How oil pipelines became one of the most divisive issues in Canadian politics

by Brent Bambury (@notrexmurphy)

If both of the pipelines approved by the federal government this week, the Kinder Morgan Trans Mountain and Enbridge's Line 3, clear regulatory hurdles and are eventually built and put online, they will not significantly expand Canada's existing infrastructure. There are 840,000 kilometres of pipeline in Canada. Implementing both of these projects would increase the total by just .3%.

But obviously, the political impact of developing oil infrastructure in Canada, particularly when it's attached to the oilsands, is massive. That was clear in the careful language used by the Prime Minister, in the nearly instant fury from opponents, and the debate over the social license the development may or may not have.

Some sceptics expect at least one of the two pipelines will be voided by the process, like Northern Gateway, which was green-lit by the previous government and killed on Tuesday by the Liberals, a symbol of how hard it is to build infrastructure in Canada.

It was not always like this.

The ghost of peak oil

Trevor McLeod sees the roots of some of the fierce opposition in the concept of peak oil and its failure to materialize. He's the Director of the Centre for Natural Resources Policy at the Canada West Foundation in Calgary, an organization that supports pipeline development.

"You know we had that in 1970, we had the sense that we were going to peak at about 13 billion barrels a year and we're now at about 32 billion barrels a year," McLeod said.  For activists, who'd been counting on an end of supply, the breakdown of the peak oil theory was a blow.

"They got frustrated", McLeod says, "And you got to '97 and the Kyoto Protocol and there was a real sort of a stagnation there and they couldn't really figure it out."

But for Alberta and the oil sands the death of peak oil coupled with a massive spike in price was pure oxygen to investors and developers. Unconventional oil got more attractive as prices rose. From 2000 through 2014, the oilsands grew exponentially and producers were hungry for new investors.

The truck that became a symbol

In July of 2006, the government of Alberta saw an opportunity to attract investment in a culture fair happening at the Smithsonian on Washington's National Mall. Alberta was the first Canadian province to be featured in the Smithsonian Institution's Folklife Festival. On their website, the Institution describes the festival as a place to sing, dance and sample recipes.

Alberta had a different idea. They sent a giant truck.

It was a Caterpillar 777, a towering, 100 tonne behemoth.

"It's half the height of the White House", says McLeod. "Within every wheel well you could fit a mid-sized car. This is on the Mall", he says. "People are shocked."

"And at the exact same time environmental leaders in the United States are kind of grasping around trying to find their next iconic campaign. Well they found it. It's the oilsands."

Obama's road to Keystone

Two years later came the election of Barack Obama who would become, with his decision on Keystone XL, the world's most famous anti-pipeline activist. But McLeod thinks the Keystone position was the result of the administration's failure to pass their cap and trade bill.

"When Obama was elected there was so much optimism on the environmental side, the sense that he was going to tackle health care, he was going to tackle the environment and climate change. And he had this bill called the Waxman-Markey bill, which was a cap and trade bill. And the United States was going to lead on climate."

"They decided to tackle health care first and they didn't have the luxury of maintaining control of the Congress forever and they weren't able to tackle the environment."

The Waxman-Markey bill died in the senate in 2010.

"And so that really was devastating to the environmental movement." McLeod says.

"Obama was in there, and the Waxman Markey deal had fallen through.  Then it was, 'OK, let's salvage something. Let's oppose Keystone XL. Let's use this, sort of, supply side reason to end the oil sands and rise of the unconventional oil.'"

"And you know, then- we kind of switched right then, to pipeline opposition."

McLeod says the strategy hit the oilsands from a new angle.

"I guess, you go back and you think of the opposition to the oilsands, and it wasn't really pipeline opposition to begin with."

"It was really about the mega-projects it was about, you know, kind of creating this notion that the oilsands are some kind of Frankensubstance. They were different. "

"And so, while that really tarnished the reputation of the oilsands, it didn't stop investment.'

But with Keystone, McLeod says the protests moved from the heart to the arteries.

"And so the arteries were market access, pipelines and finance."

A tentative move forward

In the U.S. the continuing standoff over the Standing Rock pipeline in North Dakota is entrenched, and sometimes violent. But McLeod sees some hope for agreement in the strategy the federal government is using in Canada. He says it could work.

"They have this sort of thread the needle strategy: 'We're going to take aggressive action on climate. And then we're going to approve pipelines and some of these other energy infrastructure facilities.'"

"And it ties the two really closely together. But at the same time there's sort of a de-linking happening as well: this idea that we can do both. So yeah I think that it's going to be really hard to extract the two, one from another."

"But it's really important I think that we do. "

McLeod wants people to think about greenhouse gas emissions as a product of demand.

"If the goal here is to reduce global greenhouse gas emissions, if the goal is to keep global temperatures well below two degrees Celsius below pre-industrial levels, which we agreed to in Paris, then we really, really have to start thinking about demand."

"It's been proven that unconventional oil isn't going to stop. It found its way through rail. It was being barged down the Mississippi. You know, it's found a way to markets".

"And even if the oil from the oilsands doesn't find a way to markets it's going to be produced somewhere else."

"So this whole peak oil theory is not really playing out the way it was anticipated to. So we really do need to start paying attention to demand. "