Jeff Lee: 12 reasons Canadians should do the world a favour by building pipelines

Protesters gathered outside the TD Bank tower at Georgia and Howe streets in Vancouver on May 12 to protest against TD and other banks financing the Kinder Morgan pipeline. Francis Georgian / PNG

Anti-pipeline activism has turned contentious, with emotions flaring and politicians scrambling.

To be sure, pipeline projects put a disproportionate burden on certain First Nations and municipalities. But from a national interest, economic, humanitarian and even environmental standpoint, there is a strong case for Canadian pipelines. This includes establishing a natural-gas export corridor from Prince George to Prince Rupert, completing the Trans Mountain loop and Keystone expansion, and freezing future pipeline development. The world will thank Canada for it.

Two billion people from mostly poor countries will be added to the global population in the coming decades. Access to cheap and reliable energy sources will raise their quality of life. To demand nothing but clean renewable energy is impractical and disingenuous, even cruel. Consider also the global environmental footprint. Canada has among the highest environmental standards for oil and gas development. When a big consumer like China buys from Canada, it takes demand away from unsustainable sources while displacing dirtier coal and reducing the net carbon footprint. To secure its supply, China has even financed Russian drilling projects in the Arctic Circle newly opened due to climate change. A hypothetical 800-kilometre, multiple-pipeline corridor would require about 400 square kilometres of restorable land. Contrast that to the nearly 9,000 sq. km (22 times) of forests consumed in a single forest-fire season in B.C. last year.

The world is rapidly moving toward cleaner and renewable-energy sources due to falling costs and irreversible advancements in solar, battery technologies and demographic trends. With worldwide oil demand peaking, the Saudis are in a frenzy to diversify their economy, build solar farms and ally with Russia to sell as much oil as possible before time runs out. Being a middling producer, Canada will never supply enough oil and gas to alter the trajectory, so it should bank the money while it can. In 20 years there may no longer be talk about new fossil-fuel investments.

Currently, constrained export pipelines are causing Canadians to subsidize American shale-oil and gas producers by selling at a consistent discount. Producers have had to load more oil on railcars, which are less safe and more energy intensive. Turning off oil and gas will have huge repercussions. Job losses and reduced social benefits will hurt the lives of millions of lower-income Canadians. Moreover, by conducting policies unpredictably and discrediting decisions by legitimate institutions (National Energy Board) the governments risk destroying Canada’s credibility to investors in all industries and undermining rules-based democracy in favour of populism. In the age of protectionism, Canada should secure all its revenue streams. Natural resources are a one-time gain that must be strategically managed. Good fortune has been squandered for too long and Canada needs to build a Norwegian-style sovereign wealth fund. This fund can be used for research, prize programs for innovations, sustainable social welfare and job-training programs to prepare Canadians for the future.

There is nothing hypocritical about using resource money to deny corrupt authoritarians of ill-gotten gains. By siphoning off resource revenues from illiberal countries, Canada can accelerate meaningful reforms while pursuing worthy causes in many places. The world needs more liberal-minded Canadians to advocate for sustainability, free trade and human rights. For too long Canada has punched below its weight on international affairs. By supplying more energy Canada can support its peaceful projection of power, forge closer ties with its trading partners and reduce everyone’s reliance on corrupt regimes.

To paraphrase a former Saudi oil minister, “The Stone Age did not end because of a lack of stones.” The demise of fossil fuel will come from better technologies and economics, and it will be a gradual process. The notion that stopping resource development now would force us into renewable energies is a myth. Many people were lured into ideological purity, false expectations of a quick solution or, worse, activism for activism’s sake. Discussions should instead be directed at the responsible use of oil revenues and ways to enhance Canadians’ quality of life.

Canadians should be proud to provide the world with a reliable and cleaner source of energy. By the same token, Canadians should be embarrassed that, after decades of oil and gas production, no lasting legacy is visible from this one-time gain. Opportunities were squandered, but aren’t lost forever. Now is the time to step up and do us all a favour, Canada.

Jeff Lee is a commodity trader with Kronos Management LLC. He resides in Vancouver and San Antonio, Tex.

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