Canada’s oil and gas industry might be struggling to reduce its greenhouse gas emissions, but it remains as enthusiastic as ever about recycling. Witness its ongoing commitment to dredging up failed and disproven ideas, from the nonexistent business case for an LNG facility on Canada’s East Coast to the even less existent case for it getting emission credits for the LNG it might ship from BC. But now, with Donald Trump about to return to the White House, the industry is ready to recycle its biggest failure yet: the Northern Gateway pipeline project.
“I hope this tariff nonsense helps us understand we shouldn’t push Keystone XL,” Heather Exner-Pirot, director of natural resources, energy and environment at the Macdonald-Laurier Institute, wrote last week on social media. “We should build Northern Gateway instead.” Former Kinder Morgan Canada CEO Ian Anderson apparently agrees. “It’s a long putt to resurrect KXL,” he told the Calgary Herald’s Chris Varcoe. “You’ve proved that you can go to the West Coast.”
This is, to be kind, wildly optimistic on their part. Yes, a future Poilievre government could repeal Bill C-48, the federal legislation that bans ships that hold more than 12,500 metric tonnes of oil from waters off the northern coast of BC. And while the private sector has made it abundantly clear it wants no part of the risks associated with reviving Northern Gateway, that same federal government — perhaps backstopped by Alberta and the money in its Heritage Savings Trust Fund, which just happen to be controlled by Stephen Harper — could agree to cover the construction costs associated with Gateway 2.0. Heck, it might even have more of the support from impacted Indigenous communities that it lacked the first time around, especially if the economic benefits created by the project were more fully shared with them.
Even then, it’s a dead letter being written to a past that no longer exists. It trades on a vision of the future in which global demand for fossil fuels will grow without end and supplies are constrained by geology or geopolitics. The reverse is true on both fronts now, of course, with demand growth slowing and both the OPEC cartel and Trump administration prepared to unleash a tsunami of new supply. It’s not 2008, when Northern Gateway was first proposed, and all the motivated reasoning in the world can’t change that.
Because Canada is still a nation of laws, any revived Northern Gateway would have to begin the consultation process with Indigenous communities from scratch. It would then have to endure the inevitable legal challenges mounted either by environmental groups or dissatisfied members of said communities, all of which would take time. Even if everything broke in favour of the proponents and its government sponsors, it wouldn’t begin operations until some time in the next decade. By then, who knows what global demand for oil will look like, much less the price at which it trades.
Doubling down on fossil fuels would be a bad idea regardless of who won the 2024 U.S. election, but it’s particularly dumb with Trump returning to office. Canada isn’t going to win a race to the environmental bottom with the Trump administration, and given how much time and treasure has been expended by the oil and gas industry talking about its supposed “ethical” bonafides I can’t imagine why they’d want to try. If anything, it should be an invitation to zig where they’re clearly zagging and attract the renewable energy investment the United States will now spend four years chasing away.
That’s because our shared energy future is already being rewritten by renewable technologies and an emerging superpower — China — that has every incentive in the world to advance them aggressively. Exports of Chinese-made electric vehicles, battery technology, and solar and wind energy will be particularly strong in India and southeast Asia, which just happen to be the same places where oil demand growth was supposed to come from over the next few decades. Under the International Energy Agency’s Net-Zero scenario — one that would be heavily underwritten by low-cost clean technology exports coming out of China — oil demand growth in southeast Asia gets cut in half by 2040. Under its stated policies scenario, accounting just for the plans already on the books, oil demand peaks by 2030.
In other words, we need to let go of these pipeline dreams and focus on something more realistic. Trump’s election presents an opportunity — and maybe our last good one — to finally decouple Canada from the extraction and export of natural resources and instead build a more diversified and resilient economy. The Trump administration and its MAGAfication of American policy may draw in some businesses and investment, but it will also exert an inverse magnetic force on the human capital Canada needs to build out its tech sector. It will almost certainly revisit its attempts to restrict the use of H-1B visas, which are widely used by the US tech sector to recruit talent from abroad. We could become a home for those people, whether they’re high-skilled immigrants working in Silicon Valley or startups looking to escape America’s increasingly toxic political and legal landscape.
I’m not even a little bit optimistic that we’ll do this. Instead, I suspect the federal Conservatives and their allies in Alberta will advance the idea that we should revive Harper’s 2006 vision for Canada as an “energy superpower.” Doing that right as the world is in the process of embracing cleaner technologies like wind, solar and electric vehicles would be a massive miscalculation, the geopolitical equivalent of investing all your money in Blockbuster Video stock just as Netflix was gaining traction with consumers. But right now, betting on the stupidest possible outcome seems to be a winning strategy.
Comments
As usual, Max Fawcett is on the money.......from a purely economic perspective. What he fails to mention is that the fossil fool efforts to resurrect the past.....if they were to succeed....likely means the end of life on earth as we know it.
Our new fire weather in Canada should be telling us that......if there were any oil boosters capable of listening to the actual planet. In typical Liberal lite efforts to reduce emissions, the government of Justin Trudeau promised to plant millions of trees. In the last two summers alone.......the burning boreal has moved from being a net sequester of CO2......to a net producer of the greenhouse gas.
Tipping points are upon us...and there is nothing they'd like better than more extinction technologies ramping up to tear corridors through that boreal, invest in massive pipelines, and ramp up the bitumen industry to further raise the amount of CO2 in the atmosphere. Goddess knows the UCP are on it....arguing at their provincial convention that CO2 is too low in the atmosphere....its good for plants so we need to produce more of it!!! A blatant lie, but Big Fossils are old hands at large untruths.
Ignorance it seems, has no boundaries or limits. Unfortunately the earth's atmosphere is not such open terrain. Yes. Green energies do provide us with real alternatives, and we should seize on them...build out solar in particular, in distributed resilient ways.
But if we fail to do so.........its not simply an economic loss. The losses hot house earth has in store for us are about more than money....Fire and Rain, as James Taylor sang in more progressive times. Floods, hurricanes and Fire Weather.
Read all about it in good research like John Valliant's FIRE WEATHER...and join the movement to reclaim the planet. We simply don't have 100 years to make the switch. The time is now.
Holy zombies! Last week I heard that Danielle Smith wanted to resurrect KXL. Now people are nostalgic for northern gateway. Think of the opportunities if we combine zombie pipelines with bans on renewable energy. Alberta government wants it both ways.
If the fossil lobbyists sense some (retrograde) progress towards the glory days of fossils, perhaps they'll start a movement to ban wheeled transport. Who needs wheels anyway if everything on wheels is going to run on renewable energy? Speaking of zombies, how 'bout that Stephen Harper. Bet he wants to lead us lemmings to the cliff.
Thank you Max Fawcett. This is a critically important article, worth copying and forwarding on.
The ducks are aligning in one direction: renewable energy and fighting climate change. I was surprised to read that world investments in renewables have already far surpassed world investments in fossil fuels. Just a year or two ago they were at par for the first time. The growth is phenomenal. To outright deny this is happening is delusional. And yet here we are, the government of Alberta and the federal opposition leading millions down the path to a mass shrinkage of big economies.
Re: investments in renewables, the data is from the latest IEA report.
Heather Exner-Pirot, director of natural resources, energy and environment at the Macdonald-Laurier Institute, wrote last week on social media. “We should build Northern Gateway instead.” Former Kinder Morgan Canada CEO Ian Anderson apparently agrees.
Should we really consider the foxes advice on building our hen house? Those opportunists, with bitumen running in their veins, shouldn't have a voice in our future. Time for these greed driven dinosaurs to butt out considering we are in this mess directly because of O&G lackeys.