the efforts of aboriginal and environmental groups, photographers and
filmmakers, and diverse citizens opposing key pipelines in Canada and
the US are having some effect. Judging by the pep talks flying around
industry gatherings and the op-ed pages of conservative media outlets,
the industry is seriously worried about the Tar Sands' future. Even a
recent article in the industry publication Alberta Oil Magazine
about several major proposed pipeline routes from the Tar Sands (more
on these in a moment) refers to them as "radically different but equally
What's at stake is three (potentially four) major new pipelines or expansions designed to amp up the export capacity for the Tar Sands to both the US and Asia. Together they could justify a doubling of total Tar Sands output.
- Enbridge's Northern Gateway Pipeline from Bruderheim, Alberta to Kitimat on BC's North Coast (525,000 barrels/day)
- TransCanada Corp.'s Keystone XL Pipeline
from Hadistry, Alberta to refineries in Illinois, Oklahoma and the Gulf
Coast (would add 510,000 barrels/day to existing Keystone Pipeline)
- Kinder-Morgan's Trans-Mountain Pipeline from Alberta to the Westridge Terminal in the Burrard Inlet in Burnaby, BC (would raise existing line from 300,000 to 700,000 barrels/day)
- Recent documents show Kinder-Morgan is considering a spur splitting off its Trans-Mountain Pipeline east of Prince George, heading to Kitimat - which could become the default if the Enbridge line doesn't go through. (450,000 barrels/day)
The latter is becoming a more realistic prospect as Enbridge faces increasingly fierce opposition to its Northern Gateway Project. And the company isn't doing itself any favours - with three major pipeline leaks in the US last year and a recent one in the Northwest Territories (on top of the dozens of smaller leaks it averages every year). But it's the First Nations opposition to the project that presents its greatest challenge - one that may well prove insurmountable. Over 60 nations have lined up together against the Northern Gateway - many of them situated along the pipeline or tanker corridor, thus holding considerable constitutional and legal power over the project through their ancestral title and rights.
TransCanada is also facing an uphill battle for its Keystone XL expansion to refineries in the US. The 590,000 barrel/day existing Keystone line is currently shut down under presidential order, following a pair of recent leaks in North Dakota and Kansas. The associate pipeline safety administrator with the U.S. Department of Transportation, Jeffrey Wiese, recently wrote to TransCanada executives: "After evaluating the foregoing preliminary findings of fact, I find that the continued operation of the pipeline without corrective action would be hazardous to life, property and the environment."
These troubles couldn't come at a worse time for TransCanada, as they are in the midst of seeking approval from regulators to build the expansion Keystone XL line. The Environmental Protection Agency has been highly critical of the proposal to the US State Department, which is charged with making the final decision on the project. According to a recent article in the Globe and Mail, "For the oil patch, the possibility that the XL project will falter is so outside expectations that many haven’t even considered it. Indeed, companies have already signed up for the majority of its capacity." And yet, to the industry's incredulous horror, failure is now a distinct possibility for the Keystone XL.
Campaigners, industry and media have started discussing the battle over these pipelines in terms of "choke points". The idea is that Tar Sands expansion could be curbed indirectly by choking off its avenues for growth - and it has real strategic merit, enough to cause the industry to lose some sleep. Without these new corridors to move diluted bitumen, Tar Sands expansion is unnecessary, as the Financial Post remarked recently in a piece about the “Oilsands: What’s Really Going On” conference in Edmonton.
Leach, environmental economist and assistant professor at the
University of Alberta School of Business, said Alberta faces a future
bottleneck as oilsands production is forecast to ramp up while North
American consumption wanes. "There’s not enough domestic demand to soak
up what the production potential is and not enough pipeline capacity to
move it, so you’ll be running up against a wall pretty quickly in the
next eight or 10 years," Leach said.
This is because the real growth in demand for Alberta bitumen lies not in North America, where economic conditions have seen oil demand plateau, but in new markets in Asia - which would be difficult to access without new supply lines carved through BC.
energy minister is far from the only one whining about the rough ride
the Tar Sands are getting of late. Premier Ed Stelmach shot back angrily
at a provocative billboard campaign in the US last year, which asked
Americans to cancel their Banff vacations in protest of the Tar Sands.
Stelmach responded with a series of his own taxpayer-funded ads south of the border, bearing the rebuttal: "A good neighbour lends you a cup of sugar. A great neighbour supplies you with 1.4 million barrels of oil per day." Consider yourself told, America.
Industry nabobs have also been busy rallying the troops and doing their version of image control. Most notable has been the multi-million dollar PR campaign by the industry's official lobby, CAPP. You know, the one with the happy employees extolling the improvements of an industry recently found to produce (surprise!) among the dirtiest oil in the world.
Then there's Christy Clark's advisor and former Encana CEO Gwyn Morgan. In an op-ed published in September of last year in a number of Alberta papers, Morgan wrote:
Environmental zealots are pulling out all the stops to promote a U.S. ban on fuel made from oil sands crude...One thing I learned from my many years as a CEO is that corporations must ensure what they say will stand up as the truth in the face of intense scrutiny, while the innuendo and deliberate distortions of their critics are seldom questioned. But I also learned that you don’t win games back on your heels playing defence. Industry leaders need do more than sitting behind the blue line trying to block shots. They need to take their oil sands story and skate hard up the ice.
wasn't directed at the general public. This is the godfather of the
Canadian fossil fuels industry sending out the bat signal from his
humble $7.5 million abode in Saanich, BC - admonishing his lieutenants
and successors for not doing a better job protecting the industry's
Finally, there's Enbridge CEO Pat Daniel, who addressed a gathering at the Empire Club in Toronto in the lead-up to our recent federal election - urging his fellow captains of industry to get behind the Harper campaign and the oil patch, lest they face a set-back from a Tory loss or another minority government.
According to the Canadian Press, in his speech, "Daniel criticized 'hard-line' activists for being hypocritical in 'saying no' to the project outright while accepting the benefits that oil brings — ranging from heating their homes to bringing fresh produce to supermarkets."
Daniel would write an op-ed several weeks later, dismissing voters' concerns with the Tar Sands and his company's proposed bitumen pipeline to Kitimat: "Opponents of energy development go so far as to suggest that Canada should be ashamed of our country's abundant energy resources - the oilsands, in particular. I think this is nonsense. Canada is a leader in the world energy industry in safety, reliability, environmental performance, respect for human rights, regulatory oversight and technological innovation."
In this time of unprecedented challenge, all the Tar Sands players appear to be reading from the same PR script - particularly several key talking points:
- Play up First Nations interest in pipelines and tankers (even, and especially, when it's not actually there)
- Exaggerate job benefits, while downplaying the risks and economic impacts of a spill (Enbridge is particularly good at this one, considering all the high-profile spills it keeps racking up and the paltry jobs it would actually yield in BC)
- Dismiss opposition as one of two (seemingly mutually exclusive) things: a) incredibly well-funded environmental foundations who've turned opposing the Tar Sands into a lucrative mercenary industry unto itself; b) nothing more than a handful of crazy, socialist, tree-hugging "extremists" (of course, leaving out the part about 80% of British Columbians being in favour of a coastal oil tanker ban).
As Alberta's energy minister told the “Oilsands: What’s Really Going On” conference, “If we don’t get moving on these projects, our greatest risk in Alberta is that by 2020 we will be landlocked in bitumen."