Forget Keystone XL, Trudeau is about to kill Northern Gateway all on his own
Our newly minted Prime Minister Justin Trudeau could almost be forgiven for his underwhelming response when President Barack Obama rejected the TransCanada Keystone XL project after 7 years. It was Prime Minister Stephen Harper’s fight, and Harper lost. But what hardly got any press at all was his own pipeline-killing announcement, done somewhat slyly, under the radar.
In ministerial mandate letters published on the prime minister’s web page, Trudeau made public his explicit marching orders to each of his new ministers. Buried in the letter to Minister of Transport Marc Garneau, Canada’s first astronaut, was this shocker: Among Garneau’s top seven priorities, he is to “Formalize a moratorium on crude oil tanker traffic on British Columbia’s North Coast, working in collaboration with the Minister of Fisheries, Oceans and the Canadian Coast Guard, the Minister of Natural Resources and the Minister of Environment and Climate Change to develop an approach.”
In other words, Prime Minister Trudeau is going to effectively kneecap a pipeline proposal that already has National Energy Board approval. There is zero point to building a pipeline if you can’t load your product on ships. Enbridge's Northern Gateway is now all but dead.
For those who are counting, in the space of a week we went from four potential oil export pipelines to two – Kinder Morgan’s TransMountain Expansion (TMX) and TransCanada’s Energy East. This comes after years of the industry saying we were going to need all of the above when it came to export pipeline proposals.
Losing Keystone XL was expected. Many had become disillusioned with Northern Gateway’s prospects. But to lose both, that’s a body-blow to the Canadian oil sector.
A tanker moratorium would also preclude the usage of crude-by-rail to the northern B.C. coast. It means that West Coast exports are now all-or-nothing; Kinder Morgan’s TMX, or nothing. Abandon all Pacific and possibly south Asian markets. It doesn’t make a lot of sense to ship oil from Fort McMurray, to St. John, New Brunswick across the Atlantic, through the Suez Canal in the opposite direction of all other loaded oil tankers, around India to China. The Panama Canal could be another option, but instead of taking the shortcut great circle route to Asia, you are going all the way across, then around North America, and then around half the planet along the equator to get to Asia.
Perhaps this is why, during the televised leaders’ debate, Trudeau said nothing directly about either Northern Gateway or TMX. Now we know – he intended to kill Northern Gateway all along, he just wasn’t going to let the other leaders make an issue of it. If this was an election promise, it wasn’t one he broadcast widely.
With the upcoming climate change conference, COP21 in Paris, Trudeau is planning on making a very, very big deal out of it. He’s taking all the premiers along with him who want to go, as well as opposition leaders. By mid-December we will have a very clear idea of how much more of our industry he plans to lay waste to.
With a prime minister like Trudeau, who in our industry needs enemies?