Expert analysts break down the oil lobby’s most persistent misinformation campaigns
For a special episode of the Dogwood Podcast, Sophie Harrison tackles ten myths about Kinder Morgan’s expansion proposal, with the help of expert guests.
We chatted with Robyn Allan (economist and former ICBC CEO), Marc Lee (senior economist at the Canadian Centre for Policy Alternatives) and Professor Jocelyn Stacey (UBC’s Peter Allard School of law). Here’s what they had to say:
1. Kinder Morgan’s expansion will help tar sands access Asian markets.
Tidewater access at the Westridge dock has existed since 1956. Kinder Morgan bought the pipeline in 2005. They’ve had years to find Asian markets for Alberta’s oil. And yet, in 2016, none of the tankers from Kinder Morgan’s Westridge terminal went to Asia. They all went to U.S. markets.
Robyn Allan, “Offshore Markets? What Markets?”
2. Canada is selling its oil to the U.S. at a discount!
We’ve all heard it. Because Canada’s oil is landlocked (see above) and can’t get to Asia (see above) — we’re stuck selling our oil at a discount to the U.S.!
Well, this hasn’t been true for many years. Canada’s heavy crude is a lower-quality oil. It’s more expensive to refine. That’s why there’s a natural discount between Western Canada Select (the benchmark for Canada’s heavy crude) and West Texas Intermediate (the American benchmark).
The National Energy Board expects this natural discount to be about $20/barrel. Well, right now Alberta’s oil is selling at more like $9/barrel below WTI. That means, as Robyn Allan put it:
“We in fact have a very healthy premium price for our heavy oil in North America right now.”
Where did this myth come from? During the Enbridge debate, one CIBC analyst cited a number — $50 million a day — that the Canadian economy was losing by selling our oil at a discount. There was no analysis to back it up, and it has since been thoroughly debunked.
But still the idea keeps on getting repeated by politicians and industry. Robyn Allan went as far as to call it “propaganda.”
Robyn Allan, “Oil sands ‘money left on the table’ and more myths”
Robyn Allan, “Bitumen’s deep discount deception and Canada’s pipeline mania”
Oil Change International, “Tar sands: the myth of tidewater access”
3. If we don’t build Kinder Morgan’s Trans Mountain expansion, they’ll ship the oil it by rail instead!
As Robyn Allan describes in the podcast, nobody is proposing rail-to-tanker shipments through B.C. Connecting Kinder Morgan’s Trans Mountain expansion to oil-by-rail is a complete non-sequitur.
Allan further points out that if oil-by-rail is as unsafe as government and industry suggest, then they should fix it. Immediately. Our safety should never be put at risk.
Oil-by-rail is happening now because those tracks link producers to refineries. That will continue, with or without new pipeline infrastructure. Just listen to the companies themselves.
4. The oil sands are pipeline capacity constrained; they need Kinder Morgan!
There was maybe an argument for this five years ago, before the oil price tanked. Now? Not so much…
Tar sands producers don’t need more pipeline capacity to maintain current production levels, only to enable even further expansion. But oil prices are now critically low, Alberta has capped on oil sands emissions, and industry analysts worry about a pipeline overbuild. In the current economic environment, few new tar sands extraction projects are coming online. Oil majors like Shell and Statoil are pulling out of the tar sands already.
It’s time to stop desperately trying to ship out more carbon-intensive raw resources, and instead have a real conversation about the new steps for Canada’s economy in the 21st century.
CCPA, “Kinder Morgan’s Trans Mountain pipeline approval based on faulty assumptions”
Thomas Gunton, “Is Canada setting itself up for a pipeline glut?”
Oil Change International, “Reconsidering the need for new pipeline capacity in Canada”
Oil Change International, “Reality check: the end of tar sands growth”
5. B.C. needs the jobs and revenue from Kinder Morgan’s tanker expansion.
The jobs and revenue arguments for this project, as purported by industry, are completely overblown.
In the long-run, Kinder Morgan’s pipeline expansion, according to their own numbers, will create only 50 permanent jobs in B.C. — while putting at risk thousands jobs in tourism, fisheries and more.
6. New pipelines are all part of Canada’s climate plan.
Canada is trying to have its cake and eat it too. But in the end, increasing pipeline capacity to get more tar sands oil to market is a clear contradiction to Canada’s promises under the Paris Agreement.
The upstream emissions from tar sands expansion pose a major and unresolved challenge to meeting even Stephen Harper’s 2030 climate target. And by proposing to extract an unfair share of the global carbon budget, Canada’s oil economy is making a dangerous economic bet on catastrophic climate change.
CCPA, “Can Canada expand oil and gas production, build pipelines, and keep its climate change commitments?”
Kathryn Harrison, “Pipelines are not a reconciliation of Canada’s environment and economy”
Dogwood, “Trudeau’s climate plan: made for the oil patch”
7. The Province of B.C. has no power to stop this project.
B.C.’s government does not have the power to reject Kinder Morgan outright. However, B.C. does have a clear responsibility to respect the Constitutionally-recognized rights of Indigenous peoples. The Province also has a clear responsibility to look after the health and safety of its residents — and the ability to set up processes or enforce conditions accordingly.
Trudeau’s government could launch their own legal challenge against B.C. for any actions the province takes, around respecting First Nations right or defending local health and safety. (A risky move politically if we’ve ever heard one!) Then, as Professor Stacey says, “the courts will have to resolve that, because there are conflicting interests at stake.”
Jocelyn Stacey, “Provincial power on pipelines comes from being an Indigenous ally”
West Coast Environmental Law, “A legal toolbox to defend B.C.”
Dogwood, “Can John Horgan’s new B.C. government really stop Kinder Morgan?”
8. If they stop the project, Canada’s rule of law is broken.
Look, it makes sense that investors want certainty. But here’s how Professor Stacey put it: “We live in a federal state, we live in a colonial state, and so there’s inevitably going to be some sort of uncertainty to ensure that interests are protected… when you have interests that are colliding between different provinces, different First Nations.”
Interestingly, virtually none of these pro-pipeline rule of law arguments mention the rights of First Nations. Section 35 of the Constitution recognizes and affirms these rights in the “supreme law of Canada.” So we won’t even know if the initial federal or provincial approvals were legal until the courts rule on whether those rights were violated.
Further, Professor Stacey adds: “I would argue the federal process for approving the pipeline, when you think back to the flawed NEB process or the Ministerial Panel that was put in place afterwards, that those processes themselves have actually violated the rule of law.”
“There was a lot more that could have been done up front, by the federal government, by the provincial government to ensure that these requirements were met up front… We’re now just experiencing what happens when those processes aren’t in place.”
9. This project was approved based on a rigorous, evidence-based review process.
The actual facts of the matter are this: Justin Trudeau knew when he was running for office that the National Energy Board process was broken. So he promised to redo their review of Kinder Morgan’s Trans Mountain proposal. Then he broke that promise — and never explained why.
Instead, we got the slapdash additional Ministerial Panel hearings. The panel produced a report with a bunch of outstanding questions, which Prime Minister Trudeau proceeded to ignore before approving Kinder Morgan’s project in November.
B.C.’s Premier Christy Clark, previously opposed to Kinder Morgan’s tanker proposal, greenlighted the project based on the same flawed NEB review, which systematically underestimated the environmental and economic costs while relying on industry numbers to overstate the economic benefits.
10. You can’t fight pipelines if you drive a car! You’re a hypocrite!
Ah, the oldest in the book!
Let’s not forget that Kinder Morgan’s pipeline and tanker expansion is an effort to increase oil production. We community organizers and concerned citizens aren’t proposing to stop the tar sands overnight; saying no to Kinder Morgan is merely saying no to further expansion of this industry.
Dogwood’s Christina Smethurst put it best:
“It’s like saying, if I drink alcohol then I can’t possibly fight liver cancer… I live in a world that was not designed by me, but I’m trying to design a world for the future.”
Anjali Appadurai, “On feeling guilty about climate change”
Did we miss anything? Other myths that should’ve made the Top Ten?
Leave us a comment below!