Wednesday, July 25, 2012

Oil Pipelines: BC's Christy Clark misfires; what the Liberal Party of Canada should do

Congratulations to Premier Clark for doing two things at the same time: starting a meaningful dialogue about the environmental concerns behind the export of heavy oil from Canada, and staying true to her pattern of shooting herself in the foot at the same time.

However, her opening gambit is one that the LPC (and other parties – nudge, nudge: anyone got Mulcair's telephone number?) may use to build a sound tar sands policy that takes into consideration national interest, the interests of the First Nations, and provincial interests.

Clark opened the battle with Premier Redford of Alberta with this announcement of her 'principled poliicy' for oil pipelines crossing BC:

Lake laid out the five new requirements all new crude oil pipelines will have to meet before they get provincial approval:
  • Completing the environmental review process. In the case of Enbridge, that would mean a recommendation by the National Energy Board Joint Review Panel that the project proceed.
  • Deploying world-leading marine oil-spill response, prevention and recovery systems for B.C.'s coastline and ocean to manage and mitigate the risks and costs of heavy oil pipelines and shipments.
  • Using world-leading practices for land oil-spill prevention, response and recovery systems to manage and mitigate the risks and costs of heavy oil pipelines.
  • Addressing legal requirements regarding aboriginal and treaty rights, and ensuring First Nations provided with the opportunities, information and resources necessary to participate in and benefit from a heavy-oil project.
  • Ensuring British Columbia receives a fair share of the fiscal and economic benefits of a proposed heavy oil project that reflects the level, degree and nature of the risk borne by the province, the environment and taxpayers.
The criteria will apply to the controversial Northern Gateway project and any other new crude oil pipeline in B.C., Lake said.

The rub lies in the second, third and fifth principle.

When she laid out Principle 5 (the 'Fair Share Principle'), Clark pulled the trigger and blew her little toe off. At the rate she is going, she will have to hobble to the polling booth come 2013 in order to cast her very own vote at the next election.

Urged on by her advisors, Premier Clark yet again showed her lack of gravitas as a serious politician by offering a soundbite instead of a rationally derived policy.

She obviously wanted to pit the voters of BC against an external enemy, in order to take the heat off her own government, and so – following the decades old tradition of provincial premiers blaming the problems of the world on another government (usually Ottawa) – she attacked the Conservative government of Alberta.

And her ploy worked, so far.

The fan is whirring, the premiers are gathering, the media is salivating like Pavlovian-trained dogs, and the temperature is rising.

On Tuesday, Premier Christy Clark said the pipeline will die if Alberta doesn't negotiate with British Columbia over the sharing of economic benefits.
 "If Alberta doesn't decide they want to sit down and engage, the project stops. It's as simple as that," Clark said in an inter-view from Halifax.

"So the ball is in Alberta's court today to decide whether or not they want to sit down."

So, Clark would stop the pipelines running across BC unless the provincial government of Alberta gives BC a bigger share of any income it gets from the pipeline owners. And she would so so even though she acknowledges that the pipeline project in question is good for Canada:

“This project is good for Canada. It’s great for Alberta and at the moment it’s not very good for British Columbia,” Ms. Clark said.

So Premier Clark, on behalf of the citizens of BC, would hold to ransom a project that is good for Canada, unless Premier Redford pays the ransom d emand.

Redford's Retort:

But Redford has politely told Clark to take a running jump, basing her argument on constitutional grounds and practical grounds:

"From my perspective, I'm not going to sit back and wait for the conversation to continue to be defined without ensuring that Albertans and Canadians understand what Alberta's position is, and that is we will continue to protect the jurisdiction we have over our energy resources."

Zounds! Shades of Pierre Elliot Trudeau and his National Energy Program. Clark is doing a Trudeau, seems to be the Albertan response, and trying to muscle into provincial jurisdiction over provincial resources. To the barricades!

The Pipeline company:

And what about the pipeline company? It seems delighted to have avoided the fray:

Enbridge considers the request for a “fair share” of revenue a “government-to-government issue,” and says it’s eager to discuss environmental plans and first nations engagement with Ms. Clark’s government.

What did Premier Clark do wrong?

She aimed at her toe instead of at real target.

The LPC could adopt the Five Principles with a serious modification: the the polluter must pay.

The issue that Clark glimpsed but misunderstood how to respond to, is simple: There will be oil spills and the environmental and economic damage could be considerable.

How is this best reduced, and who pays what to remedy the damage as much as it can be remedied?

The Sixth Principle – Polluters Pay and Backers backstop:

If the LPC added to the Five Principles the principle that the Polluter Pays, and defines those responsible for paying for any pollution (the "Backers") as any commercial enterprise that has a commercial stake in the product (the oil), the transmission system (the oil pipelines), the shipping systems (the port facilities and tankers), then we can structure a sound policy.

One suggestion is that we learn from the Gulf spill and BP's handling of it. It became very clear that BP could not be trusted to be straightforward with the governments, the public and all stakeholders when it came to speed of response, size of response, and degree of response.

So the Sixth Principle would require the posting by all the Backers of performance bonds by creditworthy third parties. These performance bonds would have teeth and would work this way:
  • The bonds would be posted with the federal and provincial governments by financial institutions whose creditworthiness is undoubted.
  • The bonds would be for amounts determined by a panel with members from the two government levels and independent third party experts, with such independent parties in the majority.
  • In setting the amounts of the bonds, the Panel would include amounts to remedy oil spills, repair economic damage to government assets, pay economic damages of all affected stakeholders (remember the shrimp fisheries in the Gulf, whose livelihood was so badly damaged?).
  • The Panel would be obliged to review the amount of the bonds each year, and increase their amount if needed by changing circumstances. Any failure to provide the increased bonds would immediately lead to charges on the Backers' assets.
  • The bonds would be triggered as soon as damage was done, with the Backers having to sort out later who should pay them for any damages caused by third parties. There should not be any delay in getting the monies needed to pay for the damages; the courts could be used by the Backers at their leisure to sort out who pays whom.
  • The financial institutions would have to satisfy themselves that the Backers have the financial wherewithall to pay them if the bonds are used.
How this differs from the Clark principles:

Clark aimed at Redford's province.

Redford resisted this and told Clark to raise taxes on the BC portion of the assets.

The oil company tried to stay as far away from the fight as possible.

The Sixth Principle treats the whole process as one commercial enterprise, and requires all commercial Backers to participate in providing a meaningful solution and support. in proper amounts. and with due speed.


  1. I don't buy any of it. Attending a secret meeting, in which we are told nothing was discussed, smells more like a bait and switch sting to me, rather than an honest outrage. These neo-con self helpers, dressed in progressive garb, should not be trusted, no matter how sincere they sound.

  2. Anon, it matters not who starts a meaningful dialogue; what matters is what the other people do once it is started. Clearly setting provinces against each other ala Clark/Harper is not productive.

    Equally clearly, not addressing the real cost of fossil fuels (which includes remedying spills, removing carbon dioxide to prevent further global warming, and remediation) is the duty of politicians.

    Which most politicians fail to carry out.

  3. Cat, we have long realized that the LPC is about one step behind the CPC at selling out British Columbia. There are reasons the LPC has become utterly irrelevant to this province. I voted Liberal for four decades. Never again.

  4. The pipeline could be built along national rail line right of ways, or go East or thru the US n.w. or or or.
    Path of least resistance, pay no toll.
    Albertan companies can find another route to get our black gold to market.

    Once loaded onto tankers BC has no jurisdiction over the waterways and seabeds along the coastline, SCofC decision 1969.

  5. Wilson, BC has an interest in keeping its coasts clean of oil spills and in having oil spills properly remedied, even though legally the federal government has jurisdiction. Dp any BC government should consider the overall picture when deciding whether to agree to any oil pipeline crossing its territory. If the BC government decides that the federal government rules are inadequate, it should take steps to prevent the pipelines being built until adequate rules and funds are provided for.

    My argument in this post is that by treating the problem of heavy oil being transported from Alberta through BC and then by tanker to China etc as being a problem to be viewed solely through the prism of the parts, things get lost in the shuffle.

    That's why we need a broad definition of 'Backers', to ensure that a company involved in the whole process cannot escape responsibility by claiming only to share a part of the duties to maintain proper systems and backups. Look at the whole process holistically, and deal with it as such.

    The duty primarily falls on the federal government, which should adopt the 'Backer' concept in my post; my argument is that the Liberal Party of Canada should adopts such a holistic approach to heavy oil, and make sure the process works from beginning to end.

    Let's not focus on the splintered system that now exists; let's be sensible and take the necessary steps before we have our very own made-in-Canada Gulf incident.

    1. Clark's stand is great, and well-principled. Sure, it could have used some "tweaking" but too much of that and the essence of the message is lost. For idiots like Ezra Levant calling it "un-canadian" (really?? you are perhaps the most un-canadian pundit out there. American maybe...) to rednecks in Alberta calling for separation (let us know when it happens, we will have a new national holiday...beers and bc beef burgers at my place, boys!). I can only hope that her stand means something and is not mere grandstanding which would leave us even further behind. There WILL BE SPILLS. Wer all know that. My first choice is no pipeline anywhere in this great distant second choice is no pipeline in BC.

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