Re the Trans Mountain Pipeline – Justin, call Donald

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On April 15 the nation saw the reaffirmation of Justin Trudeau’s non-leadership on the Trans Mountain pipeline project. Following his meeting with premiers Notley and Horgan, Trudeau revealed that his government would be entering financial talks with Kinder Morgan aimed at providing the pipeline’s proponent with the certainty it requires to proceed. It is not clear that a financial backstop is the sum total of what Kinder Morgan was seeking when it asked that its concerns over the future of the project be resolved by May 31.

Kinder Morgan is a transportation company that builds fully approved and regulated pipelines to deliver oil and gas produced by its customers from point A to point B. It is not a flag-bearer for a political philosophy or ideological group. Its opponents on this project, however, are a very vocal, highly politicized and ideologically driven sub-set of the Canadian population with numerous axes to grind; anti-oil sands, anti-capitalist, anti-colonialist, to name a few. While a minority, these groups have influence out of proportion to their size including allies among some of Trudeau’s closest advisors. They are making every effort with their opposition to the Trans Mountain pipeline to draw a line in the sand and to force the government to cross it.

Both Kinder Morgan and its opponents rely on the rights delivered by Canada’s democratic institutions to allow them to go about their business, express their point of view, and not be interfered with or obstructed in their various enterprises by anyone without the appropriate cause or authority to do so. This is the “rule of law” referenced endlessly whenever this project is discussed. We accept the rule of law in our daily lives almost unquestioningly. By way of illustration, if you fail to pay your taxes you may be subject to fines and could face a prison term. People generally pay their taxes knowing that the government has the legal authority to collect them while also understanding that it has the coercive power, i.e., the police and court system, to enforce the law.

Opponents of various government policies or corporate activities have every right to protest against them by exercising their freedom of expression or to mobilize politically. The next level of engagement is to participate in or instigate acts of civil disobedience. There is a line that most of us understand should not be crossed; when these acts become criminal in nature and harm is done to persons or property. Those who choose civil disobedience often feel justified in their actions because they believe that theirs is a just cause, that they occupy a moral and ethical position that gives them licence to obstruct and push against or beyond legal boundaries.

Trudeau’s Liberals have been spinning a narrative from before the 2015 federal election that seemed bound to fuel anti-pipeline sentiment. They began by branding the NEB and its approval mechanisms as badly flawed or even broken. The previous Harper government had made efforts to streamline what was already an arduous process, principally by limiting consultations to those who might be directly affected by a given project. This was characterized as “gutting” the existing safeguards, the implied message being that existing pipelines and projects under review were not subjected to adequate scrutiny and therefore posed undue risk to the environment and to public safety. Even a superficial review of the safety and reliability of the 73,000 kilometres of NEB-regulated pipelines in Canada reveal this to be fatuous nonsense. The Liberals promised to revamp the process and restore the public trust they were largely responsible for undermining.

This narrative, while obviously useful to the Liberal electoral effort to demonize the Harper Conservatives, has also served to solidify the resolve of those already disposed toward actively opposing pipeline projects. Once elected, the Liberals then cancelled the Northern Gateway pipeline project claiming the cartoonishly named (by activists) “Great Bear Rainforest” was no place for a pipeline and also imposed a ban on tanker traffic along B.C.’s northern coastline. These arbitrary decisions, made without any visible signs of the “evidence-based” policy-making philosophy the Liberals claim they adhere to, must have been for the environmentalist crowd like catnip for a tabby. The ascension of an anti-pipeline NDP/Green provincial government in B.C. that since taking office has actively sought to derail the Trans Mountain project despite having no jurisdiction in the matter would have further agitated their already fevered minds.

The tepid support for the project since approval from Trudeau and key ministers like Jim Carr (Natural Resources) and Catherine McKenna (Environment and Climate Change) suggested that the government’s own heart was not really in it. Meanwhile, Kinder Morgan was discovering that the business of getting the thing built was not going to be easy with petty bureaucratic roadblocks being erected by the local municipal government in Burnaby being just one obstruction.

It has become more and more apparent that all the political wrangling and legal arguments are not and never were going to be the real battle. The real battle, and likely greatest source of uncertainty for Kinder Morgan, is what will take place on the ground when the acts of civil, and possibly criminal, disobedience become the centrepiece of everyone’s daily newsfeed. And that’s when the prime minister who has tried to substitute charm, endlessly repeated and often inane talking points, and largely pointless globetrotting for actual leadership is going to run aground.

Kinder Morgan just wants to build and operate transportation infrastructure to serve its clients as it believed it had the right to do and has reliably and safely done with its existing Trans Mountain pipeline for over sixty years. It doesn’t want to be defending the ramparts from the hordes in their trendy hiking gear or Alpaca wool ponchos, waving placards and chaining themselves to construction equipment. Demanding reassurance from this government is not gamesmanship but a sensible and prudent decision. There are other places where Kinder Morgan can operate that offer a more predictable business environment, the U.S., for one, where it won’t be necessary to die on some hill it has no interest or obligation to defend.

So how does the PM extricate himself from this ugly mess he has played a large role in creating? The first thing he should do is place a call to Donald Trump. Why Trump? Because, unlike Trudeau, Trump has confronted a similar situation and resolved it with swift and decisive action.

For months, during the late days of the Obama administration’s reign, opponents to the Dakota Access Pipeline project had occupied a tent city obstructing work on the project. Obama had ordered the U.S. Army Corps of Engineers to conduct a full environmental impact assessment and issue an environmental impact statement. The Corps of Engineers had previously reviewed the route and found no significant impact. Shortly after taking office in January and February 2017, President Trump first reversed Obama’s legislation and then ordered the Corps of Engineers to conclude the environmental assessment. The project was completed in April and oil began flowing through the pipeline in May.

More than 1,000 permits and approvals were granted for the pipeline from a host of regulatory bodies. Engineering plans for the pipeline addressed a major point of contention, the risk associated with passing under Lake Oahe, by burying the pipe more than 95 feet below the lake bed – far deeper than the seven existing pipelines that already traversed the bed of the lake. Court actions may continue, but the pipeline is a physical reality.

Protesters in the camp were given a deadline to leave and the evacuation was completed only a day late in fairly orderly fashion. Unlike Trump, Trudeau does not need to expedite the permitting process as Trans Mountain has been approved by the NEB and by cabinet, and the jurisdictional right of the federal government is beyond dispute. What he does need to do is acknowledge that threat of disruptive behaviour by activist protesters is the one significant roadblock to getting the pipeline built and that the perceived weakness of the government with respect to upholding the rule of law is the primary source of uncertainty for Kinder Morgan. That he and his government have the will to stop unlawful actions, even at the risk of losing approbation from many of the groups they have so assiduously courted, is the message he must sell.

The question, yet unanswered, is whether the prime minister is capable of a believable performance as a tough and principled leader who will back up his “it’s in the national interest” mantra with decisive use of the coercive power that rests with his office. Such a persona is entirely at odds with his irrational desire to endlessly consult with everyone on every issue. “Sunny ways” just won’t cut it this time.

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Up in Smoke – Burning Taxpayers’ Money Chasing a Dream

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Anyone planning to cast a ballot on October 19th should take a careful look at progressive promises to invest in green energy technologies. The return on such investments will likely be very poor as Ontario, the United Kingdom, and Germany have already demonstrated. To date, the leaders’ debates and mainstream media coverage of the election have left some key questions unanswered by the Liberals and NDP (the Green Party, too, but they have no hope of forming a government).

In December 2013 an ice storm swept up from the Great Plains of the U.S. into southern Ontario and moved eastward across the province knocking out electric power for hundreds of thousands of homes and businesses. Toronto was particularly hard hit, some residents waited a week or more for power to be restored.

My family was without power for about a day; an inconvenience, far from catastrophic, and even somewhat enlightening. You very quickly comprehend how reliant we are on an uninterrupted supply of electricity when it is suddenly unavailable.

As a ratepayer concerned about the rising cost of electricity in Ontario and the provincial government’s headlong rush into renewables, I thought it might be interesting to see how the green energy plant was performing during the crisis. Viewing the Independent Electricity System Operator (IESO) website a day or two after the storm revealed that both wind and solar were effectively contributing nothing to meeting the power needs of Ontarians.

Wind turbines cannot be operated in icy weather conditions. Accumulated ice unbalances the rotor blades which may lead to a very expensive failure. Latitude and seasonality affect the amount and intensity of sunlight received by a particular patch of real estate, so photovoltaic panels in Ontario would have been at their least productive when the ice storm struck. Being capped with layers of ice and snow can’t have helped much either.

When service was restored it was electricity from Ontario’s nuclear, hydro, and gas-fired generating plants that flowed to customers. Ontario’s nuclear plants supply more than 60% of the electricity used in the province annually. During the ice storm and its aftermath they were humming along reliably while the renewables were stopped dead in their tracks.

Solar and wind are both plagued with a major, as yet unaddressed, problem – intermittency. Solar and wind are often at peak output when there is no concurrent demand for that output, and produce nothing when demand is at its highest. Unlike zero-emissions nuclear power plants, they are largely unfit for purpose.

Capacity utilization in Ontario is about 83% for nuclear plants and around 26% for wind. A simple analysis using IESO and other publicly available data suggests that replacing the fleet of nuclear power plants in Ontario would require more than 20,000 wind turbines at a conservatively estimated cost of more than eighty billion dollars. To provide gas-fired back-up capacity or some form of energy storage system to meet demand when the wind isn’t blowing would add billions more to that estimate – all for a net gain of zero in terms of reduced emissions.

Like many environmentalists, the signatories to the recently unveiled ‘Leap Manifesto’, believe that we must decarbonize immediately to save the planet and that we can meet all of our energy needs with wind and solar power. The manifesto is just one more indicator of how hopelessly optimistic and misguided these green enthusiasts are. Even without the damage to the distribution network during the ice storm, thousands of residents would still have been freezing in the dark if the province had to rely entirely on wind and solar to supply its electricity.

I also checked the IESO website this past July 28, when southern Ontario was experiencing a heat wave. In the middle of the afternoon, there was no wind and virtually no electricity being generated by the scores of wind turbines standing motionless in the countryside. Demand for electricity was peaking as homes and businesses cranked up their air conditioning. Once again, nuclear, hydro, and gas-fired generators fed the grid and kept everyone cool. Solar contributed less than one half of one per cent of generated output during the day, and of course nothing once the sun had set.

A key actor in the Ontario Liberal government’s decision to adopt renewables as the way forward was Gerald Butts. He had then-premier Dalton McGuinty’s ear just as he now has Justin Trudeau’s in his role as Trudeau’s principal advisor. Butts is a fervent environmentalist who used to head up WWF Canada. He’s on record saying, “…100 per cent sustainable, renewable energy is possible and economical by 2050 if we start the transition today.” For the record, WWF Canada opposes nuclear power generation so it’s probably reasonable to assume this is Mr. Butts’ and Mr. Trudeau’s position also.

While campaigning in Trois Rivières on September 2, Trudeau declared, “Ensuring that our infrastructure is able to adapt to new challenges – like climate change and threats to our water and land – is essential to our future prosperity.” He then laid out his party’s plans to address this perceived deficiency through (presumably deficit-financed) infrastructure “investments”. These investments will include the establishment of a “…Canada Infrastructure Bank to provide low-cost financing for infrastructure projects, and Green Bonds to support renewable energy projects.” The Liberals promise to “…use new financing instruments to stimulate investment in retrofits and distributed energy systems.”

In short, the federal Liberals will adopt the ruinous policy that Gerald Butts sold to their provincial counterparts in Ontario. It’s extraordinary that these radical and economically unsound positions are part of a major party’s platform, particularly a platform founded on the belief that public investment is what is needed to kick-start the national economy. The return ratepayers in Ontario have seen from the McGuinty/Wynne “investments” in green energy is worse than the output of a solar panel at midnight – less than zero. We don’t need to borrow money to repeat those mistakes nationally.

The NDP are no less committed than the Liberals to this fanciful line of thought. Tom Mulcair, presumably to reinforce his credibility on this file, frequently reminds us that he held the Environment portfolio as an MNA in Québec. In a 2013 speech to the Economic Club of Canada Mulcair said in order to ensure Canada’s long-term prosperity an NDP government would, “…invest in modern, clean energy technology that will keep Canada on the cutting edge of energy development and ensure affordable energy rates into the future.” The NDP has always opposed nuclear power so we can be pretty sure the range of investment options Mr. Mulcair is considering is pretty limited.

Mulcair also told the Economic Club audience that, “We will rise to meet our international climate change obligations by creating a cap-and-trade system that puts a clear market price on carbon.” Mr. Trudeau also talks about putting a price on carbon. The revenues generated will presumably be directed to “clean technology” investments so favoured by both leaders, and both are practically champing at the bit for a chance to commit Canada to massive emissions reductions at the Paris COP in December.

As an informed, concerned member of Canada’s electorate I think Mulcair and Trudeau owe voters explicit details about how their vague plans to limit emissions, price carbon, and “invest” in renewables will deliver the low-, or no-carbon robust economy they each promise. I believe that the positions of Liberal advisor Gerald Butts and Leap Manifesto author Naomi Klein are extreme, unaffordable and ultimately counter to the national interest.

So, Mr. Mulcair, Mr. Trudeau, please tell us how much do we need to reduce emissions by, and what will the effect on the global climate be if we make these cuts, bearing in mind that Canada is responsible for less than 2% of world emissions? If the solution is renewables, what is the target proportion of our energy mix for these technologies and what will it cost to achieve? Most forecasts suggest that renewables, including biofuels, will be only 10-20% of the global energy mix by 2050. How will we ensure the global competitiveness of our industries and the financial security of Canadians if they must shoulder additional tax burdens, higher costs for carbon-based fuels, and ongoing subsidies for renewables? We need substantive answers to these questions, and more. Asking voters to take a leap of faith just doesn’t cut it.

Access to affordable, reliable energy delivered the prosperity Canadians enjoy today. How we will maintain that foundation, or at least avoid materially damaging it, is the most important conversation we haven’t had in this election to date. The progressive parties, with their ill-defined plans to “invest in green technology” have provided plenty of reasons for Canadians to be very wary of the future they promise.

Why environmentalists and policymakers should read auto mags

I’m not sure what environmentalists and policymakers read in their spare time but I’d like to suggest they could do worse than read the odd car magazine. I’ve been reading them for years and have found them to be a window into emerging social trends, technologies and how government and industry can work together to improve the lives of ordinary citizens. For example, I first heard about cell phone technology in Road & Track. Other auto publications have helped expand my knowledge of recycling, energy use and pollution control – and all while being entertained.

The auto industry is often vilified by people who are passionate about living in a more environmentally and socially responsible way. For some, the car is a symbol of everything that is wrong with our modern industrial culture. There is no denying that private vehicles, for all the economic, convenience, and other benefits they provide, also impose a significant burden on the planet’s finite resources. And car accidents claim lives or leave people permanently injured, serious social and economic costs. Still, though, the car genie is long out of the bottle and won’t be put back soon, or easily, so we really have to be clever about how we live with the genie now and in the future.

The car was born of ingenuity, coincident technological developments and entrepreneurial spirit. The industry’s early and rapid growth and its ascension to a place of prominence in our modern economy bear testimony to the power of capitalism and free markets. Automobiles directly or indirectly transformed everything, from the physical landscape to how we live, work and play. Over time, and as vehicle ownership and use became pervasive, some of the negative aspects, e.g., tailpipe emissions or safety concerns, became more and more apparent and less and less tolerable.

Even if you view the car as a problem and an impediment to realizing a safer, greener world, there are valuable lessons to be learned from our now century-plus relationship with it. Over the past 40-50 years, the industry and its products have been transformed. This was achieved by identifying specific targets and then enacting regulations that forced automakers to respond. For example, tailpipe emissions of various gases and particulates have been dramatically reduced in response to California-led legislation that over the years established ever more stringent standards.  The smog over Los Angeles and other major urban centres – a visible manifestation of auto use – was the catalyst for massive, positive change. The US Environmental Protection Agency reports “…emissions from a new car purchased today are well over 90 percent cleaner than a new vehicle purchased in 1970.” Even with more vehicles on the road, the total environmental burden for specific emissions is lower. http://www.epa.gov/airquality/peg_caa/carstrucks.html

Great strides have also been made in recycling vehicles that have reached the end of their useful life. In 2000, the European Union issued a vehicle end of life directive and there have been many other initiatives on the part of governments and automakers globally aimed at reducing the volume of material that goes to landfill. Today, attention is paid to this issue from the design stage forward.

Similarly, highway death tolls and other safety concerns prompted the introduction of regulated standards so that modern automobiles are far more crash-worthy than their predecessors (check out this crash between a ’59 Chevy Bel Air and an ’09 Chevy Malibu staged by the Insurance Institute for Highway Safety http://www.iihs.org/50th/default.html. In addition to all of the “passive” safety features, e.g., collapsible steering column, seat belts, deformable structures and air bags found in modern vehicles, there are also “active” safety systems such as anti-lock brakes and electronic stability control which improve drivers’ chances of avoiding collisions in the first place.

Currently, automakers are focusing considerable attention on fuel economy. The US (Canada is following) is ramping up its fuel economy standards dramatically as a means for reducing greenhouse gas (GHG) emissions. The objective is straightforward – reduced fuel use and, therefore, lower carbon emissions – even if the solution is not.  Automakers are working on combustion technology, aerodynamics, new weight-saving materials and construction techniques, and other technologies to meet the regulatory requirements. They’re even building electric vehicles. The market will also play its role in shaping the final solution(s).

This approach differs in a very important way from other approaches such as the hotly debated idea of a carbon tax. People may or may not respond as hoped depending on their willingness and ability to shift consumption away from other goods so as to maintain their same level of energy consumption. A carbon tax is a blunt instrument that will potentially impose hardship on those who can least afford it. The objective of a tax is to raise money; taxes have generally been ineffective instruments for achieving other policy objectives. Governments are notorious for collecting revenues for a specific purpose and then redirecting the funds toward unrelated objectives.

Governments also founder when they attempt to pick solutions rather than set targets and regulate industry participants. In a number of jurisdictions globally, in an effort to reduce GHG emissions associated with electricity generation, governments picked wind and solar power as the solution. They have then have imposed taxpayer-funded subsidies to try and make their solution work, distorting the market in the process while also harming their domestic economies. In many cases, they simply shift emissions to a neighbouring country from which they buy power to make up for generation shortfalls.

Cars continue to play an important role in our everyday lives and in the global economy. That is why environmentalists and policymakers should read car magazines. They might then understand how regulated targets and market responses can, and do, deliver meaningful, positive outcomes. They would get some reasonable insight into the massive progress automakers have made toward making their products more socially and environmentally responsible and how that could be effected in other industries. They might also understand how consumers are willing to play along or even advocate for change when they have access to information about the intent and results of the process.