Does anyone remember last August 30th? I sure do. That was the day that the Federal Court of Appeal (FCA) came down with their judgement that the Federal Government had failed in its duty to consult with Indigenous communities on the Trans Mountain Expansion project and that the NEB and the Cabinet had inappropriately not considered the environmental impact of shipping related to the project nor its impact on the Southern Resident Killer whales.
Remember now? Remember how mad everyone was that that had happened? That we had somehow checked every box there was to check except the one the government was responsible for and the one we thought we didn’t have to?
Well guess what. We are still playing baby. That’s right. Once again the spectre of appeal against the TMX has reared its ugly head. Well not ugly. I don’t deny anyone their right to appeal this approval, it just feels a bit, umm, well, like we’ve kinda been down this road before.
This time it’s a ruling from the FCA that 6 out of 12 applications to appeal the most recent approval of the TransMountain Expansion can proceed.
It’s like living in Groundhog Day the Movie. The pipeline that just wants to be left alone is still the lightning rod, a symbol of an oil industry run amok, climate disaster, Liberal/Trudeau antipathy for Alberta, a foreign-funded attack on our economic sovereignty, an election issue, a flashpo8int in the battle against colonialism. It’s all that and more. And I’m stuck writing about it week after week. It’s boring. And it’s still just a pipeline. It goes from point A to point B. It doesn’t increase oil production globally. It allows people who want our oil to buy our oil. And it allows Alberta to see it sold at a higher price.
As I said before, I don’t deny anyone the right to a fair appeal. What irks me is that these are appeals of appeals. Sub appeals. Furtive appeals. Secret appeals. Waste of everyone’s time appeals. They are just not very appealing.
These appeals that are not being made because these First Nations groups want to be consulted more. It is a power move and part of the ongoing strategy to stop the project at all costs and one of the best ways to stop a major project is through the near constant and exhausting delay and challenge via lawsuit after lawsuit. The theory is that the proponent will just get tired and walk away. Kind of like Kinder Morgan did.
Except I think it’s different this time. It’s not Kinder Morgan they are fighting against anymore. It’s the Federal government with a whole year under its belt as owner. And I think they like owning a pipeline. And I think they actually want to see it built (if only to poke Jason Kenney in the eye). So these groups can challenge all they want but they are challenging the wrong entity. The Federal government is monolith – it doesn’t answer to the same shareholder and profit-motive as a private company. It doesn’t cut and run. It just is. And does. It can wait.
Even if it loses the appeal, it will just keep consulting until the protestors run out of steam.
I feel like the points above have been lost in the hysterical reaction, especially on social media. I saw one tweet that said this was “devastating”. Really? Far from it. It’s annoying maybe but far from devastating.
This is not the same as the decision handed down last year which was almost existential and shut the project down. Not even close. The implications here are different. Even if the appeals win, it is highly unlikely the remedies will be the same.
So before everyone jumps off a cliff – let’s collectively take a deep breath.
This isn’t Trudeau’s fault or part of a secret plot to never build the expansion. People are working today, as you read this. It’s not activist Liberal appointed judges. It’s not an attack on Alberta. That the Federal Attorney General declined to challenge the applications isn’t some sinister signal that the Federal Government secretly wants the pipeline to not be built – I’m guessing the Feds have some smart lawyers who determined that the 6 appeals were likely to allowed and simply declined to be part of the show by fighting a battle they knew they would lose, likely confident in their case in the next round.
And as a reminder, everyone knew this was coming. They said they were going to do it the day Cabinet re-approved the project. It’s part of the annoying strategy I outlined above and the environmental groups and their legal teams are pretty good at it.
So, this isn’t some kind of horrible loss. Missing in all the reaction is the fact that 6 out of 12 applications were denied. And these ones were related to environmental matters, “conflict of interest” and a charter of rights challenge. Nope, nope and nope. We should happy these were denied, because they could have gotten ugly.
Instead, the 6 that received the green light to continue were all about the consultation the Federal Government did. Not the reconsult, the earlier consult that the Fed reconsulted on. Look everyone has a beef, especially if they feel their concerns were ignored. I suspect that the Federal government got it right this time. Because to get it wrong would be such a disaster. So let the appeals proceed. It’s fair and it’s how the legal system works. Worst case outcome is the Federal government has to go back in these 6 specific instances and reconsult the reconsulted consultation. It doesn’t stop the project.
To me, a more interesting aspect of all of this is the political implications. As some of you may have noticed, there is an election coming and this will never be put to bed before that election.
Construction on the pipeline will continue while the appeals are being heard. The Conservatives, the NDP and the Greens are all going to use the pipeline and the ruling and the fact that the Federal government declined to show up at the FCA to argue against allowing these appeals to go forward as ammunition to pound the Liberals for on the one hand not defending their own damn pipeline project and on the other hand, having the audacity to own a pipeline in the first place.
The only strategic angle I can see here is the Liberal party considered two very likely scenarios that would occur during the election period.
They could have declined to oppose these applications to appeal, resulting in the appeals being allowed and have the appellants then peacefully engaged in assembling documents and arguments for presentation to the court.
OR
They could have aggressively defended their interests, maybe even had the applications tossed and then faced the very real spectre of these same First Nations groups and environmental NGO’s unleashing holy hell on the actual crews working on the actual construction of the pipeline in the form of protest and demonstration and become the first Canadian government in history to invoke the War Measures Act, deploy troops and start mass arresting people – during an election!
If you think about it that way, it becomes a little more understandable.
The War Measures Act worked well for the old man, but I think Trudeau the younger would pay a dear price for something similar.
So? Where do we go from here?
We wait. Construction continues. We wait a bit more.
The appeals are narrow and are to be “expedited”, so we should hear something by year end. As I said previously, it is highly unlikely that even if the FCA finds, yet again, that the Federal Government missed on its duty to consult that construction work on the pipeline will be halted. Rather, I suspect specific instruction would be provided to the Federal Government. Consult here, fix this. Move on. Lather rinse repeat.
The previous FCA decision was much broader in scope and scale and included the NEB and the whales and tankers. Those cases were much, much stronger. This feels like a last gasp.
We don’t know what ammo the Federal Government has on their side, but I suspect they believe they have a pretty sound case and that they just want this whole thing to go away. And never underestimate the ability of a cornered Liberal government* to fight back. It feels fundamentally wrong to say trust the process, but in this instance? Trust the process.
*You will notice I said Liberal government – I need to keep reminding people what the next four years will be like so they are prepared.
Prices as at September 6, 2019
- Oil prices – Finally a normal week
- Storage posted a decrease week over week
- Production was down
- The rig count in the US was down and Canada was down
- Prices rallied moderately on positive economic new out of China. Gave back some ground at the end of the week.
- Natural gas storage was up and remains higher than this point last year
- WTI Crude: $56.59 ($55.01)
- Western Canada Select: $44.69 ($43.01)
- AECO Spot : $0.8960 ($1.0127)
- NYMEX Gas: $2.487 ($2.278)
- US/Canadian Dollar: $0.7557 ($0.7520)
Highlights
- As at August 30, 2019, US crude oil supplies were at 423.0 million barrels, a decrease of 4.8 million barrels from the previous week and 21.5 million barrels above last year.
- The number of days oil supply in storage is 24.2 compared to 22.6 last year at this time.
- Production was down for the week at 12.400 million barrels per day. Production last year at the same time was 11.000 million barrels per day.
- Imports rose to 6.904 million barrels from 5.928 million barrels per day compared to 7.714 million barrels per day last year.
- Exports from the US rose to 3.061 million barrels per day from 3.019 million barrels per day last week compared to 1.508 million barrels per day a year ago
- Canadian exports to the US were 3.648 million barrels a day
- Refinery inputs fell during the during the week to 17.381 million barrels per day
- As at August 30, 2019, US natural gas in storage was 2.941 billion cubic feet (Bcf), which is about 3% lower than the 5-year average and about 15% higher than last year’s level, following an implied net injection of 84 Bcf during the report week
- Overall U.S. natural gas consumption fell by 1% during the report week.
- Production for the week was flat week over week. Imports from Canada were up 8% from the week before. Exports to Mexico were up 2% for the week
- LNG exports totaled 43 Bcf
- As of September 6, 2019, the Canadian rig count was down 3 at 147 (AB – 97; BC – 9; SK – 37; MB – 3; Other – 1). Rig count for the same period last year was 207.
- US Onshore Oil rig count at September 6, 2019 is at 738, down 4 from the week prior.
- Peak rig count was October 10, 2014 at 1,609
- Natural gas rigs drilling in the United States was down 2 at 160.
- Peak rig count before the downturn was November 11, 2014 at 356 (note the actual peak gas rig count was 1,606 on August 29, 2008)
- Offshore rig count was unchanged at 26.
- Offshore peak rig count at January 1, 2015 was 55
US split of Oil vs Gas rigs is 80%/20%, in Canada the split is 67%/33%
Trump Watch: DJT, closet meteorologist. Loves Alabama. So weird.
Kenney Watch (new!): Slash and burn spending report issued. Not sure we voted for this. Still no talk of a sales tax. I am betting the first referendum Albertans see is on a PST not equalization. You heard it here first!
Trudeau Watch (for balance): A completely disastrous week. Lousy interview on millennial version of Stephen Colbert (https://youtu.be/cDPeXoQUrbI) and the FCA TMX mess
