Northern Gateway

The start of the hearings for the Northern Gateway pipeline (NGP) was this past week. People who understand how the regulatory process works, understand that the pipeline has already been approved and that the hearings are just to provide noise as a distraction for that which has already been decided.

In principle I support the opening up of a transportation route to the coast for all products from Alberta, including oil and gas. I do not agree that the government should be playing favourites by supporting one method of transport over another and I do not agree that the government should be subsidizing any form of transportation option, as it is doing with the pipelines.

Firstly. You know the process has been 'fixed' when the process allows a lot of people who can not prove a direct impact, to participate in the process. This is a rather standard procedure and is used because you can almost guarantee that the people with very little at stake will go all out to try to get their demands met. Been there, seen that.

The NGP hearings are going to allow just about any group with a dollar to spend on a lawyer to make written and verbal submissions. Most of these people have no direct connection to the area and consequently the outcome of the hearing is largely inconsequential to their lives. They are ideologues, fighters looking for a fight. Win or lose, when the hearings are over, they will just move on to the next fight. Most of them have never been to the route the pipeline will take, and never will, but they are greatly concerned about the environment on principle.

Why are they permitted to participate? Because they will take up most of the time, they will get all of the media attention, and the public will not be offended that the National Energy Board (NEB) ignores them. The people who have real issues that need addressing will be lost in the lights and whistles that these ideologues set off, and consequently the public will not notice that real people will suffer real hardships as the pipeline goes forward. The people with real issues will simply be lumped together by the public with the professional complainers. Been there, seen that.

Standard operating procedure when you want a project rubber stamped with no changes.

Knowing this, are you surprised then that the federal energy minister and the prime minister came out with comments to shape the public perception of the hearings? They want the public to be irritated by all the people who shouldn't be participating in the process.

It does not offend me that the prime minister spoke out. It is the job of the government to make policy determinations and to speak out on projects that are in the national interest. What bothers me is that the process has been set up to trample the rights of Canadians for the benefit of shareholders that live a long way away from any negative impacts from the project.

The process should have been set up to address the issues of the people who are going to be directly affected by the project. Ideologues should not be allowed to participate.

Yes, I know, an oil spill on the coast will affect a great many people and pollute a significant part of the environment for a number of years. But an oil spill is not a disaster for the environment, it is only a disaster for those individual organisms that are poisoned by it. The environment will do just fine.

There may be changes to the ecosystem, but there will be no long term damage. When I speak of long term, I mean time measured in decades if not centuries. Just because we demand instant gratification doesn't mean that nature is obliged to grant it. Nature adjusts at its' own pace, not ours. An oil spill is a change in the environment not a catastrophe.

Keeping tankers out of coastal waters? What kind of nonsense is that? Do people really believe that if a tanker goes down 12 miles out, the oil won't reach the shores?

What are the odds of a significant oil spill from a tanker anyways? Other than the Exxon Valdez, can any of the protestors identify another tanker that has caused a major spill? How many major oil spills from tankers have there been in the 20^th century? My point is that the risk is very small.

The protestors, however, are going to yell and scream like it will be a weekly occurrence if the project is allowed to proceed. What they won't try to deal with is the problem of ships pumping out contaminated waste water on a daily basis. The amount of oil pumped into the ocean this way is probably greater than a super tanker worth on a global basis per year. It's a difficult problem that the public can't really understand, so it's tough to get them to donate money for that cause.

To the issue of subsidies for the pipeline industry.

The argument for the pipeline includes the argument that it is the most cost effective way to move fluids. This is certainly true under the current regulatory framework, where the full costs of the pipeline are not paid by the beneficiaries of the pipeline. Since they do not have to pay the full costs, it is not possible to say if it is the most economical method to move fluids.

The biggest subsidy that pipeline company's receive is from private land owners. The pipeline company's do not have to pay the full cost of the depreciation of the land to the owner. The right of way is forced on the land owner because if the government failed to do so, the cost of purchasing the right of way in a 'free' market would make the project prohibitively expensive. The project is declared to be in the 'public interest', and the rights of the individual land owner are stolen.

The existence of the right of way restricts all future development of the property which nominally the land owner is compensated for. The social costs of those restrictions are not compensated. The restrictions may result in inefficient future development because the optimal development location is prohibited by the pipeline. These costs are not borne by the pipeline company.

Furthermore, the pipeline company's are not required to bare the costs of removing the pipelines when they are decommissioned. These costs are left up to future land owners and the governments of the future. Only fools believe that these pipelines will not have to be removed eventually. They can not be cleaned perfectly upon decommissioning and consequently there are contaminants that are released when the pipeline eventually corrodes. This problem is already occurring with the pipelines that were among the first laid in the ground. Modern manufacturing techniques can make the pipes last longer but they can't make them last forever.

The costs of the environemental clean up after a decommisioned pipeline leaks contaminants into the environment are also not factored into the cost of the pipeline. These costs will inevitably be borne by the government because industry is very clever about extracting money from a company and leaving the liabilities for others to deal with. There is a reason that the Alberta government has a back log of abandoned well sites to reclaim.

Additionally, once the right of way is removed and a land owner is no longer restricted in what he or she can do with the land, it is up to the land owner to remove the pipeline if they wish to erect a building over the site of the decommissioned line.

When you add all these factors together, I am not certain that pipelines are the most economic solution for moving fluids. They may be, but until the regulatory framework is adjusted to force the pipeline company's to pay the full cost, we will not know for certain.

The bigger question that I have is why the government is supporting the NGP but not offering support to the alternate options of rail? Personally, I believe that multi use infrastructure is inherently more efficient than single use infrastructure as it is not prone to sudden obsolescence when technology changes before the full capital costs have been recovered. That being said, if the full costs of the pipeline were being paid by the beneficiaries of the pipeline, and they felt it was still worth the cost, I would have no problem with the pipeline being built.

The governments should not be playing favourites. The government should be supporting the principle of getting the best price for products produced in Alberta. It should not be deciding how to go about getting that price. When governments do that they end up using hidden subsidies to try to fool the public into believing that the current government is extraordinarily competent. Create a level playing field and allow industry to decide what is the most economical way to achieve a profit.

What I really have problems with in regards to the hearing process is that the people who will suffer the most will not likely even be heard. The hunters and trappers who still live in the back country of BC might not even be aware that they are going to be affected. If they are, it is most likely because some of the professional complainers found them and want to use them as a human shield while they pursue their own objectives. I am concerned therefore that because of the way the process is set up, that many people will earn a very good living from the process but the people who might lose their living, will get nothing.

Ultimately this is the reason that the process was set up the way it was. The government does not want the public to know that there are people who will lose everything because of the project. What the public will see, is that a whole lot of people who will lose nothing from the project are furiously putting on a big theatrical performance for the entertainment of those who created the process. Been there, seen that.