Gateway: Jim Prentice would like a word with you, Prime Minister

An extraordinarily reticent man sounds mightily concerned

Charlie Smith at the Georgia Straight is the one who pointed this out, and it’s super-interesting. Jim Prentice, banker, former cabinet minister, friend to the oilman, had a piece in the Vancouver Sunon the weekend that starts off much as you’d expect — “The time has come when Canada must diversify beyond its traditional U.S. energy export markets and seek new ones, specifically those in the Asia Pacific” — and then takes a surprising turn:

A key element to achieve that end is a clear public policy framework that provides consistency and transparency. The absence of private and public sector leadership, however, is a serious impediment. …

To begin, however, the constitutional obligation to consult with first nations is not a corporate obligation. It is the federal government’s responsibility.

Second, the obligation to define an ocean management regime for terminals and shipping on the west coast is not a corporate responsibility. It is the federal government’s responsibility.

Finally, these issues cannot be resolved by regulatory fiat – they require negotiation. The real risk is not regulatory rejection but regulatory approval, undermined by subsequent legal challenges and the absence of “social license” to operate.

Prentice isn’t wildly offside the federal government here. I’ve heard nearly identical arguments in Ottawa from a senior member of this government, and to the extent several current and former federal Conservatives in BC are supporting Christy Clark’s Sort Of Liberals over their former caucus colleague John Cummins, it’s precisely because they recognize there’s no way forward for energy exports if the province’s aboriginal leadership doesn’t give the green light.

But Prentice, an extraordinarily reticent man who goes out of his way to avoid saying anything that others might judge excessively noteworthy, sounds mightily concerned here. And on the substance, he’s right: I could push a couple of pipelines through British Columbia for you by next Tuesday, as long as you didn’t mind spending the following 30 years in court. Getting it done in a way that’s actually of any use to anyone is harder.

 

 

 




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Gateway: Jim Prentice would like a word with you, Prime Minister

  1. I read this when on the weekend and it appeared to me to be consistent/of a similar nature to arguments from other prominent individuals – perhaps a sort of concerted effort (of which I largely agree).

    Joseph Doucet, Interim Dean of U of A Biz School wrote an op-ed in the G&M March 2nd entitled “Unclog the Pipeline Process” based upon a study he undertook for the CD Howe Institute http://www.theglobeandmail.com/commentary/unclog-the-pipeline-process/article4092479/

    Some key/similar points:

    The federal government must be clear about which issues should be dealt with by regulators and which by politicians and policy-makers. Hard decisions on energy or environmental policy should not be shunted to regulators.

    Opponents are concerned about the greenhouse-gas emissions that would result from the oil sands production that eventually would flow through the pipeline..But these issues have little to do with the pipeline itself. Although they may be significant, such as employment benefits, energy security or first nations sovereignty, they go beyond the scope that a regulator should address….Environmentalists have legitimate concerns over the oil sands. But the best forum for dealing with this broad issue is in Parliament, not in a pipeline regulatory review. In the absence of a credible government policy dealing with greenhouse-gas emissions, advocates for their reduction likely will oppose any project that could lead to incremental emissions..Unless Ottawa clarifies the NEB’s role and takes on the task of dealing with society-wide matters, the public debates over pipeline reviews will continue to re-emerge at regulatory hearings. Such debates are essential. But they’ll hold more meaning if held in the right forum, where those debating the issues have the power to enact the resolution.

    • A mild quibble, but I think Doucet’s comments here are more applicable to Keystone XL, if only because the Gateway opposition has a lot more marine and spill-related apprehension attached to it. In other words, if Doucet’s recommendations above were followed, Gateway would still be the subject of vigorous opposition and Keystone XL might not.

      • I don’t think the Canadian portion of Keystone faced much opposition – partly due to the topography and widely accepted in AB.

        The decision for approval of offshore tanker traffic I believe rests with DFO. True, NEB is still responsible to ensure the shipping terminal is safe, properly designed, and environmentally sound. But within the context of a different dept. approving tanker traffic.

        Spills/river/stream crossings would be reviewed still though NEB (although type of crossing – drilled under vs. open cut and buried would require DFO input/ expertise).

        Aboriginal/First Nations land rights are outside of NEB jurisdiction.

  2. It should not be that hard. We have power lines criss-crossing the nation. We have roads criss-crossing the nation. We have railway tracks criss-crossing the nation. I can see that leadership is required, and I can see how consultation and possible compensation for land use is required, but I cannot see how such things could be subject to constant legal challenges.

  3. PW: I think the much more controversial aspect of Prentice’s remarks is the paragraph calling for a co-management regime and new marine legislation. The stuff you have highlighted is not contentious. The stuff that follows immediately after amounts to tearing up the stuff he worked on while in government. Let me explain.

    Concerning the uncontentious stuff:
    -The Gateway project will be litigated regardless of the outcome. Its social licence to operate will be partial at best even if it proceeds: those chips have fallen. I don’t think anyone is saying that the CEAA JRP / NEB processes are the exclusive mechanism that will satisfy the Crown’s duty to consult. Regardless, even if all parties were onside about the appropriate consultation mechanisms, the outcomes would still be litigated at this point.

    -Enbridge’s leadership has seemed ham-handed with respect to consultation, but I suspect the fully story is that there are a lot of signed agreements and the critique that there is a lack of leadership is not fair. A more fair critique is that Enbridge has done a poor job of communicating what it has done and has been tone deaf at the same time.
    -The government created the MPMO to deal with consultation issues that exist above and beyond regulatory approval processes. If it’s not working, Prentice should say so and say why rather than repeat an argument about federal responsibility that has been widely accepted. The devil is in the details.

    Noone disagrees with the broad policy points that underpin Prentice’s remarks. The government is acting on them as part of the Gateway review:
    -Transport Canada filed an extraordinarily complete (and useful) description of their role and the role of the legislative regime they operate under on the Gateway record to buttress Enbridge’s (fair) claim that there is an existing and effective regime in place to deal with marine oil export safety issues. It happens to be poorly understood because it is a relatively obscure topic. Prentice is now saying that it’s not good enough. That’s shocking.
    -The government has also, generally, accelerated the land claim negotiation and resolution process in BC, addressing another of Prentice’s comments. While Prentice is saying you have to coordinate these efforts, which is fair, his comments imply that no steps have been taken.
    -DFO is also continuing to pursue a co-management aboriginal fisheries approach (admittedly not marine regulation) – something I would have thought this government would have ended immediately in 2006, but it continues. Prentice is saying extend this to marine regulation. Looking at DFO’s frustrating experience on the West Coast, the notion of trying to start and complete a similar effort in a different area within the lifetime of a project approval process is unthinkable.

    The remarkable point is that Prentice is advocating for new legislation. He’s saying that the framework he worked under isn’t enough, and forging ahead here won’t work. One wonders what he was saying internally several months before his exit.


    • The remarkable point is that Prentice is advocating for new legislation. He’s saying that the framework he worked under isn’t enough, and forging ahead here won’t work. One wonders what he was saying internally several months before his exit.

      Like most AB based individuals he probably hadn’t identified the issue (Gateway) as “critical”. Personally, I think its a bit of a manufactured crisis – based upon overly optimistic production forecasts/time frame and not fully developed contingency plans/options.

      Vaughn Palmer, columnist with VanSun is worth listening to. His closing comments on a piece The siren call of oil profits isn’t enough for B.C. to forsake the environment are worth noting:

      My advice to our landlocked neighbour, expressed in a speech in Calgary this week, was to look to their alternatives. The Keystone pipeline to the U.S. Expanded capacity to serve a possibly expanded refining industry in Eastern Canada.
      Either is likely to be in service long before Alberta ever manages to build a new pipeline through this intransigent province.

      http://www.vancouversun.com/business/2035/Palmer+siren+call+profits+enough+forsake+environment/6791596/story.html#ixzz1zfFCwJMP

      • You can stop the pipeline. You cannot stop the trains shipping the oil to the coast for export. The rail lines are already built. The tanker car industry for rail is booming already because of the oil glut in Cushing.

        The cheese has already moved folks.

        The aboriginal groups better cut their deal with Enbridge now, because CN won’t have to cut a deal with them.

        • See below. This is a niche market – small volumes or unusual situations.

  4. This was interesting from the Staight article:

    “Keep in mind that CIBC has a huge vested interest. First Nations youths have already warned CIBC not to finance Enbridge’s Northern Gateway Project.

    “CIBC should catch up with Royal Bank and TD Bank, which have already committed to recognize our right to consent,” Jasmine Thomas, a 24-year-old member of the Yinka Dene Alliance, said in a news release last year. In other words, CIBC is in the sights of First Nations activists to a greater degree than other banks.”

    It is really tough dealing with some of the FN – so much in-fighting, so much money being thrown at them from enviro NGOs. Wonder if the Gitxsan have sorted out if they are for or against?

    JMHO but I see this going the same way as the Mackenzie Valley – over 30 years of studies only to have them miss the window once it was given the go ahead.

    • “our right to consent”
      Ms. Thomas apparently hasn’t studied Aboriginal Law. Because as it stands right now, First Nations have a right to be consulted, which right stems from an obligation of the Crown to consult. First nations do not have a right of veto over projects.
      But it’s typical of activists these days to claim rights that don’t actually exist.

      • The CIBC is free to recognize a right to consent regardless of what the law says, just as I recognize my neighbours right to consent before I fire up my chainsaw at 5am despite a lack of law requiring me to.

        • I don’t disagree with that. But that’s different from there being an actual legally recognized and enforceable right to consent. That’s all I’m saying.

          • The constitutional duties to consult and accommodate are being enunciated by the courts and that process is far from complete. Part of their deliberations will be the United Nations Declaration on the Rights of Indigenous Peoples which specifies the right to “free, prior and informed consent”. Together these may be the source of a de jure right.

      • Sorry but sitting on the land is a defacto veto whether we like it or not. The current problem is what does constitute consultation. Most FNs that I’m aware of define it as taking no to mean no when all is said and done – eventually the courts are going to share this view, whether Harper or resource companies approve or not.

        • I was simply stating the law as it exists. It will be interesting to see if any future court decisions ascribe a de jure veto to First Nations, as you seem to be boldly predicting.

          • Indeed.

    • Leo why do you repeatedly distort the MV proposal? It was NOT 30 years of foot dragging at all. There was a legally sanctioned Berger inquiry in there as you well know – the results of which were examined by and acted on by a Parliament. Really you should pay less attention to clowns like Ezra or ideologues like TF on FNs issues and more to SCoC decisions.

      • I am not distorting, and yes I realize there were land claims to work out. My main point is many FN bands can’t seem to agree amongst themselve where they stand on treaty/claims so who is the government supposed to consult with??

        Mackenzie Valley pipeline: 37 years of negotiation

        http://www.cbc.ca/news/business/story/2010/12/16/f-mackenzie-valley-pipeline-history.html

        The part that strikes me:

        “In recent years, there has been a resurgence of interest in a gas pipeline up the Mackenzie Valley, and many of those now pushing for the pipeline were the young radicals who opposed it with such vehemence 25 years ago.”

        • If you troubled to read the recommendations of the Berger inquiry you would know this not so surprising at all. The elders blocked the pipeline as they didn’t feel their people were ready for the change, and Berger listened- thus modern land claims were born. ( did I hear you say yeah Pierre! Indeed!) it was always understood the.nextgeneration might later say yes to development … They have. Yet some still try to spin this as envio obstructionism… It was the system working as it should, but for the people for a change rather than just the suits and industry crowd.

          • The problem now is the window has closed – nat. gas is at historic lows, the current pipeline construction costs have doubled ($16 billion) and oil & gas companies that were to fund this are pulling out. So what do the FNs get? Nada.

          • Well that’s true if you only look at it from an economic standpoint; obviously FNs had a different perspective. And, since neither they or gas industry are omniscient your point is moot; no one could foresee the collapse of gas prices. By that logic we shouldn’t ever say no to profitable resource development for any reason, ever.

          • The Berger inquiry was based on “social, environmental and economic” effects of building a pipeline. JMHO but some FNs have a problem with understanding the “economic” part. Thus my pointing out the radicals that were against it now understand the benifits as in jobs and revenue.

            Staying on a reserve with 90% unemployment with no sense of having a purpose or being productive is killing their souls. Makes me sad.

  5. The Crown has yet to understand – or, I suspect, fully accept – the direction of the Supreme Court with regard to the dual duties to consult and accommodate First Nations interests. The current government has expressed frustration at the Court’s
    judgments and failed to enunciate any plan to address them. AANDC is in
    the 4th year of developing a policy on consultation that has not been built through consultation
    with First Nations. They don’t seem to understand the irony in that.

    To respond to 3 parts of Matt’s lengthy and reasonable post, the leadership of Enbridge is of secondary importance to the lack of leadership from the federal government, which is part of Mr. Prentice’s point. The MPMO is regarded by most First Nations as hostile to their rights and interests and continuing with that process will not help avoid the noted challenges. The perceived acceleration of the claims process surpassed a very low bar set by previous governments (29 year average) and closed only 3 files so far. There is little to no progress involving the First Nations directly on the path outlined for either the Keystone or Enbridge pipelines and the agreements Enbridge has been touting are with First Nations and Metis groups on the periphery of those lands. In sum, there is little cause for optimism.

    It can be anticipated that approval of either Enbridge or Keystone will be met not only by litigation but by a level of civil disobedience that Canada has not seen in a very long time. No one should want that outcome. It will not help economically and it will damage our country socially. Mr. Prentice’s remarks should be seen as a clear warning to his former colleagues to change their approach before it is too late.

    • Agree with your points Dan, but I would add that in-fighting within respective FN bands carries some blame as well.

      “The chief of a First Nation on B.C.’s Sunshine Coast says protesters have blocked members from casting ballots during a treaty-ratification vote.

      Clint Williams of the Tla-amin First Nation says between 200 and 250 people were expected to vote on the deal Saturday.

      The treaty is expected to give the band about 8,322 hectares of land, nearly $30 million over 10 years, as well as self-government, economic development funding and resource revenue.

      But Williams says a small group of protesters blocked the doors of the polling place with vehicles near the community of Powell River, B.C.

      A group calling itself the Concerned Members of the Sliammon First Nation says the treaty process has had a negative effect on band members and still has unanswered questions.”

      http://www.cbc.ca/news/canada/british-columbia/story/2012/06/17/bc-treaty-vote-protest.html

      • Agreed. The myth of First Nations solidarity is just that — a myth.

      • What are you confused about?
        Every First Nation west of Prince George through which the pipeline or tankers will pass has been quite clear in their opposition.

      • Le_o: There is no reason that First Nations should be expected to agree amongst themselves about extractive resource development any more than other Canadians, for example the current government and those they have termed dangerous radicals.

        The fact is that successive federal governments have made every effort to undermine the concept of governance in First Nations, dividing the original nations ten-fold to diminish their power and imposing a foreign leadership selection process in order to influence the choices made among other steps. It will take a lot of time and a lot of work building capacity and confidence and rebuilding the nations. In the meantime, I think judgements about blame are best left to their citizens rather than outsiders.

  6. Good find Paul and bang on for both of you. Just where is the federal govt given its fiduciary duty in all this? Along the coast and most tellingly in FNs communities the Harper govt is seen as being the bagman for Enbridge. Harper made a huge overreach IMO ( when hasn’t he?) when he abandoned neutral but concerned status as befits the PM. He’s helped create radicals out of moderately concerned citizens and fired up opposition amongst young Aboriginals.
    Personally I very much doubt this can be turned around. And that’s fine by me . The risks far outweigh the gains for BCers. Whatever small chance it had for FNs goodwill Harper squanderd. The man’s a clueless negotiator.

  7. The Northern Gateway pipeline will never be built. It was a bad idea from the beginning, a route that will have destructive leaks, and an abysmally bad choice of port that will have accidents poisoning BC’s coast. BC would be insane to allow it and Alberta is stupid to be pushing it.

    By the time it could be built after going through the courts and killing some protestors (you know the Harperites would be willing to kill protestors), there would be no demand for bitumen. Climate change is already obviously happening, and as governments finally start to take action, Alberta will face a worldwide boycott long before the pipeline could ever be built.

    • ” (you know the Harperites would be willing to kill protestors),”
      On what evidence do you base this assertion?

      • Their tweets and comments on blogs; the G20 mess; the ongoing trend in their crappy legislation; their orchestrated attacks upon anyone who criticizes the criminally stupid things they do, say and think.

        • Wow.
          This is like beyond Godwin. Like Godwin Squared.
          Your though processes are remarkably similar to somebody with Borderline Personality Disorder. You really ought to get some therapy.

          • All of a sudden you are a fully qualified psychiatrist? No, wait, you’re just a typical rightwing shill who likes to pretend to special knowledge.

            Go and diagnose yourself, loser.

          • Spoken exactly like a Borderline — heavy on the projection. Whenever Borderlines are confronted with the truth, this is what they do, they lash out viciously. Fascinating.

          • Interesting: I rarely comment at Maclean’s these days, yet there you are, eager to attack me when I do. Part of your job description?

            Your current tack reminds me of the Soviets putting dissenters into insane asylums. Sorry, Orson, it’s people like me who dissent from the abominable Harper regime who are the sane ones.

          • I have lots of problems with the Harper regime myself, for example:
            - I opposed their GST cut and am repeatedly on record as opposing it
            - I oppose their anti-marijuana laws, as I am in favour of full legalization
            - I opposed their changes to the long-form census, and am repeatedly on record for that.
            And so on. What I have not done is accuse Harper and his “Harperites” of being “willing to kill protestors”, as you have done. And that’s because I am reasonable, fair and clinically sane. You are none of those things. You appear to be an unhinged, personality disordered, hyper-partisan harpy.

          • I totally stepped over the line on those last three posts, I apologize.

    • The oil will move to the coast by train if it doesn’t move by pipeline.

      The BC aboriginal groups are going to feel suckered by the environmental groups when they lose all the benefits that would accrue to them from the pipeline, because it is moving by train to the coast.

      The oil industry in North America has rediscovered rail transport in the last two years.

      • Not even close to the same volumes.

        • It won’t take long. Oil transport by rail is on a heavy ramp in the United States. If Northern Gateway becomes toast, the oil sands companies committed to Enbridge will quickly sign long term deals with CN, which will allow CN to order and build the rail tankers (not in BC, but hopefully in Ontario, rather than in the States). They will have lead time to. So the difference in timeline will be relatively insignificant considering the time it takes to build the pipeline.

          Bitumen by rail has less cost disadvantage to pipe than regular oil by rail, since bitumen by rail doesn’t require diluent, whereas bitumen by pipe does.

          “The spice must flow.” “The spice will flow one way or another. BC aboriginals should make a choice where they get the skills training, the jobs, and the rentier income for a century.

          • CN can offer flexible transport to bitument producers also. To the west coast, or through the heartland of the US down through Illinois to Louisiana, and onward to Texas, or to Eastern Canadian and US markets.

          • 1) A rail tanker car holds 500-750 Barrels
            2) The tanker cars are about 60′ long coupling/coupling
            3) This means a 100 tanker train (50,000 Barrels) is over 1 mile long (6000′ – 1 mile = 5,280′, or 1.6 km)
            4) To unload the tanks you’re going to need 1 mile in either direction of clear, uncrossed rail way right-of-way. Good luck finding that in Vancouver/Burnaby or Prince Rupert
            5) If it’s undiluted bitumen, and you’re shipping in the dead of the winter through Alberta/ N BC where it can dip to -40, it’s going to be super thick and viscous when you try to pour it from the tankers.
            6) Avalanche or heavy snow fall on tracks? Shut ‘er down.

            You still need to overcome opposition to shipping by sea when you hold hearings for your tank farm / loading/unloading facilities.

            Choo-Choose Pipelines

          • Great little company STP.TO

            “Calgary-based Southern Pacific Resource Corp. said it has signed a long-term deal to transport bitumen from its STP-McKay thermal oilsands project to the U.S. Gulf Coast via CN Rail.

            “This arrangement is significant to Southern Pacific because it demonstrates that alternatives to conventional pipelines are available to market bitumen from the Athabasca oilsands,” said chief executive Byron Lutes in a news release.

            “This has implications not only for Southern Pacific shareholders through higher netbacks, but also for Albertans through increased royalties and demonstrating another safe and viable alternative for transporting bitumen.”

            In the same release, James Cairns, CN vice-president, petroleum and chemicals, said CN expects to move about 25,000 carloads of crude oil this year, up from about 5,000 last year.”

            http://www.edmontonjournal.com/business/Southern+Pacific+hires+Rail+bitumen+Gulf+Coast/6850841/story.html

          • I dare say shipping to warm Gulf Coast refineries due to an interim bottleneck is a bit different than shipping to the BC coast to load on tankers.

          • It is a long term contract – they get world prices per barrel plus no need to dilute for pipeline transport.

          • Yeah, but nothing to do with shipping through BC coast.

          • Do you really think CN would invest this much money?

            “CN to construct five long sidings in 2012 on B.C. North Line as part of C$155-million expenditure to handle rising traffic in Edmonton-Prince Rupert corridor.

            In 2011, more than half a million carloads/intermodal units moved over CN’s B.C. North corridor. By 2015, CN traffic on this line could nearly double. ” http://www.stockhouse.com/financialtools/sn_newsreleases.aspx?qm_symbol=T.CNR&newsid=8555630

          • Good find. I presume “sidings” are temporary storage sites well outside the actual ship loading/unloading sites. Interesting that the release doesn’t mention specifically bitumen, though.

            Coal or intermodal containers are different animals.

          • What jobs are you talking about?

          • Virtually every Impact Benefits Agreement or similar agreement with a First Nation these days provides for (among other benefits) jobs, job training and the like for the First Nation signatory. There are the initial jobs in the construction phase, and then usually service and maintenance-related jobs in the operational phase.

      • Won’t do much good without tankers to load it on to. You’re dreaming if you think trains are some sort of clever back-door.

    • Just like all the protesters they were willing to kill in Caledonia, BigTrout, Desoronto, etc. The evidence doesn’t seem to be on your side.

  8. Prentice does a great job of mentioning who has what responsibilities, which many seem to forget when it suits. It is a lesson the provinces have all had to learn, some of them quite reluctantly, such as Ontario.

    However, the Supreme Court has made a mess, even when it tried not to. It requires FN consent, while specifically excluding a veto for FN. This hasn’t stopped FN from claiming a veto anyway, along with their political bedmates, which was entirely foreseeable except from the bench.

    Unfortunately for Canada, a fluid legal landscape and irresponsible governance has created a business environment with enough uncertainty to kill many projects big and small, leaving FN poorer for it too.

    That leaves the Federal Gov’t to take the next step, to start the pendulum on a track back towards a balance that allows energy and economic development to proceed with more certainty, and more quickly. That appears to be underway. The courts will respond eventually.

    Prentice is correct that the Federal gov’t will overreach and that there will be consequences. But the federal initiative is necessary, and failing to make the effort at all is a surer recipe for failure.

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