You know you’ve got the attention of the fossil fuel industry when the Financial Post’s Claudia Cattaneo pens a dismissive column about your efforts.

On Tuesday, Cattaneo — recently dubbed “everyone’s favorite oil and gas shill” by American Energy News — bestowed the honour on a new report about TransCanada’s proposed Energy East pipeline, published by the Natural Resources Defense Council and 13 other environmental organizations including 350.org, Greenpeace and the Sierra Club.

“Canadian [sic] are also right to wonder why a deep-pocketed U.S. group with an army of lawyers is meddling in an all-Canadian pipeline project,” she opined in her 820-word column, shortly after insinuating the Natural Resources Defense Council “needed to conquer and make money off a new dragon” following the presidential veto of the Keystone XL pipeline in 2015.

The idea that Energy East only concerns Canadians is a curious perspective. But it’s certainly not a unique one.

The Energy East project, requiring 1,500 kilometers of new pipeline and the conversion of 3,000 kilometers of existing natural gas infrastructure in order to transport up to 1.1 million barrels of dilbit per day, has been heralded by many as a quintessentially Canadian project, comparable to the Canadian Pacific Railway in scope and significance. Even Rick Mercer argued for its construction.

Unlike the Kinder Morgan’s proposed Trans-Mountain Expansion, however, there’s been a fair bit of obfuscation about what the desired market is for the transported product.

That’s a key problem for a big picture defence of the project.

Some have contended that Energy East will transport products for consumption in Eastern Canada, helping to foster energy security by breaking a reliance on imports from the Middle East. Such a reality would indeed seem like an “all-Canadian pipeline project” and justify Cattaneo’s confusion about why U.S. organizations are getting involved in the battle.

But as the Natural Resources Defense Council’s new 24-page report (ominously titled “Tar Sands in the Atlantic Ocean“) sketches out, the U.S. has many, many reasons for concern: threats to marine mammals, vulnerable ecosystems and progress on climate change, for starters.

“From the U.S. perspective, [Energy East] is a huge project that right now feels as if it’s being snuck in,” says Josh Axelrod, a Washington, D.C.- based policy analyst at the Natural Resources Defense Council and co-author of the report in an interview.

”We’re worried if it remains on the down-low that our regulators will basically find out about dilbit tankers the day something goes wrong and will not be prepared for it. We would like to, at the very least, have them prepared, if not express their disapproval of the idea.”

Sinking Tarballs, Whale Collisions: Potential Impacts of #EnergyEast on the U.S. Coast Detailed in New Report https://t.co/wCTtKXg8bG

— DeSmog Canada (@DeSmogCanada) July 28, 2016

Tankers Could Move 328 Million Barrels of Oil Per Year in U.S. Water

Axelrod’s quick to point out there’s “no compelling case” for the suggestion that Energy East is planned to transport oil for Canadians to use.

In TransCanada’s May 2016 consolidated application to Canada’s National Energy Board, the company estimated it would ship up to 281 tankers every year.

Axelrod says the proposed tanker configuration amounts to 900,000 barrels a day.

By the report’s estimates, tankers could move up to 328 million barrels of oil to refineries in New Jersey, Delaware, Louisiana and Texas: the U.S. Gulf Coast sports 25 refineries, 17 of which have a history of processing heavy oilsands crude.

Meanwhile, New Brunswick’s Irving refinery doesn’t have the capacity or even necessarily the desire to process dilbit (Axelrod adds the reversal of Enbridge’s Line 9B in September makes Energy East less useful to the Montreal refineries).

This matters a great deal. If TransCanada was intending to transport and sell dilbit to Canadian refineries for Canadian usage, it would indeed be odd for a report to call for a moratorium on tankers; Cattaneo strangely suggested in her column that the proposed ban is “a bit surprising given that oilsands tankers would be leaving from a Canadian port, making it harder to block by the U.S. administration.”

For at this point, the facts seem clear: tankers will be leaving a Canadian port and travelling through American waters with potentially catastrophic impacts in the case of a spill or accident.

Dilbit Spills Notoriously Difficult to Clean Up

The report points to two major incidents that have occurred in the past few years — the 2010 Enbridge spill in Michigan’s Kalamazoo River, and the 2013 ExxonMobil spill in Arkansas — as examples of the difficulties of containing and cleaning up a dilbit spill.

A 2016 report by the National Academy of Sciences emphasized that dilbit sinks in water and doesn’t biodegrade easily, making a spill far more disastrous than its conventional counterpart.

And that’s not even to speak of issues like ship strikes (when ships hit whales or other marine mammals), noise pollution or the accidental transportation of invasive species.

These are all issues that one would hope regulators would consider in their review of projects. But Axelrod says the National Energy Board (NEB) has “really flubbed this,” using a process that fails to consider cumulative impacts or acknowledge difficulties with cleaning up other dilbit spills.

“The NEB likes to make it seem like their processes are straightforward but they’ve really made it into a disaster,” he says. “There’s pro forma discussion of some of the impacts but a very limited scope.”

Energy East Exempted From Environmental Assessment Overhaul

There is still lots of time to correct such problems: the NEB’s consultation process will be continuing until 2018, while the very earliest Energy East could start transporting dilbit would be 2021.

But companies including TransCanada and Kinder Morgan have already been told by the federal government that “no project proponent will be asked to return to the starting line,” with the exception of the evaluation of their upstream greenhouse gas emissions.

“I hope it’s being used as a way to look at a project’s impacts on provincial and national climate goals and international commitments, and if that’s the case it could be a useful tool,” Axelrod says. “But it really misses a lot of the project’s climate impacts.”

And given the NEB will almost certainly approve the project — since 2012, the body has had to conduct environmental assessments and consultations, tasks that are far outside of its original mandate — that’s a problem the federal cabinet will have to confront.

Kinder Morgan’s Trans-Mountain pipeline expansion will be decided upon before Energy East. But that’s a far more complicated project due to dozens of unresolved First Nations land claims. The Alberta NDP also appears to have put more long-term hope in Energy East due to such factors.

But if Canada does end up approving Energy East — and, of course, depending on who’s elected as president of the United States — it may end up seeing a similar conclusion to what happened with the Keystone XL pipeline: pushed for by Canada and rejected by America due to potential impacts on environments and wildlife.

Maybe, by then, it will have all started to make sense for Cattaneo and her pals.

Image: NRDC

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This article originally appeared on the Dogwood Initiative website.

“Oil to tidewater.”

It’s an industry mantra happily adopted by politicians — and even some environmentalists. But ask yourself this: what happens when you pump more product into an oversupplied market? Answer: the price goes down.

Who benefits from cheaper crude oil? First, the customers — like China’s state-run heavy oil refineries. And later, competitors with lower overhead, like Saudi Arabia.

You’ve probably heard these twin arguments before:

1. Canada’s oil would fetch ‘global prices,’ if only it could access ‘tidewater.’
2. If we approve pipelines to the coast, the ensuing bonanza will make us all rich.

Let’s address each of these political talking points in turn.

What’s the ‘Global Price?’

The first thing to remember is that pipelines don’t magically add value to crude oil. What they do is reduce transportation costs from point A to point B, allowing the seller to pocket a few extra dollars per barrel.

The real problem for Canadian oilsands producers is that prices all over the world are low. If oil is selling for $45 and it costs you $46 to dig up a barrel of oil, no pipeline can fix that.

Worse, we’re talking about heavy oilsands bitumen, which is worth even less than the global “price of oil” you see quoted in the newspaper.

That’s because oilsands crude is heavy, sticky and high in sulfur, which means you need more lube to get it through pipelines and special refineries to turn it into gasoline.

Most refineries in Canada are not set up to chew through heavy oilsands bitumen. It would be like trying to fuel up your grocery getter with creosote: bad idea. So we export this low-value crude, mostly to the United States, while importing lighter crude and fuel products.

For a real comparison, we have to look at another sea-traded heavy crude. Mexico has a blend comparable to oilsands bitumen called “Maya.” The Alberta finance department tracks the average price spread between the two in a graph they update every month.

Canada is the blue line. We’re chasing the green line:

What would happen if oilsands producers hit their expansion targets, and put all that heavy crude on tankers?

The current oil price slump, which you can see started in summer 2014, was triggered by an oversupply of global markets. Oil producers were pumping out about two millionbarrels per day more than people needed.

Hang on. Enbridge Northern Gateway is designed to carry 525,000 barrels per day. Kinder Morgan’s Trans Mountain expansion would carry 890,000. And Energy East would carry a whopping 1.1 million barrels per day.

“We’re in favour of all pipelines, to be honest,” Alberta energy minister Marg McCuaig-Boyd told the Edmonton Journal in April. “We see the need for more than one pipeline, and what helps one will help another.”

If the Alberta government could wave its magic pipeline wand and build all three of these projects, 2.5 million barrels of heavy crude would flood overseas refineries. With demand growth slowing, this would put downward pressure on prices.

Who Would Benefit?

Subtract the corporate welfare our governments give to oil companies, the billions in damage caused by climate change and the public cost of oil spills. Imagine for a minute the oil companies get their way and sell a whole bunch of crude in Asia at rock-bottom prices. Who benefits?

Not British Columbians, that’s for sure. We get no royalties and not even a guarantee of temporary construction jobs.

The federal government might at least break even, by collecting more income tax from oil workers.

The Alberta government has given itself no other choice. With no sales tax and an electorate hostile to tax in general, Albertan politicians depend on whatever oil royalties they can get to pay for social services.

The real winners would be the state-owned refineries in China, which would get a reliable supply of cheap feedstock. That’s why the government in Beijing has been pushing for these pipelines for 10 long years. And sourcing that crude from Canada would come with a strategic geopolitical bonus.

Dire Straits

With 21.1 million passenger vehicles sold last year and the world’s largest active military, China goes through a lot of oil: 11 million barrels a day.

The majority of that is imported through two geographic choke points: the Strait of Hormuz and the Strait of Malacca. That makes China’s rulers nervous, which is why they’re expanding overland oil and gas pipelines — and looking to Canada as a future supplier.

U.S. Department of Defense

We could help ease China’s reliance on those contested shipping lanes, but it appears increasingly doubtful prices will climb again to the levels that had oil producers rubbing their hands at the prospect of West Coast exports.

In 2012, the pro-pipeline Fraser Institute predicted the Enbridge Northern Gateway pipeline would allow oil producers to make an extra $2.50 more per barrel  than if they sold in the U.S. Yes, that’s the pot of gold at the end of the “tidewater” rainbow: a toonie and two quarters per barrel.

Since then the pace of growth in China has slowed while global oil supply has expanded — thanks in part to fracking technology. More worrisome, from the perspective of Canadian oil companies, is the strategic shift by Saudi Arabia.

The End of the Oil Age

“The Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil.” That prophecy came from the Saudi oil minister, Sheikh Zaki Yamani, in 1973.

In February 2016, Yamani’s successor took the idea a step further. Ali al-Naimi told a crowd of oil executives in Texas why, despite low prices, his country refused to turn off the taps: “We’re going to let everybody compete.” Addressing investors in high-cost deposits like the oilsands, al-Naimi said “inefficient, uneconomic producers will have to get out.”

The Saudi regime slaughters its own citizens and harbours religious extremists. It is, by all metrics, repressive, brutal and corrupt. But when it comes to the realpolitik of oil markets, the Saudis have an advantage. They can pump it out of the ground cheaper than anyone else.

With climate treaties coming and electric transport set to cut into oil demand, the Kingdom is not counting on the return of $100 prices. Instead, it’s planning to crank up production even further, to wring every last drop out of the sand before the rest gets locked underground forever.

What’s becoming clear is that Canada is pursuing the same strategy, despite having a product that costs more to dig up and sells for less.

Under relentless pressure from oil lobbyists, politicians of all ideological stripes have accepted the industry’s logic: just pump more crude and pray for higher prices.

Let’s get real. These pipelines are not nation-building projects. They are catheters designed to drain a giant pool of carbon as cheaply as possible, so oilsands companies can keep the lights on for a few more years.

The irony is that flooding the market with cheap crude would make it less likely for prices to recover. That’s fine for the Saudis, who are happy to compete in a low-price environment. But it’s a poor long-term strategy for Canadians.

Approving Enbridge or Kinder Morgan’s oil tanker terminals will lay the path for a furious final expansion of the oilsands, before creditors stop lending money and the heavy-oil producers start going bankrupt.

We can’t change the end-times mindset of the global oil industry. But we can give our politicians a reality check.

For more on a provincial vote on oil tankers visit LetBCvote.ca.

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.