Clinton’s comments put pipelines back on to Canadian election agenda

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Hillary Clinton's decision to voice her opposition to the Keystone XL project this week has thrust pipeline politics back into the federal election campaign.

Even before the U.S. Democratic presidential front-runner waded into the North American energy development fray, the federal government's approach to pipeline development was likely to be a key issue for voters in Alberta and British Columbia, and parts of Atlantic and Central Canada – whether they are pro- or anti-pipeline.

For the political parties, that means "there's some careful dancing that has to happen," said Jamie Lawson, a political scientist at the University of Victoria.

A day after Ms. Clinton's pronouncement, the NDP used it to criticize Liberal Leader Justin Trudeau for being supportive of Keystone. "Are Trudeau and Harper both on Team Trump 2016?" said a news release from the New Democrats.

The statement was meant to compare the two Canadian leaders to the U.S. Republicans' most bombastic presidential candidate, Donald Trump. It's clear where Conservative Leader Stephen Harper stands on pipelines: He is an unabashed supporter of new projects, assuming they've gone through his government's environmental assessment process. Green Party Leader Elizabeth May is just as direct in her position, saying her party "opposes every single one of the pipelines that are proposed."

But Canadian voters need to decipher the nuanced take on pipeline development by the NDP's Thomas Mulcair and Trudeau. Now that TransCanada Corp.'s Keystone XL has been lumped in with Enbridge Inc.'s Northern Gateway in the category of projects with diminished prospects for success, the two leaders' positions on other, more likely, proposed projects will come under more scrutiny.

As Canada's oil industry struggles with the economics of $45-a-barrel oil, Canadian midstream companies are looking past election day on Oct. 19 to whether Ottawa will be cool or welcoming to new oil pipelines. Enbridge spokesman Graham White said the company will do as it always has, and "focus on ensuring governments understand the fundamentals so they can best adapt to the changing needs and requirements of the industry."

Energy insiders also say they're watching the political race to see whether the Conservative government's three-year-old changes to the regulatory process, meant to streamline approvals and reduce duplication, will remain after the election.

Both the NDP and the Liberals charge that the government has weakened environmental laws and regulatory processes to the detriment of the public trust and Canada's international reputation – and this has in fact hurt pipeline development. However, the two parties are far from taking a one-size-fits-all approach to pipelines.

Mr. Mulcair has steadfastly opposed Keystone XL – an 800,000-barrel-per-day project that would bring bitumen to U.S. refineries that specialize in heavy oil – on the grounds that he wants more processing jobs in Canada. He also has spoken against Enbridge's Northern Gateway project out of concerns about supertankers coming in and out of Douglas Channel in B.C.

It's on other projects that Mr. Mulcair is more difficult to pin down. While he once described the 4,600-kilometre Energy East pipeline as a "pro-business, common-sense" project, he has cooled to the TransCanada proposal, and said opposition stems from the Conservative government's decision to weaken the Navigable Waters Protection Act and a confrontational approach with First Nations. When it comes to Kinder Morgan Canada's plan to triple the capacity of the Trans Mountain pipeline conduit, enabling shipments of Alberta crude to Asia, the NDP leader says he shares Green Party concerns about the increase in tanker traffic.

At the same time, he's not 100-per-cent opposed to either of the two projects. "Opposing these pipelines systemically in advance is just as wrong as supporting them in advance," Mr. Mulcair said in August. He notes that building Energy East – which would be able to ship 1.1 million barrels of crude per day from Alberta and Saskatchewan to refineries and port terminals in Eastern Canada – could reduce oil-by-rail traffic.

In Victoria, Prof. Lawson says the NDP must tread carefully. "There is a green kind of voter who is concerned not just about these [pipeline] developments – not just with respect to value-added or the local impacts – but is concerned because of what it does to accelerate or continue a dependence on fossil fuels."

Mr. Trudeau has also shifted his position on proposed projects. On the Trans Mountain expansion, Mr. Trudeau told Calgary's Metro News early in 2014 that he hoped "we're going to be able to get that pipeline approved." However – perhaps recognizing growing opposition to the project – he has more recently said it requires "public trust."

Similarly to Mr. Mulcair, Mr. Trudeau criticizes the environmental and regulatory process under the Conservatives, and says Energy East needs a strong "social licence."

The NDP position becomes more difficult to read when Mr. Mulcair talks about making greenhouse gas emissions part of the calculation for pipeline approvals. Mr. Trudeau has made similar proposals. This will be difficult to reconcile on a number of fronts, including the fact that older pipelines, still in operation, were approved before emissions were taken into account.