Earlier this week, the federal government published a bombshell report on carbon pricing, predicting that a nationwide price of $50 per tonne by 2022 will cut emissions by 80 to 90 million tonnes of carbon pollution.

That’s equivalent to shutting down up to 23 coal-fired power plants or taking as many as 26 million cars off the road. In other words, a pretty big deal for the climate.

The stunning news spread quickly in online circles, shared by renown energy economists, clean energy experts and pollsters.

Journalist Justin Ling tweeted: “There’s been an incredibly disingenuous effort to suggest that carbon pricing won’t reduce CO2 emissions, or at least to contend that there’s no evidence to support the claim. So Ottawa went and produced the research.”

But nobody slowed down to check if the numbers were actually reflective of reality.

And they’re not.

The research that Ottawa went and produced isn’t really evidenced-based at all.

According to an analysis by Simon Fraser University energy economist Mark Jaccard, the federal carbon pricing policy will only reduce emissions by 10 to 15 million tonnes below 2005 levels — but it will take until 2030 to get there.

So the federal government’s claim of a 80 to 90 million tonnes reduction by 2022 is raising some eyebrows.

“When I see that, I’m like ‘oh come on guys, you’re trying to pull a fast one on us.’ ” Marc Lee, senior economist at the Canadian Centre of Policy Alternatives, told DeSmog Canada.

“People who ought to know better are just uncritically praising it.”

Carbon pricing being used as tool to justify new pipelines

This might just seem like a boring and wonkish debate over numbers. And in a way, it is.

But carbon pricing is currently playing a major role in the current climate policy landscape, viewed as the likes of Prime Minister Justin Trudeau and Alberta Premier Rachel Notley as a key bargaining chip in the campaign to get Kinder Morgan’s Trans Mountain Expansion built.

As a result, the amount of emissions that we think the policy can cut matters a great deal — especially if it’s used to justify a new pipeline and subsequent oilsands expansion.

Carbon pricing can be a very effective tool for increasing the cost of emitting. B.C. has been a shining example of a carbon tax that is both effective and popular with the public.

But disingenuous accounting has undermined faith in both the efficacy of putting a price on carbon emissions and the integrity of climate plans.

“The federal climate plan, overall, is weak,” said Laurie Adkin, political science professor at the University of Alberta, in an interview with DeSmog Canada.

“They keep trying to dress it up, and the latest assessment of anticipated gains from the federal carbon tax may be part of that effort.”

Analysis way overinflated current emissions

So what went so wrong with the federal government’s analysis?

Well, for beginners, it didn’t actually reference any specific numbers. The closest that they came to that was presenting a colourful graph with unclear metrics.

As Bora Plumptre of the Pembina Institute put it: “There are difficulties in actually assessing how they actually got the numbers that they did.”

By manually drawing a straight line from the supposed emissions reduction to the vertical axis (yes, that’s the only way of figuring it out) it appears that government assumes that carbon pricing will cut emissions to 680 megatonnes by 2022.

Given they’re predicting 80 to 90 megatonnes in savings, that means that it thinks emissions without carbon pricing would be between 760 and 770 megatonnes without carbon pricing.

But at last count, Canada’s greenhouse gas emissions were 704 megatonnes. Even the country’s highest year for emissions — in 2007, when we emitted 745 megatonnes — was considerably less polluting than what the federal government used in the analysis.

So the actual starting point appears inflated.

“This is a trick the Conservatives used many times to try to pretend their plans were actually doing a lot more than they were actually doing,” Lee said.

A spokesperson for Environment and Climate Change Canada told DeSmog Canada that they were contacting a “few different branches within the department” for more detailed methodology of the carbon pricing analysis but didn’t provide a response before deadline despite multiple extensions.

Government analysis ignored existing provincial carbon pricing

The analysis also assumed that the four provinces that currently have carbon pricing in place (B.C., Ontario, Quebec and Alberta) don’t already have them in place.

You read that correctly.

B.C. introduced its carbon tax in 2008. Quebec brought its cap and trade scheme into existence in 2013.

For inexplicable reasons, the federal government simply pretended that wasn’t the case and that four of the five highest polluting provinces in Canada didn’t already have carbon pricing. In his critical breakdown of the analysis, Jaccard wrote that it’s “grossly misleading to suggest that current provincial pricing can be attributable to federal policy.”

It also appears safe to assume that the modelling didn’t include industry exemptions and subsidies like gasoline used on farms, or natural gas burned by conventional oil and gas producers, or a large chunk of completely unpriced emissions at oilsands mines via Alberta’s convoluted output-based allocation system.

Experts suggest there’s also a chance that the federal government included significant emissions reductions accomplished by other policy measures.

“It’s very misleading, and also neglects that most of the impact is largely based on regulation, Lee said.

“We didn’t get rid of lead in gasoline because we had a lead tax that was phased in over 20 years. We just said ‘no, you can’t have lead in your gasoline after this date.’ ”

A steep carbon price needed for dramatic cuts

It’s not like carbon pricing couldn’t have these kind of reductions.

In fact, if you plug in a $50/tonne carbon price into the Pembina Institute’s nifty new climate policy simulator, it pops out 114 megatonnes in reductions by 2022.

But Plumptre caveated that by noting the simulator doesn’t include any exemptions or subsidies, and treats all carbon pricing as a tax (instead of including more complex cap and trade schemes, used in Ontario and Quebec).

Furthermore, Pembina actually uses a considerably higher baseline emissions assumption than the federal government due to recently updated global warming potential factors and higher rates of methane leakage, which puts Canada even farther from its Paris targets.

Jaccard and his team at Simon Fraser also reported in a 2016 analysis that Canada could meet its Paris target with a $200/tonne carbon price by 2030.

But they concluded rather starkly: “ It is highly unlikely that our political leaders will implement such a price, given the severe political consequences.”

So without such dramatic increases to the carbon tax and in the absence of transparent government accounting, experts are left scratching their heads at Ottawa’s latest rosy report.

“It’s all just been this black box and they’re basically saying ‘trust us,’” Lee said.

“I feel like the federal government doesn’t have much credibility on the climate file these days because they’re saying ‘we’re all in favour of climate action and we’re also in favour of pipelines,’ which we know are going to increase emissions and are specifically designed to allow the increase of production from the oilsands.”

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For years, we’ve been told again and again (and again) that Kinder Morgan’s proposed expansion of the Trans Mountain pipeline is desperately needed for producers to export oil to Asian countries and get much higher returns.

The way it’s been framed makes it seem like it’s the only thing standing between Alberta and fields of gold.

Small problem: Canadian producers already have the ability to ship their heavy oil to Asia via the existing 300,000 barrel per day Trans Mountain pipeline — but they’re not using it.

“Virtually no exports go to any markets other than the U.S.,” economist Robyn Allan told DeSmog Canada. “The entire narrative perpetrated by Prime Minister Trudeau and Alberta Premier Notley is fabricated.”

In 2017, the Port of Vancouver only shipped 600 barrels of oil to China. That’s less than a tanker load. That same year, the port shipped almost 13 million barrels of oil, or about 24 Aframax tanker loads, to the U.S.

In other words: oil tankers are being loaded in Vancouver, but instead of heading to vaunted Asian markets, they’re heading south to California.

Shipments to Asia reached their peak seven years ago when the equivalent of nine fully loaded tankers of oil left Vancouver for China. Since then, oil exports to Asia have completely dropped off.

Some experts suggest exports to Asia are very unlikely to rebound in the short-term, with producers from many other countries continuing to dominate such markets. Others take a more long-term view, remaining optimistic that opportunities will arise over time — and only after the pipeline is actually built

“There’s no appetite in Asia for heavy oil,” said Eoin Finn, former partner at KPMG, in an interview with DeSmog Canada. “They don’t have the refineries to refine it. And the world is swimming in light sweet crude that’s cheaper and easier to refine, and altogether more plentiful.”

“There’s no appetite in Asia for heavy oil. They don’t have the refineries to refine it. And the world is swimming in light sweet crude that’s cheaper and easier to refine, and altogether more plentiful.” https://t.co/XCN92a02eS

— DeSmog Canada (@DeSmogCanada) April 19, 2018

No guaranteed access to Asian markets

One challenge is that the Port of Vancouver can’t even physically fit the size of tanker required to economically compete with other shippers of oil to Asia.

The largest class ship that is allowed in Burrard Inlet is what’s known as an “Aframax.” It can only be filled to 80 per cent capacity due to depth restrictions. That means a tanker from the Port of Vancouver can only ship 550,000 barrels at a time.

Meanwhile, Very Large Crude Carriers — yes, that’s actually their name — are now embarking from Louisiana via its brand new port, carrying two million barrels each. They’re also used by many Middle Eastern producers.

Practically, this means that Trans Mountain will have a harder time competing with producers in countries that can pay far less to ship their cheaper-to-refine oil in much larger ships. Trans Mountain supporters suggest this could become quickly irrelevant if situations change: say, a war breaks out in the Middle East and takes millions of barrels per day offline.

There’s also no guaranteed demand for Alberta’s lower quality crude on the other side of the Pacific. While 13 producers and shippers have signed long-term contracts with Trans Mountain — a fact that’s leaned on heavily by the company to make its business case, as they represent 80 per cent of expanded capacity — none have buyers in Asia yet.

“It’s a bit of a chicken and egg scenario. You need to build that pipeline before people are going to spend billions of dollars configuring their refineries to take your crude,” Jackie Forrest of ARC Energy Research told the CBC in a 2017 interview.

It’s expected that “sample shipments” of oil would be sent to various markets for testing once the pipeline was built.

But there’s very little proven interest in Alberta’s hard-to-refine oil. Instead, Asian countries are continuing to rely on imports of light sweet crude from Middle Eastern locales like Saudi Arabia, the United Arab Emirates, Iran, Qatar and Iraq. At this point, that appears unlikely to change in a significant enough way to make Alberta oil competitive.

Price discount results from lack of capacity, not location

The reality is that Alberta oil will always sell at a discount to lighter crude with greater market access.

In fact, back in 2014 a vice-president at the Canadian Association of Petroleum Producers told the Toronto Star that “there’s always a natural discount in the range of $15 to $25 [per barrel].”

In recent years, the “discount” has hovered around $10/barrel.

Nothing about a new pipeline will change the fact that Alberta’s heavy oil takes more effort to refine into usable products and is located farther from major markets than most other sources.

“It’s the lack of pipeline capacity that creates the price discount for Alberta. It’s not where that pipeline capacity goes. It’s not the difference between the U.S. Gulf and Asia,” Tom Gunton, professor and director of Simon Fraser University’s resource and environmental planning program, told DeSmog Canada.

“It’s got to do with that there’s not enough pipeline capacity.”

When Trans Mountain was pitched in 2013, there was a legitimate shortage of pipeline capacity, a reality made more concerning to industry by massive production forecasts for future decades. It seemed like an imminent and long-term backlog was about to emerge — which would actually lead to a price discount.

But then the 2014-15 price crash happened, new pipelines came online and dozens of proposed oilsands projects were either scrapped or put on hold.

When former U.S. president Barack Obama’s vetoed TransCanada’s Keystone XL pipeline in 2015 the backlog idea began gaining traction once again. But the veto has since been rescinded by President Donald Trump.

Gunton said that if you combine Keystone with Enbridge’s Line 3 and the proposed Mainline expansion, “there is more than enough pipeline capacity to meet all of Alberta’s needs without Trans Mountain” meaning that no serious price differential will emerge.

TransCanada spill in South Dakota responsible for current discount

The main reason that Alberta is currently experiencing a larger differential than usual (around $25/barrel) is because TransCanada’s Keystone pipeline spilled almost 10,000 barrels of oil into a South Dakota field in November — the third incident from the pipeline since 2010.

That resulted in a two-week shutdown, and the pipeline has been running at 20 per cent reduced pressure ever since.

As Allan pointed out in a letter to the Calgary Herald, this means that around 120,000 barrels per day have been backlogged, accounting for the widening differential. You can basically see the moment when the spill happened on differential estimations, increasing from $11/barrel in November to $25/barrel in February.

It is not a lack of market access to Asia that gutted returns for oil companies — it’s a pipeline spill. The phenomena of spills squeezing pipeline capacity is something Allan has previously documented.

Gunton said that even the two reports submitted by Kinder Morgan to the National Energy Board — the first of which was striked as evidence after its author, Steven Kelly, was controversially appointed to the regulator — didn’t identify an “Asian premium.” Instead, they argued that some of the shipments out of Alberta would have to go by rail due to inadequate pipeline capacity, reducing netbacks to producers. That’s no longer true.

“That’s another big lie that there’s this big demand in Asia,” said Green Party leader Elizabeth May. “There’s this series of assumptions that are repeated so often that nobody questions them.”

Most expanded capacity will end up in California, not Asia

But while politicians like Rachel Notley continue to repeat the fiction “that there is now and will always be a pretty substantial market for bitumen in the Asia-Pacific” many analysts have identified that most oil shipped from the expanded Trans Mountain line via Vancouver (with a significant chunk already diverted in Abbotsford to Washington refineries) will end up in California in the short term.

A 2013 report from the University of Calgary’s School of Public Policy argued: “Movement of crude supplies originating in Vancouver should satisfy U.S. West Coast demand before the first barrel crosses the Pacific to Asia.”

This is mostly because California is facing declining domestic production and imports from Alaska’s North Slope. Additionally, it already has refineries in place to process heavy oil, and Albertan bitumen could directly compete with Mexican Maya, a similar quality crude.

Based on 2017 data, only 3.4 per cent of California’s foreign crude imports came from Canada. That same year, half of the state’s imported oil came from Saudi Arabia, Ecuador and Colombia — which can all produce at far lower costs than Alberta. The state’s Low Carbon Fuel Standard also rewards crude oil with lower carbon intensity, further benefiting OPEC exporters over Alberta.

“There’s no premium to go to California,” Finn said. “There’s probably a discount because it’s farther and costs more to have ships go down there.”

U.S. Gulf Coast remains most lucrative location

So where is Alberta’s slowly-but-surely increasing oil production supposed to go? Well, where it’s always gone — to the U.S. Gulf Coast, aided by TransCanada’s Keystone XL and Enbridge’s Line 3 pipelines.

Compared to shipping via tankers from Vancouver, the Gulf offers comparatively cheaper transportation fees and existing heavy oil refining capacity.

In addition, both Venezuela and Mexico’s heavy oil production have also been in steady decline in recent years, providing even more potential for Alberta to fill existing refinery capacity in the Gulf.

“As we implement climate policies and as the world transitions away from fossil fuels, production in Alberta is not going to grow very much,” Gunton said.

“It’s the highest-cost producer in the world. Consequently, the demand for pipelines is down. And there is more than enough pipeline capacity to meet all of Alberta’s needs without Trans Mountain.”

Economic circumstances have shifted dramatically since 2013 when Kinder Morgan first proposed the pipeline, which raises the question: does the company want to back away from the project for reasons that stretch beyond the opposition its facing in British Columbia?

Even with both the Alberta and federal governments discuss bailing out the private project, in an investor call on Tuesday, Kinder Morgan indicated the investment may still be “untenable.”

If the company walks, a government could either purchase the $7.4 billion project as hinted at by Premier Notley. Or, Kinder Morgan may opt to sue the Government of Canada via NAFTA.

Whatever happens, one thing seems certain at this stage: it’s not going to be predictable.

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Reflecting on his long struggle against South African apartheid, Nelson Mandela said, “One effect of sustained conflict is to narrow our vision of what is possible. Time and again, conflicts are resolved through shifts that were unimaginable at the start.”

The Kinder Morgan Trans Mountain pipeline expansion is not apartheid — let’s get that off the table right away. It’s a pipeline. But in its sustained, divisive nature, in the way in brings up hard constitutional questions and emotional responses while deepening political entrenchment, the very debate over the pipeline is worth considering in its own light.

“Debate” might not even be the right word at this point. When one side is being arrested for opposition while the other is worried about their ability to operate within the basic Canadian principles of peace, order and good government, this has become something deeper and less flexible than a debate.

How did we get here?

“What mobilizes or activates our defences is almost always that there’s enormous fear,” Renee Lertzman, an expert in the psychology of environmental education, told DeSmog Canada. “The tendency to go towards polar positions and black-and-white is a well-known defence mechanism.”

In the Kinder Morgan debate, the parties talk past each other like a bickering couple; the values and even the realities from which they’re speaking are driven further apart with each new rhetorical volley.

Andy Hoffman, a professor of sustainable enterprise at the University of Michigan, describes scenarios in which two opposing sides talk past each other as a “logic schism.”

“In a logic schism, a contest emerges in which opposing sides are debating different issues, seeking only information that supports their position and disconfirms their opponents’ arguments,” Hoffman told the University of Michigan Record. “Each side views the other with suspicion, even demonizing the other, leading to a strong resistance to any form of engagement, much less negotiation and concession.”

For Lertzman, the solution to the seemingly intractable problem of where to go from here — or at least how to talk about it — is to start by recognizing the fear and concerns others have.

“You don’t just start with attack, you actually acknowledge this might seem like the right thing to do,” she says. “Without that acknowledgment, it’s very hard to break through.”

So what is that fear?

Here’s a cheat sheet; it’s not a perfect representation of everyone’s fears within the groups, plus, there are subgroups, and there are entire factions that aren’t included. But if you’re firmly embedded in any side of this debate, take a moment to consider the following.

For some First Nations, the fear is that their constitutional right to decide for themselves how their land is used is being trampled upon and that their sources of food, water and cultural practices are being compromised as a result. It wouldn’t be the first time: we live in a country that has routinely ignored First Nations’ rights for its entire history and only now are many of their cultures beginning to recover and regain control over their lands and resources.

Free, Prior & Informed Consent means #FirstNations have the right to say yes or no & to determine conditions for development in their territories. Together we must arrive at a process that respects rights, title, #FPIC and #UNDRIP. #TransMountain #KinderMorgan

— Perry Bellegarde (@perrybellegarde) April 10, 2018

Many Albertans fear their ability to grow their economy and provide for their families is being limited by their intransigent neighbours. This is a province with a strong dependence on one resource, and which is only beginning to recover from an oil-price shock that devastated its economy in 2014.

Alberta is a province of warm hearted people who fundamentally believe in the balance between resource development and responsible environmental stewardship. Every day that @JustinTrudeau allows #KinderMorgan to be stalled is a day he hurts the people of this province. #ableg

— Kristin Raworth (@JC4ever) April 8, 2018

Many British Columbians worry that their invaluable coastline and coastal economy is being put further at risk to benefit foreign corporations, while they have no say in what level of risk they are willing to accept. Many are also more wary of the impacts of climate change than Albertans are, and see the pipeline as a mechanism that will ramp up emissions.

.@JustinTrudeau‘s government has a choice: They can stand up for Canadians protecting their coast, or a Texas pipeline company protecting its investors. https://t.co/uhXB2bjOTX #cdnpoli #kindermorgan #notankers

— Dogwood (@dogwoodbc) April 10, 2018

For some Canadians outside of the affected provinces, the fear is that authority over important infrastructure is now more of a question than a statement; for others, it’s that growth of the oilsands, and its associated emissions, will be locked in for another 50 years at least.

This is a clear challenge to federal jurisdiction. It leaves the federal gov’t with no choice but to assert its authority. If the BC Gov’t’s position is let stand, it means activists & the politicians who support them can simply ignore the rule of law. 1/2 https://t.co/UkanVzf1la

— Perrin Beatty (@PerrinBeatty) April 9, 2018

What is the common theme? Agency. Everyone fears that the people and institutions they care about have no say in what happens to their resources, their livelihoods, their climate, their rights, their backyards.

When Prime Minister Justin Trudeau said that this pipeline “is going to get built,” in a distant echo of his father’s famous “Just watch me” moment during the October Crisis, he’s speaking as someone who is trying desperately to reassure Canadians that the government, at least, has agency over projects that happen within the country.

“That surprised me because it’s not the sort of thing politicians normally say,” Adam Kahane, a conflict-resolution expert credited with helping to end Colombia’s civil war, told DeSmog Canada.

“What’s interesting to me about all the people who are saying ‘it’s going to be like this’ is what is their power to impose the solution they want? Does the federal government have the power? Constitutional, regulatory, financial or, in an extreme situation, with security forces?

“Does the government of Alberta have the power, including through the trade sanctions that have been discussed? But similarly, do the opponents have the power — legal or political or through their willingness to protest and be arrested? Does anybody have the power to impose the solution they want regardless of the others? And if not, who is going to negotiate?”

In his latest book, Collaborating with the Enemy: How to Work with People you Don’t Agree With or Like or Trust, Kahane outlines four choices when it comes to working with others: collaborate, adapt, force or exit.

Forcing a solution, either through legal, economic or even police or military means, usually doesn’t result in a stable situation, he says.

“That’s the problem with forcing, is it tends to be temporary. Eventually, the people who were on the losing side of it find a way to get back in the game.”

Kahane brings up the Mandela quote to illustrate that this doesn’t need to remain the way things are: gridlocked, escalating and fearful among all the parties, or, as he described them “wholes” with their own realities and concerns.

“There are lots of different ways to do things and I don’t know whether a solution that works for more of the wholes can be arrived at, but stating that it either has to be my way or no way doesn’t move us forward much.”

The debate isn’t going to return to normalcy on its own, and if Kahane is right, that’s especially true if the government decides to use forceful means to make it happen. It’s going to require a great deal of empathy, a cooling of rhetoric and an acknowledgment that most of the arguments flying around come from a genuine place of concern and of love for one’s home.

As Mandela himself put it, “I learned that courage was not the absence of fear, but the triumph over it. The brave man is not he who does not feel afraid, but he who conquers that fear.”

— With files from Emma Gilchrist

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All hell is breaking loose over the Trans Mountain pipeline.

On Sunday, Kinder Morgan announced it was putting all “non-essential spending” on hold until it could be guaranteed “clarity on the path forward.” That sent both the Alberta and federal governments into a near-frenzy — Premier Rachel Notley pledged to buy the entire pipeline if needed, while the federal cabinet held an “emergency meeting” (ministers literally ran from the media afterward).

It’s also come to light that Kinder Morgan could actually sue the government of Canada if it can’t build the pipeline. In a call with investors, Kinder Morgan chair and CEO Steven Kean said that it’s far too premature to consider.

But it certainly wouldn’t be unusual: between 1995 and 2015, Canada has been sued 35 times by investors and paid out at least $170 million.

“It is extraordinarily easy for a deep-pocketed company like Kinder Morgan to sue Canada using NAFTA,” said Gus Van Harten, an associate professor at York University’s Osgoode Hall Law School and expert in international investment law and arbitration, in an interview with DeSmog Canada.

So what would this look like in practice? And would Kinder Morgan have a serious shot at winning? DeSmog Canada took a look at the details.

How on earth would Kinder Morgan actually sue Canada?

It would happen via the Chapter 11 provision of the North American Free Trade Agreement (NAFTA), which was signed by Canada, the United States and Mexico in 1994.

Here’s how Global Affairs Canada describes the process: “It establishes a framework of rules and disciplines that provides investors from NAFTA countries with a predictable, rules-based investment climate, as well as dispute settlement procedures which are designed to provide timely recourse to an impartial tribunal.”

It also happens to be the most notorious part of NAFTA.

The concept itself is referred to as an “investment-state dispute settlement.”  Basically, if an investor — aka a large corporation — thinks that a government has acted in a way that’s unfair and disadvantaged their ability to make profits by introducing a new policy, it can sue the government for alleged losses.

This ability is baked into many international trade agreements: for example, Canadian mining company Gabriel Resources is currently suing Romania for $4.4 billion because the government denied it permits to construct a large and environmentally destructive mine. U.S. company Bilcon is currently suing Canada for rejecting a quarry in an endangered whale nursery.

In the case of NAFTA, an investor has to be based in a different country than the one it’s suing for damages. So even though Trans Mountain ULC is technically the owner of the pipeline, it would be the Texas-based Kinder Morgan Inc. that would launch the challenge.

How Kinder Morgan Could Sue Canada In a Secretive NAFTA Tribunal https://t.co/vjgsRS4PJp #kindermorgan #cdnpoli #bcpoli pic.twitter.com/LgDjq1wjlu

— DeSmog Canada (@DeSmogCanada) April 11, 2018

Is there another motive at play here?

Well, the most obvious thing would be the potential for a large sum of money. For instance, in 2016 TransCanada filed a lawsuit against the U.S. for a whopping $15 billion over the blocked Keystone XL pipeline (the challenge was withdrawn following the election of President Donald Trump and subsequent approval of the project).

But it can also be used as a tool to pressure governments to back down on policies.

“In the present case, a NAFTA claim would allow Kinder Morgan to team up with Alberta and perhaps the federal government too to pressure British Columbia politically,” Van Harten said.

It sounds a bit bonkers, hey? The federal government effectively using a lawsuit against itself to pressure a province to reduce its opposition to a project that it legitimately believes may have calamitous impacts on Indigenous rights and the environment?! Well, it’s worked before.

According to Van Harten, one of the earliest NAFTA cases was against Canada and led to a “humiliating settlement by the federal government.” In 1997, Canada moved to ban a gasoline additive that contained a neurotoxin. The retailer of that additive in Canada then sued the government for $250 million USD. In the end, the government rescinded the ban, apologized, issued a statement saying the toxin wasn’t toxic and then paid the company $13 million USD.

The company didn’t receive the amount of money it was pursuing. In a sense, it received far more than money because of the unique powers that NAFTA provides companies to pressure governments to back down on policies or avoid implementing such policies in the first place.

But why would Kinder Morgan sue the federal government, which supports the project?

It’s the only government that it could actually sue.

NAFTA was signed by the three countries, not provinces or territories. So even if a conflict is between an investor and sub-national government, the lawsuit is still filed against Canada, Mexico or the United States.

Van Harten described the set-up as the “result of bad negotiating decisions in the past by the federal government, advised by federal trade officials who in my experience are often hawkishly pro-investor. For 20 years, Canada has been and still remains the only Western country that allows these aggressive international claims by U.S. multinationals against the country’s sovereign and democratic choices. Thus, our exposure to these claims lies primarily with officials in Ottawa, not B.C. or the other provinces sometimes targeted under these trade agreements.”

We’ve seen this pan out recently with the lawsuit by Lone Pine Resources against the federal government for $118.9 million in alleged damages following Quebec’s decision to revoke oil and gas exploration licences beneath the St. Lawrence River. It’s fundamentally a conflict with Quebec, but has to be dealt with by Canada.

Oh, the joys of federalism.

So who actually decides this stuff? Is there a NAFTA court?

Kind of. It’s actually more of a secretive tribunal.

There are three arbitrators on the tribunal. There are no public records available for most of the decision-making process. It’s up to the tribunal to decide if the challenge is legitimate and, if so, how much the government should pay in damages. Asides from the country directly involved, the tribunal doesn’t allow standing for other stakeholders who may be impacted by the decision.

Keep in mind there’s no equivalent process in place for governments to sue investors that damage local environments or economies.

These challenges can take a long time to resolve. The aforementioned Lone Pine lawsuit against Canada was first launched in 2013 and is still ongoing. It also costs a lot of money for both sides. As a result, it might make more sense to view a potential Kinder Morgan challenge as a means of forcing B.C. to back down and prevent it from considering future standoffs that would impede profits.

Where does this leave B.C.?

Wait and see.

There’s no guarantee that Kinder Morgan will pursue this option. The company has issued the specific date of May 31 as the deadline for the standoff to be resolved, after which it may walk away from the project. At that point, it’s conceivable that it could launch a challenge against the federal government.

“I would advise people in B.C. not to be bullied in this way and to stick to the position that they think is principled and fair,” Van Harten said. “B.C. has a right to enforce its provincial laws and regulations, in a situation of overlapping constitutional jurisdiction and regulatory responsibility, as Kinder Morgan should have known from the start.

“If Canada is sued because of B.C.’s own decisions to protect its environment and economy, the fault lies with the federal government that negotiated and concluded NAFTA, subjecting Canada to these claims by U.S. companies where no other Western country had done then or has done since.”

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Elizabeth Dubois, University of Ottawa and Grant Blank, University of Oxford

“Information warfare” may be a top concern in the next Canadian election cycle, as a report on a workshop by CSIS suggests, but some fears about how people get their political information and the impact of social media are overstated.

In a recently published study, we show that fears about an “echo chamber” in which people encounter only information that confirms their existing political views are blown out of proportion. In fact, most people already have media habits that help them avoid echo chambers.

There is a common fear that people are using social media to access only specific types of political information and news. The echo chamber theory says people select information that conforms to their preferences.

A related theory about “filter bubbles” claims social media companies are incentivized to prioritize likeable and shareable content in an individual’s feed, which in turn puts people in an algorithmically constructed bubble.

The democratic problem with these supposed echo chambers and filter bubbles is that people are empowered to avoid politics if they want. This means they will be less aware of their political system, less informed and in turn less likely to vote — all bad signs for a healthy democracy.

People who like politics aren’t immune either. They might become increasingly polarized in their views since all they see are people confirming their own beliefs. While a lot of the current work is theoretical, a few studies have shown that echo chambers and filter bubbles could exist on Twitter or Facebook, for example.

People get information from many sources

But people don’t consume political information and news from only one source or channel.

Individuals have access to a wide range of media, from traditional news outlets on television, radio and newspapers (and their digital versions) to a wide range of social media sites and blogs. This means studies that focus on any one single platform simply cannot speak to the actual experiences of individuals.

We wanted to solve this problem by conducting a study examining the media habits of individuals. We wanted to understand what social media they use on a daily basis, what political information and news sources they incorporate in their daily lives, and whether they do things that might help them avoid echo chambers.

To do this we conducted a nationally representative online survey of 2,000 British adults. This is part of the larger Quello Search Project that examines the formation of political opinions and the digital media habits of adults in seven different countries. Unfortunately no similar Canadian data set exists at present.

Our analysis suggests that people are rarely caught in echo chambers. Only about eight per cent of the online adults in Great Britain are at risk of being trapped in an echo chamber.

Individuals actively check additional sources, change their minds based on information they find using search engines and seek out differing views. All of these are ways individuals can avoid that echo chamber effect.

Importantly, political interest and media diversity — how many sources of information and how many social media a person uses — both help people avoid the threats of echo chambers.

People who have more than one source of political information are far more likely to act to avoid echo chambers.

They encounter different perspectives, they verify information and they sometimes change their minds. Even people who are not interested in politics are likely to do things that help them avoid echo chambers as long as they have a diverse media diet.

There are widespread fears that so-called echo chambers and filter bubbles are leading to political polarization that poses a danger to democracy. But are the fears unfounded? https://t.co/wAaNMLzE3k

— DeSmog Canada (@DeSmogCanada) March 14, 2018

Fact-checking is crucial

Worries about political polarization are also dampened based on these results.

We fret about polarization, but in fact those who are politically interested are more likely to have encountered different opinions, checked facts and changed their minds about a political issue after searching for more information.

This means that most people are already on the right track for avoiding echo chambers. It also means that media literacy programs that emphasize incorporating multiple sources into your daily routines, and fact-checking, are crucial.

Social media platforms also have an important role to play.

Facebook and Twitter could still be home to communities that exchange information in a way that confirms existing beliefs and opinions. This is not necessarily a bad thing. It’s important to remember that people rarely get all their political information from just one place.

That said, social media companies can help promote media literacy in the very design of their platforms, for example by making sources of news content visible, explaining how their personalization algorithms work and offering suggested content that helps users find new perspectives.

Happily, some of this experimentation is going on within social media companies already. Facebook has experimented by tinkering with what shows up in news feeds and how content is flagged as false. Twitter recently announced a program to examine the health of conversations. So far there have been varying levels of success and criticism.

While we do not have access to data about the Canadian population, preliminary results from our U.S. data set, and from work others have been doing in different national contexts and with different samples from the U.K., suggests we should expect the same trends in Canada.

Most people have media habits that help them avoid echo chambers. When it comes to our elections, our democracy or information warfare, the threat of social media-enabled echo chambers is not a major concern.

Elizabeth Dubois, Assistant Professor, University of Ottawa and Grant Blank, Survey Research Fellow, Oxford Internet Institute, University of Oxford

This article was originally published on The Conversation. Read the original article.

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Conspicuously absent from the B.C. government’s 19-page budget speech on Tuesday was any mention of the largest publicly funded project in the province’s history.

Nor did the government devote a single word to the $10.7 billion Site C dam during last week’s Speech from the Throne, which presented the NDP’s “affordability” agenda for the coming year.

Green Party MLA Sonia Furstenau said the avoidance of Site C appears to be deliberate.

“To not talk about it, as it’s moving forward, seems to be more than just an oversight,” Furstenau told DeSmog Canada.

It suggests that “the government does not want to bring this to the forefront, does not want to be talking about it, does not want to bring this to people’s minds,” she said.

Site C’s only mention in a stack of budget documents — including beefy backgrounders and a lengthy news release — was a line item at the bottom of page 47 in the 150-page budget and fiscal plan, which details spending priorities right through to 2021:

“Site C power project

Cost to December 31, 2017: $2.13 billion

Estimated cost to complete: $8.58 billion.”

It was a curious portrayal in light of the budget’s hallmark items.

A “striking” omission from the budget speech

Consider this. Site C will cost British Columbians more than ten times the amount of the “historic” $1 billion child care investment announced Tuesday by Finance Minister Carole James, a pledge that child care advocates described as “monumental.”

It’s almost $4 billion more than the largest investment in housing in B.C.’s history, a budget announcement of $7 billion spread out over 10 years that was widely praised by housing advocates.

And it’s more than 50 times the amount of money — $200 million — the budget devotes to a three-year investment in housing, child care and skills training dedicated to indigenous priorities, as part of its stated commitment to adopting and implementing the UN Declaration on the Rights of Indigenous Peoples.

Yet no mention of Site C. Nada.

Ken Boon, president of the Peace Valley Landowner Association, representing 70 property owners who will be affected by Site C, called the omission “striking.”

“One would think that the recent decision to proceed with a $10.7 billion dam would warrant attention, especially after the poor economic rationale of the project was exposed by the B.C. Utilities Commission,” Boon told DeSmog Canada.

“Even just the $2 billion increase given to the [Site C] project budget on December 11th is larger than almost any other budget measure.”

The Site C dam has barely been mentioned in the legislature since it resumed sitting last week, a gap the Green Party promised to redress in the coming weeks when its three MLAs have an opportunity to grill the NDP during ministry budget estimates.

The Greens plan to “focus on that elephant in the room and to really hold the government to account for its decision” to proceed with Site C, in order to determine if there are increasing reasons to question that decision, said Furstenau.

The latest Site C dam development

Furstenau and her colleagues might want to start by zeroing in on the latest perplexing Site C development, a last minute major design change that nobody saw coming.

The change is so significant it requires BC Hydro to seek an amendment to its environmental assessment certificate for the project.

In January, BC Hydro notified the B.C. Environmental Assessment Office it plans to submit an application to change the design for Site C’s generating station and spillways.

“This isn’t a minor kind of amendment,” said former BC Hydro CEO Marc Eliesen, who was also the CEO of Manitoba Hydro and Ontario Hydro.

“I have never seen anything like this taking place. What I find just shocking is that these changes would take place at the last second.”

That notification came only weeks after BC Hydro announced it had selected the preferred proponent for a major contract to build the station and spillways, a consortium that gives a 30 per cent share in the Site C venture to the state-owned China Communications Construction Co. Ltd.

It’s unclear at this point if the design changes are related to ongoing geotechnical issues that have slowed construction, and how they might impact Site C’s accelerating cost and timeline.

In a letter to the environmental assessment office, BC Hydro described the changes as “improvements” to optimize capacity, minimize environmental risks and improve safety.

BC Hydro also noted that the new design is “not expected to change fish injury or mortality.”

Up to 40 per cent of bull trout, a species vulnerable to extinction, are expected to die in Site C’s turbines while attempting to migrate downstream.

That’s after the fish are anesthetized and transported upstream past the dam in trucks to reach their spawning grounds, at a projected cost of $127 million over 100 years. (That same amount of money would build nine new elementary schools in the Lower Mainland.)

BC Hydro also told the environmental assessment officethe design changes will “reduce the likelihood” of reservoir levels topping maximum levels “under extreme flow scenarios.”

The certificate amendment process, which could take months, will require consultations with First Nations, the federal government, local government and may even warrant public consultation, according to the B.C. environmental assessment office.

Eliesen said even if there are reasonable grounds for making the unexpected design changes he is surprised BC Hydro did not submit the changes to last fall’s independent review of the project, when any potential impact on Site C’s finances and timeline would have undergone independent scrutiny.

“For the past five years, there’s been a picture of what the generation station and spillways looked like and now that’s been changed,” he said.

In a recent affidavit filed in B.C. Supreme Court in support of a new legal case against Site C by two Treaty 8 First Nations, Eliesen said that the “necessary experience and due diligence rigour required for managing a major hydro project such as Site C is deficient among the executive at BC Hydro,” noting it has been more than 30 years since BC Hydro constructed a major generating station.

Are we back to BC Liberal-era secrecy on Site C?

Before the former Liberal government changed the law to exempt Site C from independent oversight by the B.C. Utilities Commission (BCUC), the commission would have monitored ongoing planning expenditures related to the project.

For years, the NDP said that Site C should be scrutinized by the utilities commission.

Yet, instead of restoring full BCUC oversight of Site C, the NDP has announced the creation of a new “Site C Assurance Board.”

The government says the board will provide “enhanced oversight to future contract procurement and management, project deliverables, environmental integrity, and quality assurance — all within the mandate of delivering the project on time and budget,” according to the government.

But the NDP has not yet determined to what extent the board’s findings will be made public, according to a statement emailed to DeSmog Canada this week by the B.C. energy ministry.

The composition and terms of reference for the Site C Assurance Board are being finalized by BC Hydro and the government and will be announced in the coming weeks, said the ministry.

Boon said he finds it disturbing that the board’s full discoveries might be withheld from the public, given its stated purpose is to enhance oversight of Site C to deliver the project on time and within its revised budget.

“How will the public know that is indeed happening if their work is done in secrecy?” asked Boon.

“Secrecy is what happened under the BC Liberals with this project, and it took a BCUC review to finally reveal just how bad things were. I personally believe the only way we will get true transparency on this project is if whistleblowers come forward and tell their story to the media while keeping their identity protected.”

(If you have a story to tell, you can get in touch with DeSmog Canada’s team of journalists here.)

How does Site C square with the NDP’s affordability agenda?

Notably, the NDP’s only reference to hydro rates in the budget rollout was to restate the party’s earlier commitment to seek a one-year freeze.

Eliesen and other experts expect hydro rates will climb significantly once the Site C dam becomes operational, supposedly in just six years.

The NDP has said Site C’s surplus power would be sold on the spot market, likely at rates far lower than it costs to produce it.

That leaves B.C.’s hydro customers to make up the difference — at the same time that they begin to pay for Site C’s construction cost, which the BCUC warned could top $12.5 billion.

B.C. only needs to look east to gauge the affordability of large hydro dams compared to more flexible alternatives such as wind power.

The “boondoggle” Muskrat Falls dam in Labrador has added an average $1,800 to the annual hydro bills of every household in Newfoundland and Labrador.

The over-budget Keeyask Dam in northern Manitoba recently compelled Manitoba Hydro to ask for “exceptional” hydro rate increases that, if approved, will add $600 to an annual hydro bill of $1,000.

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When it comes to the rights of Indigenous peoples, Prime Minister Justin Trudeau talks a really good talk. A close look at new laws that will dictate how major resource projects are reviewed, however, suggest he wants to leave himself a lot of wiggle room when it comes to walking the walk.

The week before Trudeau was lauded for a speech in the House of Commons that promised of a new legal framework for Indigenous people, his government released two long-awaited pieces of environmental legislation.

Initial reactions were cautiously optimistic. But now that the dust has settled,  it’s clear that matching words to action is often an exercise in optimistic romanticism.

Bill C-69 — which will overhaul the Canadian Environmental Assessment Act, National Energy Board Act and Navigable Waters Act — mostly restores protections to how they were before the Harper Conservatives decimated them in 2012, but little has been done to truly modernize processes.

It’s “abundantly clear that the architects…have no transformative aspirations,” wrote University of Victoria law professor Chris Tollefson in an article for Policy Options.

Unfortunately, the same appears to be true about what the new legislation means for how Indigenous peoples and communities will be included in future environmental assessments and protection planning: rather than tightening the rules to make ministers more accountable for upholding First Nations’ rights, the new laws give them broad discretion at every turn.

“Looking at the bill itself, we don’t really see the robust impact-assessment, sustainability framework that was promised,” said Sara Mainville, partner at OKT Law and former chief of northwest Ontario’s Couchiching First Nation.

Requirements to integrate Indigenous knowledge, governments

To be sure, there were some new developments on how governments plan to engage with Indigenous people.

The revised acts require that Indigenous traditional knowledge be used to inform decision-making, require that such knowledge is protected from public disclosure, and create new abilities for Canada to enter into management agreements with Indigenous governing bodies (rather than just provinces and territories).

In the case of impact assessments, the revised bill also explicitly requires that adverse impacts on Indigenous rights need to be considered — a significant shift from the current legislation.

“What the present Act requires is that potential impacts to the current use of lands for traditional purposes be assessed,” said Jeff Langlois, lawyer at JFK Law and recently counsel for Gwich’in Tribal Council in the Peel Watershed case.

“It lets proponents and the government in these formal environmental assessment processes just focus on the use of the land today. Like ‘Have you hunted in the last couple of years? Is it going on right now?’ It’s made these environmental assessments very narrow in scope.”

The proposed legislation expands the review criteria. But here’s the catch — it only needs to be considered by the minister and can always be ignored in the name of “public interest.”

“All that cabinet has to do is say in its reasons that, ‘We took Indigenous impacts and interests into account,’ ” said Jason Maclean, environmental law professor at the University of Saskatchewan. “It doesn’t change anything. In fact, it could provide the government cover and insulation for even worse decision-making, making it that much harder to overturn.”

“It doesn’t change anything. In fact, it could provide the government cover and insulation for even worse decision-making, making it that much harder to overturn.” https://t.co/2ZDqesKoPc

— DeSmog Canada (@DeSmogCanada) February 20, 2018

Regional impact assessments only required if minister wants

The issue of ministerial discretion also plagues many other elements of the bills.

For example, Bill C-69 suggests the use of regional impact assessments and strategic impact assessments. Such tools can be used to provide baseline data or plans for an entire area such as the oilsands-dominated Lower Athabasca Region of northeast Alberta in order to help track cumulative impacts — whether they be on the local environment, Indigenous rights or ability to meet climate targets.

Langlois said that a big problem with the current approach is that every proponent and government will argue that you can’t blame any one project for infringement on Aboriginal and treaty rights, meaning none are ever stopped on those grounds.

But once again, the rules are soft: the  bill is worded carefully to say that the Minister “may” order a regional or strategic assessment.

“If you want to take these strategic and regional assessments as effective tools, you should be putting some trigger in place to say, ‘What’s going to make you do that assessment?’” Langlois said. “Right now, it’s still just totally discretionary, as is all decision-making under the act still.”

Bill falls short of expert recommendations

It’s also a fundamental undermining of recommendations made by the government’s expert review panel in its comprehensive April 2017 report, which specifically recommended that legislation “require” such tools to be used in any area where cumulative impacts may occur or already exist and to “guide” the entire impact assessment.

It’s one of the panel’s many key suggestions that has been weakened in the bills.

“I often look at the expert panel report as a recipe, not as a menu,” Mainville said. “You can’t really pick and choose different pieces of it.”

A central ingredient in that recipe was dealing with the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), which contains the principle of “free, prior, and informed consent.” But there wasn’t a single mention of UNDRIP in the bill.

Instead, Trudeau’s Environment and Climate Change Minister Catherine McKenna pledged to “try really hard” to gain consent from Indigenous communities.

Further complicating the situation was McKenna’s assurance that the Kinder Morgan Trans Mountain pipeline would have been approved under the new environmental assessment legislation — despite many Indigenous communities vehemently opposing its construction.

“Bill C-69’s really obvious failures to mention, let alone implement, UNDRIP or [free, prior and informed consent] is a failure for the government to take a step forward towards shared governance with Indigenous peoples,” Maclean said. “Instead, it retains the same colonial top-down model that reposes all the decision-making power with the federal cabinet under a very broad and highly discretionary ‘national interest’ test.”

Liberals recently supported UNDRIP bill, pledged new legal framework

In addition to finalizing the legislation, the government will have to craft a wide range of regulations, policies and programs. Such tools could provide more insights into how the Liberals expect to integrate their support of MP Romeo Saganash’s recent private member’s bill to fully implement UNDRIP, as well as Prime Minister Justin Trudeau’s pledge to establish a new legal framework for Indigenous peoples.

“This staged approach is the silver lining to all this,” Mainville said. “But the wait-and-see is wearing First Nations’ patience a little thin.”

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

On Friday, the federal government released its long-awaited draft regulations for the phase-out of coal-fired power in Canada. It was a huge move — the first step to fulfilling a central piece of the government’s pledge to “transition to a low-carbon economy” via the Pan-Canadian Framework.

But another draft regulation was also released on Friday, albeit with a lot less fanfare: performance standards for natural gas electricity generation. Basically, it proposes establishing maximum carbon intensities for different kinds of gas plants. Importantly, it won’t apply to facilities that already exist, converted from burning coal or those operating as “peaker” plants.

Doesn’t sound awful, right? Except one big catch: the regulation effectively gives the go-ahead for provinces transitioning away from coal — Alberta, Saskatchewan and Nova Scotia — to replace a lot of their lost generation capacity with natural gas. And that seriously undermines the country’s ability to decarbonize its electricity system anytime soon.

“Having a grid that relies on 70 per cent on natural gas by 2030 is definitely not compatible with a strong climate policy,” said Benjamin Israel, analyst at the Pembina Institute, referencing Alberta’s climate plan. “That’s a very huge concern because we’re not going to meet the federal target of 90 per cent carbon-free electricity by 2030.”

The regulation dictates that most  facilities will be allowed to emit a maximum of 420 tonnes of CO2 equivalent per gigawatt-hour. While that will prevent future construction of the dirtiest kinds of plants, it still allows for most modern operations: for example, the recently opened Enmax Shepard Energy Centre in Calgary boasts an emissions intensity of 370 tonnes per gigawatt-hour.

New Natural Gas Plants Can “Lock In” High Emissions for Decades

In 2014, Canada generated 78 per cent of its electricity from non-emitting sources: large hydroelectric dams, nuclear power plants and conventional renewables such as wind and solar. But a recent report by EnviroEconomics and Navius Research concluded that by 2030, Canada will only generate 80 per cent — a mere two per cent increase.

That’s almost entirely because of the doubling of natural gas generation that’s about to take place.

To be sure, there’s also going to be a 250 per cent increase in generation from renewables. But it won’t be enough to replace all the coal-fired power. Exacerbating the situation is the temporary loss of low-carbon electricity from the Darlington Nuclear Generating Station in Ontario, which is undergoing a decade-long refurbishment.

As a result, provinces are turning to gas — which will increase annual emissions by 19 megatonnes, greatly undercutting the savings from the coal phase-out.

There are a number of reasons this doubling down on gas is concerning to experts.

Clearly, Canada wants to cut its emissions by as much as possible in line with its Paris Agreement commitments. Switching from coal-fired power (with an average emissions intensity of over 800 tonnes of CO2 per GWh) to natural gas (as low as 370 tonnes per GWh) is a step in that direction. But wind, solar and nuclear facilities have an average operating emissions intensity of literally zero. It doesn’t take a math nerd to know that 370 is a lot more than zero!

There’s also the potential issue of gas-heavy jurisdictions exposing themselves to fluctuations in commodity prices, resulting in electricity prices spiking if gas supply falls for whatever reason. And on that note, we can’t forget where natural gas comes from in Canada — fracking currently accounts for 66 per cent of domestic production, but will rise to 80 per cent by 2035, carrying all sorts of local environmental impacts and unknowns about methane leakage with it.*

All of that will be “locked in” for 30 or 40 years if new natural gas power plants are built — resulting in a serious risk of creating stranded assets and having to compensate owners.

“As we’ve seen with coal, if you’re looking at stranding those assets that usually involves some form of compensation that ratepayers or taxpayers are footing the bill for,” said Dan Woynillowicz, policy director at Clean Energy Canada. “Are we potentially repeating mistakes of the past in terms of allowing things to proceed that if you play it out over their full operating lifetime are going to be inconsistent with other objectives that have been set and therefore require compensation?”

Canada Is Replacing Coal With Natural Gas — And That’s A Huge Problem https://t.co/HvwL6USZwl #coal #naturalgas #climate #cleanenergy #Electricity via @james_m_wilt pic.twitter.com/2YD9qH2buU

— DeSmog Canada (@DeSmogCanada) February 17, 2018

Modelling Shows Wind Power Can Make Up 35 Per Cent of Canada’s Power Supply

Luckily, there are lots of other options.

Economists Brett Dolter and Nicholas Rivers recently published a study in Energy Policy modelling the lowest-cost pathways to decarbonize Canada’s electricity system. It was a huge endeavour, including hourly solar irradiation data from 200 stations and hourly wind speed data from more than 2,000 locations. While conclusions varied by specific scenario, wind power ends up as the superstar on all counts, making up 30 to 35 per cent of the future decarbonized system (with hydro and nuclear contributing the remainder).

Interestingly, solar power won’t play a role at all assuming the continuation of current installation costs (which is by no means certain). Dolter explained in an interview that a key challenge with solar is “seasonal capacity factors” that sees facilities in Saskatchewan generating at 30 per cent of capacity in the summer but only 12 per cent in the winter — at the exact time when the grid needs the most electricity.

There’s also the complicating factor of “variable” versus “dispatchable” electricity, in which baseload sources like hydro, nuclear or gas need to be deployed in conjunction with solar and wind. Alternatively, innovations in energy storage and demand flexibility can be used to “balance” the system. All of this would be greatly accelerated by a higher carbon price or more rapidly tightened output-based allocation framework.

“You’re missing the opportunity to send that price signal that might also drive some competition from alternative sources of supply that don’t have carbon emissions,” Woynillowicz said.

New Transmission Lines Would Reduce Costs of Transition, Improve Reliability

Central to any decarbonized future will also be new high-voltage direct current (HVDC) transmission lines.

“Because we have so much hydro in Canada, if you can connect hydro jurisdictions and non-hydro jurisdictions and start to use the hydro to balance the wind,” Dolter said. “If you can start to link across jurisdictions, a lot more becomes possible.”

According to their model, this would include new transmission lines between Labrador and Nova Scotia, northern and southern Quebec and the “western interconnect” project through the four western provinces.

“There’s no politics in our model so it’s easy for us to assume that this could be built,” Dolter admitted. “Generally, we’re finding it’s going to cost less if we can act together. Decision makers should see even the political benefit of that, if you can make a decarbonized system for a lower cost.”

* UPDATE Feb. 20, 11:25 a.m.: This article originally stated that fracking accounts for 53 per cent of domestic gas production, but that number has actually increased to 66 per cent.

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It all started with the Asti Trattoria Italiana restaurant in Fort McMurray, whose slogan is “Live, Love, Eat.”

But there was no love lost for restaurant owner Karen Collins two weeks ago when the B.C. government announced it will set up an independent scientific advisory panel to examine how diluted bitumen can be safely transported and cleaned up, if spilled.

Pending the review, B.C. said it would restrict increases in the transport of the substance — a mixture of thick unrefined oil from the oilsands and highly flammable gas condensate — through the province, a move widely seen as an attempt to stall the Kinder Morgan Trans Mountain pipeline expansion.

Calling the review “just crazy,” Collins pulled eight B.C. wines off her menu, which includes coastal delicacies such as seafood strozzapreti and croccanti di salmone (pan seared salmon filet).

Alberta Premier Rachel Notley thought that was such a great idea that she announced a B.C. wine boycott.

This week the wine-pipeline fracas intensified, with new twists that included childcare, a natural gas pipeline from B.C. to Alberta and a “B.C. Wine Smuggling Escape for Albertans” arranged by a luxury tour company, complete with a private jet to fly people to the Okanagan and Cowichan valleys and home again with 50 hand-picked bottles of B.C.’s finest (#PinotNotPipelines).

The B.C. Liberals, with new leader Andrew Wilkinson at the helm, sallied forth with a news release and peppy speeches in the legislature, accusing the NDP of destroying thousands of jobs and demanding that Premier John Horgan “swallow his pride” and fly to Edmonton immediately to sort out the squabble.

In the midst of all the brouhaha, political spin took the front seat while some salient facts were left at the side of the inter-provincial road faster than you can say, “bring me the B.C. bubbly.”

Let’s take a look at some of the developments this week in the War of the Rosés. Spoiler: it’s not really about wine.

The wine and pipelines week in review

The week began with the NDP government taking out a full-page ad, featuring three giant corkscrews, in last Saturday’s Globe and Mail.

The ad, which also appeared in The Province, urged people to buy B.C. wine “and raise a glass to protecting B.C.’s coast” (#toastthecoast).

(Presumably, if things go sideways for the NDP, the hashtag could always be reordered to say #thecoastistoast.)

On Tuesday — the same day the B.C. government proclaimed April as B.C. Wine Month — it was revealed that the federal government had suddenly cancelled a joint announcement with B.C. about an early learning and childcare funding agreement.

Ottawa claimed a scheduling conflict, and there was much speculation that the move had far more to do with B.C.’s new tactics to stall a pipeline pushed by Ottawa than any calendar alignment.

“The media are reporting that the child care transfers from Ottawa to British Columbia are in danger of drying up,” Wilkinson told the legislature.

But the Trudeau government denied that the rescheduling had anything to do with B.C.’s plans to restrict the transport of diluted bitumen. Ottawa said a child care deal will be announced soon, adding that the amount of federal money won’t be affected by B.C.’s stand against the Kinder Morgan pipeline.

Then, on Wednesday, the B.C. Liberals issued a press release saying that “Horgan’s trade war” has “imperiled” a $2 billion private sector gas pipeline investment in British Columbia that would create 2,500 jobs.

“This trade war is about to escalate beyond a $70 million wine industry loss into a $2 billion loss, with thousands of jobs at stake,” Wilkinson told the legislature.

As proof, the Liberals circulated Alberta’s February 8 submission to the National Energy Board about the North Montney Mainline Extension, a $1.4 billion natural gas pipeline linking B.C. natural gas operations with eastern markets.

The Alberta government filed the NEB submission, in support of a tariff on the B.C. gas, after Alberta producers complained that TransCanada’s project would flood a glutted gas market and drive down prices for their own product.

“This is not a coincidence, the Alberta government has never expressed opposition to the proposed pipeline until last week,” Peace River South Liberal MLA Mike Bernier said in the news release. “The trade war is expanding and the job losses are mounting.”

Whoa Nellie.

Back in reality, the Alberta government immediately debunked the Liberals’ press release. Mike McKinnon, press secretary for Alberta energy minister Margaret McCuaig-Boyd, told DeSmog Canada that “our filing has nothing to do with the recent dispute with the government of B.C.”

“This is about standing up for Albertans and our energy industry,” McKinnon said in an emailed statement. “The filing is consistent with Alberta’s past positions relating to fair and just toll principles as well as consistent, well-established and accepted pipeline tolling principles.”

In the midst of all the brouhaha, political spin took the front seat while some salient facts were left at the side of the inter-provincial road faster than you can say, “bring me the B.C. bubbly.” https://t.co/aeXbKWxDGJ @sarahcox_bc #oilsands #toastthecoast #bcpoli #cdnpoli pic.twitter.com/9XTirAheEe

— DeSmog Canada (@DeSmogCanada) February 17, 2018

What about those “mounting” job losses?

We asked Unifor, the union that represents about 12,000 workers in Canada’s energy sector, about the Trans Mountain pipeline and jobs.

And whaddya know? Unifor told us that if the Trans Mountain pipeline expansion goes ahead, up to 600 workers in Burnaby stand to lose their long-term jobs —- “good, family supporting jobs, the kind of jobs that help build our economy,” according to Joie Warnock, Unifor’s western regional director.

The jobs are at the Burnaby refinery on the Burrard Inlet, formerly owned by Chevron and purchased in April by Alberta’s Parkland Fuel Corp. The facility, which refines crude and synthetic oil into products such as jet fuel, gasoline, diesel and heating fuels, relies on the existing Kinder Morgan pipeline for its raw product.

But the pipeline expansion is targeted at the lucrative Asian export market, and Warnock said that likely means there will no longer be sufficient supply for the refinery — one of only two oil refineries left in B.C. — to bid on.

“That’s what makes us very concerned.”

Unifor is opposed to the export of raw bitumen, Warnock said, and wants to see raw bitumen exports prohibited because they are “not a good jobs strategy.”

“It doesn’t create jobs in Canada. We want to see more Canadian content, more Canadian value, added at every stage in the energy sector.”

The union also pointed to a piece published in The Province last August by B.C. economist Robyn Allan, titled “The search for Trans Mountain’s mythical 15,000 construction jobs.”

Allan took aim at statements by former B.C. Premier Christy Clark, Notley and Prime Minister Justin Trudeau who all asserted the pipeline expansion would create 15,000 new construction jobs.

Kinder Morgan itself told the National Energy Board that the project would employ about 2,500 construction workers, for two years, Allan pointed out.

“Trans Mountain’s 15,000 construction workforce jobs are a scam,” wrote Allan. “The more realistic figure is less than 20 per cent that size.”

So what’s really going on here?

Any delay in expanding the Trans Mountain pipeline “puts a lot on the line” for Notley, according to UBC political science professor Kathryn Harrison, whose research focuses primarily on environmental policy.

Notley, who is facing a re-election campaign next year and formidable opposition from the new United Conservative Party, has tried to strike a careful balance between continued support of Alberta’s oil industry and taking action to reduce the province’s sizeable carbon footprint.

“She really needs to show Alberta voters that she is strongly committed to doing everything in her power to get pipelines through,” Harrison said in an interview. “At the same time she is making a commitment to address climate change through phasing out coal-fired power plants and introducing a carbon tax.”

“Those are two things that are very hard to reconcile,” Harrison said, especially given that the problematic growth in Canada’s carbon emissions comes from increased production in Alberta’s oilsands.

Trudeau, for his part, has been “much more candid” in pointing out that support for the Kinder Morgan pipeline is pretty much a quid pro quo for Alberta backing a national carbon pricing plan, said Harrison.

“It’s quite an extraordinary compromise to say we need to expand the production of fossil fuels and build national infrastructure [for their export] — and that is the condition of a national climate action plan.”

Time for a pairing?

Perhaps the calmest head in the wine-and-pipelines mêlée goes to the B.C. Wine Institute, which issued a press release last week saying “oil and wine don’t mix,” and expressing disappointment that Alberta is “aggressively boycotting B.C. wineries over a yet-to-be-determined British Columbia government policy in a different sector.”

The wine institute is now promoting a “grazing” event in Vancouver that will pair B.C. wine with Alberta beef.

The motto for the evening?

The Only Beef is on the Table.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

By Edward Struzik

This article was originally published on The Conversation Canada.

Northwest Territories Premier Bob McLeod was right when he issued a “red alert” in November and called for an urgent national debate on the future of the Northwest Territories. His peers, the premiers of Nunavut and the Yukon Territory, would be justified in calling for the same thing.

As housing, poverty and unemployment statistics show, Northerners are at a crossroads in their efforts to find a balance between a traditional way of life that puts country food on the table and one that provides basic goods, luxuries and economic opportunities that most southerners take for granted.

McLeod, however, was wrong in complaining about a “colonial” attack on the future of oil and gas development in the Arctic.

If the past tells us anything about the future, forging the Arctic’s future on fossil fuel development is not the way to move forward.

Leading energy experts have been saying this since 2006, when international energy consultants Wood Mackenzie and Fugro Robertson questioned “the long-considered view that the Arctic represents one of the last great oil and gas frontiers and a strategic energy supply cache” for the U.S. and Canada.

Sliding into the sea

In Canada, Arctic oil and gas has offered no significant returns since the late 1960s when the Canadian government engineered a plan to consolidate the interests of 75 companies with holdings in the Arctic. As a major shareholder in Panarctic Oil and Gas, and then Petro-Canada, the government used its resources, regulatory control and taxpayer money to encourage oil and gas exploration in the region.

Since then, government subsidization of Arctic oil and gas development has continued unabated at a very high cost.

In 2008, the federal government launched a program to bring petroleum geologists to the Arctic each year. To date, this program has spent nearly $200 million of taxpayers’ money to help the energy and mining industries find new sources of fossil fuels and minerals in the region with very limited success.

Another $16 million was spent to find ways to extract natural gas from methane hydrates in the Mackenzie Delta, a resource the energy industry has showed little interest in because of the technical and economic challenges associated with extracting it.

The recently completed $300 million Inuvik to Tuktoyaktuk Highway, built on rapidly melting permafrost, is another example of this misguided government strategy. According to a study done by the Northwest Territories government, it promises to save the town of Tuktoyaktuk $1.5 million in cost-of-living deliveries, and increase tourism — a good thing if it weren’t for the fact that the town of 900 is sliding into the sea.

Its main purpose, however, was to support energy development. It promises to deliver between $347 million and $516 million in increased cash flows from transportation savings over 45 years to resource companies operating in the Arctic.

The problem is that none of this Arctic oil and gas has ever made it to market, with one exception: A few shiploads of oil that Panarctic sent out from Melville Island in the 1980s.

Canada's North Needs Many Things, But Oil and Gas Drilling Isn't One of Them https://t.co/LMTMHR6Cb1 via @ConversationCA & @Kujjua #cdnpoli #arctic #climate

— DeSmog Canada (@DeSmogCanada) January 3, 2018

What does the Mackenzie Valley Pipeline Inquiry Have to Do With This?

Many have blamed the failure of Canada’s Arctic oil and gas strategy on Justice Thomas Berger’s Mackenzie Valley Pipeline inquiry in the mid-1970s.

Berger’s report recommended a 10-year moratorium on pipeline construction in the Mackenzie Valley so that First Nations could resolve their land claims with the federal government. It also led to the creation of a complex permitting process, which has slowed approvals for a more recent pipeline construction project.

The inquiry cast Berger as a symbol of environmental and social justice with his recognition of Indigenous rights.

But the real reason why Arctic oil and gas has never made it south is because of the high cost of piping it over land or shipping it by sea to market.

The Mackenzie Valley Pipeline Project that Justice Berger considered in the 1970s was touted as “the biggest project in free enterprise history..”

Had it been built, it would have been an economic disaster. Bob Blair, the Calgary-based entrepreneur who wanted to build one of two proposed pipelines, suggested as much years later when he wondered why anyone would try again to ship Arctic oil and gas south.

The second Mackenzie Valley pipeline would have fared even worse. First proposed in 2004, the pipeline would have required gas prices to be in the range of $6 to $8 to break even.

That looked good in the years that followed when gas prices temporarily soared to nearly $15 in June 2008. Since then, however, the price has sat largely in the range of $2 to $6. The cost of the $20 billion pipeline would now need gas prices to triple from current rates to recoup its cost. That’s why Imperial Oil, its main proponent, received permission to delay the project until 2022 at the earliest.

In the meantime, Canadian governments have seemed oblivious to the fact that human-caused climate change — largely due to the burning of fossil fuels — is ending the Arctic as we know it. Since the 1970s, air temperatures in the Arctic have risen by as much as 5℃ and sea ice area has declined by about 12 per cent per decade.

The ripple effect

A warmer and shorter ice season means some polar bears have less time to hunt seals, and mosquitoes and flies have more time to take their toll on caribou, whose populations are at a historic low.

As sea levels continue to rise, powerful storm surges are causing massive saltwater intrusions, imperilling the freshwater lakes, wetlands and deltas that support tens of millions of nesting birds.

Soon low-lying coastal Inuit communities such as Tuktoyaktuk, sitting on rapidly thawing permafrost, will have to be relocated, like residents of the Alaskan community of Shishmaref have voted to do.

We are already seeing the rippling effects of some of these changes throughout the Arctic ecosystem.

Capelin, not Arctic cod, is now the dominant prey fish in Hudson Bay. Killer whales, once largely absent from the Arctic, are beginning to prey on narwhal and beluga, important food sources for the Inuit. Polar bears at the southern end of their range are getting thinner and producing fewer cubs. Trees and shrubs are overtaking tundra landscapes. Sub-Arctic forests are burning bigger, hotter and more often.

What the future holds for Inuit and First Nations peoples of the north, whose cultures grew out of a close association with this frigid world, is a puzzle.

Those cultures are already in a state of rapid economic reorganization and social readjustment. Most of these people continue to live in overcrowded houses. They have stopped or reduced their consumption of caribou, walrus and other Arctic animals, not because they prefer store-bought beef and pork but because the caribou populations are collapsing, and the receding sea ice makes it difficult for them to hunt marine mammals.

Steered by Northerners

What will the future Arctic look like? That is a wide-open question that can only be answered by debates steered by northerners.

Here’s a list of topics worth discussing. Oil and gas development isn’t one of them.

The Canadian Arctic needs an affordable and efficient air and road network that can bring in tourists and investors.

It needs museums to display artifacts — such as those in the recently discovered Franklin ships — that have been routinely shipped south.

It needs food security that goes beyond subsidizing the transportation of southern foods to the North.

It needs renewable energy to replace diesel, which is prohibitively expensive and polluting.

It needs a better form of post-secondary education that combines traditional knowledge with western scientific knowledge — and a way to convince its best students to stay home, instead of relocating to the south.

It needs a forward-looking ecological conservation plan that will ensure a future for polar bears, caribou, walrus, narwhal, beluga and other Arctic species.

Prime Minister Justin Trudeau’s decision to temporarily ban future oil and gas exploration in the Arctic in December 2016 was a good start to setting a new course for the North.

So was Mary Simon’s report “A New Shared Arctic Leadership Model.” It makes 40 recommendations, many of which have been made several times in the past four decades.

Now it’s time to find new ways of moving forward with a road map to the future that will lead to economic advancement and improvements in the quality of life that Northerners long for and deserve.

The oil and gas industry has has tried and failed for more than 40 years to make a contribution. It doesn’t deserve to be part of this future.

Edward Struzik is a fellow at Queen's Institute for Energy and Environmental Policy in the School of Policy Studies at Queen's University.

Image: Edward Struzik

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By Maryann Watson, Marine Scientist and Stephanie Hewson, Staff Counsel at West Coast Environmental Law

Clouds of blood pumped straight from a fish plant in B.C. made worldwide headlines last week after diver Tavish Campbell published a shocking video revealing the practice. Since then, people from all over the province have asked us at West Coast Environmental Law about its legality.

The short answer is that the practice of discharging bloodwater from fish plants is legal for now, even if the blood contains instances of PRV. Currently, the federal government regulates fish farms and animal health, while the province regulates fish processing facilities. This has created two separate systems that are not clearly linked, leaving regulatory gaps that threaten the health and habitat of wild salmon and other marine organisms.

Fish Blood From Fish Farms

It appears that under the current regulations, fish blood can legally enter the ocean from open-net pen fish farms. The federal Fisheries Act prohibits unauthorized deposits of blood and other biological substances into the water (which likely qualify as "deleterious substances" under the Act), except when they come from fish farms directly. Under the Aquaculture Activities Regulation, fish farms can deposit fish blood and other matter (such as fish feed and feces) directly into the sea, though they must monitor for disease and other parameters, and to minimize the impact of the discharge.

Fish Blood from Fish Processing Facilities

It appears that fish blood can also legally enter the ocean from fish processing plants. Though the Fisheries Act prohibits the deposit of "deleterious substances," there's an exception when the release is authorized. It is not clear whether this exception includes provincial authorizations. The provincial Ministry of Environment regulates wastewater discharge from these plants through permits under the Environmental Management Act. We looked at the permit held by the Brown’s Bay fish processing facility, which requires the company to follow provincial and federal procedures when dealing with diseased fish, bloodwater treatment and disease monitoring.

Though the permit does not name the procedures that the company should follow, the practice captured in Tavish’s footage may violate the 1975 non-legally binding Fish Processing Operations Liquid Effluent Guidelines, which restrict the discharge of bloodwater and require treatment of contaminated process water.

What About PRV?

Both fish farms and fish processing facilities must monitor fish and fish blood for disease. So why is it legal to discharge bloodwater that contains PRV, despite the fact that it has been linked to HSMI?

Although discarding diseased fish parts into the water is prohibited under the federal Health of Animals Act and its regulations, PRV and HSMI are not listed as reportable diseases under the Act. So it appears that under the current regulations, it is legal to discharge fish processing water that contains instances of this virus.

This is a bigger issue than just one processing plant: over 80% of farmed salmon in BC carry PRV. However, under current regulations, farmed fish are not tested for the virus. Scientist Alexandra Morton and Ecojustice are in court with the federal government arguing that the government has been acting illegally by issuing licences allowing the transfer of farmed salmon without testing for the virus. Transferring fish into fish habitat or fish farms that carry disease or disease agents is prohibited in the Fishery (General) Regulations under the Fisheries Act.

The "bloodwater" dump exposes weaknesses in the fish processing regulatory system @WCELaw https://t.co/bZoKCZFqGf

— DeSmog Canada (@DeSmogCanada) December 6, 2017

What Can be Done?

Wild salmon are under assault from a slew of forces: pollution, changing ocean conditions, warmer waters, and possibly open-net pen aquaculture itself, as the 3-year judicial inquiry led by Mr. Justice Cohen found back in 2012. Protecting wild salmon appears to have been lost in the complex division of responsibilities between the provincial and federal governments for oversight of fish farming operations.

Though this fish processing plant may have been treating the bloodwater to the standard of the current regulations, it is apparent that these laws are not strong enough to protect wild salmon from disease.

Members of the Musgamagw Dzawada'enuxw and ‘Namgis nations have been occupying fish farm sites in the Broughton Archipelago off northern Vancouver Island since August, and want the fish farms removed from their territory. Tavish’s video and First Nations’ occupation of fish farms highlight the environmental and public health risks associated with aquaculture on the Pacific coast, from both cultivation of fish and fish processing. We, like many others, are concerned about the lack of adequate regulation, oversight and enforcement at all stages of fish farming and processing.

Though the Province is responsible for inspecting some of these facilities, ultimately the protection of fish and fish habitat in marine environments falls to Fisheries and Oceans Canada (DFO). As a DFO workshop noted back in 2003, we need to address public concern about fish plant effluents, “perhaps the least examined source of marine environmental effects,” and find solutions that include changing the law.

Thankfully, following the release of this footage, the provincial and federal governments both announced investigations into the regulatory requirements for fish processing plants. A month ago the BC government launched a review of the Province’s animal testing laboratory which conducts diagnostic testing on farmed salmon. While the reviews from both governments are a welcome step, there is a larger problem of under-enforcement and regulatory omission, and a need for a hard look at the industry.

There are many plants and fish farms that require action from both levels of government, including clearer regulations and regular inspections and enforcement. The development of a federal Aquaculture Act is an opportunity to introduce stronger standards for this industry and better protections for wild and farmed fish.

We’ll be examining solutions to the issue of bloodwater discharges that may affect not only wild salmon health, but the health of other marine organisms. West Coast is willing to assist with the government-led review processes, and encourages both governments to look at the entire aquaculture industry closely, with the goal of ensuring our laws are up to the task of not only protecting but restoring our wild salmon.

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