If you’re wondering how surreal
environmental politics have been in
Canada over the past year, here’s “Exhibit
A”: this Halloween, Environment Minister
Catherine Mckenna came to Parliament
Hill dressed up as a “Climate Crusader” -
while at the same time overseeing a Ministry
which, according to its audits, won’t even
come close to its United Nations climate
commitments. Prime Minister Justin
Trudeau also somehow found it unironic to
dress up as Superman after his campaign
slogan “Real Change Now” has become
more like “Real Disappointment Now”
- especially when it comes to Indigenous
rights and climate action.
However, Superman and the Climate
Crusader took it to a whole other universe
this May when they decided to become
Oil Company Executives and committed
billions of taxpayer dollars to buy the
existing Trans Mountain pipeline and its
and controversial expansion project from
Kinder Morgan.
It was a move that even the most skeptical
observer probably didn’t expect, and while
protests were immediate and continued,
there has been some necessary recalibration
and fact-finding as to how this government
bailout effects the project and the campaign
to stop it. Truth be told, what we are finding
out is even worse than we thought possible.
It’s hard to summarize the absurdity, but
here are 7 Important Facts About the
Trudeau Pipeline Bailout:
1 -- It’s More Like a $15-20 Billion
Commitment Than $4.5 Billion
We reported this last issue, but it’s worth
repeating. Well-known economist and
specialist on the Trans Mountain pipeline
Robyn Allan found that “By the time
the expansion is built, the price tag for
nationalizing the existing assets and
building the expansion will cost Canadians
upwards of $15 - $20 billion.
That’s because the $7.4 billion capital cost
for the project estimated in February 2017
will likely exceed $9 billion by the time an
up to date budget is prepared. Then there is
$2.1 billion in financial assurances required
for the land-based spill risk and $1.5 billion
Oceans Protection Plan for marine spill
risk that Ottawa has already agreed to.”
2 -- The Alberta Government Admitted
in Its Budget that the Pipeline Won’t
Create New Revenue
Another Robyn Allen investigation found
that despite claims from the Alberta
government that the pipeline expansion
would add $15 billion a year in government
revenue, their Budget explains it would
provide no economic benefit because
any potential pricing gain from increased
pipeline capacity will be offset by major
heavy oil pricing problems.
“In 2016, the International Maritime
Organization (IMO) announced new
regulations to reduce greenhouse gas
emissions. It ruled that after January 1,
2020, marine vessels will be required to
burn fuels with a sulphur content of no
more than 0.5 percent, reducing the current
sulphur content cap by 3 percent.
Alberta’s Budget clearly states that ‘the
light-heavy differential is forecast to remain
wide as new rules on the sulphur content
of marine fuels from the International
Maritime Organization go into effect. This
is expected to reduce demand for bunker
fuel, which mainly comes from heavy oil,
and reduce heavy oil prices.’
Alberta’s Budget identifies that the price
impact of IMO 2020 will be about $8 US
per barrel. What this means is that instead
of the promised narrowing of differentials
from Trans Mountain’s expansion, Alberta
expects none.”
3 -- This is Going to Cost Taxpayers Big
Time
A new study released by the Institute
for Energy Economics and Financial
Analysis (IEEFA) said buying the Kinder
Morgan Canada assets, plus planning and
construction costs will put $6.5 billion in
unplanned spending on the books for the
2018-19 fiscal year. This will add 36% to
the already projected $18.1 billion deficit.
Some of the report’s key points:
“There is every indication that the Canadian
government has bought the pipeline at a
high price and is likely to resell it for far
less than it will pay to build it.
“The Canadian government is taking
open-ended responsibility to absorb all
costs and ensure profits for any potential
new owner of the pipeline. As a result,
long-term cost increases for taxpayers are
effectively uncapped, posing a significant,
unquantifiable liability.”
4 -- Kinder Morgan is Making Out with
a 637% Profit
The same report also found that: “IEEFA
estimates that the outlay that can be
attributed to Kinder Morgan Inc. for the
project is approximately $610 million.
Between them, Kinder Morgan Inc. and
Kinder Morgan Canada will receive $3.89
billion in profit. This amounts to a return
on an outlay of 637%.”
Two Kinder Morgan Canada Executives,
Ian Anderson and David Safari, will also
earn $1.5 million each in bonuses from the
sale.
5 -- They Call Us ‘Fanatics’ While
Issuing Death Threats
David Dodge, former Bank of Canada
governor and high-profile advisor to
Alberta’s NDP government, recently made
this threatening prediction at a public talk
in Edmonton, “There are some people that
are going to die in protesting construction
of this pipeline. We have to understand
that. Nevertheless, we have to be willing to
enforce the law.”
He then went on to say, “It’s going to take
some fortitude to stand up [to them],” while
referring to those who oppose the pipeline
as “fanatics” who have “the equivalent of
religious zeal.”
So who are the “fanatics” and why didn’t
Trudeau or Notley publicly condemn these
not so subtle threats?
6 -- There are Still Many Potential
Hurdles Before Construction
A recent press release by the West Coast
Environmental Law points out, “the federal
government, as the owner of the pipeline,
must honour its commitment to the NEB
process, including the 157 conditions,
to ensure the project’s safety. These
conditions include obtaining more than
1,000 permits required for the construction
and approving a safe, final route through
multiple route hearings. There are also
around 40 pre-construction conditions
still under review, including a dozen that
applies to the Burnaby terminal, which is
slated for construction in a week.”
It continues, “The NEB conditions are
weak, ignoring concerns made by First
Nations and science on bitumen spills.
However, at a minimum, whoever owns
the pipeline must at least honour what is
there.”
There are also currently 14 legal challenges
before the Federal Court of Appeals.
7 -- We are the Most Important Factor
While permit applications and legal
challenges have been able to slow projects
down, it’s rare they stop them. With
literally billions of dollars at stake, there’s
always a loophole found or a convenient
excuse for why the rules were changed at
the last minute. The reason the project is
so far behind schedule and the government
is resorting to such desperate measures is
ongoing mass public opposition. Without
it, the pipeline would already be built.
This has been a successful formula so far,
but we need to go even further the get the
project cancelled. This means continuing to
mobilize the hundreds of thousands already
opposed, and appealing to the many more
who are disgusted by this huge waste of
taxpayer money and confused about the
alternatives. We have a real opportunity
here - let’s make the most of it!
No Trudeau Pipeline Bailout!
People and Planet Before Pipelines and
Profits!
Follow Thomas Davies on Twitter: @thomasdavies59
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