Public opinion is growing increasingly hostile to building oilsands pipelines across British Columbia and shipping it in large, fragile tankers down the treacherous waters of Douglas Channel, or though busy Burrard Inlet and the Strait of Georgia.
Many in B.C. think that, with enough political will, the provincial government can stop these projects. I am not so sure, and it's time to look at how they could be stopped and at what cost.
These projects are, probably, entirely under federal jurisdiction, like railroads.
If not, then perhaps Prime Minister Stephen Harper might be forced to declare them "works to the general advantage of Canada" and unilaterally override the provincial government.
This ultimately also holds true for the challenges by aboriginal chiefs. The Supreme Court of Canada has said that First Nations must be consulted and accommodated, but that is far short of giving them a veto over a project.
While it may take a decade of legal wrangling, in the end the oil companies will still be seeking offshore markets. What then are some of the implications of building - or not building - these pipelines?
There are two suggestions for possibly making the pipeline more politically acceptable that have not been explored. The first is to recognize that aging pipelines leak, so why not simply license the line for, say, 30 years? At that point it must be torn up and replaced with a new one.
Second, why bother asking for a share of Alberta's oilsands royalties, which would be a minimal sum?
Why not just impose a provincial property tax on the pipeline and the land it crosses that would yield, say, $2 billion or $3 billion a year? Given that the owners of the oil will be able to sell it offshore for several times more than they get in Oklahoma, they might well be agreeable.
If the intent of a B.C. government is to prevent a pipeline, maybe a property tax of $4 billion or $6 billion might be needed. Would such a provincial tax pass constitutional muster in the Supreme Court? Properly framed, it should.
But what are the consequences of B.C.'s attempts to stop the pipelines?
The federal government seems determined, despite recent softer comments. It could well make life difficult in the federal-provincial arena for B.C. by manipulating numerous programs, policies and financial transfers at great cost to the province. Over the past decade, VictoriaOttawa relations have been smooth, and we have forgotten the sulphurous intergovernmental relations that cost B.C. billions of dollars over the decades before that.
Then there is China, for whose benefit the pipelines are being built, and which is making huge oilsands investments that promise to grow larger. What will the Chinese government think - should Ottawa allow the Nexen takeover by China's state-owned energy company China National Offshore Oil Corp., as it presumably will - if it cannot get its hands on the oil because of the lack of a pipeline? Might it say, "We will buy no more timber, coal, copper concentrate and whatever from B.C. until permission is given to build a pipeline?" Does anyone doubt they might do that? They might be more subtle, but with the same results.
There is, however, an Ottawa-China alternative. Ship the oil by train to Prince Rupert and Vancouver. Using the port of Prince Rupert avoids the Douglas Channel and, in Vancouver, the bitumen could go out to the Roberts Bank port facility, avoiding the need to move oil in tankers though the First and Second Narrows of Vancouver's busy harbour.
Thick, undiluted bitumen has to be heated to be loaded into rail cars and ships' tanks. It goes almost nowhere if a rail tank car falls off the tracks and breaks. The cost would be greater than moving it through pipelines, but ports and rail lines are undeniably entirely under federal jurisdiction and little new construction would be needed, nor would provincial permits or consultations with natives be necessary. Ultimately, that is what might happen, at least while the pipeline battles are fought in the courts.
In that circumstance, might any B.C. government say, "We'd rather have a pipeline, and a substantial bit of revenue, than get nothing?" Again, who knows? But it promises to be an interesting debate, likely the most confrontational and the one with the greatest potential consequences for this province than anything we have seen in decades.
Tex Enemark is a public policy consultant, a former deputy minister in the B.C. government, and a former president of the Mining Association of B.C.
