Oil and Gas Sector-Politics and Image

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

WASHINGTON — The Keystone XL pipeline faces a new, formidable and deep-pocketed foe: Tom Steyer, a California billionaire, has targeted the controversial Canadian project to funnel Alberta’s landlocked heavy crude to Texas refineries on the Gulf Coast.

For Mr. Steyer, Keystone “has become the defining issue in the climate change fight of our times,” said Chris Lehane, Mr. Steyer’s authorized spokesman. “He has plenty of resources and plays to win,” Mr. Lehane said in an interview after Mr. Steyer waded into the Democratic primary race in Massachusetts with a threat to skewer a pro-Keystone candidate. That race is to select the party’s candidate for the Senate seat vacated by John Kerry, an ardent environmentalist who, as secretary of state, will also play a key role in Keystone’s fate.

Massachusetts “is the next front where the Keystone fight will be engaged,” Mr. Lehane said, adding that for Mr. Steyer, the bigger battle over Keystone was worth “tens of millions” in spending on political action, public awareness and other unspecified efforts. “Keystone has enormous symbolic value” in the whole climate change struggle, Mr. Lehane said.

Mr. Steyer, 55, the founder of one of the world’s largest hedge funds, Farallon Capital, ended his active role as an asset manager last October to turn to full-time political activism – and climate change is, in his view, the gravest threat facing humanity.

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The National Post is Canada’s second largest national paper.

Tom Mulcair got himself elected leader of the federal New Democratic Party on a promise he would bring hard-headed realism and a centrist political ethic to the job. He was to be, it was murmured at the time, the NDP’s Tony Blair.

As it turns out, there’s little indeed of Blair’s famous economic pragmatism in Mulcair. He talks the talk but, when push comes to shove, quacks like a duck. Currently, the NDP leader is tromping with big, gnarled feet all over the delicate buds of the Keystone XL pipeline. Criticism of his criticisms, while on a recent Washington D.C. trip, he dismisses as Conservative hypocrisy. All opposition leaders attack the governing party’s positions when travelling overseas!

Except, that Keystone and the issues tied to it are not just political baubles to be toyed with. These are fundamental, shared economic problems – the greatest Canadians now face. The Obama administration’s pending approval or rejection will affect us all from coast to coast to coast, for many years to come. And much of Mulcair’s rhetoric about Keystone is either poorly researched, half-true or spun-up by ideological assumptions that do not hold up for a second in the cold light of day.

First let’s address the idea that Alberta’s nefarious Big Oil oligarchs are foisting oilsands development on a reluctant Eastern Canada, whose citizens will only suffer as the resultant global warming turns James Bay into a gigantic hot tub. This is the putative value proposition: Albertans benefit economically from the oilsands, but the rest of us are harmed. Why should their interests subsume ours?

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The National Post is Canada’s second largest national paper.

VANCOUVER – An inky-blue dawn breaks across Burrard Inlet as the oil tanker British Beech glides into view.

On the bridge of the tugboat Raven, captain Don Westmoreland, 59, peers at a video monitor that registers the vessel’s bearing and speed. “That’s our ship right there,” he says. Two 2,500-horsepower engines barely gurgle as the Raven tethers to the tanker’s stern for the trip under Second Narrows Bridge.

The 230-metres long British Beech has arrived from Cherry Point, Wash. this morning. In 24 hours, it will slip silently back out past Stanley Park and downtown Vancouver loaded with 350,000 barrels of Alberta crude oil, bound for Long Beach, Calif.

The journey is as much a fixture of port traffic today as a sign of things to come. Roughly five tankers berth every month at Kinder Morgan Canada Inc.’s Westridge marine terminal in Burnaby, B.C., the terminus of the Trans Mountain pipeline. That number could climb to 30 per month, or 400 per year, if plans to more than double capacity on the Edmonton-to-Vancouver pipeline are approved, providing a potentially lucrative outlet for Alberta’s oil sands and raising concerns about Canada’s ability to handle a coastal oil spill.

“They’ve been shipping oil out of here for 50 years with not one incident,” said Mr. Westmoreland, whose employer, Seaspan Marine Corp., provides escort services to the vessels.

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The National Post is Canada’s second largest national paper.

BURNABY, B.C. – Two suburban roads lay bare the promise and peril of a proposed $5.4-billion expansion to Kinder Morgan Canada Inc.’s Trans Mountain pipeline through the densely populated Lower Mainland.

At the corner of Schooner Street and United Boulevard in the Vancouver suburb of Coquitlam, a 24-inch pipeline cuts under the road, past a Starbucks and a Triple O’s burger franchise, before diving under the Fraser River.

In 2002, Kinder Morgan threaded a 1,300-metre section of the pipeline under the road after seismic tests revealed soil along the river bank, where the pipeline had earlier been moved to accommodate a Home Depot, was subject to “liquefaction,” which made it unstable.

It’s an example, said Greg Toth, senior director with the Trans Mountain expansion, of modern pipeline construction techniques in action. “You can thread [a length of pipeline] down a street, put a stake in the ground and come up within a metre of that stake,” he said in an interview at the company’s Calgary office.

A rupture five years later of a transfer line on the Trans Mountain system pierced by a contractor’s excavator — that sprayed 11 houses with a geyser of crude oil along Inlet Drive in nearby Burnaby — underscores the flipside of such precision.

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The National Post is Canada’s second largest national paper.

Not needed for U.S. energy security or employment

Many are surprised that President Barack Obama has not yet approved construction of the Keystone XL pipeline, creating thousands of jobs while reducing America’s dependence on Middle East oil. His reluctance shouldn’t be surprising — no single act that he could take would more undermine his vision for America or his desired legacy as a transformational ­leader.

To a Republican, Keystone would be a solid accomplishment in what otherwise seems a failed presidency. But to a Democrat — and especially to America’s top Democrat — the Obama presidency is on track to achieve momentous accomplishments. Here are the goals Obama announced for his presidency on the night of June 3, 2008, upon winning enough delegates to secure the Democratic nomination for president:

“If we are willing to work for it, and fight for it, and believe in it, then I am absolutely certain that generations from now, we will be able to look back and tell our children that this was the moment when we began to provide care for the sick and good jobs to the jobless. This was the moment when the rise of the oceans began to slow and our planet began to heal. This was the moment when we ended a war and secured our nation and restored our image as the last, best hope on Earth.”

Obama made good on his health-care pledge. The unemployment rate has finally begun to drop. He is making good on ending a war. The one major pledge that remains to be met is climate change, in some ways the most profound because it affects the planet and is the most consequential to his legacy — it would secure his reputation as a transformative figure outside the country as well as within.

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The National Post is Canada’s second largest national paper.

Yves-Thomas Dorval is ­president of the Quebec Employers Council.

There are no human activities without risk

Yves-François Blanchet, Quebec’s minister of sustainable development, environment, wildlife and parks, recently announced a bill to formalize a moratorium on shale gas exploration and exploitation in the province of Quebec.

In doing so, he was honouring a promise made by his party during the last election campaign. But he was also heading toward a troubling tendency that has taken root in Québec and which is aimed at suspending, contesting or prohibiting any economic development endeavour, until there is absolute proof such development contains not even the slightest risk.

This same phenomenon is noted in the issue of oil and gas exploration in the town of Gaspé and, soon, in the Îles-de-la-Madeleine, as well as in the Plan Nord development, Enbridge’s Line 9 reversal, and in many other instances.

But are there any human activities that are absolutely risk-free? Shouldn’t we be striving, instead, to responsibly and sensibly exploit to their full potential these enormous natural resources which Québec has, after ensuring this activity can be safely done according to standards applied worldwide, and properly addressing the concerns expressed by the people who are directly affected? Why turn our back on wealth and prosperity any longer?

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The National Post is Canada’s second largest national paper.

JASPER, Alta. – The smell of crude oil lingers as Rob Scott eases his pickup truck into a pump station and stops next to a tangle of white pipelines and valves jutting from the ground.

On the eastern edge of Jasper National Park in Hinton, Alta., the aroma serves as a pungent reminder of the hidden pipeline network that cuts through the surrounding evergreen forest here, under glacier-fed rivers, around wetlands and over two mountain ranges en route to Canada’s West Coast.

The pump station, located about 300 kilometres west of Edmonton, offers a final glimpse of a 36-inch jumbo pipeline — the same diameter as TransCanada Corp.’s controversial Keystone XL project — that passes unseen through Jasper, a UNESCO World Heritage site, and Mount Robson Provincial Park to Rearguard, B.C. Built over a two-year window beginning in 2006, the so-called Anchor Loop is now the linchpin of a $5.4-billion expansion proposed by Kinder Morgan Canada Inc. to its half-century-old Trans Mountain pipeline system, Canada’s lone oil outlet to the Pacific.

“Most people don’t even know there’s a pipeline there,” said Mr. Scott, an operations liaison with Kinder Morgan, pointing out of his truck window to a grassy ditch beside the highway. “In fact, when we were originally looking to expand, lots of people didn’t even realize there was an existing pipeline running through the park to the coast.”

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The National Post is Canada’s second largest national paper.

Canada’s defiant oil industry shrugged off criticism as it cranked up production to four million barrels per day last December – its highest ever output, according to the International Energy Agency. “Canadian oil production has increased rapidly over the last several months, reaching an all-time high of 4.1 mbpd in December on the back of a record one million bpd in synthetic crude output from surface mining operations,” the IEA said in a report published Wednesday.

Growth was not restricted to the oil sands. Alberta light and medium output also rose to 440,000 bpd, its highest level in a decade, on the back of new light tight oil developments in Cardium and Viking in Alberta, along with other plays in Saskatchewan and Manitoba, the IEA said.

Canada’s eastern offshore production stood at around 250,000 bpd in December. The record ramp-up in production came as some of the oil sands’ biggest critics expressed hope that the U.S. rejection of the Keystone XL pipeline would slow down heavy crude production in Alberta.

“The markets are relentless and will continue to search for ways to move that product into the United States, whether Keystone XL is approved or not,” Jim Prentice, vice-chairman of the Canadian Imperial Bank of Commerce, told the Financial Post from New York where he gave a speech on the pipeline’s role in North America’s quest for continental energy security.

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The National Post is Canada’s second largest national paper.

Excerpts from a speech given by Jim Prentice, Senior Executive Vice President and Vice Chairman of the Canadian Imperial Bank of Commerce, at the Financial Times Forum: Focus on Canada in New York

I am strongly of the view that President Obama should approve the Keystone XL pipeline on the basis that it is in the ‘national interest’ of the United States.

I say this because North America is accelerating towards a future of energy independence and the Canadian oil sands are an essential part of the North American energy marketplace.

That resource will afford both Canada and the United States security of supply and a consequential global competitive advantage for generations. That, in my view, is a prize worth seeking.

It is a pivotal and a volatile time for oil and gas producers – as new technology helps generate greater supply, and our continental relationship becomes increasingly exposed to, and influenced by, the global marketplace.

We are seeing the benefits of innovation not only in how we extract resources from the earth – but in how we reduce and limit the impact on our environment.

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The National Post is Canada’s second largest national paper.

Book describes attempt to impose climate servitude

In his brilliant new book, The Age of Global Warming, British writer Rupert Darwall notes a phenomenon known as “climate change derangement syndrome.” The phenomenon was on prominent display this week when NDP leader Tom Mulcair went to Washington.

It wasn’t just that Mr. Mulcair’s attack on the climate policies of Stephen Harper was diplomatically inappropriate, or that his support for the recent New York Times anti-Keystone XL editorial was fatuous, it was that Mr. Mulcair’s stance made absolutely no sense if he is truly concerned about the welfare of Canadians – or indeed humanity as a whole.

Mr. Mulcair criticized Mr. Harper for pulling out of Kyoto, but is he even aware that the Americans never signed on to Kyoto in the first place? To find out why, Mr. Mulcair badly needs to read Mr. Darwall’s book, which provides a thoroughly researched and lucidly written account of the truly amazing cultural, scientific and political background to the dominant global political issue of our age, at least until the subprime crisis came along.

The book should profoundly embarrass virtually the entire global scientific community, either for actively supporting the political corruption of science, or for standing silently by while it happened — although the consequences of speaking out shouldn’t be underestimated.

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The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Earle Gray is the former editor of Oilweek magazine and author of seven books about Canada’s petroleum industry.

Slower growth in world oil demand, increasing energy efficiency, alternative fuels and possible caps on carbon dioxide emissions will negatively affect Alberta’s oilsands.

Disregarding global warming and the risk of putting all your eggs in one basket, the Harper government has bet Canada’s economic future on the oilsands. But do we want to return to a time when Ontario consumers paid half a billion dollars to subsidize an imperilled Alberta oil industry, with two-thirds of its capacity shut in for lack of sales?

At risk are hundreds of billions of dollars in jobs, government and industry revenue, and capital investment. Essential to diminishing hopes for an oilsands bonanza are three proposed pipelines, costing $17 billion, to move oil to the U.S. Gulf Coast and to the West Coast for tanker shipment to China. There is no certainty they will be built — even assuming government authorizations.

A fortune from the oilsands was foreseen as recently as the middle of last year. In a study last June, the Canadian Association of Petroleum Producers (CAPP) predicted an increase in oilsands output from 1.8 million barrels per day to 5 million by 2030, plus another million barrels a day of conventional crude oil.

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The National Post is Canada’s second largest national paper.

Brenda Kenny is chief executive of the Canadian Energy Pipeline Association.

No truth to claim bitumen more damaging to pipelines

There is no doubt that public persuasion and influence are powerful tools. But with that knowledge comes responsibility. Fact-based evidence and scientific studies are the way in which our association chooses to engage Canadians about pipeline matters.

However, there are others who prefer to create myths about our industry’s safety performance. It seems the intent, or the tactic, is to instill fear in the public and paint our industry as irresponsible operators of critical energy infrastructure.

For the past two years, there has been a manufactured myth circulating that diluted bitumen is corrosive in pipelines. It began with a report created by the New York-based Natural Resources Defense Council (NRDC). This report tried to “prove” diluted bitumen is more corrosive than conventional crude. We know that this is not true, but it is easy for the public to believe this myth when the report appears to be genuine and scientific. The reality is, many of the allegations in the NRDC report are completely false, including the one about diluted bitumen.

For over 60 years, pipelines have been safely transporting oil and gas products underground with very few incidents. Most of the time, people don’t even realize that they are operating beneath our feet.

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The National Post is Canada’s second largest national paper.

“You’ll never hear me speaking against the development of the oil sands,” federal NDP leader Thomas Mulcair told the Toronto Star last year.

It’s a theme he returned to last month, telling the Calgary Chamber of Commerce that, “the NDP will be a partner with the development of energy resources … we will be there with you.”

And he means it. So long as the oil industry doesn’t want to actually extract any petroleum and then export it to foreign markets in exchange for billions of dollars. That, obviously, is totally unacceptable.

This bit of mixed messaging came to us during Mr. Mulcair’s trip this week to Washington, D.C. Addressing political and business leaders there on Tuesday, Mr. Mulcair slammed the Harper government’s environmental track record.

“[Americans] know that Canada is the only country that has withdrawn from Kyoto,” he said. “They know that the Conservatives can’t possibly meet their Copenhagen [greenhouse gas emission] targets precisely because of the oil sands. They have to stop playing people for fools.”

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The National Post is Canada’s second largest national paper.

The New York Times has urged President Barack Obama to reject the proposed Keystone XL pipeline, in an editorial that serves to underline the weakness of the opposition case.

“Saying no to the pipeline will not stop Canada from developing the tar sands,” the Times concedes, before arguing: “but it will force the construction of new pipelines through Canada itself. And that will require Canadians to play a larger role in deciding whether a massive expansion of tar sands development is prudent.”

That’s the crux of its case: that blocking a $7 billion project that would create jobs in an economy that is desperate for them, would allegedly make Canadians think twice about expanding the oil sands.

Canada, of course, has pondered that very question for a very long time. The oil sands are not some new project that popped up on the prairie a week ago, while Canadians were looking the other way. Large-scale development has been under way for decades, and has weathered many a political and economic storm along the way. Oil booms have come and gone, prices risen and collapsed, political and environmental crusades launched and allowed to fade.

The National Energy Program sought to seize the proceeds from provincial hands. The Green Shift attempted to turn profits into a social welfare program.

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