Nation on cusp of a crisis
This country is fast approaching crunch time.
Just lend an ear to some of the words being tossed around by the country’s business and political leaders.
Canadian oil is not getting to export markets, creating what is being described as the country’s “biggest challenge” in decades. It has been deemed a “crisis” in Alberta and is causing “concern” in Ottawa, where Finance Minister Jim Flaherty has chosen rather cooler language.
A reversal of the flow of oil is sought as a means to turn around an “apocalyptic” economic situation in New Brunswick and every environmental syllable uttered by Barack Obama is fiercely parsed here for clues to the future of our southern export market.
Something has to give, because there is simply too much at stake.
Canada’s inability to move its most lucrative export at world price, according to a CIBC analysis cited in a new report by the Canadian Chamber of Commerce, cost our economy an estimated $19 billion last year, more than $50 million per day. Another analysis broke it down further, putting the cost to each Canadian at $1,200 per year.
But how to unlock this pipeline gridlock?
First, Ottawa has to convince First Nations and environmentalists that it is paying more than just lip service to their legitimate concerns. It must also convince its potential customers of the same.
Then, and only then, it can move the oil.
But west, south or east?
Here’s some handicapping on how — or if — our resource riches will get to key export markets.
West: It is likely too late to save the largest westward route, the $6.5-billion Enbridge pipeline from the Alberta oilsands to the British Columbia coast. It is opposed by a powerful environmental movement, most of the First Nations in the province, conditionally by the Liberal government of B.C. and unconditionally by New Democrats, who may take power in about eight weeks.
The National Energy Board has until the end of the year to pronounce on the pipeline proposal and Prime Minister Stephen Harper could forge ahead regardless, but the political price would be too high. This proposal appears dead.
South: The future of the Keystone XL pipeline rests with Obama, but an expected pro forma approval has been thrown into question because of the U.S. president’s sudden concern with climate change.
An initial meeting between new Secretary of State John Kerry and his Canadian counterpart, John Baird, appeared somewhat cool, heaping further anxiety into the mix. Last weekend, thousands rallied in Washington to oppose the pipeline.
Most still expect Keystone to finally get the Obama nod, probably by early summer, couched by the administration as needed energy security and likely as part of a package that includes a number of clean energy initiatives.
But an increase in U.S. supply and the growth of fracking makes Alberta bitumen less crucial, and Ottawa is aware that a preoccupation with a southern market is a losing proposition.
Keystone XL is still important, but it is no solution.
East: It appears time to get bullish on the option of a pipeline from Alberta to Saint John, N.B., where it can head to market.
It has the support of Jim Prentice, a former Conservative cabinet minister and a possible one-day leader of the party. It is backed by Frank McKenna, a former New Brunswick premier and Canadian ambassador to the U.S. and a man who could have been federal Liberal leader. It has the OK of federal Opposition Leader Tom Mulcair, with his usual environmental caveats. It has the support of the federal government.
McKenna says the proposal has near unanimous backing in New Brunswick because his home is “facing unprecedented challenges to our survivability as a province.”
The advantages are clear — it provides a means for Alberta crude to get to an export market, it weans the Maritimes off more expensive imported crude and it creates much-needed jobs in Quebec and New Brunswick, at least 5,700 of them in the immediate term, says McKenna.
The wild card remains Quebec Premier Pauline Marois. She has met with Alberta Premier Alison Redford on the proposal, and Redford says she does not believe Marois would block the pipeline. Marois this week meets with her New Brunswick counterpart, David Alward.
The need to move Alberta oil, in an environmentally responsible manner, is not an Alberta issue. Nor is it a British Columbia issue or a New Brunswick issue, but a Canadian issue that should engage Ontarians as deeply as Albertans.
It is ironic that the final piece of this national puzzle could rest with a sovereigntist premier in Quebec.
Tim Harper is a syndicated Toronto Star national affairs writer. He can be reached at email@example.com.