Canadian Government Fights US Opposition to Tar Sands Pipeline

Yves Engler: Unprecedented aggressive lobbying campaign by Canada to push Obama to say yes to XL pipeline.

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Baltimore. And welcome to this edition of The Engler Report with Yves Engler. He now joins us from Ottawa.

Yves is a commentator and an author. His most recent book is The Ugly Canadian: Stephen Harper’s Foreign Policy.

Thank you for joining us again, Yves.

YVES ENGLER, AUTHOR, POLITICAL COMMENTATOR: Thanks for having me.

Jay: So The New York Times came out and said now’s the time to say no to the Keystone XL tar sands pipeline. There’s been a massive movement in the United States against it, the big protests and personalities coming out, trying to stop this pipeline taking Alberta tar sands oil in a pipeline down to Texas. How’s all this being received in Canada by, you could say, the public and by the Harper government?

Engler: Well, the Harper government is basically freaking out about the possibility that Obama would say no to the pipeline. They’ve launched a full-court press in terms of lobbying in the U.S. for the pipeline. John Baird, the foreign affairs minister, just the other day said it’s been the number-one priority for more than two years for a Canadian team based in Washington at the Canadian embassy there. And there was just access to information documents that came out about—detailed a little bit about the strategy to convince U.S. journalists to support the pipeline and Canadian officials taking a New York Times journalist out to the, you know, fancy restaurant, you know, paid $129 for, you know, two people to go out for dinner.

So the aggressiveness of the lobbying campaign is unprecedented, I think, certainly in the history of recent Canadian relations with the U.S. To have a government in this country so aggressively, basically, in a battle, political battle with a social movement in the U.S. is not something that I think maybe has ever been seen in the history of Canadian-U.S. relations.

Where the Canadian public is on the matter is a little bit unclear, but the dominant media is almost overwhelming in their endorsement of the pipeline. You have the premier from Saskatchewan, from Alberta, repeatedly going down to Washington [incompr.] lobby on behalf of the pipeline. So you have a strong, you know, full, political elite, really, in Canada supporting it.

But you know that there is significant opposition to the tar sands. One of the reasons why they need the pipeline down south is because of so much opposition to the Enbridge pipeline through B.C. and the Kinder Morgan pipeline through B.C. There’s so much opposition to the tar sands in B.C. that they need the southern route. But it is really an unprecedented political battle by the Conservative government in favor of this pipeline.

Jay: Now, I heard something about a potential pipeline that’s actually going to go through Toronto. What is that about?

Engler: Yeah. There is a reversal of a pipeline that’s currently in place, Line 9, and that’s before the National Energy Board right now. And that’s about getting tar sands oil over to refineries in Montreal and possibly in the Maritimes, but also moving some of that oil down to Portland, Maine.

And there’s been significant demonstrations in Vermont and in Maine against the pipeline. And recently, I think actually just last weekend, even, there were votes, municipal votes in Vermont where dozens of different municipalities—or counties, I guess, in the U.S. expressed overwhelming opposition in these referendums to tar sands oil coming through there.

So they’re desperate. The oil companies that have plans for, you know, doubling and tripling of tar sands extraction over the next couple of decades, they are desperate to find outlets for that oil. And, you know, the geography of Alberta means that it’s not so easy to get that oil out, and they’re trying all the different methods, the preference being, obviously, the Keystone XL, then taking it to the Gulf coast because the refineries are already there. They already have access to most of the international market [crosstalk]

Jay: Apparently, one of the bigger refineries that can deal with this heavy crude is owned by the Koch brothers.

Engler: They have significant interests. I believe they have some interest in the pipeline itself, even, they have some investment in the pipeline itself. And the lobbying, obviously, is, you know, really strong.

And one of the things that’s interesting about the Canadian lobbying is just how involved Canadian diplomats are with American oil companies and working with the American oil companies and really stoking their lobbying for the pipeline. It’s really an alliance, Canadian government really working in alliance with the most reactionary and big oil interests within the U.S.

Jay: And China’s also moved into the tar sands with some oomph, have they not?

Engler: A more than $15 billion investment, the state-owned oil company, that the Harper government approved a few months back. It was very controversial, the Chinese investment into the tar sands interests, and controversial within Canada because of the question of China—not controversial because of all the carbon that’s emitted from tar sands extraction, but controversial because of, you know, the sort of geopolitics of China being not a country that’s fully aligned with the Western powers.

Jay: And just—I guess, just as a little bit of background, particularly for American viewers, does Harper completely discount the whole issue of climate change? Or he pays lip service to it?

Engler: He pays lip service to it, a bare-minimum lip service to it. Even after Obama’s speech, his inauguration, where he, you know, referred to some of the climate disturbances, the Hurricane Sandy and other disturbances within the U.S. of recent, there were—a lot of the commentaries noted how you would never hear that from Harper. He doesn’t deny climate change. He did until pretty recent, before he took office, as late as 2002. There’s an infamous letter he sent that basically denied climate change. But since he’s taken office, that’s, you know, changed officially. But he certainly downplays it or rarely discusses it. He goes out of his way to cut funding to scientists, government-funded scientists that are investigating the matter, and obviously pulled Canada out of the Kyoto Protocol.

And they’ve really put their eggs in the tar sands basket. And that’s one of the reasons why the question of Keystone XL is so important to them, because if—currently, Canadian—or Alberta oil is sold at quite a significant discount on international markets, about $35 discount from the price that American oil is selling at. And that’s in large part because there is limited access to refining, limited pipeline capacities, and the difficulty of getting it to market. And so they’re very nervous that that price differential will continue and actually get worse, making the tar sands unviable economically. And so that’s, you know, a big part of their campaign.

They’ve been so tied into tar sands interests, and really to the detriment of much of the manufacturing sector of the Canadian economy. The price of oil [crosstalk]

Jay: Let me ask that question. How big or how significant is the tar sands in the Canadian economy?

Engler: Ultimately it’s—I don’t know the exact GDP proportion, but it’s, you know, a couple of points of GDP. It’s fairly small in the overall—you know, housing sector would be, you know, up there at the top end, and manufacturing probably still above it. But the price of oil being high and the reliance on tar sands and all the—.

Canada’s one of the few places that has lots of reserves that have completely opened to foreign investment, right? So there’s a huge influx of foreign investment into the tar sands. Most oil-producing countries have, you know, national state-owned energy companies that restrict, you know, foreign ownership. But because Canada doesn’t have that, it’s, you know, very sought after, obviously, by the big, you know, foreign multinational oil companies. And so that—the influx of money at that level has had a real pushing-up of the Canadian dollar, to the detriment of the Canadian manufacturing sector.

And so there’s been some studies—a recent one that came out just showing how few jobs are actually being created from the oil sands, from the tar sands sector, and yet they’re undermining, you know, tens of thousands more jobs in the manufacturing sector.

And there’s a regional component to this. The Conservative Party is very strong. Their base is in Alberta. And so that’s where the tar sands are. So there’s a regional component to that policy [incompr.] being so [incompr.]

There’s, you know, personal components. Harper has very strong personal ties to the oil sector.

So if the tar sands collapses, economically speaking, or even stagnates, they’ve put so many of their—they’ve put so much emphasis on that sector that that’s very dangerous for the Conservative government politically. I think that’s one of the reasons why they’re so aggressive in their lobbying in the U.S. to get the Keystone XL built.

And alongside that is the fact that this is starting to come back—it’s already come back to bite them a little bit, their pulling out of the Kyoto Protocol, their constant criticism of the NDP, the opposition, for discussing a carbon tax, in the context of Obama’s recent declarations about a desire to bring in a carbon tax and, you know, concern about climate disturbances. This is—the Conservative Party policy has started to cause them a little bit of trouble politically within Canada.

And so they’ve already started changing their rhetoric a little bit because of the protests in the U.S. against the Keystone XL. They’ve been changing their rhetoric a little bit with regards to climate change. It’s—I think at this level it’s just a rhetorical thing. Whether it will move to policy, that’s sort of a matter of, you know, where things go in terms of—politically. But they’ve been really forced on the defensive.

So it’s an interesting dynamic where you have a social movement in the U.S. that’s basically forced a, at minimum, rhetorical shift in gears by a Canadian government on the question of climate change.

Jay: Alright. Thanks for joining us, Yves.

Engler: Thanks for having me.

Jay: And thank you for joining us on The Real News Network.