No doubt they were chuckling discreetly at Kinder Morgan headquarters in Houston Thursday as they counted up their additional spare change.
They had, after all, just managed to sell off the Trans Mountain Pipeline to the Liberal government led by Canadian Prime Minister Justin Trudeau, backstopped by Premier Rachel Notley’s Alberta New Democrats, at the very moment the Federal Court of Appeal dealt a significant blow to the project.
Yesterday morning in an appeal by a coalition of First Nations governments, coastal municipalities and environmental groups of the 2016 approval by the federal cabinet of the pipeline expansion project, the court quashed the cabinet orders authorizing the multi-billion-dollar expansion of the pipeline, back when it was still the Kinder Morgan pipeline.
In the afternoon of the same day, while the meaning of that ruling was still sinking in, Kinder Morgan’s shareholders approved the sale to the federal government of the creakily geriatric existing line from Alberta to Burnaby, B.C.
Well, as has been said many times in this space, Kinder Morgan was clearly looking for an exit strategy from this project, which began to seem a lot less appealing as the price of oil headed south back in 2014 and persistently stayed there long after that.
The economics of the pipeline expansion were always pretty questionable, and remain so, despite the enormous political capital invested in it and its public takeover by numerous political players.
So we have to count Kinder Morgan Inc. as a big winner in this situation. Possibly the biggest.
As for the Canadian petroleum industry, despite media coverage portraying the ruling as a disaster for it, you can count on it the effects will be minimal. For one thing, Ottawa has vowed to continue with the project and it will likely move ahead in time. Grounds for appeal to the Supreme Court of Canada will certainly be found.
For another, the industry will have a clear-eyed assessment of the project’s true potential, which has been exaggerated by many players for political reasons. The industry knows how to wring profits out of governments, as Kinder Morgan has just demonstrated. So, this may not be a big victory for the industry, but it is not likely to be a serious setback either.
The media narrative notwithstanding, the decision should not be portrayed as “a bombshell,” as many journalists have claimed. As my blogging colleague Dave Cournoyer pointed out in a thoughtful analysis of yesterday’s developments (while this correspondent sat in an airplane over the American Midwest), the court’s decision was quite reasonable.
First, Justice Eleanor Dawson wrote in the unanimous decision in Tsleil-Waututh Nation v. Canada, the National Energy Board report on which the federal cabinet’s decision was based “unjustifiably defined the scope of the project under review not to include project-related tanker traffic” and its potential impact on marine wildlife. Second, that the federal government “fell well short of the minimum standards” required to consult with Indigenous communities during the project’s consultation process.
Whether or not the media fraternity expected this outcome, it was obviously a strong possibility. The courts do make reasonable decisions now and then. It’s what happens when you live in a democracy governed by the rule of law. No one should be shocked.
It is ironic Trudeau, the Great Promiser, fell short in much the same way as the Conservative Government of former prime minister Stephen Harper, which rushed the process on the Northern Gateway pipeline project and paid the tariff in the courts of law and public opinion.
Still, it’s quite possible Trudeau’s government will not suffer that much from this outcome, which engages Canadians in provinces other than Alberta and Saskatchewan much less than a casual observer of the day’s journalistic output might think. So let’s call the federal Liberals a loser, but not necessarily much of one.
As for the federal Conservatives led by the hapless Andrew Scheer, they will try to portray this as a national cause célèbre. It is unclear how much success they will have outside the Prairies. Obsessed by their own divisions, they will likely gain less than you might expect, if they manage to gain anything at all.
Of course, there are plenty of people in British Columbia who were engaged by this story — but they are mostly environmentalists and members of First Nations along the route who oppose the project.
Environmental groups that oppose the pipeline can count yesterday’s decision as a significant victory, as they will see any delay as making it less likely ever to be completed — and as a continued fundraising opportunity.
First Nations governments determined that the consultative process demanded by the courts be observed, can also count this as a major win.
Nor is this bad news for B.C. Premier John Horgan and his NDP Government, or for that matter the federal NDP led by Jagmeet Singh.
They can all rightly point to the court’s specifically articulated concern about the danger to the region’s marine wildlife presented by tanker traffic sailing to and from the Kinder Morgan terminal in Burnaby as a justification for their continued opposition to the project. Indeed, it may embolden both branches of the NDP to turn up the heat in their simmering dispute with the Alberta NDP.
For Singh, who has had a bumpy ride since he won the leadership last fall, this presents an opportunity to differentiate his party from the Liberals in the federal election expected next year.
So B.C. environmentalists and New Democrats from outside Alberta should be considered winners yesterday too, no matter what the long-term outcome is.
But the Alberta NDP, it goes without saying, will be hurt by this development.
Premier Notley’s entire strategy of becoming the oil industry’s determined advocate has suffered. Having put so many of her party’s eggs in the pipeline basket, she is bound to have to wear yesterday’s events. This is probably true even if the pipeline is eventually completed, as it would be far too late to much help in the provincial election expected next year.
So mark the Notley Government down as the biggest loser from the court’s decision. At the very least, as Cournoyer tartly observed in his commentary, it’s time for the government to quietly roll up its “Mission Accomplished” banner and stop drawing attention to this disappointment.
Finally, what of the United Conservative Party, the official Opposition in the Alberta Legislature led by Harper’s former lieutenant, Jason Kenney?
If Kenney were privately gleeful about this setback for the Alberta economy — as of course he is — that would be easy to forgive.
But like U.S. President Donald Trump, he doesn’t seem to have a filter to warn him when a little modest stillness and humility might become a man, or at least offer a better course than promoting the hysteria that energizes the UCP’s red-meat base.
Yet there he was yesterday, railing at the courts as if they were involved in a conspiracy against Alberta.
“Today’s ruling makes it abundantly clear that the Federal Court of Appeal has no regard for the real world economic impact this decision will have on ordinary Canadians’ lives and livelihoods,” Kenney huffed in an email to journalists that was reposted on social by Jason Markusoff of Macleans magazine. With this blast, Kenney was either demonstrating an unseemly misunderstanding of how the courts operate or a remarkable level of cynicism.
Perhaps the intervention of the courts will mute some of the more outrageous calls in Alberta for anti-pipeline protesters in B.C. to be locked up until the project has been completed. Then again, perhaps not.
Naturally, Kenney’s hastily typed missive ended with a shot at the NDP. “This decision further proves that the NDP’s idea of punishing Albertans win (sic) a carbon tax to buy social license has been a failure from day (sic).”
This project got as far as it did and may yet be completed is a direct result of Notley’s social license approach. Nevertheless, the premier seems to have recognized the effectiveness of the UCP’s attack on the carbon tax and yesterday announced her government would pull out of Trudeau’s climate plan as a result of the court decision and not implement the next step in the tax.
So Kenney and the UCP can rightly celebrate yesterday’s court ruling as a significant win for their cause. The potential remains, though, for them to shoot themselves in the foot with overheated rhetoric before voting day.
This post also appears on David Climenhaga’s blog, AlbertaPolitics.ca.
Image: Flickr/premierofalberta
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