Thursday, December 26, 2013

The Economic Case Against the Tar Sands, Part 2: Tom Mulcair's Disastrous Kinder Morgan Reversal Opens the Door for the Green Party

In Part 1 of this blogseries, I laid out a logic model which started with the most important number to Canada’s, and the world’s, economic health: 2 degrees Celsius. Following from the notion that we must hold global annual warming at no more than 2 degrees Celsius, I laid out the case that Canada is failing to do its part to prevent warming, due to our weak Copenhagen Accord emissions reduction targets – and due to our failure to meet those targets under current economic circumstances, thanks to the tar sands industrial enterprise. I concluded that emissions from the tar sands enterprise cannot be permitted to rise and therefore investing in new pipelines would be a misallocation of scarce financial resources. The only way to hold the line at 2 degrees C of warming will be through heavy investment in renewables and the construction of distributed energy systems which transport and store renewable energy, coupled with the gradual winding down of fossil fuel enterprises, including Canada’s tar sands.

With all of this in mind, the question needs to be asked, what is Canada doing to achieve these necessary outcomes?

Canada: Headed in the Wrong Direction

Of course, the answer is we aren’t doing anything much at all – in fact, when everything is factored in, Canada is actually significantly exacerbating the global climate situation by facilitating the expansion of the tar sands industrial enterprise by approving additional pipeline capacity, and to a lesser but still significant degree, by investing in natural gas extraction.

I’ll leave the natural gas matter for another day. Today, I’d like to focus on those pipelines. In Part 1 of my series, the logic model I drew concluded that if pipelines are ultimately built, the tar sands can expect to see significant expansion. Canada’s Natural Resource Minister Joe Oliver has been saying as much now for years, in his efforts to justify Keystone XL to President Obama (and despite what the U.S. Department of Foreign Affairs concluded – which was to say that the tar sands would expand with or without Keystone – which completely ignores what Oliver has been saying). I have always questioned Oliver’s wisdom, along with that of his Conservative Party counterparts – for it’s very clear to me that Canada risks economic upheaval, and potentially ruin, if we continue to invest in fossil fuels.

Northern Gateway Assessment - Absurd Economics

Last week, the National Energy Board (NEB) gave the greenlight to move forward with Enbridge’s Northern Gateway pipeline, subject to 209 conditions. In making this recommendation to cabinet, the NEB did not assess a couple of significant environmental matters, including what would happen to the bitumen once it left the pipeline in Kitimat, and importantly for my post today, what happens to the bitumen before it enters the pipeline. These impacts were simply not assessed by the NEB from an environmental standpoint – but interestingly the planned economic benefits from shipping and tar sands industrial expansion were key to the NEB’s findings that construction of the pipeline would be in Canada’s economic interests.

And that’s just absurd.

You can’t tout the economic benefits of the energy system while simultaneously ignoring the system’s environmental impacts – choosing instead to focus only on the direct environmental impacts which come along with constructing a pipeline (and even in this extremely narrow assessment, the NEB recommended 209 conditions – many of which should never have been conditions of approval at all, but rather addressed upfront as part of the approval process. What happens if Enbridge can’t meet the conditions? The go-ahead has already been given, the money will have already changed hands. You can’t put the toothpaste back in the tube, even after you’ve discovered it tastes horrible).

Mulcair, Trudeau and May on Pipelines

Of course, with regards to the Northern Gateway, there’s a general feeling that what the NEB had to say about the pipeline didn’t really matter anyway – because the pipeline is never going to get built. Opposition from First Nations and environmentalists, along with calls from Leaders of Canada’s two largest opposition parties to shelve the pipeline will almost assuredly kill the project.

Yes, both NDP Leader Tom Mulcair and Liberal Leader Justin Trudeau have been vocal in their opposition to Northern Gateway. Trudeau has been against the pipeline due to the physical impacts which the pipeline is anticipated to have on Northern BC’s rugged natural environment, and due to the lack of consultation with impacted First Nations. Mulcair has been critical for both of those reasons, and because he believes that the export of raw bitumen represents a lost opportunity for Canadian job creation and the establishment of a value-added refining industry.

The Green Party’s Elizabeth May has been vocal in her opposition for all of those reasons – and because of the impacts which the expansion of the tar sands will assuredly have on Canada achieving our emissions reduction targets – and doing our part to combat the climate crisis.

Dismissing Justin Trudeau and the Liberals

Justin Trudeau, due to his support of the Keystone XL pipeline, has really put himself in a box when it comes to the climate crisis. And that box is labelled “Not Credible”. I’m not going to spend much time assessing the Liberal Party’s position on energy and climate change, because it is so akin to that of the Conservative Party’s status quo that nit-picking the minor differences would be a futile exercise. A lack of a plan to price carbon, coupled with years of inactivity while in government, has led me to conclude that the Liberals have zero credibility on the issue, in my opinion.

Tom Mulcair and the NDP's New Energy Vision

The NDP, however, is a bit of a different story. Certainly NDP Leader Tom Mulcair has been making some positive noises about taking the climate crisis seriously. In a recent speech to the Economic Club of Canada, Mulcair had a lot of positive things to say about developing the “clean tech” sector (which I discussed earlier in my blogpost, “NDP Ups its Game: One Green’s Take on Mulcair’s Energy Vision”, December 5, 2013).

Further, the NDP have generally been against pipelines, demonstrating their “green cred” on this issue. Mulcair has long opposed both Northern Gateway and Keystone XL. And while the NDP have been rather silent on Enbridge’s proposed Line 9 reversal (even though Line 9 traverses through numerous ridings which are sure to be battlegrounds for the NDP in 2015 – while offering little or no local economic benefit). And in the recent British Columbia provincial election, NDP Leader Adrian Dix publicly expressed his Party’s opposition to the Kinder Morgan Trans Mountain pipeline expansion proposal, which would see a major increase of bitumen flowing into the Port of Vancouver.

Kinder Morgan's Trans Mountain Pipeline

If built, the Kinder Morgan Trans Mountain proposal would represent a massive opportunity for flowing unprocessed bitumen to an existing deepwater Pacific port. The Globe and Mail’s comparison of Trans Mountain and Northern Gateway (“Northern Gateway and Trans Mountain: How two pipeline projects compare”, Globe and Mail, December 22 2013) tells a very interesting story. While Northern Gateway, if constructed, would have capacity to transport 595 thousand barrels of bitumen a day, Trans Mountain would triple its current capacity and carry as much as 890 thousand barrels of bitumen a day.

There would also be significant issues for the City of Vancouver if Trans Mountain gets the go-ahead, including impacts on tanker traffic (the Globe and Mail reports that there could be as many as 34 tankers a month traversing the Burrard Inlet in an expansion scenario, versus the current 5 per month). Those, and other physical environmental concerns are important, but I’m not going to dwell on them for the purposes of this post. Instead, my concern is focused simply on how the upgrades to Trans Mountain would facilitate the expansion of the tar sands – and why that would not be in Canada’s long term economic interests.

Tangled Policy Direction: Kinder Morgan and the NDP

It’s not clear to me that former BC NDP Leader Adrian Dix really understood the climate change concerns and negative economic impacts posed by Kinder Morgan before he did a 180 degree turn during the 2013 spring election and rejected the pipeline. Dix was mostly focused on tanker traffic – along with wooing voters from the upstart BC Green Party – when he made his pitch to reject the pipeline. Later, this change of tack in the midst of an election was cited by NDP forensic electoral analysts as one of the major reasons for the NDP’s unexpected election defeat.

Now, Dix is gone, and the NDP are free to chart a new course. And that’s just what federal Leader Tom Mulcair appears to be doing with regards to Kinder Morgan. Interestingly, it appears that the NDP will now embrace Trans Mountain as part of their pre-election strategy to woo voters (presumably from the Liberals and Conservatives) in British Columbia (see: “Mulcair confident in the face of sinking polls”, Peter O’Neil, the Vancouver Sun, December 23, 2013)

NDP's Inconsistencies on Kinder Morgan

What’s clear to me (and will become increasingly clear to voters as well) is that Mulcair’s position on Kinder Morgan’s Trans Mountain is not at all consistent with his Energy Vision laid out earlier this month to the Economic Club of Canada – not from a climate change perspective, and certainly not internally consistent with this own broad energy policy approach. Let’s look at the second part first.

Mulcair told the Economic Club that Canada must begin the heavy lifting of creating a 21st Century energy system, based on a mix of renewable generation and smart grid technology. He made the connections between this industrial project, job creation and economic prosperity. With regards to fossil fuels, aside from laying out the case for better access and a social license for resource extraction, what Mulcair was really talking about was holding the line on tar sands expansion by insisting that the NDP would put a price on carbon through a cap and trade scheme, and by supporting an East-West pipeline but only if a refining industry could create Canadian jobs first. In essence, both of these measures would negatively impact any and all tar sands expansion plans – while promoting responsible and more sustainable resource development.

Mulcair was not talking about shutting down the tar sands – nobody in Canadian politics today is doing that. But he was talking about slowing down their growth by stalling transport capacity, while simultaneously creating value-added jobs for Canadians in the oil sector, and shifting in a massive and comprehensive way to renewables.

But now that Mulcair has reversed the NDP’s position on Kinder Morgan, all bets are off. The Kinder Morgan pipeline, if approved, will allow for a greater rate of expansion for the tar sands than we are witnessing today – which goes completely against the course outlined by Mulcair to the Economic Club. This recent change in position is not consistent with slowing growth.

Facilitating Tar Sands Expansion - Not Meeting Emissions Reductions Targets

And then there’s climate change. As outlined earlier, pipeline construction will allow the expansion of the tar sands industrial enterprise, and increase greenhouse gas emissions. These increases to emissions will mean that Canada won’t meet our emissions reductions targets – and will exacerbate the warming of the planet beyond 2 degrees Celsius, which threatens to bring about a global economic collapse.

Mulcair, in his New Energy Vision, ostensibly told the Economic Club of Canada that he was going to get serious about tackling the climate crisis. But now, by embracing Kinder Morgan, it’s clear that he was either just bluffing, has decided to pander for votes in BC, or simply doesn’t understand climate change.

Mulcair's Kinder Morgan Reversal - Political Winner for the Green Party

Further, I believe that this reversal of the NDP’s position on Kinder Morgan will prove a loser for Mulcair in the long run. Not only is his reversal inconsistent with the NDP’s New Energy Vision, and inconsistent with measures needed to get serious about climate change, but it creates an opportunity for the Green Party of Canada to corner the anti-Kinder Morgan vote in Vancouver.

Already, the Green Party of Canada is polling very well in British Columbia – the latest EKOS numbers have the Greens at 18%, making BC one of the highest polling jurisdictions for Greens in the world. While those numbers might be somewhat inflated, it is fair to say that the Greens are doing well in BC, having elected Elizabeth May federally in 2011 and Andrew Weaver provincially in 2013. And with BC already a battleground between the Liberals, NDP and Conservatives, it stands to reason that an aggressive Green campaign centred around the right candidate could find the Greens coming up the middle in certain ridings.

With opposition to Kinder Morgan in BC centred in Metro Vancouver and on the Island, it’s pretty fair to think that Mulcair may lose votes to the Green Party – which now remains the only federal party opposed to Kinder Morgan. Interestingly, Vancouver and Vancouver Island are the centres of Green strength in BC, and province-wide polls might actually be underselling voters existing preferences for the Green Party in those regions. If that’s the case (and it probably is), the NDP is going to find itself in real trouble in Vancouver over this move of Mulcair’s.

NDP: Putting Partisan Gain Ahead of Public Good

Now, look, I want to give Mulcair the benefit of the doubt here on climate change. I really think he does understand its dynamics – including the need to hold warming at 2 degrees Celsius. But it’s not clear to me that the NDP hasn’t watered down its past pledges to get serious about climate change. In his Economic Club speech, Mulcair talked only about Canada meeting its current “commitments” (Copenhagen), rather than the emissions reduction targets the NDP had been playing up for years and years now (those that were enshrined in Kyoto). So, if Mulcair does understand how climate change works, why is it he seems poised to take his party backward on the issue?

Clearly, it’s all about pandering to voters. Mulcair knows where his battlegrounds are, and what he must do to win enough votes to form government in 2015. Along with holding Quebec and most of BC, Mulcair needs to win suburban Ontario – and that’s where his step back on Kyoto and embrace of Kinder Morgan will likely win votes.

Kinder Morgan really isn’t a top of the line issue for most Ontario voters, despite its connection to climate change and economic collapse. I think it’s fair to say that most voters throughout Canada might not be thinking the same way that I am about this issue. Point here is that the NDP will be able to tell Ontario voters that they support pipelines and non-renewable resource expansion – as long as it’s the right pipeline (as if there could be such a thing!). Such an approach may warm Ontario voters to the notion that the NDP isn’t the party of economic mismanagement which so many in my province fear they are. This kindler, gentler (from a short-term economic perspective) NDP will sell itself well in Ontario.

And the same goes for relaxing its policy on climate change. Oh, I’m sure they’ll talk a good talk about climate change, in an effort to convince voters that they’ll take real action on the issue (and in comparison to the Conservatives and Liberals, it won’t be a tough sell for the NDP to make to voters) – but at the end of the day, these scoped actions on the part of the NDP will mean that Canada will continue to be a climate laggard, and will do nothing for ensuring that Canada is doing its part to help ensure that the 2 degree Celsius climate threshold isn’t breached.

In short, the NDP is going to sacrifice good public policy for a short term vote grab. And that’s not what Canada needs.

NDP: Leaving the Environmental and Economic Playing Field Open for a Green Party Push

So it really is all about strategy. Mulcair has probably already written off retaining all of his urban BC seats, given the strength of the Liberals and Conservatives in BC. When a small loss is already in the cards, Mulcair’s reversal on Kinder Morgan might actually help with the NDP’s campaign in BC by bolstering the fortunes of the Green Party. This might at first seem counterintuitive, but the fact is that successful Green campaigns are not always drawing voters from the NDP – statistics show that both the Liberals and the NDP are about equally effected, with the Conservatives impacted to a lesser degree. In the right riding, a strong Green campaign could draw enough votes from the Liberals to allow a New Democrat to be elected. 3-way races are a bit of a crap shoot in elections anyway. 4-way races are even more so. Mulcair has always been a gambler – so the Kinder Morgan strategy might make sense for 2015 because of BC’s electoral dynamics and the NDP’s Ontario strategy. At least in 2015.

Beyond that, Mulcair might be jeopardizing the NDP's chances of success if the Green Party is able to capitalize on building a regional power base in BC. It's no secret that the NDP fears the rise of the Green Party - it's gone to extrordinary lengths to keep the Green Party down, often to the silly point of refusing to acknowledge its existence by not naming it publicly. More importantly, the NDP has participated in a concerted effort to keep the Green Party out of televised Leaders debates nationally, and in a number of provinces as well. Greens won't soon forget that former NDP Leader Jack Layton twice publicly sought to keep Green Leader Elizabeth May out of the televised leadership debates. A public outcry (and supportive Liberal Leader) condemned Layton's efforts in 2008 - but in 2011, with Liberal Leader Michael Ignatieff onside, May was kept silent.

Greens: Putting Planet Before Party

In some ways, this NDP strategem sits well with me. Goodness knows that I’d rather have Mulcair as Prime Minister than Harper (or any other Conservative) or Trudeau, so if Mulcair thinks he can win this way, more power to him. And, as a Green, I can’t help but applaud circumstances which might allow more of my Party’s candidates to be elected, and that’s one of the outcomes I see from Mulcair’s reversal on Kinder Morgan. That being said, I have to put the value of the planet ahead of any partisan aspirations that I have, and because I value the planet, I am forced to condemn Mulcair’s approach to Kinder Morgan.

To me, it’s very clear that the NDP is not going to take combatting climate change seriously – despite the noises it is making. Yes, at least under an NDP government, some steps forward be taken, while offset by steps backwards. At least, though, that’s a better approach than on offer from the Conservatives and the Liberals – both of whom would take Canada in one direction only – backwards. But half measures at this point in our history are not what we need – not if we are going to stave off economic collapse as a result of blowing through the 2 degrees Celsius warming threshold. And that’s why Mulcair and the NDP are failing Canadians, in my opinion.

The good news is that the Green Party appears to be on the rise in Canada – and certainly the groundwork is being laid now in BC to make the Greens a regional player. If a small caucus of Greens is elected in 2015, come the next election, the Green Party will be able to show Canadians throughout all regions that we are an important contender with different priorities and ideas from any of the other old-line parties mired in their twentieth century views of politics. I really do believe that, thanks to Tom Mulcair, the opportunity for the Green Party to find its way forward has been elevated. The ball is now in our own court to capitalize on Mulcair’s foolish – and economically dangerous – plan to embrace Kinder Morgan and flout Canada’s emissions reductions commitments.

But Canada, and the world, will assuredly come to resent the NDP’s wishy-washy approach to climate change.

(opinions expressed in this blog are my own and should not be interpreted as being consistent with the views and/or policies of the Green Party of Canada)


Bruce said...

Thanks for writing this, some interesting opinions here, especially regarding the effects of Kinder Morgan. Many environmentalists are downplaying the role of the Kinder Morgan decision in the NDP loss, perhaps due to the idea that the way the decision was delivered was more of an issue than the decision itself. At the same time, the official analysis of the election results by the NDP actually didn't mention the Kinder Morgan decision, although Brian Topp's analysis did prominently. My take is the environmental groups have a hard time accepting that their version of the world is not as widely trusted (on economic and social grounds) as their campaigns would purport, and the NDP knows the environment is a hot potato that can burn so they may be trying to steer clear of anything that would cause problems in the future - even in their post election analysis.

Sudbury Steve said...

@Bruce - not much I disagree with there. Actually, I haven't read the NDP's official post-election analysis, and didn't realize it was silent on K-M (how could that be? Especially since Topp had a lot to say about it). Kai Nagata elsewhere (here: pointed out that polling in the days after the BC NDP's announcement about K-M showed the NDP receiving a bump, as reported by Justason Marketing Intelligence here: This might imply that the NDP's opposition to K-M may have been overstated by Topp as a reason for NDP defeat. But it also might just be indicative of a public not really paying a lot of attention to the election campaign at that point. Anyway, the polls proved less than trust-worthy, generally speaking, so it's difficult to read a lot into this.

I think it's fair to say that environmental issues are definetly a double-edged sword politically. The NDP, much like the Greens, seem to find themselves in opposition to so much - with that in mind, it might make some sense for Mulcair to publicly indicate that there's at least one "economic development initiative" which his party doesn't oppose in Trans Mountain. Yet, I'd suggest this isn't the right project for him to have picked, given his recent (generally pretty good) speech to the Economic Club of Canada outlining the NDP's New Energy Vision. But it will probably play well in Ontario - and right now, that's one of the NDP's main battleground areas.

Thank you kindly for your comments, Bruce. Feedback is always appreciated!