THE BLOG
12/21/2013 04:57 EST | Updated 02/19/2014 05:59 EST

A Northern Gateway to Conflict

The National Energy Board (NEB) released its report on the Enbridge Northern Gateway pipeline proposal December 19, finding that plans for building the pipeline are sufficient for its approval. The report states, "We have concluded that the project would be in the public interest. We find that the project's potential benefits for Canada and Canadians outweigh the potential burdens and risks." The NEB did have a few conditions - 209 of them in fact - but assuming they are all met by Enbridge, the pipeline project is good to go according to the NEB.

But this does not mark the end of the process. It is merely a first step in what is shaping up to be an extremely adversarial process driven by environmental extremists. A group called ForestEthics, which claims to have organized the largest act of civil disobedience in Canada "in the history of the pipeline fight," has pledged that regardless of public opinion, regardless of the fact that Canada stands to benefit from energy production in Alberta, Northern Gateway will "never be completed."

Ben West, who campaigns against the oil sands for ForestEthics, frames the issue as one of the federal government overriding the will of the province of British Columbia and pledges that the "many thousands" in the anti-oil sand social movement will never relent on the pipeline. Other environmental groups such as 350.org, the Suzuki Foundation, and Greenpeace will no doubt join them in the ongoing campaign against Northern Gateway. In an e-mail sent the day of the decision, the Suzuki Foundation encouraged its followers to send notes to support First Nations bands that oppose construction of the pipeline.

This is a deeply troubling situation for several reasons. First, it overturns an expectation that has prevailed throughout Canada's history, which is that people can engage in lawful commerce without threats of intimidation, violent protests, political sabotage and slander or disinformation campaigns. The expectation that one will be allowed to engage in legal commerce is vital to our economy because investments are made in businesses on that expectation. Without the expectation that one will be able to engage in lawful commerce, business investments become higher in risk, and ultimately become more scarce, to the detriment of a healthy economy. Indeed, the Fraser Institute's annual Global Petroleum Survey consistently finds that perceptions of unfairness in a jurisdiction's legal system are a significant deterrent to investment in petroleum exploration and development.

Enbridge is a big company and can defend itself. But one has to assume that they've spent many millions in the process of applying to build the Northern Gateway pipeline and they would not have done so without the expectation that if they followed the laws of the land, they would be allowed to build the pipeline. It's just common sense to expect companies to avoid proposing any controversial projects that might be completely legal but still die a political death.

The situation is troubling for another reason, which is that ForestEthics, and other pipeline-protest groups, are actively working to undermine a duly-established process and fairly-arrived at outcomes, that can then be implemented (or not) depending on the recommendations received. The consultation and comment process undertaken by the NEB cost over $500-million to complete and took four years. If activist groups can negate the outcomes of such consultation and public comment processes, why would anyone expend the effort to do them?

The federal government has six months to decide on the pipeline. Prime Minister Stephen Harper faces an ugly situation regardless of how the federal government acts on the Northern Gateway or other energy transportation infrastructure. He is literally in a "damned if you do, damned if you don't" situation. If he lets the pipeline proceed he will infuriate a swath of Canadians. If he turns the project down, he'll infuriate a different swath of Canadians, mostly in his home province, but across Canada as well.

But despite the political risk, there is one thing the federal government might wish to consider with regard to the message it would send by failing to uphold Enbridge's right to conduct lawful business in Canada, as approved by the National Energy Board, after extensive consultation and public involvement. A failure to allow the pipeline will essentially send the message that Canada's political process is nearly as dysfunctional of that of the U.S., and Canada can no longer deliver on critical energy infrastructure. That's not a happy message for the holiday season.

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