Pipeline hubris

Spoiler alert- This is not a travel adventure blog post. Somehow this one slipped through.

Someone wise once told me that most of our wounds are self-inflicted.

In the context of this weeks noisy debate about pipelines in Canada, we can probably identify a few self inflicted wounds and a few of the principals involved. To save their own embarrassment, energy executives and their surrogates tend to be shouting the loudest and pointing fingers with the most vehemence, a sure sign of the axiom.

Canadian energy industry executives completely missed the dizzy decline in the world price of oil. They weren’t alone, we all did; the difference is they get paid big bucks to figure this stuff out.

The Alberta economy has paid a big price, people are out of work, house prices are falling, companies will fail, investment is down. While it has happened before, everyone is spooked. The challenge this time is that the energy industry has dug itself into a fairly big hole – public trust is at all time lows.

For the past decade the Canadian energy industry has been the leading climate change denier. Their approach to opposition to tar sands development was to call it oil sands – or even better, bitumen. Major importing countries – aka customers – were so frustrated with the lack of any commitment to improving mining and processing practices that they organized boycotts of Alberta oil sands production. COP 21 didn’t help.

The energy industry, complacent after a long run of high world oil prices, decided that their good fortune was a product of their business acumen. Unfortunately, their success resulted from a commodity price set at OPEC headquarters. Now with commodity prices in the tank, rather than self examination they have chosen to blame the newly elected governments of Notley and Trudeau.

If I was out of work in Calgary my question would be to my former boss; “If you’re so smart, why am I out of a job?”

The pipeline business, heady from decades of guaranteed profitability, systematically screwed up every project put forward since the Maritimes and Northeast Pipeline was approved in the late 90’s.

Keystone XL was a straight line that ignored every obvious warning sign; ranchers, aquifers, parks, sacred places, regulatory agencies, the US President – no matter, the straight line was king. Then it wasn’t, listening and flexibility came too late.

Northern Gateway was a case study in what happens when an Alberta oilman meets determined BC environmentalist/Aboriginal/lefties – they didn’t have a chance and still can’t seem to figure out why.

Kinder Morgan botched a suburban Burnaby oil leak, couldn’t get its GPS coordinates right in mapping the new line and failed to recognize that rebuilding a pipeline route through an urban neighborhood to deliver bitumen to tidewater in beautiful Burrard Inlet might not work just on the strength of their existing right-of-way.

The industry seemed determined to alienate just about everyone;

  • the people of Alberta as evidenced by the landslide provincial election,
  • most Canadians as shown by the results of the last Federal election,
  • most other key provincial governments where support was crucial,
  • the US Government and its many agencies in Washington,
  • stakeholders all along the Keystone XL line from State legislators to farmers and ranchers to environmentalists of all stripes,
  • Stakeholders all along Northern Gateway route, including the now restive and politically sophisticated aboriginal communities,
  • residents of Burnaby where the Kinder Morgan pipeline expansion has awakened and aroused fierce opposition.

Now, having been roughed up badly and amidst failing prices, the energy and pipeline business still haven’t figured out how to get the respect they think they deserve. A few advertisements on television and in movie theaters will not burnish their image or regain public trust; haranguing government will not get them the licenses they need to proceed.

The Harper government, in its rush to become an energy super-power, pushed too hard. Cheerleaders-in-chief, they endorsed pipeline projects long before any fair analysis was conducted – public hearings and facts be damned, these projects were going ahead.

They upset the delicate balance of trust in the National Energy Board by passing new legislation to severely limit public hearings. The National Energy Board, created to take public debate out of the political arena and adjudicate them with some evidence-based objective process, was was sacrificed in Harper’s urgency to get things done. The unintended consequences: public demonstrations and a descent into politics of the most destructive kind – nimbyism, self-interest shouting matches and indiscriminate finger-pointing.

So, where are we?

First, this issue is not binary. The discussion isn’t just about a pipeline or no pipelines. It isn’t just about Energy East or no Energy East, Kinder Morgan or no Kinder Morgan. It is about climate change, public trust in our institutions and who determines our energy future.

Alberta has opened the door to a more reasoned public discussion, it is now environmentally responsible; potential international customers and their stakeholders are more willing to come to the table.

The Federal Government has helped breathe some life into Kinder Morgan and Energy East by ensuring more public consultation, real dialogue. Kinder Morgan has a chance to bring its best game – show what it will do to gain the public license to move greater quantities of bitumen to tidewater on the west coast.

Energy East faces its own obvious difficulties. Their proposal will require patience and a willingness to adjust that is uncharacteristic. They will have to find their better selves to succeed.

Both Alberta and Ottawa have created an opportunity for them to rescue these two project. The industry’s need to engage in the community is never more urgent, their dependence on a wide range of stakeholders has never been more obvious.The onus is now on the industry to reformulate their proposals, offer more assurances on public safety, increase the benefits to Canadians and engage in a thoughtful constructive dialogue with all Canadian stakeholders.

They might yet rescue themselves, their employees, Alberta and Canada from their self inflicted wounds.

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2 Responses to Pipeline hubris

  1. habnag says:

    Bob: Great words of wisdom. Is this post shareable? I have that itch to push it further out but not sure just where at this point. Your perp;active needs to be heard, Likely start to 2016. Cheers — Graeme >

  2. David Hocking says:

    Good post Bob. David >

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