We’ve heard the “three dimensional chess” metaphor get tossed around a bunch on evening news, most recently as a punchline in the latest Stormy Daniels vs. Trump saga. But if I had to earnestly apply this (increasingly meaningless) phrase, I’d likely settle on the pipeline battle currently playing out on Burnaby Mountain. Today elected MP for Burnaby South Kennedy Stewart will join dozens of self-described land defenders attempting to delay and discredit the $7.4 billion Trans Mountain pipeline expansion in hopes the project will never be completed.
Since Saturday we’ve seen an average of 15 Kinder Morgan opponents arrested every day around the Texas oil giant’s Burnaby worksite, and the choreography of it all has been striking. For each protester who has zip-tied themself to a gate or climbed on top of an excavator, cops have trotted out an exceptionally defensive strategy—reading court documents aloud, laying out legal options, in some cases negotiating for hours, and even ensuring post-arrest care for First Nations’ drums and other ceremonial items. When a grandpa built himself a hammock high up in some trees inside the construction area on Monday, Burnaby police waited until the cover of night to extract him—an apparent play to avoid photos of the struggle.
There’s a reason for all these good-mannered optics on the part of cops, and there’s a reason protesters have been doing their part to escalate the situation this week. For years opponents have pointed to ongoing First Nations land claims and the unknown spill risks that come with a sevenfold increase in Metro Vancouver tanker traffic, but the project was nonetheless approved by Justin Trudeau in 2016. Construction has been happening for months already, but this weekend will likely mark the biggest showdown yet, with 100 or more arrests expected Saturday. With arrests already totaling in the 90s and climbing, it’s worth exploring how much damage these actions could actually inflict, and what we can learn from the major players’ tactics.
The land and water defenders have presented a simple and urgent strategy—delay construction and scare off would-be investors leading up to March 26, when migratory bird protection laws may stop the company from clearing trees and other construction work until August. (It’s also quite possible construction will continue anyway.) Their latest twist on this theme was to go out and plant new cedar trees around the property Thursday, “to leave the place better than when we found it.”
Kinder Morgan’s strategic position appears to be less comfortable, as it’s had to present conflicting versions of events to its shareholders and the courts. In court documents earlier this month, the company claimed $89 million in lost revenue for every month the project is delayed, as well as hundreds of thousands more for weekly security, staff, and equipment costs. Those damage claims led to the creation of a five-metre “exclusion zone” around the construction site, which police began enforcing soon after.
These figures came a little more than a week after the company assured investors in Toronto that it has secured 708,000 barrels per day worth of “contracted capacity” once the project is complete. While the presentation acknowledged several hurdles that could delay the project up to 12 months, the price of those delays weren’t spelled out for financial backers. A slideshow explains: “Construction delays entail increased costs due to a variety of factors; however, as the extent of a delay is currently unknown, we are not updating cost estimate at this time.”
“They’re between rock and hard place,” Hadi Dowlatabadi, a UBC professor who studies global markets and resources, told VICE. “In the court filings they’re really saying ‘this is hurting us.’ And to shareholders they’re saying, ‘Oh no, we’re fine.’” According to Dowlatabadi, the viability of Trans Mountain may be more uncertain than the company has let on. He says its “lower medium” credit rating suggests it owes steeper interest to Canada’s major banks and could be weakened by adverse economic conditions, like if the price of oil falls.
In the past, Dowlatabadi says Kinder Morgan’s share price has gone up and down more or less in sync with the price of oil, but that hasn’t been the case of late. “[Kinder Morgan’s] share price was quite high, then back in 2015 the price of oil fell, so the company’s share price fell,” he told VICE. “Since about six months ago oil prices have been rising steadily, but the company’s share price hasn’t.” (For comparison: since August the price of oil went from about US$50 a barrel to $63, while KM’s share price went from about $18 to $15). This could mean a lot of things, but Dowlatabadi suggests investor confidence in the company’s largest and most ambitious project has been shaken.
“With all the risk they face in this huge pipeline project, it’s a major part of future earnings,” he said.
So are the daily arrest counts on Burnaby Mountain actually contributing to that uncertainty? By Dowlatabadi’s calculation, it is. But the company has also seen this face-off coming for years, and through careful legal maneuvering has managed to keep much of the conflict out of the national media. Until this week, a good chunk of the country may not have known how much deep planning and coordination all sides have sunk into this battle.
But as with any game of three-dimensional chess, players can selectively arrange the facts to boast an apparent upper hand.
“The only thing that continues to be in Kinder Morgan’s favour in all of this—what keeps a light burning—is the price of oil is going up, and it’s likely going to continue to go up,” Dowlatabadi told VICE. Indeed, Goldman Sachs recently predicted a barrel could go for as much as $80 in the next six months, which would probably ease the anxieties of an investor or two.
I guess that means we’ll have to wait and see who’s really playing 3D chess, and who’s playing tic tac toe.
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