A 2011 oil tank fire in Gibraltar. The Trans Mountain pipeline extension would increase the risk of such fires at the pipeline's terminus in Burnaby, B.C. Image: Moshi Anahory/Wikimedia Commons

The Trudeau government and the petrobloc — the fossil fuel industries and their political, financial and media allies — would like you to believe that the expansion of the Trans Mountain pipeline (TMX), intended to triple the flow of diluted bitumen from the Athabasca sands to the Port of Vancouver, is a done deal.

But the latest approval of TMX by the Trudeau government and the industry-captured regulatory agency, the National Energy Board, does not settle the issue. There are significant legal challenges from six major First Nations whose territories include much of the proposed pipeline route through B.C. Ecojustice is litigating in the Federal Court of Appeal to defend the critically endangered southern resident orcas. The B.C. government is taking its case for jurisdiction over the transport of toxic diluted bitumen within the province to the Supreme Court.

The Indigenous-led, grassroots place-based resistance that encouraged the Texas-based multinational Kinder Morgan to walk away from the project is re-emerging, after the construction delay imposed by the Federal Court of Appeal in August 2018.

Kinder Morgan, remember, never intended to benefit Canada. It was founded by two former executives of Enron, the company that later collapsed amidst accounting scandals. The company’s profits were reportedly linked to tax minimization and skimping on maintenance and safety.

A range of environmental NGOs and citizens’ groups are gearing up to resume the struggle. The federal election in October could give the balance of power to two parties (the Greens and the NDP) opposed to the pipeline. And now, new fronts have opened up — national campaigns to halt fossil fuel subsidies on which projects like TMX depend, and to deny insurance coverage for TMX specifically. 

B.C. residents in the sacrifice zones of the pipeline project know of its very real escalation of local, regional and global environmental risks — oil tanker spills, extinction of the iconic local orca pod, pipeline ruptures in salmon-bearing streams and in neighbourhoods (which the city of Burnaby already experienced in 2007), and a potentially catastrophic toxic fire in the expanded “tank farm.”

And of course, the intensified planetary heating which the expansion of fossil fuel infrastructure locks us into.

Unfortunately, these concerns haven’t always resonated with Canadians elsewhere facing economic insecurity and public service cutbacks. 

But the federal government’s 2018 purchase of the pipeline has added an enormous new risk — to all Canadian taxpayers. 

While the petrobloc touts TMX as a route to economic prosperity, taxpayers may see more pain than gain. Buying the pipeline alone cost taxpayers $4.4 billion, far more than analysts said it was worth, with a further $9 to 12 billion for expanding its capacity, locking Canada further into planet-heating infrastructure while creating far fewer permanent jobs than investment in renewable energy.

Independent analysts like Andrew Nikiforuk, Gordon Laxer and J. David Hughes argue that optimistic pro-pipeline estimates of Asian demand for Canadian bitumen downplay such factors as escalating construction costs, the completion of two other pipelines by 2022, high transportation costs, alternative supply sources and lower quality product.

“Trans Mountain has been losing money since Ottawa over-paid for it, leaving taxpayers on the hook,” economist Robyn Allan wrote in an email. “Revenues from tolls on the existing line are insufficient to cover all the interest expense or any of the principal amount the government borrowed to finance the acquisition of the 66 year-old pipeline. Billions more in taxpayer funded subsidies will be required to finance the expansion since shipper tolls will not cover the cost of building it.

“This is why Kinder Morgan walked away; capital costs were too high and Trans Mountain’s expansion ceased to be commercially viable. Any reasonable cost benefit analysis reveals that there are no net economic benefits from the expansion either, and the obvious environmental costs are staggering.”

So why did the federal government bail out such a toxic investment?

A senior researcher at Alberta’s Parkland Institute told me that TMX has become a political symbol. Serious climate action means ending fossil fuel subsidies (as Trudeau promised in 2015) and investing directly in sustainable energy and infrastructure. Yet Canadian governments continue to pour about $3.3 billion annually (according to the International Institute of Sustainable Development) into direct support for an industry whose business model entails knowingly jeopardizing the habitability of the planet. That amount would fund job retraining for 330,000 workers, including in greener industries with potential for exporting technology and energy.

A recent IISD recent report pegs Ontario’s subsidies alone at $700 million over the last year, equivalent to health-care costs for 189,000 Ontarians. “Spending money on fossil fuel encourages their use, increases pollution and hinders efforts to transition to a clean economy,” the report said. “These forms of subsidies ultimately incentivize investment in and use of fossil fuel infrastructure, creating long-term fossil fuel ‘lock in’ for Ontario’s communities.”

Direct handouts are a small part of a much bigger picture. The International Monetary Fund adopts a broader definition of “subsidy,” to include the untaxed externalized costs of energy use, including air pollution, traffic congestion and climate disruption. (One could add the clean-up costs of abandoned gas and oil wells, which the Alberta energy regulator has estimated at $47 to $70 billion.)

In 2015, the IMF estimated global subsidies to fossil fuels at a stunning $4.7 trillion annually (6.5 per cent of global GDP), including $58 billion from Canada — making coal, oil and gas companies arguably the world’s biggest corporate welfare recipients.

Projects like TMX limp along on such subsidies. To be sure, in a twist on colonialist divide and rule tactics, the Trudeau government hopes that Indigenous groups will buy a big chunk of TMX. Dressed up as “reconciliation,” that strategy means dumping the liability for such a risky project (including monthly interest payments of $20 million or more) onto First Nations, as Indigenous economist Winona LaDuke has put it.

Moreover, it doesn’t change the government’s obligation to obtain consent from those Nations whose territory is directly affected.

Since spring 2018, TMX has been truly “nationalized.” Economically, in that Canada’s government owns the pipeline and taxpayers subsidize it. Politically, in that, after multi-million dollar propaganda campaigns by the Alberta government and industry associations, TMX has become a wedge issue in national politics. Symbolically, in that Trudeau continually presents TMX as in the national interest — a claim echoed by petro-elites in Alberta, by ironic contrast with their 1980s call to “let the Eastern bastards freeze in the dark”. 

The West Coast-based groups opposing TMX were not well-positioned to challenge that triple nationalization. But a challenge is emerging on all three fronts.

Politically, a call for a Green New Deal — investment in renewable energy, green jobs and a phase-out of fossil fuels — is resonating across Canada and influencing federal party platforms.

Economically, a national campagin is emerging to end subsidies to fossil fuels and divert them to renewable energy, with potential for the export of both energy and technology. In 2015, Trudeau promised to end fossil fuel subsidies, and didn’t. In 2018, Conservative Leader Andrew Scheer promised the same, although his backroom meetings with oil executives and his anemic climate policy leaves ample room for skepticism. Regardless, the Stop Funding Fossils campaign aims to hold such politicians to account.

Symbolically, the resistance is challenging the petrobloc’s definition of the “national interest,” as the breakneck export of Canadian resources (and refinery jobs) at bargain-basement royalty rates, accelerating global heating that is already toasting Canada at twice the average global rate, and ignoring the failure of Canada, almost alone amongst advanced economies, to build a strategic oil reserve against international supply disruptions.

The petro-nationalists’ implicit definition of Canada — as an extractivist rogue nation that treats the world’s atmosphere as a dumping ground — is being challenged by an aspirational vision of what Canada could be.

That vision celebrates Canada’s many progressive achievements, from medicare to multiculturalism, but also acknowledges the secret history of colonialist extractivism’s violence to a racially stratified workforce, Indigenous peoples and the land itself. Instead, as professor Shane Gunster has argued, we can build a country “more in keeping with the values of democracy, equality, justice, diversity, compassion and sustainability — values that so many Canadians continue to hold as the true measure of who we are and what we do.”

One way to actualize those values is to stop giving corporate welfare to an industry that was hard-wired into last century’s global economy, but that must be scaled back quickly to give humanity a fighting chance.

Stopping TMX — Trudeau’s Misguided Extravagance — is an important step on that path.

Robert Hackett is professor emeritus of communication at Simon Fraser University. He has published eight (mostly collaborative) academic books on media and politics, most recently Journalism and Climate Crisis in 2017. This post was originally published on the National Observer.

Image: Moshi Anahory/Wikimedia Commons


Robert Hackett

Robert Hackett is Professor Emeritus of Communication at Simon Fraser University. He has published eight (mostly collaborative) academic books on media and politics, most recently Journalism and Climate...