[Canada] Canadian Politics Redux

[crazy canuck]

Because as much as this was about building a pipeline, it was just as much about showing the world that Canada's energy sector is healthy and worthy of investing in.

I don't understand what "this" and "it" are in that sentence.  The private companies who first proposed each of the three pipelines did so because they thought there was demand for the extra capacity and they thought they could make a profit from that demand.  The governments role in assessing the pipeline proposals is to determine whether the proposals meet all the appropriate regulatory requirements.  I am not sure what part of this process meets your description of demonstrating Canada's energy sector is worthy of investment.

"This" and "it" were the current brouhaha over pipelines and Kinder Morgan in particular.  All the political hot air generated by both sides.

The government's role is to determine whether appropriate regulatory requirements are met.  It's a shame then that Trudeau's government didn't actually do this.  Instead it killed the Energy East pipeline despite it getting NEB approval, and it dithered over Kinder-Morgan for months (despite it also getting NEB approval), and even when it did approve KM it was fairly mealy-mouthed in it's support.

Ok.  I am still not sure what part of the process is supposed to demonstrate the Canadian energy sector is worthy of investment.  That question is based on the price of the commodity and the cost of extraction.  Regulatory burden is part of that cost.  Alberta would like to see a very low regulatory burden.  Others would like to a higher regulatory burden.

[Barrister]

Ok.  I am still not sure what part of the process is supposed to demonstrate the Canadian energy sector is worthy of investment.  That question is based on the price of the commodity and the cost of extraction.  Regulatory burden is part of that cost.  Alberta would like to see a very low regulatory burden.  Others would like to a higher regulatory burden.

More important than the amount of regulatory burden is the predictability of that burden.  When the goalposts shift on the whim of each level of government is creates a chilling wind on investment.

[crazy canuck]

Ok.  I am still not sure what part of the process is supposed to demonstrate the Canadian energy sector is worthy of investment.  That question is based on the price of the commodity and the cost of extraction.  Regulatory burden is part of that cost.  Alberta would like to see a very low regulatory burden.  Others would like to a higher regulatory burden.

More important than the amount of regulatory burden is the predictability of that burden.  When the goalposts shift on the whim of each level of government is creates a chilling wind on investment.

I think you underestimate how poorly KM handled this project at the outset and the lessons future project proponents can learn from the mistakes they made.  The challenges they faced were certainly known and were certainly predictable.

[Barrister]

Ok.  I am still not sure what part of the process is supposed to demonstrate the Canadian energy sector is worthy of investment.  That question is based on the price of the commodity and the cost of extraction.  Regulatory burden is part of that cost.  Alberta would like to see a very low regulatory burden.  Others would like to a higher regulatory burden.

More important than the amount of regulatory burden is the predictability of that burden.  When the goalposts shift on the whim of each level of government is creates a chilling wind on investment.

I think you underestimate how poorly KM handled this project at the outset and the lessons future project proponents can learn from the mistakes they made.  The challenges they faced were certainly known and were certainly predictable.

Please educate me then on "the lessons future project proponents can learn".

Because from where I sit they ran into the same opposition that Keystone XL did, as did Energy East: a organized and determined bunch of green activists totally opposed to pipelines.  Or did you want to claim that all three companies each made the same mistakes and the opposition to each pipeline could have been totally avoided?

[Grey Fox]

They are not opposed to pipelines. They are opposed to all of the tar sand oil extraction industry.

[Barrister]

They are not opposed to pipelines. They are opposed to all of the tar sand oil extraction industry.

That's part of it, sure.

But they're definitely opposed to pipelines, usually heavily flavoured with NIMBYism.

[Grey Fox]

Sure because it serves the Industry. If we were talking about building a new railroad to transport the Oil, they would be oppose to that too.

[Jacob]

@ beeb

The gov't is going all in to cater to Alberta interests and you're still finding ways to whine about how they suck.

[Barrister]

@ beeb

The gov't is going all in to cater to Alberta interests and you're still finding ways to whine about how they suck.

Well I did start out saying

So, I mean it's good that Trudeau did actually pick a side on this one (and the right side to boot), so I can't be too hard on him.

But the Liberals... well they do suck.  If he would have pushed harder from the beginning to support his own decision to approve KM he wouldn't be in this position to have to spend billions of federal dollars.  Instead he tried to have it both ways and he got burned.

And you perhaps missed the whole point of this exercise - pipelines are a national interest.  They benefit the whole country.  That's why the Feds are involved in the first place.

[Jacob]

But the Liberals... well they do suck.  If he would have pushed harder from the beginning to support his own decision to approve KM he wouldn't be in this position to have to spend billions of federal dollars.  Instead he tried to have it both ways and he got burned.

And you perhaps missed the whole point of this exercise - pipelines are a national interest.  They benefit the whole country.  That's why the Feds are involved in the first place.

Yeah, that's the funny bit. Trudeau is giving you everything you want out of it - except failing to do so as a Conservative government - yet you're still trash talking him on the subject.

[Jacob]

As I understand it, the gov't is in talk with other investors - including potentially pension funds and indigenous communities. If Trudeau manages to sell the pipeline to indigenous funds, that'd be quite the smooth political move. It's a lot harder to argue the whole "nasty capitalists running roughshod over the noble indigenous communities" line if the owners of the pipeline are indigenous themselves and the revenue goes to indigenous communities.

The story's not over yet - it'll be fascinating to see how it wraps up.

[Barrister]

But the Liberals... well they do suck.  If he would have pushed harder from the beginning to support his own decision to approve KM he wouldn't be in this position to have to spend billions of federal dollars.  Instead he tried to have it both ways and he got burned.

And you perhaps missed the whole point of this exercise - pipelines are a national interest.  They benefit the whole country.  That's why the Feds are involved in the first place.

Yeah, that's the funny bit. Trudeau is giving you everything you want out of it - except failing to do so as a Conservative government - yet you're still trash talking him on the subject.

You know, I think my track record is pretty good for being a partisan, but giving credit where warranted.

This is not "everything you want out of it".  What I wanted out of it was for Trudeau to support the three pipelines that had been approved by the NEB - not cancel one of his own accord, plus add years of uncertainty and delay to the other two until the backers of both simply walked away.

Instead Trudeau has bungled this from the beginning by trying to have it both ways.  Look - if he had said "We have to transition to a post-carbon society ASAP and so we will not approve any new pipelines", it would have at least been a consistent message.  I would hate him for it, but it would be consistent.

If he would have backed Canada's energy industry full tilt that too would be consistent, and I'd give him mad props for it.  Hell maybe I would even vote for him (remember Scheer wasn't my guy and while he hasn't offended, he hasn't impressed either).

Instead though, he's tried to pull the "Abortions for some, miniature american flags for others" approach on this file, and it just hasn't worked.

https://www.youtube.com/watch?v=PxrsrPgPL0w

[Barrister]

As I understand it, the gov't is in talk with other investors - including potentially pension funds and indigenous communities. If Trudeau manages to sell the pipeline to indigenous funds, that'd be quite the smooth political move. It's a lot harder to argue the whole "nasty capitalists running roughshod over the noble indigenous communities" line if the owners of the pipeline are indigenous themselves and the revenue goes to indigenous communities.

The story's not over yet - it'll be fascinating to see how it wraps up.

Indeed it's not.  It could still blow up in Trudeau's face - delays add up to billions of dollars and either a future government just pulls the plug, or it comes in so wildly over-priced that the Feds lose billions.

Or it could work out wonderfully - now that the pipeline is directly supported by the Government of Canada and indigenous groups the protests melt away,  John Horgan gets slapped down by the courts, and eventually the Feds sell the pipeline for a substantial profit to private interests.

It's not that it's a good investment or a bad investment - given where we are now I'd say it's a good one.  The problem though is it is a risky one, and one that didn't need to be made.

[Barrister]

Oh, in a "everything old is new again" kind of way, if you go back to the first Canadian pipeline, which was spear header by the Feds but owned by a private consortium that became TCPL, the CCF were opposed, saying a national pipeline should be owned by the federal government.

[crazy canuck]

Please educate me then on "the lessons future project proponents can learn".

I will do my best.

Early on KM expended no resources on public engagement.  They effectively yielded the field to the anti-pipeline lobby.  Early on in the project they could have created a compelling narrative regarding the unique benefits of this project compared to the other proposed projects and the environmental protections that were being built into the design of the project to mitigate all risks.  Their complete failure to do so made the ensuing public opposition to the project a certainty.

Also, early on they could have done a much better job engaging with First Nations along the route.  That is something they accomplished later in the project but early on having first nations advocates would have greatly assisted them in the public discourse which followed.

Lastly, from a legal point of view, early on they completely blundered when they brought their initial injunction applications when they did their feasibility drilling on Burnaby Mountain.  While their lawyer was in court arguing that it was imperative that the drilling continue their PR person was literally outside the Court telling the media that if they lost the application it would not be much of a setback because they had already done sufficient feasibility studies to choose the appropriate route.

So, as you can see, a number of lessons to be learned here.  I incorporate point three as a case study I use in presentations for executives across sectors about the importance of internal communications and collaboration between legal and the rest of the organization.

As I understand it, the gov't is in talk with other investors - including potentially pension funds and indigenous communities. If Trudeau manages to sell the pipeline to indigenous funds, that'd be quite the smooth political move. It's a lot harder to argue the whole "nasty capitalists running roughshod over the noble indigenous communities" line if the owners of the pipeline are indigenous themselves and the revenue goes to indigenous communities.

The story's not over yet - it'll be fascinating to see how it wraps up.

My concern is the government will need to sweeten the pot for future investors and they will be politically motivated to do so with first nation owners.  Tax dollars spent that should never have been invested in the first place - my two cents.