Only one day after declaring a climate emergency, Canada has approved the expansion of a massive pipeline that will increase oil production in Alberta and release more greenhouse gases into the atmosphere.
On Monday night, Canada’s parliament passed a motion brought forward by Environment and Climate Change Minister Catherine McKenna calling climate change a “real and urgent crisis, driven by human activity,” and requiring the government to make deep emissions reductions to meet its Paris commitments.
On Tuesday, in a move condemned by environmentalists, Justin Trudeau’s cabinet approved the Trans Mountain pipeline expansion (TMX).
Trudeau said he was elected on a plan to grow the middle class and fight climate change, two goals he said were not at odds. “We need to create wealth today so we can invest in the future,” he said.
“This project has the potential to create thousands of solid middle class jobs for Canadians,” he said.
Trudeau made a commitment that every dollar earned from the expansion project will be invested in Canada’s transition to green energy. A senior official said that amounts to about $500 million per year once oil starts flowing through the pipeline.
The project will proceed subject to 156 binding conditions from the regulator, the National Energy Board.
All 129 First Nations along the pipeline route will receive invitations later this week to join a government engagement process toward their “economic participation” in the project, a senior official said.
In response, First Nations leaders in B.C. reiterated their opposition to the project. Tsleil Waututh community member Will George said in a statement, "No matter who approves it, this pipeline will not be built." Pipeline opponents promised to "occupy the highway" this Saturday.
Construction will start in 2019, but an exact timeline will depend on permits, according to a senior official.
“The timing is ironic for sure,” said Cat Abreu, executive director of Climate Action Network. “We’re continuing to have a conversation about addressing climate change in Canada while skirting around the elephant in the room, which is emissions from oil and gas.”
It’s not yet possible to say whether Canada will or won’t meet our Paris commitments, but the government’s own numbers show that we’re 79 megatons of greenhouse gases away from our 2030 emissions reductions targets. It’s a “significant gap,” Abreu said. “And that gap is, according to the modeling, in large part thanks to emissions from the oil and gas sector.” She said Canada will have a hard time meeting its Paris targets “without seriously addressing emissions from the oil and gas sector.”
Cabinet’s approval of the expansion will mean new jobs in pipeline construction, plus heated protests along the route in B.C., and a flurry of fresh legal challenges against the government. It will also allow Trudeau to enter the fall election saying he found a way to export Alberta oil from the west coast, where it can potentially fetch a higher price. The project would increase the capacity of the existing Trans Mountain pipeline from 300,000 barrels of bitumen per day to 890,000.
It’s the second time Trudeau has approved the expansion.
He first gave it the green light in November 2016, but last August a Federal Court of Appeal decision quashed that approval, ruling that the government failed to properly consult First Nations along the pipeline route, and the National Energy Board, the regulator, made a “critical error” in excluding marine tanker traffic from its review. In response, the government launched new consultations with First Nations, and the NEB released a report finding that marine traffic would have “significant” negative effects on killer whales, but concluded it should go ahead anyway.
According to a Crown consultation report released Tuesday, the government has promised to accommodate First Nations by enhancing spill prevention, ensuring quieter vessels, and monitoring cumulative effects, among other measures. The report concludes the government met its duty to consult, as set out by the Federal Court of Appeal. In a letter released Tuesday, former Supreme Court justice Frank Iacobucci, who oversaw the consultations, said they had reinforced his hope for “fair and equitable reconciliation.”
Pipeline worker Tyler Moss said pipeline construction business is already “busy busy” and he’s turning down jobs. Even without the expansion, there are new liquefied natural gas projects to build in northern B.C. But he said he wants the expansion to go forward for the “overall health” of the oil and gas sector.
“TMX is still a huge project and if it does [get approved] I’d be happy to work in the mountains for one of the bigger outfits.”
As for the looming climate crisis, Moss said the shift toward green energy can’t happen overnight. “If our country has money from our resources, we’ve got better options for investing in green energy.”
“That’s like saying we need to keep selling cigarettes to have money to fight cancer,” said Eugene Kung, lawyer with West Coast Environmental Law, and lead on the First Nations case against the pipeline.
Kung said he and other lawyers plan to review cabinet’s rationale, looking for opportunities to challenge it in court. New legal challenges may not stop the pipeline completely, but they could delay it enough that it becomes financially difficult to justify building, he said.
“It could be a stranded asset long before it’s paid off,” Kung said, pointing to a recent Bank of Canada review that identified climate change as a vulnerability to our financial system, posing both physical risks from extreme weather events and transition risks from adapting to a lower-carbon global economy.
The question of whether there’s actually a business case for the expansion has hung over the project since Canada officially bought it last August for $4.5 billion.On June 11, a former Liberal environment minister sent letters to six members of Trudeau’s cabinet saying the expansion has no business case. “There is no credible evidence to suggest that Asia is likely to be a reliable or a significant market for Alberta bitumen,” David Anderson wrote, according to the Canadian Press.
“I don’t think of it as a business case,” said Trevor Tombe, associate economics professor at the University of Calgary. “Pipelines, once they’re constructed, are really boring assets.” They’re like a utility, with a regulated rate of return from one year to the next, he said.
“The question is only whether they will be utilized at sufficient capacity to recoup the construction cost,” he said. “In this case, the projections for Alberta oil are such that there’s little doubt that the oil will be shipped if the pipeline is built, so in that sense, there will be a return on the dollars invested in the pipe.”
On the other hand, the case for public ownership is weak, he said. The government only bought the pipeline under enormous pressure from the previous owner, Kinder Morgan, which had threatened to pull out in the face of court challenges and regulatory hurdles.
Trudeau has been clear that the government plans to sell the pipeline. Tombe said it’ll be easy to sell it once it’s built, but it’s not clear if it will fetch a high enough price to recoup various costs including construction. “Time will tell,” he said.
Meanwhile, along the pipeline route in B.C., some First Nations groups are preparing to fight construction on the ground.
Kanahus Manuel of the Secwepemc Women’s Warrior Society sent a video showing four tiny houses parked along a highway near the site of a proposed “man camp,” where workers building the pipeline will live. She contends the pipeline infringes on her First Nation’s rights, and believes man camps pose a threat to Indigenous women. Her group blocked the road to the proposed man camp in anticipation of the pipeline’s approval.
“Yes, we’re here blockading, and TMX will never get built,” she said.
She said she was about to give her sister a stick-and-poke warrior tattoo “to get ready for battle.”