All-Canadian conflict over new oil pipeline

A pop psychologist would say I'm conflicted. I'm sure a lot of other Canadians feel the same about Thursday's announcement of an all-Canadian oil pipeline.

The TransCanada Corporation says it is going to invest $12 billion to stretch a thin line of crude from Alberta to New Brunswick, with stopovers in Quebec, pumping more than a million barrels a day from the booming west to Canada's old industrial heartland.

?It would be the most efficient and the safest and economic way to transport crude oil to eastern Canadian refineries, creating jobs, long-term economic benefits across the country and displace foreign imported oil, making Canada more energy independent,? says Russ Girling, TransCanada's CEO.

By all traditional measures it is a perfect economic project for these times. And in principle, it is something I have begged for repeatedly.

Infrastructure spending

At a time when floods of cash are being wasted ? used to bid up the price of houses and stocks ?this project takes $12 billion and spends it to make something real that creates new value.

At a time when so much money is being invested in factories overseas, this is cash being invested in Canadian salaries, that will flow into Canadian shops and services, and eventually, into Canadian tax revenues.

The rule is, investing in infrastructure is always an investment in a country's future. A deep water port, the pipeline itself, new refineries to deal with a new kind of crude, are all a replacement for once-productive factories that have now gone silent.

The project is an investment in technology as well, as TransCanada develops the latest expertise in moving heavy oil and bitumen.

A worker welds an oil pipeline in Siberia. TransCanada's proposal would cost almost $12 billion. (Dmitry Beliakov/Bloomberg News)

The fact that the investment is in Canada, sharing Alberta's resource wealth in order to stimulate eastern economies, should make warm little maple leaf flags wave in our hearts.

Not only that, but there is another advantage for ordinary consumers. Girling says the pipeline will bring gas prices down, as domestic oil replaces expensive imported crude in Eastern Canada. How different from the days when Alberta would "let the eastern bastards freeze in the dark."

In another era, the economic nationalists at the Council of Canadians would have been cheering. But not this time. That's because the Council of Canadians now backs a new kind of economic nationalism, that of protecting Canada and the world from environmental collapse. The Council spells out its argument against such projects in its report, No Pipeline No Tankers.

The position taken by the Council of Canadians and those with similar views is what makes so many of us conflicted. If you believe, as the vast majority of scientists do, that pouring carbon into our atmosphere is creating a slow-moving global catastrophe, then this project, by facilitating increased carbon use, is an all-Canadian pathway to Armageddon.

TranCanada lays out its business case in favour of the pipeline in a glossy website. Reading it, including a wide ranging discussion of environmental issues, only deepens the pain of making an honest choice.

No easy answer

By comparison, it was so easy for some Canadians to take a principled stance against Keystone XL, the proposed pipeline that would take oilsands bitumen from Alberta south to the refineries of Texas. But will those principles stand when our own interests are at stake?

Despite a lot of self interest, other Canadian pipeline proposals have been repeatedly bogged down by opposition. The Mackenzie Valley pipeline missed its window of opportunity, blocked by studies and politics until a glut of gas made it not worth the effort. Currently, the Kinder Morgan and Northern Gateway lines both face intransigent opposition.

Despite this week's fanfare by TransCanada, there are many barriers in the way of an all-Canadian oil pipeline. Provinces will have a say. The Lac Megantic disaster has reminded us that crude oil is not just a benign cargo like wheat or lumber.

Uncertain future

As we saw with the Mackenzie pipeline, economics can change over the life of a megaproject. So can politics. The current federal government is thrilled with the project and will do everything in its power to smooth its way forward. But there is an election coming well before the completion date.

In the megaproject business completion dates are like the first of three wishes. That gives Canadians a chance to study the proposal and see if the rosy projections are really likely to come true.

Maybe all the crude is heading for processing overseas. Maybe the estimates of jobs and economic benefit are an overestimate. Maybe the benefit of a few billlion dollars in oil investment now is not worth the economic cost of wrecking the world for your children and grandchildren.

It is an opportunity and a painful duty. Canadians must talk to each other, face up to their conflicts and make a wise decision.

Source: http://www.cbc.ca/news/canada/story/2013/08/01/busines-pittis-pipeline.html?cmp=rss

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