The month of February started as a good news month for the landlocked price-crippled oil industry in Western Canada.
The federal court of appeal ruled the Trans-Mountain Pipeline twinning from Alberta to the West Coast can proceed, and ruled that reconciliation to Indigenous issues does not give Indigenous people a veto over decisions.
The second good news blast was regulatory approval of the Line 3 pipeline project replacement to the United States.
Between them, the two long-delayed projects will offer new markets to expanding oil production.
Any thought by the Liberals and Prime Minister Justin Trudeau that these two good news events poured water on the fires of western alienation was incorrect.
No sooner had these decisions come out and westerners demanded approval of the $20 billion Frontier oilsands mine planned for northeastern Alberta.
The 260,000 barrel per day oilsands mine planned by Teck Corporation was previously approved. Approval came before the federal Liberals committed to net zero greenhouse gas emissions by 2050.
Environmental issues concerning Frontier range from potential impact on the nearby Wood Buffalo National Park, impacts on bison and caribou herds to water issues.
The main issue though revolves around greenhouse gas emissions. Frontier will average 4.1 mega tonnes a year for its 40-year mine life. The emissions will make it difficult for Alberta, already a high per capita emitter, to reduce to target levels.
The optics of the Frontier project hit the fan as Trudeau and the cabinet render judgment.
A favourable decision still won’t get them any more votes in the West. A denial will stir the fires of western alienation even more.
On the Liberal political side, approval will alienate the Liberal urban voter base.
Liberal MPs and cabinet ministers have been applying pressure on Trudeau, with public and private statements. Rarely do MPs openly disagree with their prime minister.
During door-to-door visits in the recent election campaign Liberal supporters had difficulty reconciling climate change policy with purchase of the Trans-Mountain Pipeline and increased emissions that will result.
Clouding the issue even more is an admission from the Teck CEO that Frontier may not get built even if approved.
To get financing, Teck needs to show a partner and bankers profitability. An independent consultant’s analysis indicates Frontier needs $75 a barrel oil to make money and the mine won’t be profitable until 2026.
That analysis alone, along with the CEO’s admission, is enough to kill the project, if economics were the main consideration.
Politics has befuddled the issue: to build a mine, or not.
No matter what decision Trudeau arrives at, he will face a storm of criticism.
The decision will require the best political juggling skills of his career, balancing the need for jobs and need to reduce emissions.
Already, the feds are floating the idea of funding to clean up thousands of abandoned wells as a concession if the project is denied.
Ron Walter can be reached at ronjoy@sasktel.net
The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.
