Trudeau Faces Split Aboriginal Groups in Kinder Morgan RulingBy
Canada’s government to decide soon on pipeline expansion
Prime minister has to balance native demands with growth needs
In the rolling country of central British Columbia, Michael LeBourdais’s Whispering Pines Indian Band is looking forward to a cash injection from a new pipeline proposed by Kinder Morgan Energy Partners LP. He’ll be seeking compensation for his band if it doesn’t go through.
Meanwhile, 400 kilometers (250 miles) away near the pipeline’s terminus in Vancouver, the Tsleil-Waututh First Nation is battling the expansion, saying it will lead to oil spills on their tribal land and in the waters of Burrard Inlet.
Into this breach will step Prime Minister Justin Trudeau, who must decide on the C$6.8 billion ($5.4 billion) Trans Mountain pipeline expansion, which oil companies say is vital to get increased output from Canada’s oil sands to global markets via the Pacific Coast.
The conflicting native views underscore the delicate balance Trudeau must strike as he seeks to fulfill his promises of upholding aboriginal rights and responsible resource development while sparking growth in an economy reeling from plunging oil prices.
Trans Mountain brings together “in one file” the biggest priorities for Trudeau and his Liberal Party government, with political implications that set environmental issues against the “cold, hard facts” of economic development, said pollster Nik Nanos, chairman of Ottawa-based Nanos Research Group. The scale of the decision may even force the prime minister to slow down the process and delay a ruling, currently set for the end of the year, he said.
This is “very tricky because of some of the conflicting priorities,” Nanos said. The decision will “be a big signal nationally and internationally and indicative on how the Liberals convert talk on the environment.”
Kinder Morgan plans to triple Trans Mountain’s capacity to 890,000 barrels a day by twinning the existing 1,150 kilometer line that runs through the mountainous Canadian province. The system, in operation since 1953, is the only pipeline from Alberta to the Pacific Coast and connects the oil sands directly to a port with reach to markets outside North America.
Input from stakeholders during Kinder Morgan’s 159 workshops and open houses as well as other feedback has “improved” the project, the company said in an e-mailed response to questions. The Houston-based pipeline operator has changed the route to avoid sensitive areas and made the pipeline thicker in some locations, it added.
In deciding Trans Mountain’s fate, the government is adding its own review of the project following the National Energy Board’s green light in May, subject to 157 conditions. The expansion probably won’t add to the climate impact of the country’s oil production, the Canadian Environmental Assessment Agency said in a separate report.
Still, even with the conditions and additional review, opposition to the pipeline remains stiff, especially near Vancouver with its beaches and environmentally-conscious residents. Mayor Gregor Robertson in June submitted a request for judicial review of the NEB’s decision. The expansion is “not in Vancouver or Canada’s economic or environmental interest,” the mayor said.
Chief LeBourdais at Whispering Pines, meanwhile, says he wants compensation if Robertson and other opponents succeed in blocking the pipeline, which would provide his band with a “very large sum of money” following years of negotiation with the company.
“If you’re going to say no, that’s ok, but then somebody owes me the value of that negotiated agreement,” he said.
And at a recent public meeting in Burnaby earlier this month as part of the federal government’s review on Trans Mountain, Burnaby Mayor Derek Corrigan summed up the challenges for Trudeau -- using the prime minister’s own words.
“Justin Trudeau said governments give permits but communities give permission,” Corrigan told the panel. “Well, we don’t.”
Canada’s oil companies have struggled to win new outlets for their increasing volumes of petroleum, especially from the oil sands where output may rise 50 percent to 3.7 million barrels a day by 2030, according to the Canadian Association of Petroleum Producers. With Enbridge Inc.’s permit for Northern Gateway recently revoked by a federal court and TransCanada Corp.’s Keystone XL approval rejected last year by President Barack Obama, the industry has pinned its hopes on Trans Mountain after years of disappointments.
“There is no question that a decision on the Trans Mountain pipeline is of significant national impact,” said Jeff Gaulin, vice president at the Canadian Association of Petroleum Producers, an industry lobby group in Calgary. “It will be a watershed moment for the development of Canada’s energy resources to reach more international markets.”
Trans Mountain will be the first test of Trudeau’s approach to Canada’s resource-heavy economy and highlights how the government is unprepared with policy to support decisions on individual energy projects, said Monica Gattinger, a University of Ottawa professor and director of the school’s Institute for Science, Society and Policy. A policy framework that provides direction on climate, aboriginal relations and cumulative effects is needed to help resolve opposition to such projects, she said.
“We have a number of policy gaps around energy that frankly extend well beyond the remit of any individual energy project decision-making processes,” she said. “Are governments really trying to make climate policy one pipeline at a time? That’s putting the cart before the horse.”
Trudeau wants to remake Canada into a low-carbon society while balancing natural resource development in an economy that relies on commodity exports, making the country more dependent on resources for economic growth than other large wealthy nations. His government is currently developing a climate strategy, including a national price on carbon, in coordination with the provinces.
“All projects are reviewed individually based on science, evidence and the traditional knowledge of indigenous peoples,” Natural Resources Canada said in an emailed response to questions about the Kinder Morgan pipeline.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.
- Stocks Drop Most in Six Weeks on Trade War Tension: Markets Wrap
- YouTube Bans Firearms Demo Videos, Entering the Gun Control Debate
- Under Fire and Losing Trust, Facebook Plays the Victim
- Fed Lifts Rates, Steepens Path Through 2020 for More Hikes
- Bitcoin Falls on Fears of Regulatory Trouble for Big Crypto Exchange