The attempt by Premier Rachel Notley, backed by official Opposition Leader Jason Kenney, to put the Trans Mountain project on life support with Alberta cash is folly in the first degree.
The Trans Mountain Pipeline expansion is beyond saving, even with an infusion of Alberta taxpayer investment.
The company announced on April 8 that it is suspending spending on the project and will stop the development on May 31 unless it has agreement that the project will proceed without further impediments.
That agreement won’t be made, so the May 31 deadline is just a formality.
The Trans Mountain pipeline expansion was unlikely when it was announced in 2012 and the anti-oilsands lobby started its campaign against the project.
In British Columbia, environmentalists trump new natural resource developments; and the larger the project the more likely it will end badly for the investors.
The Trans Mountain project became a non-starter when the energy-illiterate Liberals won the federal election of 2015.
Prime Minister Justin Trudeau has been on a hypocritical path on pipelines to the Pacific since he supports the project in speeches to corporate and Alberta audiences and gives lip service to the rule of law over the anarchy of the environmental mob.
But he hinders the project behind the scenes, as for example when he threw the National Energy Board under the bus.
And with new regulatory rules, he has made it virtually impossible to get approval for future pipelines.
His agenda is transparent. There are more ridings to be won in the Lower Mainland of British Columbia than in all of Alberta.
There’s a lesson to be learned in the U.S. refinery business. The last major refinery in the lower 48 states was built in 1977 by Marathon Oil in Louisiana, with a capacity of 200,000 barrels per day.
In the 40 years since, the largest of the 14 new refineries has a 46,000 barrel per day capacity, the smallest just 4,600 barrels per day.
The obstacle was environmental regulation.
In the current American oil boom there are only two projects proposed to handle all the new production. Both are in Texas, one of 55,000 barrels and one of 100,000 barrels per day, conditional on the success of a 10,000 barrel per day pilot.
The hasty response by Notley and Kenney to the Trans Mountain project halt is counterproductive.
They propose to try to salvage the project by having Alberta taxpayers assume the financial risk with an investment in the project.
It will escalate the conflict by inciting the project opponents into a frenzy.
And it won’t get the project built.
In her 1984 book The March of Folly, historian and journalist Barbara Tuchman said that public folly occurs when there is an alternative.
Notley and Kenney have an alternative to throwing money at a pipeline that won’t be built.
Alberta can invest in the processing of oilsands bitumen and other heavy oil production – upgrading, refining, petrochemical manufacturing.
All in Alberta where the provincial government can create a hospitable investment climate and regulate the developments and attract private dollars to the capital pool that the province seeds.
There will be opposition, but fairness and genuine respect for law and regulation can prevail.
And the public dollars can be recovered in a more orderly, predictable fashion.
- Frank Dabbs is a veteran journalist and author.
