Vancouver anti-pipeline “analysis” dominated by muckraking fabulists immune to facts, evidence, expert opinion

Most British Columbians will no doubt agree that to understand the complexity of an oil pipeline business model, say, one asks an energy economist or some other kind of expert. Not the Vancouver smart set. They prefer novelists, activists, freelance writers, old political hacks, and retread professionals who re-invent themselves as facile authorities whose gibberish is then warmly embraced by the city’s alt-media. Otherwise responsible people circulate this nonsense – Donald Trump tweets composed on the toilet at 3 a.m. are more credible – on social media. May we please stop pretending this codswallop is respectable discourse?

Trans Mountain Expansion

Crawford Kilian, retired community college teacher, novelist. Photo: Twitter.

Exhibit A is “Why Kinder Morgan’s Pipeline Is DOA: Falling prices and competition from a new Texas export terminal mean Trans Mountain fails the business test,” written by Crawford Kilian and published in The Tyee, where he is a contributing editor. His Wikipedia page – yes, you read that correctly, he has a Wikipedia page – describes him as a retired community college teacher and novelist.

Alert readers will immediately notice that nowhere on that Wikipedia entry does it mention pipeline expert or energy economist under his bona fides.

It should be acknowledged that this deficiency isn’t fatal to public comment on pipelines. I’m not a pipeline expert or energy economist, for instance, yet I frequently write on the subject.

The difference between Kilian and me is that I interview experts on the record to obtain their professional opinions on technical issues that are complex and whose workings aren’t obvious to the layman.

I’m a journalist, expert interviews are the most important tool in my crib.

Not so for Kilian. Even though he is an editor for an award-winning online newspaper, he feels no obligation to search out experts or evidence to support his fallacious arguments. Nor, we note, do his editors seem to require it.

Let me illustrate with a typical example of his allergy to basic reporting.

In one paragraph he discusses the fluctuation of oil prices over the past five years. In the next, he writes the following whopper: “A 2013 business plan is unlikely to have foreseen such a price fall, and a rebound to 2013 prices is equally unlikely.”

The jaw of even a casual observer of the oil business should hit the floor upon reading this bunk, for two reasons.

One, the entire history of oil as a commodity is one of booms and busts, high prices that lead to oversupply followed by a market crash and plummeting prices. Is Kilian seriously arguing that one of the world’s biggest pipeline companies wouldn’t have integrated an oil “price fall” into its business plan?

Two, oil prices are already near $70 a barrel and, as Energi News reported yesterday, it appears the Saudis and OPEC are determined to drive it to $80 to $100 in short order. Combined with the dramatic oil sands production and operating cost reductions since oil prices fell of a cliff in late 2014, oil economics are better now than they have been for years.

Repeat this sort of error over and over and over throughout the article and you have 1,400 words of utter bumph.

The frustration for energy journalists like me is that refuting the bumph and explaining why Kilian is so, so wrong takes 10 times the effort and space. Frankly, who has the time and energy?

And that plays directly into the hands of fabulists like Kilian.

A fellow fabulist is Paul McKay, the author of “Out of the Loop: The Fatal Flaw of Alberta’s Export Oil Expansion” in the Energy Mix, whose article is quoted extensively by Kilian and other Trans Mountain Expansion critics, and is frequently shared on social media (a dozen Energi News readers have asked my opinion of it over the past week or so).

McKay argues that the Louisiana Offshore Oil Port (LOOP) terminal, which loads the mammoth Very Large Crude Carriers full of American light sweet crude for export, will out-compete Alberta oils crude that is high cost to produce and to ship to market.

Here’s the heart of his argument:

Alberta’s huge tar sands/oil sands deposits cost too much to dig up, refine, and ship. They are in the wrong place, far from tidewater. And they rank among the dirtiest to refine into gasoline, aviation fuel, or home heating oil. These are the reasons—hiding in plain sight—why Western Canada bitumen fetches the infamous “discount” price per barrel compared to oil supplies shipped from Texas and the North Sea. The LOOP terminal for VLCCs will magnify that spread, and no mythical Asian refiner, trader, or nation is likely to purchase for long a dirtier product that costs more and arrives on slower, smaller boats.

To get to that conclusion, McKay advances a blizzard of “facts” that purportedly support his thesis. I sent his article off to a number of respected energy economists for comment. They were not impressed.

“I love it,” Kevin Birn, IHS MarkIt director for the Oil Sands Dialogue, wrote. “On one hand markets are efficient and on the other hand for Canada they aren’t.  Crude quality is not good vs. bad it’s about cost, price and competitiveness for refiners.”

Ed Hirs, energy economist and professor, University of Houston.

“This fellow is posting an opinion which we looked at a few weeks ago,” said Ed Hirs of the University of Houston. “The LOOP discussion is simply flawed.”

“There are lots of little things that are questionable in the analysis in that article,” according to Prof. Kent Fellows of the School of Public Policy at the University of Calgary. “The National Energy Board routinely (every two years or so) publishes a transportation survey examining the status of the pipeline system for oil and Gas. Their last few reports show that increasingly there is excess demand for capacity on both the Enbridge Mainline and the current TransMountain pipeline.”

The three economists, in interviews and emailed comments, refuted a couple of McKay’s points at some length, pointing out basic errors that first year economics students wouldn’t have made.

McKay is described as “an award-winning investigative reporter and author. His reports have appeared in the Ottawa Citizen, Globe and Mail, Toronto Star, and Vancouver Sun,” yet nowhere in the article does he interview an economist and most of his information is not attributed, which is pretty basic journalism practice.

That didn’t stop the “award-winning” National Observer, the flagship of Canada’s alt-media and darling of Vancouver’s chattering class, from republishing his flawed malarkey.

Unfortunately, Kilian and McKay are just two of dozens of so-called experts who torque the Vancouver political narrative around the Trans Mountain Expansion pipeline and the Alberta oil sands in the National Observer, The Tyee, and an array of lesser fake news web sites.

Immune to facts, not interested in expert interviews, their analysis accepted at face value by gullible members of the Vancouver anti-pipeline echo chamber, these are the intellectual leaders of BC’s opposition to Trans Mountain Expansion.

Can we not do better?