Donald Trump’s election might have shaken the Liberal government’s pipeline plans. But they insist Mr. Trump doesn’t make a difference. And that suggests Prime Minister Justin Trudeau will go ahead with the approval of Kinder Morgan’s controversial Trans Mountain pipeline.
Mr. Trudeau promised that action on climate change and approval of an oil pipeline go together. And he has been moving toward a double decision next month – forging an emissions-reduction deal with premiers and approving Trans Mountain.
But Mr. Trump’s election might have changed those calculations. He has not only promised he’d undo the Obama administration’s climate-change policies, he said he’d approve the proposed Keystone XL pipeline that would carry Alberta oil to the Gulf Coast of Texas.
So if Mr. Trump is promising Keystone, anyway, can Mr. Trudeau reject Trans Mountain?
Natural Resources Minister Jim Carr insisted Tuesday they’re not the same. Even if Mr. Trump approves Keystone XL, that pipeline doesn’t provide the same economic benefits, he said.
“It doesn’t get oil to export markets in Asia, and it’s a goal of the Government of Canada to expand its export markets,” Mr. Carr told reporters after a cabinet meeting.
Of course, Mr. Carr didn’t say whether the government will approve Trans Mountain, and he noted that there are conditions the government will consider before a Dec. 19 deadline.
But he pointed out that Mr. Trudeau’s been talking about “the importance of responding to the demands within other export markets and not to rely solely on one major market, that that’s a sensible approach to take and nothing has changed.”
In other words, whatever Mr. Trump does about Keystone, the Liberal government believes it is important to have an oil pipeline to the West Coast.
And it’s worth noting that Mr. Carr’s comments were really about making a political case for Trans Mountain. It’s not entirely true that Keystone XL would not provide a route to Asian export markets. Once Alberta oil reaches the Gulf Coast of Texas, it could be loaded onto tankers and shipped to Asia, albeit at higher cost.
Some in Mr. Trudeau’s own party will wish the PM could just wait for Mr. Trump to deliver Keystone. Approving Trans Mountain means political danger for Vancouver-area Liberal MPs. Former B.C. premier Mike Harcourt believes it would spark the kind of implacable protests he faced in the early 1990s War in the Woods – unless the route is changed to placate Vancouver residents.
But the Liberals show no signs of being willing to wait for Mr. Trump to approve Keystone XL. Alberta’s oil patch found out from TransCanada Corp’s first attempt at obtaining U.S. approval for Keystone that a lot of things can go wrong. And Mr. Trump has suggested his approval would be contingent on the U.S. getting a bigger chunk of the proceeds.
Instead, Mr. Trudeau’s Liberals will probably go ahead with major moves on pipelines and climate change next month, before Mr. Trump takes office: both by striking a deal with most premiers on an emissions-reduction plan, and approving Trans Mountain.
Mr. Trump could still eventually save Mr. Trudeau from danger with Keystone XL. If Trans Mountain is approved, the oil patch will have a lot more export capacity – about 600,000 barrels a day more. Mr. Trudeau’s government also had to decide within weeks on the less-controversial replacement of Line 3, from Alberta to Gretna, Man., which would add about 370,000 barrels a day. Keystone XL would transport another 700,000 barrels per day. Combined, that would be a major expansion of export capacity – at a time when oil prices are low.
Under those conditions, there might not be a lot of demand for yet another pipeline, so Mr. Trudeau might not have to worry about Energy East, which would carry oil to Saint John, N.B. – through Quebec. And that just might save Mr. Trudeau from worrying about the 40 Liberal seats in the province.
But right now, when it comes to Trans Mountain, Mr. Carr has made the Liberal government’s position clear: The election of Mr. Trump isn’t going to stop them.Report Typo/Error