Wednesday, November 30, 2016

The Wrong Decision: Politically, Economically, Environmentally...

Here are some very recent news headlines - you tell me which story is the odd one out:

  1. Shrinking glaciers cause state-of-emergency drought in Bolivia (The Guardian)
  2. Great Barrier Reef suffers most extreme coral die-off (Reuters)
  3. 2016 will be the hottest year on record, UN says (The Guardian)
  4. The North Pole is an insane 20 C warmer than normal as winter descends (Toronto Star)
  5. Trudeau Approves Kinder Morgan Plan, Rejects Northern Gateway Pipeline (Huffington Post)
It should be clear to all that yesterday's approval of the Kinder Morgan pipeline comes at time when the planet is providing daily evidence that the build-up of Carbon in the atmosphere is going to come with dramatic and severe consequences. And while the CEO of Kinder Morgan isn't certain humans are playing a role in global warming, the scientific consensus couldn't be clearer.  

It's fair to say that Trudeau is in a difficult spot here - there is pressure to appease traditionalists who believe approving this pipeline will somehow usher in a period of nation-wide economic growth. Further, there is pressure to appease right leaning voters by superseding the Conservatives as pipeline proponents. And there is pressure to 'demonstrate' Trudeau's mantra that 'economic growth and environmental sustainability can happen at the same time'. We know that Trudeau's approval was a calculated strategic decision, not one based in science, but rather a short term political calculation. The problem is that on political, economic and environmental grounds, approving Kinder Morgan is the wrong decision:

Politically, this decision sets the stage for a new era of protracted conflict between the federal government and First Nations (an already fragile relationship which the Prime Minister campaigned to heal); between the Alberta government (which wants to get its oil to tidewater) and the people of BC (most of whom feel that the presence of bitumen on the coast poses a major threat to their way of life); and between the oil/pipeline industry and the hundreds of thousands of environmentalists who have petitioned against this project. This government has also made political commitments to the world in terms of meeting global greenhouse gas reduction targets, and this decision makes that objective even more unlikely:

Environment Canada: Figure 5-1: Canada's Emission Projections in 2020 and 2030 (Mt CO2 eq).

, the pro-pipeline argument is riddled with counterfactuals and contradictory statements. We are told on one hand that additional pipeline capacity is a requirement to meet output levels from the oil patch, and yet on the other hand we're told that if the pipeline is not built it will just be shipped by rail anyway - which is true? We are told that getting bitumen to tidewater will help break our dependence on crude exports to the US, and yet meanwhile it's the US that is signalling renewed interest in Alberta oil while the rest of the world (in particular China) is signalling its commitment to wean itself off fossil fuels! We are told on one hand that Alberta needs a pipeline to facilitate economic growth and create jobs; and yet the very recent past shows us that the recent oil sands crash was not in any way a result of capacity problems, but rather a price drop due to global market conditions in the petroleum industry (and the neoliberal policies which reinforced them in Alberta). We are told that Alberta needs to reduce its economic dependence on bitumen, and then we are told that a pipeline will enable growth in oil sands production!? This double speak doesn't make any sense. There may indeed be some commercial gains from the Trans Mountain pipeline - certainly the oil sector wouldn't be so keen to have it if they didn't see a profitable opportunity - but we have to keep in mind that the self-equilibrating market has a phenomenal capacity to 'taketh away' where it also 'giveth'. Let us not forget how the last oil sands boom drove up the value of the Canadian dollar, negatively affecting Canadian manufacturing exports. Let us not forget that due to its very nature bitumen will never be as competitive as real oil. But most importantly, let us not forget that the age of oil is now entering its closing time as the world undertakes a revolutionary shift towards clean energy - in short, an investment in oil is an investment in the past. This is not to say "tough luck, Alberta" - if anything, facing up to the current economic reality calls on us to re-commit to Alberta and say "we're going to be here for you!". Let's invest in Alberta; Heck, let's invest in the province's energy sector - just not in fossil fuels. Let's build a gigafactory in Fort McMurray and secure Northern Alberta's place as a global powerhouse in fuelling the next wave of vehicles (which will undoubtedly be electric vehicles). Let's build a research station in "northern renewables" focusing on overcoming the technical challenges of geothermal and solar energy at high latitudes and cold climates. That is pathway to economic growth in the energy sector this Century.

Environmentally, it is not just an inconvenient truth, but an unfortunate reality that we must leave as much of that bitumen in the ground as possible. It's unfortunate because there is undoubtedly great commercial value in that incredibly vast reservoir of hydrocarbons - that's undeniable. But both the human world and the natural worlds are changing, and we need to wake up to that reality. The climate is verging on very serious tipping points. We just don't have the space in our global carbon budget for growth in the oil sands. Climate change is the defining issue of our time, and we're already seeing the human toll - more frequent and severe hurricanes in the Caribbean, unprecedented droughts in some areas with unprecedented flooding in others. Habitat loss and declining biodiversity also impact human societies as these environmental changes wreak havoc on agricultural productivity and a great many other realms of human commercial activity (pharmaceuticals, tourism, trade, etc.). If the climate wasn't facing a "code red", then maybe this pipeline might be worth considering; unfortunately, reality suggests otherwise. 

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