Oilsands debate in Edmonton Centre

I was very happy to see this discussion posted on line on the Edmonton Journal YouTube Channel. The video features each of the candidates in Edmonton Centre weighing in with their positions on the oilsands. I can’t resist the chance to look at some of the arguments, and provide context on each relative to the parties’ positions.  I should make very clear that I am not a resident of Edmonton Centre, that I am not member of any political party, and that I am not a supporter of any of the candidates.   This post should, by no means, be taken as an endorsement of any of the candidates in the race.

The video begins with Laurie Hawn, the Conservative candidate in the riding. I agree very strongly with some of Mr Hawn’s comments, although he also provides significant mis-information and a sprinkle of irony.  Let’s start with where I agree.  The oil sands are without a doubt “a Canadian success story”, and the industry is certainly “underpinning the Albertan and Canadian economies.”

From there, we start to go down hill.  Mr. Hawn states that,”we have encouraged the province and the oilsands companies to be as environmentally responsible as possible and they are doing a tremendous job of that.”  Here, I expect many will disagree.  In fact, a Federal Government Panel recently reported that, “the (federal) minister asked…whether or not Canadians had a first-class, state-of-the-art monitoring system in place in the oilsands. In the view of the panel, the answer is no.”  So, the Conservatives can not know whether or not the industry is doing a good job of protecting water.  On the GHG issue, the Conservatives have refused to identify how they will encourage the industry to improve its performance.  Mr. Hawn mentions tailings, and he is absolutely correct to cite Suncor and their TRO process, in which they will eventually invest billions of dollars.  He might have followed up by highlighting that the Province reacted to this innovation by relaxing the rules of Directive 074 for many of Suncor’s competitors.  Needless to say, I do not agree with Mr. Hawn’s take on the environmental performance to date.  There is plenty of room for improvement.

Now, onto the mis-statements.  Mr. Hawn says that, “all of the new development is taking place in situ (underground), not surface mining.” This is just plain wrong.  As we speak, Imperial Oil is moving modules up through the US (with some difficulty) for their new Kearl oilsands mine, for which the first of three phases is set to open in September of 2012. (You can see their tailings management plan here) Beyond that, Total’s Joslyn North Mine is scheduled to commence operations in 2017.  Ironically, Mr. Hawn says there are, “a whole lot of mistruths and mis-representations out there.” Unfortunately they are in his discussion of the development plans for the oil sands. If you look here, you will see a great interactive tool with the real story on future development, above and below ground.

Onto Mary MacDonald, the Liberal candidate.  Overall, the agenda she lays out is not that different from what her leader, Michael Ignatieff has pushed in his stump speeches.  Without specifically mentioning the Accelerated Capital Cost Allowance (ACCA), she says that “the incentives, at this point, have been used to spur development in the oilsands,” and goes on to suggest that these incentives are no longer needed in a vibrant and mature industry.  I tend to agree.  The ACCA is a small-dollar program ($400 million per year right now) that gives the impression that the oilsands industry needs special treatment, that it is marginal, and puts the industry in the same class as other non-economically viable energy sources.  That is simply not true, so get rid of it.  All the parties agree on this, they just don’t agree on the timing with the Conservatives phasing out the program by 2015 and the Liberals and NDP wanting to remove it now.

Ms. MacDonald goes on to talk about the Liberal commitment to re-invest the ACCA money in the industry, saying that, “what we need to do now are to move those incentives to R&D that makes the industry more sustainable.” I would love to hear some more detail about how this might work.  Who would get the money? How would it be allocated? What kinds of programs? Ms MacDonald says that the primary driver for this is to avoid, “the economic black eyes…or the environmental black eyes from Greenpeace or the US or the European community.”  It’s true that the EU and the US have recently had less than kind words to say about the oil sands, but I think it’s naive to expect that we could run the oil sands in a way that would satisfy Greenpeace. What she did not mention, and should have, was that the most important market we have to keep on side is the Canadian market, since it will be Canadian voters who determine the regulatory environment in which the oil sands operates, and the degree to which the relationship is cooperative or oppositional.

Ms. MacDonald did not mention the Liberal cap-and-trade program specifically.  Members of the Alberta Liberal campaign, Senator Grant Mitchell and Rick Szostak have been clarifying some elements of the program, but many key questions are not yet answered.  First, when would the program commence? How tight would the cap be? What proportion would be auctioned? How specifically would the money be spent in Alberta.

Ms MacDonald also did not mention the intention of the Liberals to formalize the tanker ban on the Northwest coast of BC, effectively ruling out the Enbridge Northern Gateway Pipeline.  While this ban would not eliminate West Coast exports as some have suggested, it would leave Vancouver as the only feasible export port within Canada, with transportation occurring via potential expansions along the existing Kinder Morgan right of way.  As I asked here, I think the Liberals need to paint a vision for the diversification of the Alberta oil sands industry absent access to Kitimat.

Lewis Cardinal, the NDP candidate, begins by acknowledging the role of oilsands as a major part of the Canadian economy, and states that we have to be responsible stewards of the natural resource because we have our grandchildren to consider. Mr. Cardinal does not begin to acknowledge key elements in the NDP platform with respect to oilsands.  The NDP have been very aggressive during and before this campaign. Jack Layton skipped mention of oilsands in his Edmonton campaign launch only to rally supporters in Montreal by saying the NDP would, “stop the flow to the tar sands, every single penny,”and, “redirect the savings into Canada’s most promising clean energy.” Our Albertan grandchildren might not be so happy about that vision.  While Mr. Cardinal talks of preserving oilsands for future generations, Deputy Leader Thomas Mulcair, an MP for the Montreal Riding of Outremont, has referred to the oilsands as “the worst pollution on the planet,” in the House of Commons.  Mr. Cardinal’s position simply does not reflect his party’s, and if that is truly the case I wish he would have said so explicitly.

The final candidate, David Parker from the Green Party, argues that the Keystone XL and Northern Gateway pipelines are facing opposition largely because of historic mismanagement of the oilsands resource.  I think that oil sands are red herrings in both cases. In fact, the US State Department very clearly re-buffed the assertion that oilsands industry attributes were a good reason to block the pipeline this week.  The Joint Review Panel for Gateway has also seen fit to exclude any consideration of the oilsands industry itself from its process to approve or deny the permit for the pipeline.  Mr. Parker argues that the tailings ponds, which have not functioned as they were intended to, are emblematic of mismanagement.  This may well be true.

Mr. Parker suggests that a moratorium should be imposed on oilsands development until they can be managed correctly.  I think that on many issues, the Green Party has some interesting ideas.  Unfortunately, on oil sands, their position seems reactionary. The Green Party platform does not appear to consider the impacts that their oil sands policy would have on their revenue projections, either through corporate income taxes or through the ripple effects that a snap to a moratorium would induce.  I am all for stronger environmental policy across the economy, but the playing field should be leveled and oil sands should not warrant special treatment because they are new.

I hope this provides some context around the issues for voters in this riding.