13 votes

Supreme Court unanimously dismisses B.C. appeal of Trans Mountain

8 comments

  1. [3]
    Loire
    Link
    For those that don't know their has been a major ongoing argument in Canada concerning the construction of new oil pipelines in the country. The majority of Canada's oil is located within the...

    For those that don't know their has been a major ongoing argument in Canada concerning the construction of new oil pipelines in the country.

    The majority of Canada's oil is located within the province of Alberta which is land locked. Oil is transported out on a number of old pipelines either south through America (96% of all exports) or west through the neighbouring British Columbia. Over the last decade Alberta's production has outstripped its pipeline capacity and rail has increasingly been used to get the oil out. This has resulted in railroads clogged with oil tankers and less capacity for transporting other goods.

    There were, at once, four proposed new pipelines to increase capacity including the notorious Keystone XL project. Each of those proposals has been held up by environmental groups, and environmental minded politicians pushing Alberta's export situation to disastrous levels.

    The province of Alberta has been suffering economically since the last oil downturn in 2015. While most of the world's oil producing regions began to recover in 2017, Alberta's inability to export it's crude reserves has caused an oil glut resulting in severely depressed oil prices and an active rig count 1/4 of what it was in 2014.

    The Trans Mountain Pipeline mentioned in this article was one of the four proposed pipelines that has been held up with environmental concerns. The project actually seeks to twin an existing pipeline that is already in the ground in B.C.. The provincial government of British Columbia has long argued that the Trans Mountain pipeline puts the province at risk for oil spills, and also increases tanker traffic along the province's coastline.

    The pipeline has undergone all necessary regulatory processes mandated by the Canadian Energy Regulator, as well as additional environmental assessments, and voluntary marine impact assessments since 2012.

    Now, to get to the actual article. Constitutionally provinces in Canada are not allowed to restrict or tariff the flow of goods from other provinces. There is defacto "free trade" across the country to prevent the interior provinces from being held hostage by the coastal provinces. The crux lf the Supreme Court ruling is that A) by preventing this pipeline British Columbia is infringing upon Alberta's constitutional rights and B) A ruling in support of British Columbia could become legal precedent for a province effectively controlling any export through its border.

    13 votes
    1. [2]
      vivaria
      Link Parent
      Also, pushback from indigenous rights groups, too. I'm by no means educated here, so I can't really engage in the discussion... Loire probably knows a lot more about the oil side of this than I...

      Each of those proposals has been held up by environmental groups, and environmental minded politicians pushing Alberta's export situation to disastrous levels.

      Also, pushback from indigenous rights groups, too. I'm by no means educated here, so I can't really engage in the discussion... Loire probably knows a lot more about the oil side of this than I could ever know. But territorial acknowledgement + acknowledging the effects of colonialism is really big in my city, so I want to pop in some links for further reading. It's an important perspective, I think?

      https://raventrust.com/2019/08/18/the-legal-breakdown-of-indigenous-rights-and-the-trans-mountain-pipeline-expansion-project/

      https://www.wildernesscommittee.org/noTMX

      5 votes
      1. Loire
        Link Parent
        It is. I rarely touch on the indigenous aspect because it is such a complicated mess of competing interests. There are something like 36 indigenous groups that support the pipeline and 52 that are...

        It's an important perspective, I think?

        It is. I rarely touch on the indigenous aspect because it is such a complicated mess of competing interests. There are something like 36 indigenous groups that support the pipeline and 52 that are fighting it (numbers may not be exactly accurate I am working from memory here).

        One thing those from other countries, even Americans, have troubles understanding is just how much land in Western Canada is reserve land. It's not that these companies are explicitly passing through reserves and water sources, it's just that you can't cross certain parts of the country without encountering one or the other.

        6 votes
  2. [4]
    JakeTheDog
    Link
    How come Alberta isn't pushing any substantial investment in other energy sources? They have already sold a ton of oil, made a ton of money (IIRC Edmonton and Calgary have high median incomes, and...

    How come Alberta isn't pushing any substantial investment in other energy sources? They have already sold a ton of oil, made a ton of money (IIRC Edmonton and Calgary have high median incomes, and growing, and the province has a big savings from the tax?) and the future is renewables anyways. Seems like they're in as good of a position as any to pivot.

    3 votes
    1. [3]
      Loire
      (edited )
      Link Parent
      They have pivoted quite a but but it's not as easy as people make it out to be, on top of long term short sightedness by politicians. What you have to understand is the province is barely over a...

      They have pivoted quite a but but it's not as easy as people make it out to be, on top of long term short sightedness by politicians.

      What you have to understand is the province is barely over a century in age. This isn't Norway or the East Coast with multiple centuries of economic growth behind it. We were the frontier until 1905. As early as 1965 the province's total revenues were 651 million a year. Literally no economy existed here but grain exports. The oil boom turned the province's prospects around but then a similarly deep oil bust occurred in the 80's that left Alberta in horrific economic peril. Nine point five billion dollars of debt in today's value (four billion in '85). It took ten years to pay off with deep, deep cuts to expenditures. The current bust left us with 6-7 billion in debt and was projected to be paid off in 8 years (2023) with no significant cuts to the budget.

      What changed between 1985 and 2015? The province's economy expanded. We have more going on now, more sources of tax revenue. The province doesn't live or die by the oilfield anymore.

      You also have to understand that due to the math behind Canada's equalization system (which I have no issues with don't get me wrong!) Alberta has literally never recieved payment
      from the fund while always paying the most per capita into it. That's 0.0% of all payouts from the system since its inception. The system has been in place since 1957 and rain or shine Alberta always pays more into it than it recieves back regardless of the economic reality within the province. That's trillions of dollars of revenue that, all else being equal, would have stayed in Alberta's coffers had it been its own country like Norway. That's revenue that can't be used on any sort of "economic pivot".

      Finally you have to consider good old fashioned conservative graft. Anytime things go sideways in Alberta the morons come along and think "Hey we have a tax revenue problem so why don't we lower corporate taxes even further? That will help!" And so bad situations become worse and Alberta loses tonnes of potential revenue until the economy turns around and then spends the good majority of the boom time paying down its debt. It burns me up that after paying down the 80's debt our leader at the time decided, with a 6 billion dollar surplus for the first time in the province's history, to write every man woman and child in the province a $400 check to do whatever they want with. That 6 billion surplus suddenly became fucking beer money instead of stowed away and invested for future generations.

      So to circle back around to your point on green energy. Its happening. Since 2005 renewables have grown by over 100% in Alberta. When accounting for PV solar we are the second highest in Canada, and when considering wind we are the third highest. Where we fall behind is hydro, because Alberta is suspiciously bereft of water unlike pretty much the rest of the country, and nuclear. With that said you can't sell excess renewable energy as easily as oil because electricity doesn't transport long distances like oil does. Resistivity in power lines prevents us from selling our green energy to China or Texas like we do our oil.

      TLDR: It's complicated.

      2 votes
      1. [2]
        JakeTheDog
        Link Parent
        That's a really nice explanation, thanks for the level-headed response. Can you speculate as to what will likely happen to Alberta in the next decade or so? It seems like they're fucked either...

        That's a really nice explanation, thanks for the level-headed response.

        Can you speculate as to what will likely happen to Alberta in the next decade or so? It seems like they're fucked either way—the expansion of the oil industry is at a literal impasse and adopting a new resource export is unlikely (renewables to support themselves but that's it). I ask because the current government appears to be all-in on oil but that may not be a sustainable strategy, wheras the previous gov (NDP) seemed to be more concerned about diversifying? Do you think Alberta's economy will wither if this continues? I know of some people thinking of joining the industry there, so I'm somewhat concerned.

        1 vote
        1. Loire
          (edited )
          Link Parent
          Non-level headed response: Jason Kenney will ruin Alberta. Level-headed response: who knows? We're predicting another decade before peak consumption. Industrialization and the growth of the middle...

          Non-level headed response: Jason Kenney will ruin Alberta.

          Level-headed response: who knows? We're predicting another decade before peak consumption. Industrialization and the growth of the middle class in undeveloped countries is still causing oil consumption to increase year over year. India especially is going to keep the oil industry afloat. Likewise the growth of renewables has only eaten into nuclear abd coal's share of the energy pie so far. How long will that last?

          And had the pipelines been completed on time we wouldn't be having this conversation right now. Had President Obama allowed Keystone through or Trans Mountain not be tied up for years then Alberta would have experienced this recovery like every other oil region.

          Shale is proving itself to not be quite as good as predicted. Return rates are not what the operators said they were and a lot of shale companies are going under right now. If the shale.miracle peters out the U.S. is suddenly in dire need of oil to import again.

          It's impossible to predict what will happen to Alberta in the long term because we genuinely don't know whats going to happen to oil in the nect ten to twenty years.

          As for your friends: Don't worry for them, just make sure they have an exit plan. Most oil jobs pay more money in a year than the average Canadian makes in three years. If they are smart with their money they can get a huge head start. I have six digits in liquid cash and another near six in 401k investments in four years of doing this. I will likely be able to buy a house in cash before I'm thirty. I don't regret joining this dying industry and neither will they as long as they are smart about it.

          1 vote
  3. joplin
    Link
    Wow! He's both a world-renown composer and a Chief Justice of Canada's supreme court. Pretty good for a guy who's been dead for 137 years. (Sorry, I'll show myself out.)

    Chief Justice Richard Wagner

    Wow! He's both a world-renown composer and a Chief Justice of Canada's supreme court. Pretty good for a guy who's been dead for 137 years.

    (Sorry, I'll show myself out.)

    1 vote