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Apr 16 2018

The Neo Liberal Instinct

Charlie Pierce calls them “death funnels” and he’s exactly right. He’s referring to pipelines designed to transport Alberta Tar Sand, the dirtiest fuel on the planet, to refineries or ports to refineries that can turn it into technically more usable types of oil. It never gets very good, more the type you can lubricate heavy machinery with or burn in a particularly wasteful in the smoggy toxic sense power plant, barely better than coal.

It’s basically asphalt, suitable for paving and not much else and it makes as much economic sense as tearing up roads or taking used tires to achieve the same effect, which is to say none at all in the current market where solar and wind are dirt cheap, batteries are getting less expensive by the hour, and fracked oil and natural gas are driving Saudi Arabia into bankruptcy. In fact the only way you don’t operate at a loss simply from mining and refinery costs is if the price of crude is well over $70 a barrel. Which it isn’t.

But Big Oil has all these sunk costs based on the notion of $100+ Oil and unlike a smart gambler it doesn’t understand that the money you’ve put in the pot isn’t yours anymore, it exists in a quantum state only determined at the reveal.

Too metaphorical? The point is that their product (tar sand) is very, very low margin and one of the few places they can cut corners and save some money is transportation, thus the lust for pipelines- the cheapest way to get their 3rd rate, shoddy, and low priced goods to market.

Now Alberta is a nowhere place that used to be pretty because it was nowhere and you could hunt and fish and get carried off by mosquitoes the size of an eagle. Now it’s a steaming industrial moonscape and they are understandably eager to see some return on that unfortunate investment. British Columbia on the other hand is not at all anxious to see their still pretty places literally paved over with the inevitable spills and the First People Nations have treaties (taken much more seriously in Canada than here) that say you can’t just take the little land you’ve left us.

As a result the Trans Mountain pipeline expansion to Vancouver (where the toxic cargo will be loaded onto ships for passage through some of the most treacherous and environmentally sensitive waters in the world) has been blocked.

To the rescue rides Justin Trudeau to save the investors of Kinder Morgan (a Texas company), with Canadian taxpayer dollars (they’re Canadian eh?, so they’re just not as good as U.S. taxpayer dollars but they’ll do).

Trudeau vows to push ahead with pipeline plans in spite of protests
by Ashifa Kassam, The Guardian
Mon 16 Apr 2018

Justin Trudeau has said Canada’s government is prepared to use taxpayer dollars to push forward plans for a controversial pipeline expansion, despite protests and efforts by a provincial government to halt the project on environmental grounds.

For months, the provinces of Alberta and British Columbia have been locked in a standoff over plans, spearheaded by Texas-based Kinder Morgan, to expand an existing pipeline and lay nearly 1,000km of new pipe from Alberta’s oil sands to the Pacific coast.

While the project could allow Alberta to get its landlocked bitumen to markets in Asia and reduce its reliance on the US market, it has encountered opposition in British Columbia over the potential for oil spills and the impact that a dramatic rise in tanker traffic could have on the region’s southern resident killer whales, a population already on the knife edge of extinction.

The political stalemate over the C$7.4bn project catapulted into the national conversation last week after Kinder Morgan Canada announced it would walk away from the project unless it saw a clear path to completion by the end of May.

Their project has now become a crucial test for Trudeau and his Liberal government, who swept into office in 2015 on promises of striking a balance between economic growth, environmental concerns and repairing the country’s fraught relationship with indigenous peoples. “While governments grant permits for resource development, only communities can grant permission,” noted the Liberal party’s 2015 platform.

The pipeline expansion has put this sentiment to the test, with Vancouver and nearby Burnaby launching court actions against the project along with several First Nations communities. After taking power in 2017, the provincial government of British Columbia – a left-leaning coalition which relies on support from the Green Party – vowed to use all the tools available to them to halt the project.

Recent weeks have seen indigenous-led protests against the project heat up, sending thousands into the streets. About 200 people have been arrested for blocking the entrance of facility belonging to Trans Mountain, including two federal MPs.

On Sunday, Trudeau interrupted a foreign trip to meet the premiers of Alberta and British Columbia, reiterating his government’s determination to see the project completed. “The Trans Mountain expansion is a vital strategic interest to Canada − it will be built,” he told reporters after the meeting.

The prime minister said the project – which would nearly triple the flow of Alberta’s bitumen to the west coast – is in the national interest. “It means good jobs in Alberta, they’ve suffered tough times. It means good jobs in BC, thousands of them as the pipeline is built.”

The uncertainty looming over trade relations between Canada and the US as well as waning investor confidence in Canada’s ability to complete big projects reinforce why this expansion needs to go forward, he added.

Trudeau said his government would launch formal financial discussions with Kinder Morgan and potentially use taxpayer dollars to ensure the project goes forward. As interprovincial pipelines are the federal government’s jurisdiction, his government may also pursue legislation to assert Ottawa’s authority over the project, he said.

The problem with that course of action is that it benefits Alberta, which has never voted Liberal, at the expense of British Columbia, which is a swing Province. Not only that, but Quebec, which has 40 Liberal MPs, is intensely interested in whether Ottawa (oh, by the way, that’s Canada’s Capital) overrules Provincial Autonomy because of their special Francophone arrangements.