The Runner Debates: Why Do Pipelines Get Approved?: Tristan Johnston
Featured / February 9, 2017
Politicians weigh the benefits against the costs, and take a risk
Check out the other side of the debate here
In a poll conducted last September, about half of B.C. opposes the construction of the Kinder Morgan pipeline, while about half approve. Obviously pipelines are an extremely controversial issue in Canada, so why are centre and left-leaning political parties willing to take on such a major risk?
If you’re a statesman in Ottawa, you likely make a political calculation when you suggest that pipelines get constructed. While opposition from environmentalists and Indigenous activists are guaranteed, performance at the next election is not.
“One powerful factor is jobs, and another powerful factor is tax revenue,” says Dr. Ross Pink, political science professor at KPU. “So, Trudeau is under a lot of pressure because the economy is fragile for bringing jobs and tax revenue into the country.”
Pink cites the difficult economic situation in Alberta as a primary factor to the approval of both the Keystone and Kinder Morgan pipelines. The province’s oil revenues are down 40 per cent because of the last two years of oil prices.
“My sense is that they’re under a lot of pressure to create jobs,” he says. “This Keystone pipeline, according to one survey, will create 4800 jobs. So, the sense is that Trudeau may risk losing some green voter support and go with jobs and tax revenue.”
The NDP, under some conditions, might support a pipeline because they want to successfully promise that Ontario blue collar workers can get some of their manufacturing jobs back. In eastern Canada, oil is often imported from the Middle East and Venezuela, and it’s typically in a state’s self-interest to be as independent as possible.
Unfortunately, oil is still an important commodity in the present global economy.
With Trump’s recent approval of Keystone XL, Trudeau faces new pressures. Again, it’s in Canada’s best interest to have good relations with the United States, and to develop economically. While it’s likely that Trudeau despises Trump on the inside, he needs to awkwardly say nice things about him and the pipeline, that it will bring the two countries closer together, and it will. The current American administration is unpredictable and aggressive, and anything to stay on their good side will be considered, especially when NAFTA talks come around.
It should also be noted that a pipeline would reduce the minimum price required for oil to be profitable in Canada. Venezuela and Saudi Arabia can extract oil at all times, due to the physics and geography of their oil patches, whereas Canadian oil needs to be fracked and moved from the interior. A pipeline would reduce the cost of moving oil, and thus make it profitable at a lower market price.
In addition, the United States is Canada’s largest trading partner, and 36 American states have Canada as their number 1 partner.
Pipelines will, of course, continue to be controversial for the fact that they leak deadly chemicals into the environment, and the fact that oil is the worst pollutant still being used around the world. Green energy is growing, but slowly, and while Trudeau is all in favour of cleaner energy, he also has economics and international relations to contend with, and economics will win in the end.