This is the fifth and final entry in a series, detailing the reasons for my opposition to the Enbridge Northern Gateway. In this post, I expose an outrageous right-wing conspiracy theory about U.S. energy security, examine the economic benefits othe Northern Gateway would offer, and conclude by questioning whether any of us can afford to see this project succeed.
Exposing a right-wing whopper about environmental charities and U.S. energy security
At first blush, it’s a theory that seems remotely plausible.
Vivian Krause, Ethical Oil, and the federal Tories have taken turns singing the same tune: that foreign (American) interests, in the form of environmental lobbyists like the Tides Foundation, the Hewlett Foundation and the David and Lucile Packard Foundation, are striving to control Canada’s bitumen. The purpose of this interference, say the conspiracy theorists, is to prevent the sale of Canadian oil to lucrative Asian markets, and force Canada to vend its oil to the U.S.
But there’s a problem: the aforementioned merchants of this conspiracy either have extremely short memories, or they’re lying through their teeth.
That’s because the same individuals who bemoan the meddling of American interests among opponents of the Northern Gateway, were also some of the most vociferous champions of TransCanada’s Keystone XL pipeline, nixed by U.S. President Obama last year.
What’s more, many targets of Harper’s, Krause’s and Ethical Oil’s criticism also staunchly opposed the Keystone XL: for instance, Tides USA – an organization founded in part by the Packard Foundation – donated hundreds of thousands to anti-Keystone non-profits in Minnesota.
Funding opponents to the expansion of U.S.-bound pipelines? Sounds suspiciously counterproductive for an alleged puppet institution of America’s quest for friendly petroleum.
What’s our hurry?
So, with the above argument debunked, we can examine the issue of American interference from another angle: that U.S.-based organizations are seeking to prevent entirely the further development of Canada’s oil reserves. And if this is indeed their goal, they’re unalterably doomed to failure: Alberta’s bitumen output is projected to double by 2021. Indeed, far from slowing, the development of the Athabasca oil sands is actually accelerating, an extensive pipeline infrastructure is already in place with links to both the United States and Asia, and there’s very little environmental NGOs can do about it.
Thus, the question we ought to ask ourselves is not “Why aren’t we selling our oil?” but rather, “Why are we in such a hurry to liquidate it?” Are we concerned it’s suddenly going to go out of style before we can reap the benefits? Why does our government seem so anxious to exploit short-term profits over long-term prosperity?
In my view, the day that burning fossil fuels to generate energy ceases to be standard practice, will be a day of victory and rejoicing for the human race. But that day’s not likely to arrive anytime soon – perhaps not in my lifetime. In fact, the laws of supply and demand dictate that the long-term trend in oil prices is likely to spike, as remaining petroleum reserves diminish – an assessment echoed by energy analysts like ForestEthics’ David Hughes.
In other words, a mad rush to bolster Alberta’s oil production may be hugely disadvantageous – both ecologically and economically. In any case, it’s an issue worthy of discussion, not dismissal.
The financial gains – worth the risk?
No analysis of the Northern Gateway proposal would be complete without an acknowledgement of the financial and economic benefits such a pipeline would deliver. Indeed, they’re significant, but in my view, still vastly outweighed by the dangers.
And British Columbians, who can expect to bear the balance of risk associated with a spill, will also prosper far less than their Albertan neighbours from the project’s returns, unless Enbridge acquiesces to our government’s demands for a fair share of the revenue.
According to the BC Liberals, the Northern Gateway will increase Canada’s GDP by $270 billion over thirty years – or $9 billion annually. However, it’s crucial to note that this figure does NOT account for the effect of the “Dutch disease” – an economic syndrome which features declines in manufacturing associated with increased commodity exploitation – from which the OECD has stated that our country now suffers, as evidenced by our strong Canadian dollar, and the gradual erosion of our competitiveness in manufacturing. The accelerated sale of Canadian bitumen will only aggravate this condition, and mitigate a chunk of the GDP growth Canada can expect from the Northern Gateway.
This figure also fails to account for the sizeable GDP growth that would occur irrespective of whether the Northern Gateway proposal succeeds or not.
At this point, First Nations in the development corridor are the stakeholders who will benefit the most of anyone in this province from the Northern Gateway’s economic boon: a 10 per cent equity stake in the pipeline’s profits, and Enbridge has promised to hire a large proportion of aboriginal workers during the construction process, providing a sizeable, if short-lived, boost to local economies.
Considering this, the fact that many of the Northern Gateway’s most emphatic detractors are B.C. First Nations, ought to be a giant red flag to all of us.
Enbridge doing just fine
Canadians don’t need the Northern Gateway. British Columbians don’t need it. First Nations are not interested.
But ironically, the entity that probably needs this project to succeed least, is Enbridge.
Beyond oil, Enbridge is also a major distributor of natural gas, which despite being inexpensive at this moment in history, still accounts for a large share of the company’s income. Last year, the corporation saw its revenues soar, the value of its stock nearly doubling between August 2010 and August 2011. And as fossil fuels become more scarce and less obtainable, Enbridge’s bottom line is likely to improve even further.
The corporation also benefits from a portion of our Prime Minister’s $1.4 billion annual tax handout to fossil fuel corporations, a policy that has fanned the flames of disgust among millions of Canadians, while further bolstering the massive emoluments of a polluting industry for a privileged few.
No wonder Enbridge has gone out of its way to offer huge sums of cash to First Nations, while making extravagant safety upgrades in an effort to appease politicians and win the rest of us over. The company can sure afford to bribe us all.
But can we afford to accept? I say, without reservation, that we can’t.