend some of their resources to find effective environmental remedies and solutions for the products they manufacture or produce. If push comes to shove, you can bet your booties they will do it.
Having said all of the above, the hard reality is that human beings occupy this earth and as long as we do we will leave a footprint. We can control pollution, but we cannot erase it. I am far more impressed with those scientists and academics who seek effective new technologies to replace harmful pollutants and to control those that cannot be duplicated, and to develop new ways of doing things that vastly reduces pollution, than I am of those of the Chicken Little variety that simply shout that the sky is falling.
As I have said earlier in this commentary, Canada has thrived as a resource-based economy. We cannot change that overnight, if we can change it at all. And there is an honest question to be asked about the degree to which we should change it, especially if we can find new ways to bring these resources to market in a manner that will minimize a negative effect on the environment. What we can do and what we have proven time after time over the centuries is that we have the capacity to develop innovative methods to deal with serious challenges to our economy, our environment, and our standard of living. That is what we do best and that is what we need to do now.
It is in this context that I believe the federal government should accept the recommendation of the federal-provincial task force—that they appointed—to proceed with the Teck oilsands project in northeastern Alberta. There should be conditions, of course. There need to be strict requirements for Teck’s investment in the latest technology for environmental safety as well as a requirement for ongoing innovative research. The Province, as well, should come to the table with hard commitments to reduce pollutants of all types in Alberta.
As someone who was born in Edmonton and whose family has deep Western roots, I know that Albertans are a proud people, proud of their heritage, proud of the contribution they have made to other parts of Canada during the hard times, and determined to seek their own destiny and well-being, utilizing the resources that they have. For the most part, they are also proud Canadians. They do not seek handouts and woe betide any government that thinks they can be bought off with “aid packages”. Albertans are as conscious of the need for a healthy environment as anyone else and they believe they can achieve that and still have a strong economy with resource-based industries creating jobs and prosperity for Western Canadians.
The federal government is well aware that fossil fuels are not going away in the near future. That is one of the reasons they own a pipeline in Western Canada, which given recent court decisions looks closer to a reality. Allowing more oil production to reach their markets, under the proper environmental conditions, is a logical next step.
Even so, it is a tough decision that the Trudeau Government has to make. It is not do or die for the Liberals. If they approve the Teck development, the Tories will support them, if they don’t approve it, the Dippers and possibly the Bloc will come to the rescue.
It could, however, wreck the country. Albertans will view a rejection of what they believe is a major boost to their economy as further proof that the federal government does not give a hoot about much of Western Canada. Ironically, Québec could get their shorts in a knot as well because they are currently lobbying for a liquefied natural gas pipeline (also a fossil fuel) between Alberta and Québec. Can Prime Minister Trudeau say no to Alberta and yes to Québec? And if he does, what a hell of a dust-up that would be! On the other hand, if Mr. Trudeau says yes to the Teck development, he will risk the ire of core supporters who will believe he is abandoning his commitment related to climate change. Will he have the courage to stand up to that?
The prosperity of Canada from both an economic and a cultural perspective depends on a healthy, finely-tuned, and highly strategic balance between two major underpinnings: financial stability and environmental integrity. These can often be at odds with each other. There is no one-size-fits-all solution.
It may take a Solomon, but the true test of leadership is not to cop out on one side or the other, but rather to find that balance.
Hugh Mackenzie
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You missed or ignored the qualification “…to tidewater” on Harper years’ pipelines. I don’t recall Harper cutting any ribbons on the Canadian Pacific or Atlantic coasts. Do you?
Pipelines to the US are irrelevant to the major argument of the industry: until you reduce dependance on the US market, oil sands output will continue to sell (in the US) at its continuing huge discount to West Tex and Saudi oil.
I qualified it as “theoretically” because it remains to be seen whether those naive traders in Japan and China will actually pay a big premium to the US for oil sands because the Russians and Saudis will likely adjust Asia pricing to reduce Canadian oil shipments. Let’s hope I’m wrong on that!
Taking a moderate approach to a giant problem is like almost jumping over the creek.
The time to tackle climate change was yesterday. Chicken Little will surely has his way with the sky as long as governments world-wide continue by design to simply scratch the surface. Yes, the climate is ever changing— there is, however, ongoing movement— the rate of escalation needs to be the focus. It’s not a political party issue; it’s not a one-country dilemma— a real and now global mess. Canada needs an all-party approach. The state of the economy doesn’t mean diddly squat if the planet cracks and crumbled— at no time in the civilization of man has anyone ate or drank money.
Your comment on “derelict” oil wells is incorrect. You probably mean orphan wells…oil and gas sites that no longer have a responsible owner. Currently, that accounts for 1.4% of the wells in Alberta.
The OWA, Orphan Well Association, is an industry run and funded, along with grants from both provincial and federal governments, group dedicated to the proper closure and reclamation of these sites. I don’t believe such responsible activity exists in Russia, Nigeria or several other of the countries we currently import oil from. If you are an environmentalist as you say, you would support more Canadian oil and gas.
https://www.alberta.ca/upstream-oil-and-gas-liability-and-orphan-well-inventory.aspx
You lost all credibility after your first point. Four major pipelines were approved/built under Stephen Harper. Kinder Morgan’s Anchor Loop, transCanadas Keystone and Enbridge’s Line 9 reversal as well as Alberta Clipper.
Kim, your passion is admirable, but your figures look off. I am not sure where you got them from. Here’s the crude oil numbers from Natural Resources Canada for 2018:
Canadian production: 4.6 MMb/d, 64% of that is oil sands oil.
Imports: 0.6 MMb/d (from US, Middle East, Norway) mostly for Eastern Canada.
Exports: 3.7 MMb/d (96% to the US)
Crude oil shipped to domestic refineries: 1.7 MMb/d.
Oil sands represent 96% of all Canadian oil reserves.
So domestic consumption is 46% of exports.
Here is the link to the source. https://www.nrcan.gc.ca/science-data/data-analysis/energy-data-analysis/energy-facts/crude-oil-facts/20064
Hope this helps with better understanding of the Canadian oil picture today.
Ray, as a environmentalist and a humanist Ì prefer to give my grandchildren a running chance at having a weather system that will support human life allow us to grow food etc into the future.
We need to get off our oil fix , if we don’t want catastrophic weather events, the scientists are very clear on this. Also
let’s not be fooled about petrochemical selfsufficiency, Canada exports more than 90% of its oil and 100% of tar sands bitumen, and that’s not likely to change anytime soon. Another example is the Coastal Gas Link pipeline (which is costing Canada a huge Reconciliation black eye) 100% of the Natural gas it will transport ,will be shipped off to markets like China (who happen to be large investor).
Then before we get all excited about the Alberta Teck project and the economic benefits for Alberta, don’t we need to know where the billions of dollars to effectively close the thousands of abandoned and derelict oil wells in Alberta are coming from ?History has shown that the oil industry uses strategies such as declaring bankruptcy , leaving the Canadian public on the hook for cleanup. Many of these old wells are pumping tons of methane into the air even though they are not producing oil.
I believe we should stop slow down, evaluate carefully, the real costs , from social , economic, environmental ( cost to the air ,water ,land) and cost of cleanup when the resource is gone. People outside our country, China, Australia, USA, etc. don’t care what kind of conditions Canadians have to live in after they have made their money ! Let’s think 7 generations ahead before approving another megga project like Teck!!!
I struggled through the comment chain, following Hugh’s “objective” assessment of the Prime Minister’s political dilemma on the Teck tar sands project. To understate it greatly, there was evidence of Tory leaning in the opinions. (Credit to High for at least acknowledging that the PM is damned if he does, damned if he doesn’t). That said a few unacknowledged facts:
1. Under 10 years of Harper’s administration, (in which Jason Kenny was a senior minister) how many pipelines got approved / built to tidewater to (theoretically) increase tar sands oil pricing for the benefit of Alberta and Canada? Answer: 0. Yet Kenny is making Teck an issue of separation!
2. In the Teck business case, what oil price is required to break even? Answer: ~USD$70/bbl?
3. What is the likelihood of hitting that price in the next 10 years, given US surplus in oil production and huge international efforts at reduction in fossil fuel consumption? Answer: likely <20%. (The price would be under $50 today without OEPC / Russia production cuts.)
4. There is not a seious environmental scientist in the world who does not believe climate change has reached crisis levels. Hardly a political ploy by the Prime Minister. In fact Alberta politicians are viewed internationally as flat earth followers on this issue. They are in good conpany with Trump! And it is generally agreed that the Tories lost the election in Ontario and Quebec (and therefore nationally) in significant part due to a feeble environmental policy. Canada's greenhouse gas emissions are about 50% higher per capita than other developed countries, including Norway a petro economy. Yes, largely because we are a resource driven economy, including and especially oil.
5. Credit to Teck: they have proposed state of the art emission surpression technology, but likely not carbon neutral until 2050.
5. Having said all that, ironically I do agree with Hugh's conclusion that economic and environmental priorities must be balanced and I certainly support the Trans Mountain Pipeline. (Which the Liberals bought when it was on life support.) But where I part company with him is to characterize it as a lack of leadership if he fails to support Teck. The issues are profound on both sides, and environmentalists are not radical wackos. This is the 21st century.
Great article. My reasons supporting approval:
1. A no confirms to (nervous) investors/workers the fed’s are hostile to the sector, all but killing future investment & pushing out jobs – a big step closer to its demise…meaning taking away 500,000+ national jobs and 10% of our economy linked to it. 2. A no feeds western alienation & potential separation (30% of Alberta’s economy & 400,000+ provincial jobs supported). It won’t stop at Alberta’s borders either… the Liberals have no representation between Ontario & Vancouver area. 3. Canada needs oil, so how does paying much higher (global) prices to dictator led countries (that lack environmental stds) accomplish anything except hurting Canadians? 4. Canada has 10% of proven world oil reserves, & when the US quickly burns through their (3%) world share (mostly shale oil), we are the only democratic country left with significant & reliable reserves the world needs. 5. A conscious choice to move from energy-security to energy-insecurity would be unprecedented … most countries would love to have our energy resources. 6. A no destroys Canadian world-class clean carbon-energy technology/expertise just when an oil dominated world needs it most. 7. We just bought an expensive pipeline (with debt), but the gov blocks supplying it? (textbook government waste). 8. Dangerously high total Canadian debt loads means we going to need all the revenue we can get to fund a growing list of big priorities .. health care, declining infrastructure, and yes, cleaner future energy too.
Disastrous doesn’t come even close to describing what would be a clearly politically motivated no decision.
The challenge would be exactly the same for any government in power in Canada. Look at what is happening right now with foreign and domestic environmental activists egging on First Nations protesters who are stopping commerce in every province to try to stop the Gas-Link project in BC. And they are still protesting against the Kinder-Morgan pipeline after it has been approved several times by several courts over several years, and even though many First Nations leaders want the jobs and many benefits these projects bring to them. United we stand and divided we fall. Other parties must ask themselves honestly what they would do differently. Liberals and Conservatives need to stop the petty politics and work together for the benefit of the country.
Paul Whillans,
I think there is a vast difference between the cod fishery in 1993 Newfoundland and the oil sands in western Canada in 2020.
In 1993 the cod fishery had become non viable.. The fish stock was terribly over harvested. Letting the situation continue would have been irresponsible from several perspectives.
Crosbie had to act and he faced down the wrath of the province and acted. This took a lot of fortitude at the time and contributed to Crosbie’s reputation as a polititian of courage under fire. It paid off however and the fishery has made a decent recovery and the restructuring of society there has been wrenching and has made Newfoungland a more viable and modern province.
The situation in the West now is quite different. Almost the opposite. The oil resource is almost limitless and at present seriously underutilized. The regional population is almost universally in favour of exploiting the wealth waiting under foot for use.
The entire country, now operating on runaway debt financing, desperately needs the revenues to be had through the export of oil to the world at large rather than the captive market in the USA where they pay a fraction of what we should receive.
As well the oil if shipped east would displace oil shipped from dictatorships with poor human rights and zero regard for the environment. We should view this Teck project and similar orhers and the necessary pipilines as entirely salutory and avoid sand bagging the projects down with needless impediments.
Wake up Canada !!!
Paul I guess your one of the people that would sooner buy oil from someone else rather than buy Canadian or do you walk wherever you go and heat your home with solar and wind or yeh do you wear clothes and if you do most of them are made from oil. So you can’t compare oil to cod no matter how you try. Denying Teck would be about the worst thing canada could do.
Great article Hugh, Canada needs real leadership now more than ever. What will the Federal Liberals choose more pipelines, or will they continue to fan the coals of separation? Replacing Stephen Harper with Justin Trudeau was not in Canada’s best
Interests, I’m afraid. And the numbers speak for themselves.
What was the composition of the joint federal/provincial task force? It would be difficult to believe that Alberta had the plurality. So why didn’t the Feds take THIS opportunity to impose appropriate environmental strictures on Teck? Since when does the private sector impose a decision of significant carbon emissions (until 2050) on Canada? Is that the projected lifetime of the tar sands? Or does Teck think that it can force a vote of non confidence?
Too late to the dance; the PM has painted himself into an untenable corner.
I agree, this project should be approved. It does not mean however, that it will get built. Under current prices it’s really not economical. Compound this with the significant lack of egress for the product in Canada…which can directly be attributed to the Liberals but is a separate discussion…and I doubt the companies involved are eager to get shovels in the ground.
At some point though, the world will need this oil as we will eventually run out and Canada is one of only 6 countries who have enough to last until 2050.
God help confederation if it’s not approved.
Jim I sure have to agree with you never mind the environmentalists they will not be happy until they go back to before the horse and buggy age anyway and then they would complain about something. Alberta needs to get there oil out of the ground and to market so lets get on with it. All the carbon that we create is just a drop in the bucket compared to the rest of world so I don’t understand why we are so set on reducing it. In my opinion there are a lot of worse pollutants in the air and ground than carbon. We need more pipe lines going in both directions from Alberta one to the west coast and one to the east coast then we could stop buying oil from the middle east to me that is a no brainer. It’s like PEI buying potatoes from China.
After the summer of 1993, 35,000 jobs were lost after the collapse of the cod fishery. Virtually overnight the then Conservative government of Canada threw 18% of Newfoundland and Labrador adult population out of work; closed whole communities and destroyed the province’s economy. (And oh my yes, there were science deniers).
This wasn’t politics. This was simply “the right thing to do”.
Teck isn’t about politics. Denying it is simply the right thing to do
If any of us were given the chance to engage in a entetprise that would bring prosperity to us and our family as well as assist our broader community who among us would turn the opportunity down?
The new Teck project is such an oportunity.
I hope Canada is smart enough to go for it. Every other country in the world would do so and with enthusiasm. The approval should not be loaded with symbolic burdens and requirements designed to please every imaginable group who’s real goal is to see the enterprise fail. No mater how many the regulations piled on might be the objectors can never be satisfied so I say ignore most of it and proceed.
Russia. India. China. The USA. None would have erected the barriers to Teck that Canada already has not to mention binders full of additional obstruction and conditions being prepared to heap upon the project.
Let’s get on with it Canada!