Is another 'grand bargain' necessary to build another pipeline?

CBC

3 days ago

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At question period on Monday, two Conservative MPs beseeched the government to approve a pipeline that very afternoon.
"The prime minister is meeting with premiers in Saskatchewan today," said John Barlow, MP for the Alberta riding of Foothills. "Will he approve a pipeline at that meeting?"
Such a request raises other questions. Questions like, what pipeline? To where? To be built by whom? And under what conditions?
Whatever the stated desire for a new pipeline to transport oil out of Alberta, there is no actual proposal for a pipeline on the table to approve. But it also bears noting that the meeting in Saskatoon on Monday was not about pipelines, per se. The first ministers were meeting to discuss "nation-building" infrastructure projects. And there are many kinds of projects that might qualify as nation-building — infrastructure like ports and railways and public transit and electricity transmission lines.
But while no pipeline was approved on Monday, at least the notion of a pipeline was referenced approvingly in the official communique that the prime minister and premiers released at the conclusion of their discussions.
In writing, the first ministers agreed that, "Canada must work urgently to get Canadian natural resources and commodities to domestic and international markets, such as critical minerals and decarbonized Canadian oil and gas by pipelines, supported by the private sector, that provide access to diversified global markets, including Asia and Europe."
That only leaves all of the other aforementioned questions to answer.
So you want to build a pipeline
When asked by a reporter on Monday to explain the federal government's disposition toward a pipeline, Carney suggested there was general agreement between the western and territorial premiers for a "corridor" that would run from the Pacific northwest to Grays Bay in Nunavut. "Within that," he said, were "opportunities" for a pipeline that would carry "decarbonized" oil to new markets.
"If further developed, the federal government will look to advance that," he said.
Alberta Premier Danielle Smith went further to suggest there was a "grand bargain" to be made. Expanded pipeline capacity, she said, would be a boost to the Pathways Alliance, a consortium of major oil companies that have spent the past few years loudly insisting that they are very eager to move forward with a large carbon capture project (just as soon as they can get enough public funding to do so).
But if the notion of a "grand bargain" on oil and climate policy sounds familiar, it might be because that's what Justin Trudeau once proposed — and seemed even to have struck, at least for a little while.
Carney says there is 'real potential' for pipeline after first ministers' meeting
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Trudeau came to office insisting that pipelines could only be built by winning "social license." And in Trudeau's version of a grand bargain, serious climate policy — including a price on carbon — would be paired with a new pipeline to the West Coast. The Liberal government then went so far as to purchase the Trans Mountain pipeline and expansion project (TMX) to ensure a new pipeline was built.
On some levels Trudeau succeeded. While burning some of his own political capital, public support for TMX increased, the project was completed and national climate policy was meaningfully strengthened during his time as prime minister.
But Trudeau still left office with Smith and other Conservatives portraying him as an anti-oil zealot, a climate radical and a threat to national unity. Meanwhile, support for Trudeau's consumer carbon tax eroded so much that Carney was more or less compelled to abandon it.
The threats posed by Donald Trump may have now created new arguments for building a pipeline — including economic sovereignty and trade diversification. But simply removing Trudeau from the equation doesn't make a new pipeline a perfectly easy or obvious thing to build.
Conservatives have portrayed Trudeau — and Liberal legislation like the Impact Assessment Act, otherwise known as C-69 — as the primary obstacle to further pipeline construction in Canada. But the pre-Trudeau world was hardly enthusiastic about pipelines, whatever the previous Conservative government's stated support for the oil and gas industry.
When that Conservative government approved the Northern Gateway proposal in 2014, it attached 209 conditions. In the words of a government spokesman at the time, the answer from Stephen Harper's Conservatives wasn't "yes," it was " maybe." The provincial government in British Columbia had its own demands and a majority of British Columbians were opposed. (The federal approval was then overturned by the courts because of a lack of consultation with Indigenous groups.)
What would a real grand bargain look like?
As reporters continued to press about the possibility of a pipeline on Monday, Carney lamented that "sometimes the discussion is reduced far too much to one type of project," but he also associated himself with Smith's talk of a "grand bargain."
For now, no private investor is currently proposing to build the sort of pipeline that Smith envisions. Smith thinks one will come forward, which at least sets up a test of how much enthusiasm for a pipeline actually exists outside the political world.
WATCH | Alberta premier's take on first ministers' meeting:
Hearing PM talk about northwestern pipeline 'very encouraging': Alberta premier | Power & Politics
22 hours ago
Duration 8:37
Alberta Premier Danielle Smith tells Power & Politics she found Prime Minister Mark Carney's comments on a possible northwestern pipeline 'very encouraging' and a 'sea change' from where first ministers' discussions on energy projects were six months ago.
Assuming a proponent is found, the notion of a "grand bargain" might at least hold out hope for real progress on climate policy and reducing Canada's greenhouse gas emissions. But in a letter to Carney in May, Smith called on the federal government to repeal a cap on oil and gas emissions, eliminate the federal system for pricing industrial emissions and withdraw clean electricity regulations. She also opposes the federal government's zero-emission vehicle sales targets and ban on single-use plastics.
At the very least, a massive retreat on federal climate policy is unlikely to increase public support for a new pipeline.
The notion of "decarbonized oil" is a contradiction in terms. But it could be possible, at some cost, to significantly reduce the emissions associated with the production of oil. And it might even behoove the federal government to help (as it already has, including the Trudeau government's commitment of billions toward a new investment tax credit for carbon capture, utilization and storage).
But as Andrew Leach, an energy and environmental economist at the University of Alberta, noted in his book Between Doom and Denial, the first promise of government and industry working together in Alberta to pursue carbon capture technology was made in 1994. That year, in situ oil sands development produced 4.6 megatonnes of greenhouse gas emissions. In 2023, annual emissions from in situ development were 47.1 megatonnes.
Total national emissions from the oil and gas industry accounted for 30 per cent of Canada's total in 2023 — up from 22 per cent in 1994.
If an ambitious prime minister was looking for nation-building projects to rally the country around, decarbonizing the Canadian economy would certainly qualify. But if another grand bargain on climate and oil policy is to be part of that, Carney might hope to negotiate something much more enduring than the last one.