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1. FP Comment

Joe Oliver: Trudeau paved the way for Biden’s rejection of Keystone

Under Trudeau’s leadership, the government is deliberately squandering a stupendous legacy — the third largest proven oil reserves in the world

Author of the article:

Special to Financial Post

Publishing date:

Jan 27, 2021  •  8 hours ago  •  4 minute read

What Joe Biden, right, did to our country was hardly different from what Justin Trudeau, left, had inflicted on us before, argues Joe Oliver. PHOTO BY REUTERS/BLAIR GABLE AND NICHOLAS KAMM/AFP VIA GETTY IMAGES

 

 

Prime Minister Justin Trudeau got a taste of his own medicine when on Inauguration Day, President Joe Biden dealt a body blow to the Canadian energy industry by cancelling the partly-built $8-billion Keystone XL (KXL) pipeline. What Biden did to our country was hardly different from what Trudeau had inflicted on us before. And for the same fatuous and hypocritical reasons.

When I served as minister of natural resources I called the proposed pipeline, which would bring Canadian crude oil to U.S. Gulf Coast refiners, “the most studied energy project in the history of the world.” Biden, like president Barack Obama before him, ignored the State Department’s Environmental Impact Statement (EIS) on KXL, which concluded approval or denial was “unlikely to significantly impact the rate of extraction in the oilsands.” Moreover, Keystone would be less risky and produce fewer emissions than rail. According to the EIS, the line could have no adverse effect on the global climate. Just as tellingly, the U.S. Defense Department said it would not stop buying oilsands fuel because there would be no environmental benefit from doing so.

 

 

 

 

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Biden also ignored the negative impact on industry revenue, energy security and thousands of union jobs. His rejection was unvarnished political symbolism, catering to militant ENGOs, jet-setting Hollywood dilettantes and the far-left Democratic “Squad,” including Alexandria Ocasio-Cortez, whose support helped him win his party’s nomination. They want to transition fossil fuel to extinction, to preclude a dreaded sixth mass extinction. They could not care less that the oilsands are responsible for a minuscule one-thousandth of global greenhouse gas emissions. Or that emissions per barrel from the oilsands have fallen 36 per cent since 2000. California crude produces more GHG per barrel.

Why would the U.S. president give a thought to Canadian jobs when the Liberal government’s own policies have devastated employment in our energy sector and supply chains across the country?

 

Trudeau’s biggest problem in trying to sell the U.S. on KXL — hypocrisy — is largely of his own making. He asked Biden to approve a pipeline from the Alberta oilsands to the U.S. even though he put the kibosh on the Northern Gateway and Energy East pipelines, which would have transported petroleum across Canada from the same reserves (and would have reduced net global emissions by substituting oil and gas for coal in Asia). Why would the U.S. president give a thought to Canadian jobs when the Liberal government’s own policies have devastated employment in our energy sector and supply chains across the country?

If an additional pipeline is socially unacceptable to Quebecers, as Premier Franois Legault says, why should a Canadian oil pipeline be acceptable to Americans? “Rules for thee but not for me” don’t migrate well across international borders. On the other hand, last year Canada accounted for 56 per cent of U.S. crude oil imports or 3.8 million barrels a day, so it is a bit rich for the president to suddenly go all judgmental about the oilsands.

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Hypocrisy, ideological fervour and partisan politics make for a noxious brew that can justify any policy, no matter how costly and counterproductive. Under Trudeau’s leadership, the government is deliberately squandering a stupendous legacy — the third largest proven oil reserves in the world: 168 billion barrels. Uniquely among energy-rich countries, Canada is prepared to deprive its citizens of an enormous economic opportunity in fully developing, transporting and selling our fossil fuel to an energy-hungry world. If renewables one day supplant oil and gas, that wealth will evaporate.

This immense financial sacrifice supposedly is justified by our moral obligation to confront a looming global-warming apocalypse that, even if “the science” did clearly predict it, Canada has zero ability to prevent from happening. Meanwhile, oil-exporting competitors with appalling human rights and environmental records are delighted by our self-destructive inanity. The Greens, NDP, progressive media and assorted socialist fellow travellers shed nary a tear for the lost revenue even as they demand yet more costly social programs.

Carrying more than a trillion dollars in federal debt, and with our economy staggering from pandemic-induced lockdowns, we can ill afford the luxury of stranded resources and foregone revenue. Canada is becoming a less prosperous country, struggling to afford the social services both this and future generations of Canadians want and need.

Now that Keystone is dead, what will Justin Trudeau do, assuming he is not secretly relieved? The Trans Mountain expansion to Vancouver and Enbridge’s Line 3 replacement and expansion to the U.S. midwest are both under construction. But much more is needed. Ideally, Trudeau would drop his hostility to the energy industry and get busy encouraging pipeline construction to access tidewater and overseas markets. Unfortunately, every government talking point suggests that is as likely as the sixth extinction.

Joe Oliver was minister of natural resources and minister of finance 2011-15.