Pipelines are a failing business model

On Tuesday, October 17th, 2017 in Debate, Parliament

Elizabeth May

Mr. Speaker, I agree with my friend from Chilliwack—Hope that it is most unfortunate when important bills have closure on debate. That is the only point with which I agree with him.

 

I am dismayed by the political willingness to try to claim credit or score partisan points for a business decision, TransCanada’s decision. I think it was well explained by Andrew Leach, associate professor, School of Business, University of Alberta, who pointed out quite clearly that what we have is a declining price for bitumen. It is a product that is expensive to produce but gets a low price on the market, because it is a solid. It is not even synthetic crude. It cannot go into a refinery until it is upgraded. Personally, and on behalf of the Green Party, we think that exporting raw bitumen to other countries for upgrading and refining is a loss for Canadian jobs. In that we are supported by the largest unions in northern Alberta.

However, I put to the member that with regard to the analysis that claims that this is somehow a regulatory process or uncertainty, that regulatory process was put in place by Bill C-38 in the spring of 2012, when, for the first time, the National Energy Board started doing environmental reviews. It is unsuited for it. There has been more uncertainty and more confusion and there are more court cases because of the shemozzle of reviews we have had post the previous prime minister. Mr. Harper’s approach to reviews, which was to fast-track approvals, had the opposite effect.

Meanwhile, there is a glut of pipelines. As Professor Leach pointed out, when Trump approved Keystone, the same producer had a problem. It could not find enough long-term contracts from suppliers who were willing to convey their product through the pipeline to justify it. It was the better business decision to kill energy east in order to line up long-term contracts for Keystone, which is more advantageous to that industry. We can twist ourselves into all kinds of knots to say that it was someone’s political fault. However, this was a business decision based on a low price globally for oil, retreating investments in the oil sands, and so many pipelines approved that there is a glut.

Mark Strahl - Member for Chilliwack-Hope

Mr. Speaker, I appreciate that the leader of the Green Party wants to take the word of academics who have made that argument. I will take the word of former energy east executives, who say that it was the government that killed that project. It was the government, by restarting the hearing process unnecessarily, that killed the project. It was the government, which made the pipeline responsible for calculating how many upstream and downstream greenhouse gas emissions would be created by the product that flowed through that pipe. Suddenly that was the responsibility of the pipeline company. That has never been done before. We cannot blame that on the previous government, as much as I know that the member likes to lay most of the problems of this country at the feet of that government. We will take the word of energy east executives, who said that it was the regulatory process by the government that created that uncertainty.

I talked about the northern gateway pipeline. What impact do you think it has on investor confidence when a pipeline that has been approved, subject to 209 stringent environmental conditions, is simply cancelled by a subsequent government for no reason whatsoever other than political whim? What do you think that does to investor confidence when they say that they can spend $750 to $800 million to get a project approved and it cannot even be built, because it is arbitrarily killed by an ideological government that is opposed to a pipeline that goes through a forest they like? It kills investor confidence, and that is what the government has

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