Published in the Financial Post Today

https://financialpost.com/opinion/opinion-alberta-ottawa-agreement-nothing-particular

Here is the text:

The new Alberta-Ottawa agreement to do nothing in particular

The firm handshake and big smiles of Danielle Smith and Mark Carney and the celebratory media coverage attending their signing ceremony last week all gave the impression the two leaders had finally signed a binding agreement that will result in construction of a bitumen pipeline from Alberta to Canada’s West Coast. How wrong the journalists were! They either didn’t read what had been signed or didn’t understand it.

This is becoming a habit. Last November, the same two actors happily celebrated their first Memorandum of Understanding (MOU) about the same potential pipeline. It was mere theatre. The MOU was not a legally binding agreement to build a pipeline or anything else. In the same way, this new “agreement” sets out aspirations, priorities and reaffirmations, but without much implementation of any of them.

The apparent purpose of what might be called “MOU Part II” is to persuade the media there has been real progress towards a real pipeline — when there has not.

Every criticism of MOU Part II that I have seen focuses on the competitive disadvantage imposed by the industrial carbon tax, given that Canada’s competitors don’t face this cost. That’s a valid criticism, but only one of many that could be made. There’s no change to the West Coast tanker ban or to the requirement for Indigenous agreement and British Columbia’s approval. This new agreement supposedly “clears a path” to a pipeline. But you don’t clear a path by creating more obstacles. And that’s what two largely unnoticed appendices to this new MOU do.

The first is the “Cooperation Agreement on Environmental and Impact Assessment,” so labelled because Alberta uses an environmental assessment process while Ottawa has the notorious Impact Assessment Act (IAA) — the one its critics call the “No More Pipelines Act.” The IAA is to be built into Alberta’s current environmental assessment, so that it is no longer the Alberta process but the federal process. If Alberta and Ottawa can’t agree on any issues that arise over impact assessment, the federal process prevails. This gives Ottawa a veto over, and effective control of any Alberta assessment of a proposed pipeline.

IAA section 22.1.n (no less) requires every assessment to take into consideration “the intersection of sex and gender with other identity factors.” This is one of the most controversial sections of the entire act. Why it is relevant to a proposed pipeline is not self-evident. Nevertheless, an impact assessment will now have to have consider whatever evidence may be presented on this issue by as many parties wish to do so — as well as on the 19 other mandatory hearing subjects.

This federal process is the real investment killer. We saw that in the TransMountain Extension Proposal, when the investors walked away after a decade of uncertainty, even before the final court decisions were released. Ottawa had to buy the pipeline and complete it at a total cost of approximately $34.2 billion.

The appendix purports to limit the process to two years following receipt of the initial project description. That’s a worthy but also likely impossible goal. Ottawa cannot control the number of Indigenous and environmentalist parties who decide to participate, nor how long it takes them to present their evidence. If it tried to establish such limits, that would guarantee litigation, which would have a good chance of success. If in the end the court quashed the original hearing, it would have to be done again, taking as long as it takes.

The second appendix is titled “Agreement in principle: Canada-Alberta methane equivalency agreement.” But that’s misleading: the document merely says that the parties commit to developing an equivalency agreement to deliver methane emissions reductions of 75 per cent compared to 2014 by 2035. This is another agreement to agree in future, with the objective, but no guarantee, of doing so by the end of 2026. If this further agreement can’t be reached, there will be no pipeline. If it is reached, that almost certainly will be because Alberta has agreed to the 75-per cent reduction. How Alberta is to achieve that level of emissions reduction isn’t specified, isn’t known, and isn’t likely.

I wrote here last year that there will be a new pipeline from Alberta to the West Coast when pigs can fly. This new “agreement,” with its two appendices, has just made the pigs fatter, heavier and even less airworthy. Good luck, Alberta!