I don’t want the Kinder Morgan Transmountain Pipeline built under the current circumstances. That’s not going to be a very popular opinion to hold as an Albertan, but I genuinely believe the pipeline is a trap.
In the best of circumstances within Confederation Notley and Justin Trudeau have put a hard cap on the Alberta energy industry’s ability to grow. Even IF the Pipeline is built, between the debt, carbon taxes, regulatory changes, abhorrent investment precedent, and toxic inter-government relationships between Alberta, B.C., and Ottawa – the damage is done.
Notley and Trudeau have undertaken a scorched earth campaign to get the pipeline built. If it gets built (and that’s a big if at this point), what is going to happen in the months and years to follow?
With the support of the United Conservatives, Notley has enacted a law that has given the Provincial government the authority to seize control of the means of production of the industry through Bill 12. The very name of the bill speaks to it’s inherent flaw: “Preserving Canada’s Economic Prosperity Act.” That could just as easily be titled the “Preserving Canada’s Ability To Rob Alberta Act.”
If the pipeline is built it might be enough to keep the oil industry alive on life support, but it won’t be enough to foster the atmosphere necessary to enable it to grow.
Who wants to invest in a jurisdiction that can spontaneously go full socialist, where projects can only succeed with a government bailout and even then, revenues can be sidelined through political grandstanding?
That’s what happens in places like Venezuela.
All the Federalist actors, Rachel Notley, Justin Trudeau, John Horgan, and worse, Jason Kenney, have expressed an interest in doing just that. Within Canadian Confederation, there is no other way. The problem isn’t the politicians. It’s the foundations of Confederation.
Racheal Notley was obviously anti-oil before her election but the nature of Canadian Federalism has forced her to champion policies that, legitimately, could be seen as essential to the very survival of the industry within Canada.
The rub is, ONLY “within Canada.” Even then, that survival is likely very short term.
The politics of Canadian Federalism leave no other option but to resort to Banana Republic, socialist totalitarianism. This means Alberta’s oil industry will very likely stagnate.
If the pipeline is built, Notley and Trudeau will be hailed as heroic “nation builders” and though we would gain 600 kbpd of export capacity, Notley’s or Trudeau’s potential re-election would enable them to continue policies that will cut the industry down at the knees.
Today the industry faces a lack of export capacity. That was the point of the pipelines. That capacity, however, is a consequence of development projects that started during the LAST boom.
Building a new pipeline won’t bring a NEW boom. It will just preserve some of the profits that were estimated during the LAST one.
Not only so, but between the Trans Mountain, Keystone XL, and Line 3 pipeline expansions, a case could be made that there would be EXCESS UNUSED capacity, which may actually cost the industry.
In Alberta, we don’t JUST need pipelines. We need pipelines and an investment environment that is conducive to the build up of our industry.
Between anti-business policies, carbon taxes, regulatory changes and the toxic relationships between B.C., Alberta, and Ottawa – that will never happen within Confederation. We may build a pipeline but only oil from the 2000’s and early 2010’s will run through it.
It was the build up of the production for that oil that created the last boom. As it stands, we are unlikely to see that kind of a build up again, perhaps indefinitely.
The debt, both Federally and Provincially, will be an albatross around the neck of both jurisdictions. That will require ever higher taxes to service. The Alberta oil industry is the most politically palatable source of revenue to pay for them.
This means there is no way for Ottawa to fund operations but to tax Alberta and accordingly, for Alberta make up the budgetary shortfall by taxing the oil industry from it’s EXISTING production capacity.
How can their be longterm growth in the industry in this environment? There can’t.
This is exactly what anti-oil radicals like “Phase them out” Trudeau and “Protest Placard” Notley wanted.
But it gets even worse.
No matter what CBC says, there is still very strong opposition to the pipeline in British Columbia.
We who support the industry cannot discount that.
One of those protesters could very likely one day become Premiere of either Alberta or B.C., the leader of the Federal Green Party, or worse, the Prime Minister of Canada.
The way the pipeline is being handled now by the B.C., Alberta and Federal governments will mean those opponents in B.C. will have a serious axe to grind for years.
If the pipeline is built, those people won’t magically disappear and love Alberta oil.
They will be angry. VERY angry. They will seethe. They will organize. They will protest. They will vote. They will run for office. Maybe one day, they will be elected.
Then, whether by ideology or incompetance, they will strike back and future generations will be right back at the where we are today.
Within Canada, there is no other alternative.
Because of our oil, Alberta pays between $15-20 billion annually for the privilege of being Canadian. That’s a privilege we see nothing back for in return. With a population of 4.1 million that is $3700 – $4900 taken from every man, woman and child, every year.
Most Albertans don’t even bat an eye at that. We’ve normalized that level of prosperity being taken from us. Whether we’re in a boom or bust, that’s just what life in Alberta is like.
The vast majority of Albertans will never spend a day in Quebec, where the lions share of the money taken from us is sent to. Quebec politicians frequently and intentionally sabotage our industry. The industry they are physically removed from and which guarantees the transfer payments that assure their way of life.
That is why the “Phase them out” Trudeau Government is championing the pipeline. All his votes are in Quebec and the pipeline will keep this charade going a little while longer.
B.C. politicians may be trying to sabotage our industry, but they are NOT physically removed from it. They have legitimacy to their grievances (whereas Quebec politicians have none). Not only so, but by the numbers B.C. is getting shafted.
Consider a recent (pro-pipeline) article from Business Vancouver (Link), which laid out the costs to British Columbia if the Pipeline were cancelled:
- $1 billion revenue-sharing agreement with B.C. (over 20 years);
- $1.5 billion Oceans Protection Plan;
- $5.7 billion in provincial tax revenue (over 20 years);
- $922 million in municipal taxes (over 20 years);
- $127 million annually in oil tanker port spending;
- $150 million investment in marine spill response;
- $400 million in First Nations benefits agreements; and
- $7 million in community benefits agreements in B.C.
Over a 20 year window, that works out to $9.9 billion dollars. That’s $495 million per year.
How is it fair that the province that is directly impacted by the build up of the pipeline receives $495 MILLION per year, whereas Quebec receives $10 BILLION per year?
It’s not fair. It’s Canada.
With B.C.’s present population (4.6 million) that works out to about $108 per year for every man, woman, and child if the pipeline is built.
As an Albertan, I would rather see B.C. transferred every penny of the $15-$20 billion we pay into Canada EVERY year and get nothing for.
That would work out to $3300 – $4300 per British Columbian.
If it gained us tidewater access with none of the heartburn we are experiencing now (which I think it would), I would consider that a very good investment. We wouldn’t even notice the difference in Alberta.
If you are a British Columbian and the Alberta government sent EVERY PERSON in your household a $3300 – $4300 cheque, EVERY YEAR, would you go out and protest the oil sands? No. You’d probably tar and feather anyone among your midst who did.
We’ve sent cheques out to millions of people before. We could do it again… if we separated from Canada.
Within Canada, the Kinder Morgan Pipeline is being built to keep the Alberta oil industry on life support. It won’t lead to another boom.
It may lead to the re-election of Racheal Notley and Justin Trudeau (which assuredly would prevent another boom).
It will keep the transfer to Quebec charade going until Alberta is “equalized” with the rest of Canada (i.e. – indefinitely). In so doing, it will guarantee that every single person in Alberta lose $3700 – $4900 per year, mostly to Quebec, as long as we remain in Canada.
It will only provide a $108 per-person benefit for 20 years to the people of British Columbia.
It would also turn British Columbia into the fermenting grounds for the next generation of anti-oil radicals like John Horgan, Elizabeth May, Racheal Notley, and Justin Trudeau.
I want the pipeline built. I just don’t want it built under these circumstances.
This pipeline, and Canada’s hand in it, is a trap.