With the big climate conference about to get underway, and the current oil price crisis in Alberta – along with the demands by the Conservatives to withdraw Bill C-69, there’s a lot of interesting things going on if we wanted to actually talk policy and not just hurling insults and blaming Justin Trudeau for everything wrong in this world. So with that in mind, here’s Andrew Leach with a fascinating thread on the oil sands, pipelines, climate commitments, and Bill C-69.
You hear a lot of people having two separate conversations – one about oil demand (it's going up, it's going to be high forever, etc) and climate change (sure, we're committed to action) but never the two discussions shall meet. They need to meet.
— Andrew Leach (@andrew_leach) December 6, 2018
However, that's the wrong place for that test to be, and that really makes it look like pipelines are being singled out for treatment that is not applied to the rest of the economy. Climate change policy is market and supply risk, and that's where it should be in C69.
— Andrew Leach (@andrew_leach) December 6, 2018
Worried that you'll invest in your restaurant and then two others will open nearby and, ahem, eat your lunch? Yes, that's a risk. With pipelines, you're protected from entry which would compromise your markets through the regulatory process so stranded assets are avoided.
— Andrew Leach (@andrew_leach) December 6, 2018
So, part of the price of admission is that you need to show that your pipeline has a market and that it will not be full only at the expense of another regulated asset. Proponents might gripe about that when building, but you know they'll fight tooth and nail to keep the test.
— Andrew Leach (@andrew_leach) December 6, 2018
If companies want to pitch a pipeline for approval on the basis that it will have a market because crude is going to be $200/bbl (maybe they read the second Rubin book, not the third or the fourth?), they will be challenged on that. Do the same for climate change.
— Andrew Leach (@andrew_leach) December 6, 2018
It turns out that I've come to basically the same conclusion in a different way as I reached when writing a piece about the NEB TMX hearings in 2014. https://t.co/bhkCP0w4kR Then, as now, the climate test should be in the mix and it should be part of the market assessment /END
— Andrew Leach (@andrew_leach) December 6, 2018
By now means is Bill C-69 a perfect bill either, and I’ve spoken to lawyers on both the environmental and proponent sides about their concerns, and they can all point to some of the same concerns, but I also think that the Conservatives’ characterization of it as a “no more pipelines” bill is beyond hyperbolic. If it works as it’s supposed to, the ability to better scope assessments will likely mean more timely actions and targeted consultations thanks to the early engagement that the bill mandates. But trying to cast this bill as a millstone around the country’s economy is ridiculous on the face of it, and withdrawing it won’t miraculously make the oil price differential disappear, or GM to reopen the Oshawa plant, as has been intimated. But far be it for us to expect honest debate on these issues these days.