The Western Standard has done yeoman work reporting on Quebec’s changing view towards pipeline construction in that province, see below. If true, this will mean the end of talk about Alberta independence, right? Right? Isn’t that what we all want at the end of the day, a new pipeline? Not so fast..Critical report challenges Quebec’s pipeline shift amid changing public opinion and US trade tensions.In the first place, pre-election public opinion polls in Quebec demonstrated support for pipeline construction at over fifty percent. The recent excitement about the possibility of pipeline construction in la belle province predates the electoral elevation of the droopy elbows of Captain Canada. More importantly however, there is a huge gap between public support and economic reality.A little of the back story. In 1977, the Berger Commission on the Mackenzie Valley pipeline ruled against pipeline construction and the thousands of jobs that would have resulted. Based on evidence at a more recent pipeline hearing in Fort Simpson, support for that pipeline remains high still, yet it remains unbuilt. As antiquity’s wisest ruler once said,“For everything there is a season, a time for every activity under heaven.”That applies to pipeline construction as well and, if you miss the season, you have likely missed the opportunity. .The Energy East pipeline was predicated on the conversion of almost three thousand kilometers of natural gas pipeline to an oil pipeline. The project made sense because a large section of it was already built. Since 2017, when Energy East was shelved, natural gas production from northeast BC and northwest Alberta has expanded and the pipelines, once empty, are now close to full. The economic foundation of the Energy East project has disappeared. This does not mean that the economics of an oil pipeline through Quebec are no longer positive. I have no idea what the profitability of such a project might be, but I am guessing it will not be attractive. Quebec may be open to pipelines, but someone needs the incentive to build them. I don’t see any incentive. This raises the question of yet more government involvement in energy infrastructure. In 2015, the Trans Mountain Expansion project was being built by Kinder Morgan, which estimated a final constructed cost of under $5 billion. In 2018 the Trudeau government bought the project for $4.7 billion and spent more than $30 billion to complete it. Heavy rains and COVID-19 interruptions certainly added unexpected costs to the project but governments do a bad job of project management. Remember too, that a former premier of Alberta donated over a billion dollars to TC Energy to build the Keystone XL pipeline. TC Energy has sold its oil pipeline assets, and I haven’t been able to determine whether Alberta sold its TC Energy shares to recover its investment. I conclude that Albertans are left holding a very expensive and empty bag. Canadian governments at all levels are terrible proponents for infrastructure development. Enough already. .Premier Danielle Smith wants the federal and other provincial governments to allow private sector pipeline construction to bring Alberta crude oil to tidewater. She is pushing for a northeast BC route that requires a modification of the tanker ban imposed by the Trudeau government. The federal and Quebec governments seem to want to push a cross-Canada route. We need to ignore the breathless headlines about Quebeckers' increasing acceptance of pipeline construction. For the reasons given above, I doubt that the economics of the former Energy East project can be replicated in the absence of an existing, empty, convertible pipeline. Perhaps the headlines are strategic rather than meaningful. .There are four requirements of the federal government laid down by Premier Smith. Breathless reports of a potential pipeline through Quebec meet none of those requirements. These headlines are meant to deflect discussions of Alberta independence, while providing nothing that remotely meets our premier’s demands. The ball we are being asked to keep our eyes on is a bauble that may be shiny, but is also useless.The economic case for independence is overwhelmingly positive but the decision is not easy for every individual to make. Getting to a positive referendum result will require more “soak time.” Until then we mustn’t get distracted by shiny objects.
