Eby’s Pipeline Protestations Based on Fallacies, Not Facts – Kenneth Green

Data show oil spills are a thing of the past and private proposers will come forward once regulatory barricades are cleared

By Kenneth Green

The latest war of words over pipelines is between Alberta Premier Danielle Smith, who wants to see one built from Alberta’s oilsands to export facilities on the Pacific coast, and British Columbia Premier David Eby, who is foursquare against it.

Smith says a pipeline is needed to break the U.S. market-lock on Alberta oil, which the United States buys at a steep discount from world prices. She argues higher prices and increased trade in oil and gas would be good for the Alberta and national economies and can be done while protecting the environment in both provinces. Eby denies virtually all these claims.

More specifically, he makes four arguments against a new pipeline, all incorrect.

First, Premier Eby argues any pipeline would pose dangerous risks to B.C.’s coastal environment. But the data are clear: oil transport off Canada’s coasts is very safe. Since the mid-1990s there has not been a single major spill from oil tankers or other vessels in Canadian waters. The “tanker ban” the Trudeau government enacted in 2017 is not the reason. It only applies to Canadian tankers. Non-Canadian oil tankers and large fuel-capacity ships regularly cruise up and down the B.C. coast (between Alaska and other U.S. ports) with spectacular safety records.

Second, Eby argues that B.C.’s First Nations oppose any such pipeline. In fact, such opposition is quite contingent. The Trans Mountain pipeline expansion project (TMX), which has increased shipping capacity from Alberta to the West Coast, signed agreements worth $657 million with 81 Indigenous community groups in both provinces and produced more than $4.8 billion in contracts with Indigenous businesses.

Third, Eby claims Smith’s proposal is not “real” because no private-sector companies have proposed to build the pipeline. And he’s partly right: no rational investor would look at the regulatory barricade facing pipeline construction and spend the time and money to propose a project. In 2017 TC Energy said it had spent more than $1 billion trying to get permits for its Energy East/Eastern proposals before finally withdrawing due largely to regulatory barriers. In a 2016 report, Enbridge listed pre-construction expenditures (which include crafting proposals) of up to US$1.5 billion to build its three proposed pipeline projects. These costs will not have declined since then. But despite this discouraging record, the Alberta government’s pipeline proposal has the backing of an advisory group including energy companies Enbridge, Trans Mountain and South Bow — presumably because they want to invest in the project after there’s some assurance it will break the regulatory blockade.

Finally, Eby’s claim that there’s no market demand for new pipelines is unsubstantiated. According to S&P Global, Canadian oilsands production will reach a record annual average production of 3.5 million barrels of oil per day (b/d) in 2025, five per cent higher than in 2024. By 2030, production could top 3.9 million b/d, 500,000 b/d higher than in 2024 (although this assumes the federal cap on emissions, imposed by the Trudeau government, does not curtail production to the extent predicted). This profit potential will almost certainly attract investors, if they can overcome the regulatory blockade.

It’s fine for Premier Eby to look out for the people of B.C. as best he sees fit — that’s his job, after all. But it’s also his job to recognize the limits of his authority. In its 2020 decision on B.C.’s “turn off the taps” legislation, the Supreme Court of Canada ruled that the province does not have the authority to block infrastructure of national importance, including pipelines.

As the saying goes, you’re entitled to your own opinion but not to your own facts. Premier Eby’s objections to another Alberta pipeline are rooted in fallacies, not fact. The Carney government should recognize that and decide soon whether or not another pipeline to B.C. tidewater is “in the national interest” — which apparently is how you get a permit to build major projects in Canada these days.

Kenneth Green is a senior fellow at the Fraser Institute.

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