Saturday, 21 December 2013

What Do Oil, Potatoes, and Lobster Have in Common?

It's always been the most imporant part of being a reporter, but it's gotten much harder. The business/political world is full of PR, spin, and manipulation, and reporters have to somehow sort it out. The number of communications experts being hired by industry and governments is soaring, while journalist numbers everywhere continue to fall.  It's no longer a fair fight. 

Pipelines, and all of the financial, environmental and political risk that goes with them are a good example of what can happen. Remember last summer when Mike Duffy (when he was still Stephen Harper's guy on PEI) told all who would listen that the West to East pipeline would bring cheaper oil to the Maritimes. Even Frank McKenna (who should know better) joined the chorus It was widely reported. And today, well before new pipelines are built, it's true.   It's what's driving the rail transportation of North Dakota Bakken oil to the Irving refinery now (it was one of these shipments that led to the tragic loss of life in Lac Megantic).   It's cheaper than what the Irvings would have to pay for Middle Eastern or Venesualan crude brought to St John by water, but bought at the higher world price. 

The reason Canadian and Northern U.S. oil producers get less than the world price is strait forward and familiar to lobster and potato producers here on PEI, too much supply. The oil gets bottle-necked in Oklahoma. The existing pipelines just aren't numerous enough to handle the growing supply from shale gas fields, and increased tar sands production from Alberta.  It's why the oil industry and the Federal Government are so anxious to get new pipelines built, to remove this bottleneck. A good summation of the problem here:

With this week's announcement by the National Energy Board's Joint Review Panel giving the go ahead to the Northern Gateway project to carry Alberta tar sands to Kitimat B.C. and on to Asia by tanker, the real agenda is again before the public: not a "made in Canada" cheaper price to help our Maritime brethren as we heard last summer, but every expectation that this and other pipelines will finally deliver a world price to Canadian producers.   (We had a "made in Canada" price with Trudeau, the older one, back in the '70's, and you can remember how much that was supported in Alberta.)

So if and when these new pipelines are built, that will be the very reason oil prices will go up, not down. Even U.S. president Obama sees the connection when commenting on the XL pipeline:      “...... oil is going to be piped down to the Gulf to be sold on the world oil markets, so it does not bring down gas prices here in the United States. In fact, it might actually cause some gas prices in the Midwest to go up where currently they can’t ship some of that oil to world markets.”

 Some excellent discussion on the NEB decision with former Islander journalist  Jim Brown here:

As for who to believe?  Simple for some, hard for others.  A fascinating interview with Christophe de Margerie, the head of the big French oil company Total, by Stephen Sachur, the take no prisoners BBC Hard Talk interviewer here:

Absolutely no shame in looking for oil, supplying the demand, making money for the company. Climate change? Not my problem. 

For Canadians, there may be an incredible irony at play. Stephen Harper has gutted science both in Environment Canada, and DFO. He's weakened regulations and the regulatory bodies that were in place to oversee sensitive projects like the pipelines. Now just when he needs to win the confidence of British Columbians,  First Nations leaders, and other skeptical Canadians,  he doesn't have the regulatory credibility to do it. It  allows journalists like Chris Turner to take a hard run at the project:

Scenic Photos the High Point of Panel's Report on Enbridge's Northern Gateway Oil Pipeline Proposal

The final report of the National Energy Board’s Joint Review Panel landed in Calgary today with an authoritative thud. “After weighing the evidence,” it announced in outsized type, “we concluded that Canada and Canadians would be better off with the Enbridge Northern Gateway Project than without it.”
The report sprawls across two volumes — a 76-page summary entitled Connections, and a phone-book-thick 417-page volume of conditions and rationales called Considerations. Both are bound with bright green spines and back covers, and the front covers feature atmospheric photos of rugged Canadian wilderness, similar to the sort you’d find in a travel brochure.
I mention the cover images because they are among the report’s most significant environmental assessment features. Whatever else, the Joint Review Panel knows what a pristine environment looks like when it sees one. You want pictures of salmon spawning in streams and caribou peeking out from glades and humpbacks breaching majestically from Great Bear Rainforest bays? This report’s got ‘em.
On facing pages of the “residents and communities” section of Connections (Item 2.4 for those playing along at home), there are pictures of the Gitga’at village of Hartley Bay (which lies at the mouth of Douglas Channel, where supertankers would pass en route to and from Enbridge’s oil tanker terminal at Kitimat) and a tourist office with solar panels on its roof. They know what First Nations communities and low-carbon energy technologies look like too, those graphic design whizzes down at the National Energy Board.
But surely there’s more to the most hotly anticipated National Energy Board report in many moons, right? Surely the nation’s media did not gather eagerly in a conference room in the heart of downtown Calgary to look at a long-form travel ad for northern British Columbia? Surely all those numbers — 1,179 oral statements, 175,669 pages of evidence, 47 aboriginal groups and 884 hours of hearings — amounted to more than a sort of shrugging “seems pretty good to us, eh?”
Well, you tell me. Probably the most revealing passage of the report is the one entitled “What Was Outside Our Mandate?” (Item 2.2.2). Among the not-our-department issues were “both ‘upstream’ oil development effects and ‘downstream’ refining and use of the products shipped on the pipelines and tankers.” Got that? A report on the “public interest” involved in an oil pipeline decided that it was irrelevant where the oil came from or where it goes.
Skipping ahead to 2.4.1, “a large oil spill” was deemed “unlikely,” and in any case “the adverse effects would not be permanent and widespread.” Pipelines don’t, in and of themselves, emit greenhouse gases. And oil spills are basically spilled milk, not worth crying over. So check off the 209 conditions between the picture of the grizzly bear on the cover of Considerations and the Forest Stewardship Council logo on the back cover and you’re good to go!
(Incidentally, Item 4.3.6 concedes that eight grizzly bear populations would be affected “over the linear density threshold,” but this — and the negative impact on woodland caribou — were “found to be justified in the circumstances.” There is a picture of a grizzly with a salmon in its mouth on that very page of Connections. I have thus far resisted adding to my pristine copy a cartoon word bubble indicating an out-of-frame voice saying, “Suck it, fishface!”)
To be fair — I know, a little late in the game — the report does take some pains to indicate that it listened to a lot of dissenting voices. Why, Item 2.3 in Connections (“What were the public concerns?”) is a veritable litany of complaints and wrung hands. “People expressed concerns about the ‘catastrophic’ effects they believe a major pipeline rupture or tanker spill could have on salmon and other fish... People were concerned about the effect of tanker traffic... Aboriginal and non-Aboriginal participants said clean environments are crucial parts of traditional and present-day cultures.” Duly noted, y’all. We feel you.
I could go on, but there are two odd little logical hiccups I’d like to highlight from the report. They concern the two shrugging dismissals I’ve already mentioned: that upstream and downstream impacts were outside the mandate, and that large oil spills would cause damage limited in time and space.
Let’s start with upstream and downstream impacts. There are any number, but for the overwhelming majority of people not living along the length of the pipeline, the big one is climate change. This is broadly understood beyond the pages of Joint Review Panel reports on oil pipelines to be the absolute top concern regarding the extraction, refining and burning of the fossil fuels transported by such pipelines. It’s conspicuously absent from the report, aside from some passing references to “emissions.” Which — again to be fair — are created before and after the oil passes through the pipeline.
But perhaps you’d been led to believe — by Canada’s prime minister and natural resources minister and Alberta’s premier, among others — that the whole reason Northern Gateway was such a high-priority piece of infrastructure was because it would encourage new oilsands developments, thus creating new “Economic Action” in the field of “Responsible Resource Development,” as per maybe the most vociferously championed "Plan" in the nation’s history.
Well, hold it there, hoss. “We did not consider that there was a sufficiently direct connection between the project and any particular existing or proposed oil sands development or other oil production activities to warrant consideration of the effects of these activities.” Got that? Northern Gateway has no direct connection to Alberta’s oilsands! This must just be surprising the boots right off the feet of a great many CEOs in a great many Calgary boardrooms, but there you go.
And to their credit, the Joint Review panelists offer up “four factors” to explain this reasoning. (We’re back in that gem Item 2.2.2, by the way.) They’re all impressive, but I liked the third bullet point best. “Bruderheim Station” — the eastern terminus of the pipeline — “would not be located near oil sands developments and could receive oil from a variety of sources.” I wish I could report that those Joint Review Panel dreamers suggested a few other possible sources for the hundreds of thousands of barrels of diluted bitumen per day the pipeline is being built to transport, but alas they left us to wonder.
Anyway, point being this is a report that doesn’t consider such fussy “upstream” details. Except when it’s assessing the economic benefits of the very same pipeline, over in Item 3.1, which is rather inconveniently located just 12 pages further along in the very same report. “We have taken into consideration that Western Canadian crude oil supply and the demand for imported condensate are forecast to grow significantly over the life of the project.” So a cornerstone of the economic case for the pipeline is that oilsands supplies will increase, but those increases have no direct connection to the project being used to deliver them to new markets from an environmental perspective. Connections is nothing if not one seriously gutsy Joint Review Panel report.
There’s a similarly nifty trick going on in the oil spill risk assessment section, which as I’ve mentioned estimates the possibility of a major spill to be “unlikely,” with no “permanent” or “widespread” impact. Turn to Item 5.5 for some elaboration: “We found that, in rare circumstances, a localized population or species could potentially be permanently affected by an oil spill. Scientific research from a past spill indicates that this will not impact the recovery of functioning ecosystems.”
Sure aren’t a lot of specifics there, and to be fair (yet again!) you have to turn to a whole other page of the report to find the section where it says Northern Gateway is obliged to establish “a scientific advisory committee to study what happens to diluted bitumen when released into the environment.” So we don’t actually know how the oil would behave if it spilled, but we’re really quite sure the impacts won’t be too bad. Take our word for it or whatever.
This is a report that almost physically shrugs in your hands as you read it.
I haven’t even mentioned the fact that Fisheries and Oceans Canada told the Joint Review Panel many, many moons ago it lacked the capacity to provide a full environmental impact assessment. Or that First Nations along the route are already asserting their intention to refuse to let the pipeline be built on their land. Or that as a country we have just maybe the most incoherent climate and energy policies in the industrial world.
I really could go on, but I won’t for now. Heckuva job there, Joint Review Panel. Lovely photos.

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