Alberta government, industry associations spend little time, effort, and money building pipeline support outside Alberta. More effort might create better outcomes.
In the early 1980s, when I was an inquisitive undergrad, I attended a presentation by Western Canada Concept party founder Gordon Kesler. His concept of Western separation was goofy then and the faddy idea of Alberta seceding alone is even goofier. Rather than separating, Alberta needs to politick better.
This argument won’t sit well with the usual leaders of the Alberta Victimhood Cult, but consider this simple truth: Alberta is a landlocked economy.
Alberta is not Texas, with its expansive US Gulf Coast and easy access to tidewater. Texas and its 28.3 million people could secede from the United States tomorrow and oil exports would continue unabated, both to foreign markets and the former states it once consorted with.
This fact seems to be lost on Prof. Jack Mintz of the University of Calgary School of Public Policy, who penned a pro-Alberta separation – he calls it “Albexit” – op-ed in Wednesday’s Financial Post.
His grievances are the standard fare of current Alberta politics: not enough pipelines.
“Because of the lack of pipeline capacity promoted by environmentalists who push for Canada to be a ‘climate leader,’ and the politicians who play along, Albertans are losing high-paying jobs, wealth, government revenues and foreign investment in the oilpatch,” he argues.
And that is a fair grievance. Alberta is losing billions by selling at steeply discounted prices or having to cut back production. Alberta is entirely justified being mad as hell.
But thinking that Albexiting will somehow solve the problem is a fool’s dream.
“It’s typical to pooh-pooh the possibility of Alberta separation as unrealistic, given the close familial and economic relationships Albertans have with other parts of Canada,” Mintz writes.
Close relationships with Canada are hardly the issue. If Alberta was an independent state, export pipelines heading east, west, or north would still have to travel through Canadian territory.
Why should Canada be any more helpful to the State of Alberta than it is to the province of Alberta?
Will Section 35 of the Constitution that requires the “duty to consult” aboriginal peoples suddenly not apply?
Will British Columbia coastal First Nations, Vancouver residents, and West Coast environmental groups miraculously embrace Alberta pipelines to tidewater?
Will Quebec opposition to a resurrected Energy East disappear overnight?
Or, maybe Alberta should join the United States or apply to build more pipelines south to the Gulf Coast, where Western Canadian Select actually fetches a premium to West Texas Intermediate for those producers lucky or smart enough to have contracted pipeline capacity.
Isn’t it an article of faith that American pipeline projects are given a free ride while US-funded activists badger and harrass Trans Mountain Expansion?
“There certainly is opposition to pipelines in the United States and NEPA [National Environmental Protection Act] is actually a much bigger stumbling block to approval than the Canadian environmental assessment rules,” says Prof. James Coleman of the Dedman School of Law, Southern Methodist University based in Dallas.
Prof. Victor Flatt, an energy law scholar with the University of Houston, says that every new pipeline that crosses state borders is protested by the usual suspects like Greenpeace.
“There’s an Atlantic Coast pipeline (between West Virginia and North Carolina), the big natural gas line that is being fought tooth and nail, from local all the way through national. There’s talk of expanding the Colonial Gas pipeline, which carries gasoline and refined products from Houston to New Jersey, and there are a lot of protests against that,” he told Energi News.
“If we think about the other big pipeline projects – Enbridge Line 3, Dakota Access, Keystone XL, TransWestern – all of them are being protested. Some more than others.”
Would the US want Alberta as the 51st state?
Probably not, at least not for its oil. American shale production is nearing 11 million b/d and the US Energy Information Administration forecasts around 14 million b/d by 2030.
The US refines 3 million b/d of heavy crude oil, much of it from Alberta, but refineries already get as much as they need at great prices.
Why buy the cow if you can get the milk cheap?
So much for secession as a solution to Alberta’s pipeline woes.
Mintz also pooh poohs the energy transition as an argument for Alberta staying: “Even with rising production of electric vehicles, all the credible energy agencies project that demand for oil in 2050 will be as high as or higher than demand today.”
This is simplistic baloney. There are plenty of reputable consultancies, like Wood Mackenzie and Mckinsey, forecasting peak oil demand as early as 2025 and most likely around 2036. Suncor, Alberta’s oil and gas giant, thinks it could come as early as 2038.
By the time Alberta seceded, there is a very good chance the global low-carbon economy will have arrived.
“Whatever negatives Alberta would face are easily swamped by the positives that would come with separation,” Mintz blithely opines.
If this is the intellectual rigour Albexit supporters bring to the argument, then Confederation is safe.
But that still leaves the problem of insufficient pipeline capacity.
Here’s an alternative strategy for Alberta: politick better.
“The lack of support from other provinces — especially British Columbia and Quebec — is raising questions about Alberta’s place in Confederation,” argue Mintz.
Not really. Polling data shows that far more Canadians support new pipelines than oppose them, even in British Columbia. An Abacus Data polls pegs opposition around 20 per cent and support at 44 per cent, and the rest of Canada is neutral on the issue.
Why do Mintz and his fellow believers think Alberta is entitled to 100 per cent support? A two to one margin over opponents isn’t good enough? Alberta has to divorce Canada because David Suzuki and Tzeporah Berman don’t heartily endorse oil and pipelines?
The pejorative term “snowflake” comes to mind for some reason.
Let me suggest an alternative strategy: If Alberta wants more pipelines, Alberta can damn well fight for more pipelines.
Contrary to popular opinion, Alberta hasn’t shown much fight up to now.
Consider this: The Trans Mountain Expansion project has become a $12.5 billion (asset purchase plus construction costs) symbol of Alberta grievances, yet the Alberta government and Calgary-based industry associations spend a pittance on West Coast communications and advertising, and have the absolute bare minimum presence within the critical Vancouver market.
Alberta’s idea of engaging British Columbia on the oil sands and pipeline issues is lob verbal bricks across the Rockies at perceived opponents.
And Alberta can’t even get that right, obsessing over US environmental charties funding BC anti-pipeline activists while ignoring far and away the most vociferous source of TMX opposition, coastal First Nations and indigenous communities.
Here are two simple things Rachel Notley and industry can do immediately to grow Canadian pipeline approval.
Engage opponents – pipelines and the oil sands are complex issues that are difficult for most Albertans to understand, let alone Canadians with no connection to the industry. Experience shows that talking to non-Albertans builds understanding and support.
Stop feeling entitled – this may be the biggest impediment of them all. Industry oozes entitlement, the idea that the oil and gas brings so much capital, so many economic benefits, so many jobs, so much tax revenue to Canada, that it is owed pipelines.
Well, Alberta is not owed even one pipeline.
The world – including Canada – has changed a lot in the past decade, not least its attitude toward crude oil and pipelines.
Canadians know alternatives are coming. They worry about climate change and the environment. Support for the energy transition is strong and growing.
And they tell pollsters that as long as Canada supports the transition to electricity from low-carbon technologies (hydro, wind, solar, tidal), then they will support pipelines.
Alberta can achieve its pipeline objectives within Confederation, but only if it admits that new attitudes, strategies, and tactics are required by industry and Alberta political leaders.
Business as usual clearly isn’t working, but Albexit isn’t the solution.