Analysis

Winnipeg Free Press - PRINT EDITION

U.S. environmental politics threaten our prosperity

By: Tom Ford

Posted: 11/7/2011 1:00 AM | Comments: 0

It's fashionable to discuss oil's future and its problems with pollution, climate change and diminishing supplies. But I want to talk about a more important problem: the present.

Right now, the petroleum sector is Canada's biggest exporter. Robert Mansell, of the University of Calgary, says it's the dominant contributor to our favourable trade balance, the largest private-sector investor in the national economy and accounts for about a quarter of all tangible national wealth. Last week, Statistics Canada said energy drove our GDP up in the third quarter.

Right now, America depends heavily on our oil, and reducing the supply could tip over its precariously perched economy.

Right now, the Canadian and U.S. economies could both be damaged because U.S. environmentalists are on the verge of blocking a major Canadian oil pipeline in the U.S.

The pipeline in question is TransCanada's Keystone XL, a $7-billion, 2,700-kilometre long project designed to bring oil from Alberta's oilsands through six states to refineries on the Texas Gulf Coast.

A canny observer of the United States, Gary Doer, our ambassador to that country and a former Manitoba premier, says the pipeline will succeed if the debate is "based on facts and reports and merit." But he adds, "If it's based on noise, it won't."

And that's the problem. After the longest approval process in U.S. history, the nation's State Department says Keystone XL is not an environmental threat to the U.S. It plans to come up with a final report before the end of this year.

The issue, however, has gone political. U.S. environmental groups, which often march to different drummers, have united to stop Keystone XL. They think President Barack Obama has been a wimp on environmental matters. They know that only he can stop the pipeline. He can't hide behind Congress. They have him in a corner and they are now kicking him with their skates.

For his part, Obama is worried about whether he can win the 2012 presidential campaign. He needs the support of the left if he is to beat the awkward but very active Republicans. "I know your deep concern about it" he told protesters last week. "We will address it."

If the U.S. turns its back on Keystone XL, we'll look to export more oil to other countries, particularly Asia, federal Natural Resources Minister Joe Oliver said last week. "If they don't want our oil, it is obvious we are going to export it elsewhere."

Easier said than done. A major project, Enbridge's $6-billion Northern Gateway, designed to take oilsands production across northern B.C. to Kitimat, has more aboriginals lined up against it than faced Gen. George Armstrong Custer. I was in Vancouver earlier this year when representatives from some 80 First Nations marched through the streets, protesting what they called a major environmental hazard.

"They didn't talk to the aboriginals soon enough," Calvin Helin, a smart young entrepreneur, told me at a Winnipeg meeting. Governments and industry, he says, have been slow to recognize that aboriginals are now key players in a lot of resource development, and they want to use that role to better themselves.

Helin's calling card, which is in English and Chinese, says he's "investing in a tribal self-reliance."

"British Columbia has the dubious distinction of ranking among the least attractive jurisdictions in the world in terms of land-claims issues," says Gerry Angerine, an economist with B.C.-based Fraser Institute.

When it comes to disputed land claims, B.C. ranks fourth from the bottom of 136 jurisdictions surveyed by the institute. Only Iraq, Bolivia and the Northwest Territories are more poorly regarded.

This has been a problem for decades. Our approval process for resource projects needs to be shortened and streamlined. A striking example of dithering: the Mackenzie Valley pipeline, which was cancelled this fall, after 40 years of getting nowhere.

While the review boards tiptoe through their studies, the environmentalists are free to organize and calumniate all they want. Governments just stand by, primly saying little because, as Oliver puts it, they don't want to taint the review process.

Prime Minister Stephen Harper needs to come to the fore, leading a team of his ministers, because any northern B.C. project involves not just a pipeline, but also aboriginal affairs, the environment and shipping in dangerous coastal waters.

If he could start right now, it would be useful.

Tom Ford is editor of The Issues Network.

Republished from the Winnipeg Free Press print edition November 7, 2011 A13

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