Whether or not it is actually true, tout le monde political Alberta nowadays believes fervently our province’s oil will fetch a higher price if you can ship it to a saltwater port, particularly a West Coast Canadian saltwater port conveniently along the way to Asia.
This is the theoretical foundation of the increasingly passionate insistence that we Albertans must be allowed to build at least one new pipeline to the West Coast to get the best possible market price for the oil squeezed out of the Athabasca Bitumen sands.
The day before yesterday, Alberta NDP Premier Rachel Notley stated forcefully: “Mark my words, that pipeline will be built. The decision has been made.”
This Albertan insistence has in turn become the cornerstone of a similar debate in British Columbia, although in that province the discussion is being led nowadays by people who are just as convinced pipelines must never be built.
So, on one side we have Albertans of all political stripes who believe that our province’s economy depends on the pipelines being built, and on the other we have many British Columbians who believe the survival of the planet may depend on them not being built, and many more who simply don’t want to face the risk of having them run through their province and the waters off their coast.
In other words, whatever else they are, the so-called tidewater premium and the conceptually similar Asian premium for Alberta oil, and especially Alberta bitumen, are now deeply entrenched political facts.
Enter earth scientist David Hughes with his apple-cart-upsetting view that the evidence strongly indicates there is no tidewater premium for Alberta Bitumen, and no Asia premier either.
He told this to a conference in Victoria two weeks ago, while the dust from the B.C. provincial election was still settling. He said it again yesterday in a report on the topic released by the Edmonton-based Parkland Institute and the Canadian Centre for Policy Alternatives just as it appears the political opponents of new pipelines, B.C.’s New Democrats and Greens, are likely to form a new government when that province’s Legislature eventually gets together again.
This is sure to further inflame a debate that is already getting pretty heated on both sides of the appropriately named Great Divide.
While both the federal and Alberta governments assert the truth of the premium concept, Hughes said in a Parkland news release accompanying the report, “my research shows that Canada’s oil is not being unfairly discounted by the U.S.”
“Oil prices internationally and in North America are now nearly identical,” he stated. “That means Canadian crude producers are likely to receive lower prices overseas than in the U.S. because of the higher transportation costs involved in transporting bitumen by pipeline to B.C.’s coast and then exporting it by tanker. A ‘tidewater premium’ does not exist.”
According to the report, published yesterday by Parkland and the CCPA as part of their Corporate Mapping Project, several assumptions on which approval of the pipeline was based are questionable or no longer valid.
- Too-optimistic projections of future oil supplies
- Failure to consider Albert’’s cap on oilsands emissions
- Kinder Morgan’s expectation no other pipelines would be built, including the Keystone XL pipeline and Enbridge’s Line 3 project, both of which have now been approved
“Given the incorrect assumptions used by the NEB in approving the Trans Mountain pipeline it is surprising that the federal government approved it,” Hughes said in the Parkland news release. “The pipeline isn’t needed given recently approved pipelines, it will not mean a higher price for oil, and increased tanker traffic would place unnecessary risks on B.C.’s Lower Mainland and sensitive marine environments.”
His conclusion: “The new B.C. government would be wise to withdraw the province’s approval for this project.”
Or, as stated in the conclusion of the report released yesterday: “Canada does not need (the Trans Mountain expansion project) nor does it need other tidewater pipelines such as Energy East.”
Needless to say, this message is deeply disturbing to many important people in Alberta. Politicians on the left and right alike have based their political strategies on the assumption that pipelines to Canadian tidewater are essential to the future of the province. Their yardstick for success or failure is based on whose strategy is most likely to get a pipeline built.
Hughes has said similar things before — but they didn’t rock the debate then the way they have now because the political facts in Alberta, Ottawa and especially British Columbia were quite different a year ago than they are today.
The latest Parkland-CCPA report is already generating ad hominem attacks on Hughes in commentary sympathetic to the pipeline and resource extraction industries that argues because he’s an earth scientist, not an industry insider, and because his forecasts aren’t as optimistic as their forecasts, he’s all but producing alternative facts.
The trouble with this line of attack is that what Hughes is producing is an alternative interpretation of the known facts, which is, as they say, a horse of a different colour. His work is respected in academic circles for a reason.
And this means his report truly has the potential to dramatically undermine the prevailing narrative. People with a lot invested in that tale aren’t going to like that one bit.
Expect more fireworks.
This post also appears on David Climenhaga’s blog, AlbertaPolitics.ca.
Image: Wikimedia Commons
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