On Wednesday, Finance Minister Bill Morneau broke the federal government’s long silence about its plans for financially backing Kinder Morgan’s Trans Mountain Pipeline.

Details were scarce. But Morneau confirmed the government is indeed ready to compensate any company — whether Kinder Morgan or any other company that takes on the project — for any financial losses resulting from delays.

It’s unclear how much money the government would commit, but in late 2017, the company stated that it loses about $75 million in gross earnings for every month of delay. That could — um — add up.

The decision by the government to financially back an oilsands project didn’t come from nowhere. In fact, there’s an incredibly lengthy history of public investments and supports in the sector — which continues to this day.

“The idea there would be public investment in the industry as a whole is nothing new and nothing surprising,” said Chris Turner, journalist and author of The Patch: The People, Pipelines, and Politics of the Oil Sands, in an interview with The Narwhal. “You’ve got this 100-year history of government investment and partnership to get it to commercial viability. It’s a bit strange in the current market environment but it’s not something wildly new to the industry.”

So in honour of Morneau’s big announcement, here are some of the “greatest hits” of such investments over the years.

Opening up the sands

Almost all of the early major players in the oilsands were government employees.

For instance, the first full mapping of the region’s potential for oil development was conducted in 1913 by an engineer from the federal Department of Mines.

Hot water separation, the process vital to the commercializing bitumen, was perfected by the now-legendary Karl Clark when he worked as a research scientist for the provincial government.

In 1950, an engineer hired by the Alberta government published a landmark report about economic viability, which Turner described in his book as bringing “an unprecedented sense of purpose to the oil sands project.”

Following that, the province hosted a sizeable conference in Edmonton that attracted oil companies from around the world to hear about the region’s prospects, after which Clark gave guided tours of the hot water processing facility in Bitumount. That technology, as Turner put it, “remains at the core of every oil sands mining enterprise.”

“I don’t think the oilsands would have the success that it has had today in terms of production and investment if there hadn’t been that initial government investment,” said Gillian Steward, journalist and author of the 2017 Parkland Institute report, Betting on Bitumen: Alberta’s Energy Policies from Lougheed to Klein.

Early companies

But it wasn’t just about the research: the public also played a significant direct investment role in launching the oilsands. In fact, Turner described the first two mines as “all but Crown corporations in their early days.”

First was the Great Canadian Oil Sands — which later became the mighty Suncor — and its sale of $150 million worth of equity to 100,000 Albertans to open its project in the late 1960s. Turner said the Alberta government, then led by premier Ernest Manning, “ushered it in every step of the way.” In 1981, the Government of Ontario bought a 25 per cent stake in Suncor, which it held until 1993.

Government support was even more pronounced with Syncrude. As the consortium was gearing up to build its project, Atlantic Richfield (ARCO) — which had a 30 per cent stake — pulled out. As Steward put it in her report, “other private corporations involved in the project used the withdrawal to force major concessions from the Alberta, Ontario, and federal governments.”

“It was in danger of the whole thing falling apart,” Steward told The Narwhal. “It was at that point that the federal government, Alberta government and Ontario government actually stepped in and bought a significant equity in it, which allowed it to keep going.”

The federal government bought 15 per cent, Alberta bought 10 per cent and Ontario bought five per cent. The Alberta Energy Company, founded in 1975 by the Lougheed government, also held a 10 per cent share for decades.

Ongoing research

The Alberta Energy Company (AEC) was a key creation by the province to take a more active role in energy, forestry and coal, with half of its shares owned by residents.

Another piece of the puzzle was the Alberta Oil Sands Technology and Research Authority, also known as AOSTRA, which Turner described as being “set up by the Lougheed government with the single task of making in-situ bitumen deposits commercially profitable.”

It’s no exaggeration: without the public research body that was set up in 1974, there’s a high probability that the groundbreaking in-situ method of steam-assisted gravity drainage (SAGD) wouldn’t have happened — or at least not for decades. The process now represents almost all future oilsands growth beyond 2025.

“I don’t think that would have happened without government money,” Steward said.

The 1995 task force

In mid-1995, the National Task Force on Oil Sands Strategies — created by industry lobby group, the Alberta Chamber of Resources — released a 62-page report calling for an aggressive overhaul of tax and royalty regimes for the oilsands.

The organization that created the task force was also headed by the CEO of Syncrude. In total, 45 of the 57 committee chairs and members were from industry, with the other dozen from the federal and provincial government.

Both levels of government almost immediately accepted the task force’s recommendations: Alberta established a generic royalty regime that only charged one per cent of revenues until projects had recouped capital costs, while the federal government brought in accelerated capital cost allowances — which let companies write off more costs, earlier.

Those highly generous regimes have stubbornly remained to this day, even through multiple royalty reviews.

“Once things got rolling after 1995 or 1996, it was almost exclusively private investment from then on,” Turner said. “But it was all built on old public investment.”

To three million barrels and beyond

But Laurie Adkin, political science professor at the University of Alberta, isn’t convinced that it’s been all private investments since.

In fact, she said in an interview with The Narwhal that a vast majority of the tech innovation sector of the province has been oriented towards supporting fossil fuel development.

“The infrastructure of research innovation has always been oriented towards massive subsidies for fossil fuel related technologies,” she said. “You can see that in every kind of area.”

Lougheed’s AOSTRA, which developed steam-assisted gravity drainage, never died: it transformed into the Alberta Energy Research Institute and later Alberta Innovates.

That’s been accompanied by sizeable government grants and collaborations with universities. There are countless public agencies providing research and development for industry: CanmetENERGY, the University of Alberta’s Institute for Oil Sands Innovation, Emissions Reductions Alberta (the latter of which is funded by carbon levy revenue which Adkin argued should be directed towards actual low-carbon energy sources).

The Alberta government has also announced a wide range of oilsands investments in recent months: $440 million in December 2017 to help producers cut emissions, $1 billion for partial oil upgrading facilities in February 2018, $70 million for emissions-reducing techs earlier this month.

As a result, Adkin isn’t at all shocked at the federal government’s willingness to compensate for losses in Trans Mountain — and thinks it might only the beginning, setting up the possibility of province eventually taking increasing equity shares in the sector.

“In the future, I won’t be surprised if it goes to the province buying equity in CNRL and Cenovus and other companies to say the province is invested in these,” she said. “And it’s now even more in the interest of Albertans that they don’t fail.”

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Documents released on Monday reveal that B.C.’s climate plan under the previous Liberal government was drafted by the oil and gas industry in a Calgary boardroom, just as the province’s new NDP government moves to ban corporate and union donations to B.C. political parties.

The documents speak to long-standing concerns over the influence of political donations in B.C.’s political process. B.C. has long been considered the ‘wild west’ of political cash for placing no limits on corporate, union or foreign donations.

“I think this is deeply corrosive to our democracy and it encourages cynicism about politics,” Max Cameron, political science professor and director of the Study of Democratic Institutions at the University of British Columbia, told DeSmog Canada.

The documents, released to Shannon Daub of the Canadian Centre for Policy Alternatives as part of her research with the Corporate Mapping Project, reveal that while the B.C. government under former premier Christy Clark hired a celebrated Climate Leadership Team and conducted public consultations, a parallel industry consultation process occurred behind closed doors in a boardroom of the Canadian Association of Petroleum Producers.

The BC Liberals have raked in cash from the fossil fuel industry, including more than $3.7 million from just the top 10 industry donors between 2008 and 2015.

Cameron said the documents, which include slides outlining industry working groups tasked with addressing carbon pricing and methane emissions, provide a much-needed glimpse into what exactly industry is paying for when making large donations to political parties.

“Reading these documents gives us some real insight into how it is that these kinds of donations can buy not just access to government but access to actually writing policy,” he said.

Clark’s Secret Consultations with Oil and Gas Donors Revealed As BC Introduces Big Money Ban #bcpoli @CCPA_BC https://t.co/nFjm9W8Vqx

— DeSmog Canada (@DeSmogCanada) September 18, 2017

Climate Leadership Team Unaware of Parallel Industry Consultations

B.C. handpicked a blue-ribbon team of 17 academic, business, environmental and First Nations stakeholders to form the Climate Leadership Team. That team made 32 official recommendations to the B.C. government, none of which were implemented in the province’s eventual Climate Action Plan.

Merran Smith, executive director of Clean Energy Canada, was a member of the team and said the fact that not a single recommendation was adopted “really says it all.”

Christy Clark’s government “allowed the oil and gas sector to write the climate plan for B.C. that is mostly status quo and has very little impact on B.C.’s growing climate pollution,” Smith told DeSmog Canada.

She added once the team made its recommendations to the government, their involvement in the crafting of the Climate Action Plan tapered off quickly.

“We had very few meetings with the B.C. government once the recommendations were created. It was clear that they actually had very little interest in doing anything with recommendations.”

Meanwhile, Christy Clark pointed to the recommendations at the UN Climate Summit in Paris as evidence of B.C.’s climate leadership.

Tzeporah Berman, a prominent environmental advocate in B.C. and member of the Climate Leadership Team said she had no idea B.C. was conducting parallel consultations with industry.

“I was shocked when I saw these documents,” Berman told DeSmog Canada.

“Consultation should be a transparent process and should be done with multiple stakeholders. These were secret meetings in Calgary where the oil and gas industry was rewriting B.C. policy. That's not consultation, it's corruption.”

Berman said the documents reveal an “unacceptable level of access and influence with the Liberal government.”

“They also help those of us from the leadership team understand how the climate plan that the Liberals put together really had no similarity to what the Liberals’ own climate team recommended,” she said.

The team worked hard for months to deliver a plan within a short timeframe and offered to meet with stakeholders to “problem solve any concerns” if that would help B.C. “ensure implementation” of the recommendations, Berman said.

But that offer was never taken up.

“From our end it was a bizarre process,” Berman said.

Fossil Fuel Companies Regularly ‘Craft’ Climate Plans

Laurie Adkin, professor of political science at the University of Alberta, said when it comes to government consultations with corporations, “secrecy is routine” and “transparency is the exception.”

“Even when governments reveal that they have met with representatives of private corporations, reporting on these meetings typically does not reveal which corporate representatives were in the room, or what their positions were,” Adkin told DeSmog Canada.

Adkin, who is a member of the Corporate Mapping Project, specializes in documenting corporate influence in politics and on university campuses.

Government consultation with industry is the status quo, Adkin said, while public consultation is meant to merely survey public opinion and “give the appearance that government has created meaningful opportunities for citizen input into policy decisions.”

“I do not believe that any climate change plan has been written, to date, in which the major fossil fuel corporations have not ‘directly crafted’ the plan,” Adkin said.

Adkin and Cameron agree the documents are reflective of “institutional corruption.”

“Corruption isn’t just quid pro quo of privately benefitting from your public office, it’s also a corruption of the institution, when the public purpose of the institution is undermined by private actors in a way that diminishes our trust in those institutions,” Cameron said.

“The goal of public policy is to serve the public’s interest, not to serve particular private interests.”

Leadership Team Hopeful Under New NDP Government

Berman said the oil and gas industry has too much political influence in Canada, but said she is hopeful the new B.C. government will “design policy to benefit the people and not just polluters.”

“I was very glad to see the carbon tax increase in the last budget,” Berman said.

“I think the next step is removing all the subsidies that the Liberal government handed out to the gas industry. We shouldn't be spending taxpayers dollars to help the fossil fuel industry expand in the climate era”

Berman said she also looks forward to the new government moving forward on the zero emissions vehicles targets and strengthening the clean fuel standard.

Smith said she is pleased the Climate Leadership Team had the opportunity to craft the recommendations when it did.

“The silver lining is that we still have a good, solid set of climate action recommendations sitting there, and we now have a Premier and government who is interested in taking climate action and building a clean growth economy for the twenty-first century.”

Image: Former premier Christy Clark at a Woodfibre LNG announcement. Photo: Province of B.C. via Flickr

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.