Eagle Spirit Energy Corridor Could Kill Four Birds With One Stone

It’s hard not to respect people who look adversity in the face and appear to laugh at it.

The Trudeau government passed Bill C-48 and Bill C-69 into law in late June, effectively banning crude oil exports from ports in northern B.C. and upping the regulatory ante. Two weeks later the Eagle Spirit Energy Corridor (ESEC) Chiefs’ Council sent a letter to the National Energy Board (NEB) asking for guidance on how to proceed with its submission of a project description — an early step in the regulatory process that they are hoping to accomplish later this year — given the transition period for this new legislation.

This request may prove unnecessary if a majority Conservative government is elected into office in October. Prime Minister Andrew Scheer would likely quickly toss the crude tanker ban onto the dustheap of history, and probably gut the Trudeau government’s natural resource regulatory reform not long thereafter.

But as argued in Trudeau Minority Government Next?, the Conservative Party is unlikely to win a majority in the upcoming federal election, opening the door for the Liberal Party to form a left-wing government in concert with the New Democratic Party (NDP), and possibly the Green Party as well. In this case, a Trudeau minority government would have a very important decision to make regarding the potentially massive ESEC project — whether to allow it as an exemption to the northern B.C. crude tanker ban or not?

Assuming a left-wing minority government, there are four reasons Prime Minister Justin Trudeau should allow an exemption: the ESEC project would nip rapidly rising Western separatism in the bud; open new markets for the western Canadian oil and gas industry around the world in a relatively timely fashion; allow Canada to adopt energy policies similar to Norway’s, significantly reducing our greenhouse gas (GHG) emissions in the process; and help achieve reconciliation with our Indigenous peoples.

National unity

The Trudeau government’s anti-resource development agenda is leading to a national unity crisis, in the opinion of premiers from six provinces and territories, with Western Canada’s oil and gas industry in depression for the fifth year running. A lack of egress has been the major reason for depressed regional activity the past few years, with a long line of crude pipeline projects cancelled either directly or indirectly by the federal government or delayed again and again by pipeline opponents using a wide range of tactics.

The ESEC project, a multi-use energy corridor for oil and natural gas pipelines and other resource transportation facilities running from northern Alberta to the Prince Rupert area of B.C., could ultimately break Western Canada’s egress and markets problem in grand style, reviving the region’s oil and gas industry, and thwarting a key driver for Western separatism.

Market freedom

We have had a heck of a time getting new crude pipeline capacity to either tidewater or the U.S. over the past several years, while Western Canada’s traditional gas markets in the east of North America are being lost to rapidly rising American production due to the shale gas revolution. The ESEC project, in conjunction with LNG liquefaction plants, would open international markets, especially lucrative Asian markets, to Canadian oil and gas on a massive scale in a relatively timely fashion.

The goal of the Indigenous-led project is to ultimately have two 48-inch oil pipelines, each transporting two million bbls/d of partially upgraded crude, and two large-diameter gas pipelines shipping a total of five-six bcf/d. The first phase of the project is to be a crude oil pipeline.

The energy corridor concept, which has the support of five provincial and territorial premiers (see ‘Like-Minded’ Premiers Voice Support For Energy Corridors), could significantly hasten the Canadian regulatory process, especially once the first crude pipeline has been approved and constructed.

In addition, the present terminus of the ESEC project, the Prince Rupert region, is lightly populated, decreasing the likelihood of NIMBYism being a major roadblock, unlike the fed-owned Trans Mountain expansion with an end-point in the Greater Vancouver region.

On the other hand, if the Eagle Spirit project does not gain an exemption to the northern B.C. crude tanker ban, the chairman of the Chiefs’ Council, Calvin Helin, has said his group will redirect the two crude pipelines to an Alaskan port instead. In this case, Canada loses control, potentially leading to delays as we’ve seen with crude pipeline projects to the continental U.S. — in particular, Enbridge’s Line 3 Replacement and TC Energy’s Keystone XL.

Energy policy

The possibility of bringing on massive new oil and gas pipeline capacity in a timely fashion opens the door for the federal government to adopt energy policies more like Norway’s, which have been far more successful than Trudeau government policies (see Canada Should Follow In Norway’s Energy Footsteps).

In a nutshell, the Norwegian government has supported its oil and gas industry since commercial quantities of oil were first discovered in the North Sea in 1969, and with the proceeds is leading international, and now domestic efforts to combat global climate change.

In contrast, the Trudeau government has thrown a wrench into Western Canada’s oil and gas industry in recent years, in a vain attempt to thwart the anti-oilsands lobby, while chasing its tail as it tries to decarbonize the country’s economy.

Reconciliation

Finally, the Eagle Spirit project provides an excellent step towards reconciliation between Indigenous peoples and other members of Canadian society by improving the economic standing of the more than 35 First Nations committed to the project. “The project represents an opportunity to advance reconciliation with the Indigenous Peoples of Canada,” says the Chiefs’ Council in the letter to the NEB.

At the same time, if Canada follows in Norway’s energy footsteps, including developing our massive hydropower potential to support greater non-carbon electrification of our economy — especially for space heating and the transportation sector — far more Indigenous peoples across Canada could benefit economically. For example, Manitoba Hydro developed a partnership with four First Nations in the province to advance the 695-megawatt (MW) Keeyask hydroelectric generating project on the lower Nelson River, roughly 725 kilometres north of Winnipeg.

As Phil Fontaine, three-term national chief of the Assembly of First Nations (AFN), has said on numerous occasions in the past, reconciliation is not possible without improving the quality of life of Indigenous peoples, with substantial equity stakes in major natural resource projects impacting their lands an important step in that direction (see A Small Step On The Long Road To Reconciliation).

To conclude, an exclusion to the northern B.C. crude tanker ban for the ESEC project would appear a wise move for the four reasons discussed above. But, based on the track record of the Trudeau majority government, and the fact a Trudeau minority government in concert with the NDP, and possibly the Green Party, is likely to be even more environmentally doctrinaire, an exclusion for the project is no slam dunk.