Jan. 18, 2012 - Issue #848: City of champions
Political Interference
The real question
Does the Northern Gateway pipeline work in the public interest?
Is it in the public interest? With one notable exception, that's really the only question that matters in the determination of whether the proposed Northern Gateway Pipeline should be built or not. It's not about who's funding the various sides in the debate; it's not about ethical oil, and it's not even about how long the hearings will take. It's about figuring out the degree to which the pipeline is necessary, and whether the benefits of building it are sufficient to outweigh the associated costs and risks.
The notable exception, of course, is the question of whether or not the First Nations over whose land the pipeline is to be built are in agreement with it or not. If they do not approve it, then the pipeline's proposed route either needs to be moved away from those lands, or not be built at all. These are sovereign peoples on sovereign land and for the federal government unilaterally to impose this type of infrastructure on them would be a gross violation of their rights.
The question of the public interest is a bit more nuanced. Every public policy proposal contains both benefits and costs, and it would be disingenuous to pretend otherwise.
If we look at the issue purely from an economic growth perspective, which Conservative governments and industry tend to do, then the pipeline would definitely be beneficial. It would essentially allow for astronomical growth in the number and output of Alberta's tar sands projects, and all of the jobs, money and government revenue that would accompany that growth.
The flip-side on the economic front, as we saw during Alberta's last boom, is that out-of-control expansion of the economy brings with it significant downsides. Labour shortages, inflation, increased crime, increased homelessness, and infrastructure and public services that simply cannot keep up with the pace of growth were all part and parcel of our last boom, and Enbridge's projections are that we would expand even more quickly this time than we did between 2003 and 2008.
The reality is that these projects will continue to expand even without the pipeline. According to estimates by the Canadian Association of Petroleum Producers, our bitumen production is set to almost double over the next 10 years. This growth is not dependent on the existence of the Gateway pipeline. As geologist David Hughes pointed out in a November report, we already have sufficient pipeline capacity to accommodate all this growth (or will have once already-approved expansions are finished). In other words, we are already heading into a boom and bitumen production will continue to increase over the next decade with our without the new pipeline. If our economy will continue to grow, and even boom, then the money and jobs arguments do not carry as much weight as the Alberta government would like us to believe.
The pipeline would also bring a strategic benefit with it, in that it would lessen our dependence on the US market as an outlet for our natural resources by allowing us to export our products to expanding markets in Asia.
Even this benefit, however, has been overblown by proponents of the pipeline, as a significant portion of the bitumen reaching Kitimat via the pipeline would still end up in the United States by way of tankers bound for California. The expansion of the existing Kinder Morgan pipeline to the west coast will also achieve this goal by allowing for more exports to Asia of Alberta oil.
Interestingly, the folks that tout the need to lessen our dependence on the United States market for our energy have historically refused to take the two steps which would go further than any other in securing our energy sovereignty: getting out of the NAFTA energy clause, and ensuring that Alberta oil can meet Canada's needs so that eastern provinces can stop importing from volatile OPEC nations. If our goal is to end our energy subservience to the United States, than there are better ways to do this than by way of a pipeline.
What this means is that the two main touted benefits of the proposed pipeline, economic growth and strategic diversification, are being over-stated by government and industry. We don't need the extra economic growth that would be provided by the pipeline, and the independence objective could be met much more effectively in other ways.
As such, once we start looking at the costs and risks associated with the pipeline, it really does become obvious that the project should not proceed. This pipeline will leak. Enbridge's own CEO has boasted that Enbridge pipelines spill about 4.2 barrels of oil for every billion barrel-miles. What this means when applied to the Northern Gateway Pipeline is 588 barrels spilled each year—about 94 000 litres. Given that the pipeline route includes national parks, northern rainforest and numerous communities, that cost alone is enough to tip the scales.
If the National Energy Board and the Alberta and federal governments were to genuinely embrace their roles on behalf of the public interest, this is the type of sincere cost-benefit analysis that they would engage in (albeit in much more detail than allowed for in this space). Even a cursory look at the main benefits versus the main costs is enough to come to the conclusion that the project should not be allowed to proceed. Is this why our governments have begun trying to distract from the issue at hand with accusations of foreign interference and sabotage? It's time to hold them to task and remind them why they're there. V
Ricardo Acuña is the executive director of the Parkland Institute, a non-partisan, public policy research institute housed at the University of Alberta.
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