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Jeffrey Simpson: Oil and LNG: Why B.C. still isn’t open for business

Globe and Mail columnist Jeffrey Simpson.

There might be more trying places in the world to build pipelines or a liquefied natural gas industry than British Columbia, but it's hard to know where such a place might be.

The domestic obstacles to getting anything done in B.C. are numerous and formidable. Why companies bother is a mystery, when there are other, more welcoming places around the world.

If the economics of projects don't cause companies to wonder, then a thicket of native land claims and interminable negotiations with aboriginals might. If that doesn't suffice, there are courts, especially the Supreme Court of Canada, whose decisions make things really difficult to know who owns land, who can do what where, and what level of consultation and consent with aboriginals is required. And what does constitute "social licence"?

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Vocal and organized environmental groups oppose development of any energy sources that are not renewable – so long as wind turbines or hydro dams are not built near them. Throw in regulatory hearings that take several years, and whose decisions are immediately declared useless and biased by project opponents before the proceedings begin.

And don't forget governments, such as Christy Clark's in British Columbia or Justin Trudeau's in Ottawa, that blow hot and cold depending on their sense of public opinion, regardless of what regulators have found and recommended.

Oh, and by the way, the world does not stand still waiting for British Columbia because overseas buyers of what B.C. (and Canada) want to sell – liquefied natural gas and oil – will buy elsewhere; and producers of what B.C. (and Canada) have will sew up markets while B.C. (and Canada) try to untie knots of their own creation.

The latest victim of this labyrinth is Kinder Morgan Canada's proposed Trans Mountain pipeline – a straightforward project to twin an existing pipeline from Alberta's bitumen resources to Burnaby, B.C. The new pipeline would triple output and diversify Canadian markets for bitumen oil.

The National Energy Board, as required, held extensive hearings. Intervenors submitted more than 15,000 questions to the proponent. Hundreds of other questions were asked orally. Four hundred participants intervened directly. The board held four special sessions to allow aboriginals to present oral evidence in keeping with their traditions.

The NEB hearings lasted a year. A report of 533 pages appeared last week, recommending on balance that the project proceed but affixing 157 qualifications to the approval. The reaction suggested that the report and all that went into it had never happened. Without the report even being read, it was denounced or ignored. Before the report was published, the Trudeau government announced the creation of a three-person group to consult aboriginals (again) and report findings to the government.

Trans Mountain, learning from the unhappy experience of Enbridge's Northern Gateway pipeline project, had spent two years consulting municipalities, communities and aboriginal groups along the proposed line before formally submitting its project. After that two-year opportunity, NEB hearings offered another opportunity for "consultation," including from aboriginals.

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As if to say the NEB could not be counted on, the Trudeau government created an additional layer of consultation and complexity, the result of which should be fascinating given that some First Nations, already given three years to be consulted, approve of the project while others oppose it.

There being 75 First Nations along the line (and others near the sea where oil tankers would pass), it is impossible to imagine unanimity. If every group must give "free, prior and informed consent" (the new phrase entering into Canadian discourse from the United Nations and endorsed by the Trudeau government's early pronouncements), then no linear project such as a pipeline that crosses many claimed aboriginal territories will ever succeed. British Columbia might just as well erect a "Closed for business" sign for these sorts of industries and focus on yet more condo development, real-estate speculation and film making in and around Vancouver.

There are more than aboriginal misgivings. There is extensive opposition in and around the Lower Mainland to Trans Mountain because of the additional tankers that would be required to pick up the oil – opposition articulated by the mayors of Vancouver and Burnaby.

The national interest as articulated by the NEB is of no concern to them. Opponents denounced the report before reading it.

Ms. Clark does not favour an oil pipeline, but remains desperate for a liquefied natural gas industry of the kind she promised in the previous election. Its launch, however, has been been grounded by the domestic labyrinth and the loss of market to LNG-producing countries elsewhere.

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About the Author
National affairs columnist

Jeffrey Simpson, The Globe and Mail's national affairs columnist, has won all three of Canada's leading literary prizes -- the Governor-General's award for non-fiction book writing, the National Magazine Award for political writing, and the National Newspaper Award for column writing (twice). He has also won the Hyman Solomon Award for excellence in public policy journalism. More

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