British-Columbians Without Leadership on Northern Gateway

There used to be an unwritten golden rule for Provinces in Canadian politics; if you are going to do some beggar thy neighbour monetary demanding or demonizing make sure it’s against the feds. Provinces typically demand funds from flush federal government coffers, or when they need a scapegoat for this or that local problem they can always trash the federal government for their ills. They usually abide by a set of rules of solidarity to put pressure on Canadian federal governments. With Stephen Harper immovably tightening the federal purse’s strings, it would seem that hard-pressed Premiers need new scapegoats for populist speeches and monetary extortions.

 This new reality was on full display this week as British-Columbia’s Liberal Premier Christy Clark put down her conditions for the approval of Enbridge’s Northern Gateway oil pipeline joining Bruderheim, Alt and Kitimat in BC. Clark put down five conditions for her approval of the project the most important of which were world-class environmental emergency response plans, for Enbridge to go beyond the minimum legal requirements with respect to First Nations relations and for BC to get its ‘fair share’ of tax revenue from the oil to flow through Northern Gateway.

 The Premier from Alberta Alison Redford responded to Christy Clark today by saying that BC won’t get a looney’s worth of tax money it is not already entitled to from the pipeline. Stating that resource management is the purview of individual Provinces exclusively, Ms. Redford objected to Ms. Clark’s policy of nitpicking projects and subjecting them to targeted political scrutiny.

 Ms. Clark’s approach to Northern Gateway however deserves much more scrutiny than Alberta’s Premier has so far leveled against it. Let us start by examining BC’s request for world-class environmental disaster response plans. That such regulation wasn’t already the norm in BC should be news to British-Columbians. Since environmental regulation is as much a provincial responsibility as a federal one, why is BC home of Canada’s most ardent environmentalists not already the most protected and best regulated in the world? Does this mean that other energy projects aren’t going to be subject to such environmental scrutiny? Why single out Enbridge when it comes to protecting Canada’s Pacific coast?

 Moving on to the provincial Liberals’ demand that Enbridge go above and beyond legal requirements in dealing with First Nations. Enbridge states that it already has 60% of concerned Native bands signed on to Northern Gateway. If so many First Nation’s have already of their own volition accepted Enbridge’s proposals one might assume that the company has already gone beyond legal requires in enrolling Native support. Why go into the media playing the ‘white man guilt’ card against Enbridge? This looks like an almost Orwellian display of government interference in private affairs. Governments should not ever, be in the business of telling private citizens or corporations how they should think and behave. Ms Clark shames the name of her party with such private affairs meddling.

 That Ms Clark should go after private enterprises in trying to boost her pre-electoral profile seems to fit with the times but for her to go after another Province for revenue is a relatively new development in Canadian political history. Ms Clark has asked for a ‘fair share’ of tax revenue from Alberta.

 A report by Calgary firm Wright Mansell estimated that BC would only be getting a paltry 6.7 billion dollars worth of tax revenue from the pipeline over 30 years from a total pie of 80 billion. Ms Clark pointed out that BC would be shouldering 100% of the maritime environmental risks and over 50% of the land based risk. With such false assertion the BC Premier is effectively spitting in Albertans and Canadians faces. The environmental risks don’t start at Bruderheim, they start near Athabasca Lake where the extraction occurs and where Alberta will cover 100% of the risk. Let’s face it, the oil sands represent the largest oil related environmental risk worth monitoring, Northern Gateway is a sideshow. The oil must flow through pipelines all the way down to Bruderheim first where again Alberta is responsible for all leak risks. In any case the monetary responsibility of cleanup falls squarely on Enbridge so what kind of risk is the Province assuming exactly? With proper regulation, which BC is entitled to implement, risks can be minimized if not eradicated so why demonize Alberta?

 Ms Clark further added injury to insult when she said, “This project is good for Canada. It’s great for Alberta and at the moment it’s not very good for British Columbia”. It would seem that 60% of concerned First Nations disagree. Such blatant ‘not in my backyard’ styled blackmail is unbecoming of a Canadian Premier. What would Canada look like today if it weren’t for generations of Ontarian and now Albertan uncompromising funding of equalization? Such inter-provincial self-centeredness hasn’t been seen since the Lower Churchill Falls deal where Quebec unceremoniously screwed over Newfoundlanders.

 If political leadership is bringing out the best out of one’s constituents, BC’s Liberals have succeeded in wrestling the crown of leadership deficiency from Quebec. It was bad enough when Obama blocked Keystone XL for electoral purposes to the detriment of America’s economy and North American relations, that such demagoguery and populism should have crossed the 49^th parallel is a new low in the history Canadian Confederation.

(First published on The Prince Arthur Herald website)

***Apologies to all readers, this post has somewhat strayed from the more economic level headed commenting this blog was started for. None the less this was worth posting enjoy.

Another Spill Another Outrage

Oil spill on Red Deer River, Alta

Another spill another excuse for environmentalists to block the Keystone XL and Northern Gateways of this World. Alberta suffered its third significant oil spill of 2012 near Elk Point 200 km northeast of Edmonton, as Enbridge’s Athabasca pipeline spilled some 1450 barrels of oil onto farmland. This comes as environmental crews are still cleaning up two larger oil spills in Alberta near Red Deer in Alberta’s deep north.

One can now expect to see the Pembina Institute, Greenpeace et al. descending on Alberta with renewed fervour to oppose the Oil Sands development. Likewise, south of the border, environmental groups will use these spills as further proof that Keystone XL and other pipeline projects must be stopped. Industry insiders and astute observes might come to a different conclusion based on these spills.

It is well know in the industry that the leading cause of pipeline rupture is third party related. That is to say I pipeline is most likely to be ruptured when a construction crew doesn’t do its land surveying due diligence. In the rest of incidences, the leading cause for ruptures or spills are corrosion and excess pressure.

Now both these causes have their own causes and those are the ones environmentalists should be worrying about.

Corrosion occurs most often when the interior coating of a pipeline isn’t adequately maintained and is exposed for long periods of time to acidity. Heavy Crude oil can be highly viscous and must be diluted with various sorts of acids and chemicals to help ease the flow in a pipeline. Such additives may corrode a pipeline over time when coating isn’t sufficiently or regularly applied. In Germany for example most of the pipeline infrastructure dates from the post war recovery, and thanks to consistent coating, the industry there reports some of the lowest incident records.

Excess pressure is a problem due to mismatching of the pressure pumped through a pipeline and its design pressure capacity. With time the structural integrity of a pipeline tends to diminish somewhat, which means that pressure needs to be corrected downward as a pipeline ages. With the ramp up of production in the Bakken oil fields of North-Dakota and Oil Sands in Alberta’s Athabasca Region, expectation is that pipeline operators will be pushed to capacity, increasing pressure flow to its limits and playing catch up on pressure capacity assessment.

In both cases monitoring is key to safety. Nobody argues that industry norms need to be updated regularly if not imposed through regulation. What can be argued is that in both cases there is a common variable. Time. A Canadian study by the Energy Board of Canada said that non third party related spills were time dependent. On average the first spill in a pipeline system occurred after 28 years of operation. After adequate monitoring of pressure and coating adequacy quality control, the most important contributor to pipeline spill prevention is keeping pipeline systems young. In other transportation industries such as airlines, shipping and railroads the norm is to limit the age of fleets as well as do proper maintenance.

So what do Keystone XL and Northern Gateway have to do with all this. These pipelines would both do three things. One, they would reduce average pressure throughout the North American pipeline system by increasing flow capacity for a predetermined amount of oil and gas production. Secondly, modes of oil transportation with even worst safety records wouldn’t be used. Trains and trucks tend to derail or get into highway accidents, causing injuries or fatalities as well as spills that wouldn’t occur in pipelines; today without XL and Northern Gateway trucks and trains are increasingly being used to transport large amounts of oil. The third effect of building Keystone and Northern Gateway would be to decrease the average age of the pipeline system, as they’d be new.

All in all these pipeline mega projects would serve to increase the safety of the North American energy industry and reduce ecologically destructive oil and gas spills. Environmentalists should ask themselves whose side they’re on: the anti-oil lobby side, or the environment’s.

Also published in the Prince Arthur Herald here.