November 03, 2014

Gas Processing Association Canada Speech

Good afternoon and thank you for the opportunity to speak here today.

I first presented this idea in my speech today about three months ago in Vancouver. As I get into it further, you’ll see why British Columbia was the logical launching point for the idea.

But after I gave it, a headline in the Calgary Herald declared “Wildrose leader presents an appealing pipe dream.”

I’ve spent my fair share of time in the media, and I know a backhanded compliment when I see one.

A pipe dream. Is that really what this is? I thought long and hard about it. I asked a lot of people about it too.

Now before I go on, here’s one thing you should know about me: I am the quintessential eternal optimist. So take it with a grain of salt when I say this: It is absolutely NOT a pipe dream.

And I’m going to do my best to make the case for why we can do this. So here we go.

First of all, the obvious. Our province is hopelessly landlocked. You can hop in your car from and drive 15 hours in any direction without reaching tide water. The closest and most accessible port is Prince Rupert, nearly 2,000 kilometres away.

Not only is this inconvenient for when we want a day at the beach, it means the energy we extract and produce in Alberta isn’t easily transported and made readily available to an energy-hungry world.

Throw in a BC government that has hardly been a cheerleader for greater market access, and an American president that won’t approve a simple pipeline, and Alberta has a serious problem.

We produce the oil the world needs to the great economic benefit of many and believe – myself included – that it should be transported to international markets by pipeline and tanker, absolutely the safest and most reliable methods of moving crude oil that we have today.

From where we sit in Alberta, the Pacific Ocean is a mere 1,100 kilometres away – a straight line from Edmonton to Prince Rupert. The route, while rugged, doesn’t cross any international borders and cuts through a jurisdiction with a similar economy and history to ours.

To the rest of the world, this must come across as a little strange. It should be a no-brainer: Build transportation links. Sell resources. And create wealth and prosperity. For everybody.

B.C., on the other hand, can hardly be described as enthusiastic about this opportunity. The breadth and intensity of the opposition appears, at least to us, daunting, edging on hopeless.

But let’s be clear: Neither Alberta, nor Saskatchewan, nor British Columbia would be where we are today – booming economies, healthy populations and bright futures – without developing and selling

To be fair, the opposition to oil pipelines and tankers in particular and industrial development in general are not unique to B.C. In today’s world, it seems as though there's always somebody opposed to pretty well anything that turns a profit.

Award winning business author and Financial Post columnist Peter Foster has just released a book called Why We Bite the Invisible Hand – The Psychology of Anti-Capitalism.

In it, Foster analyzes over 300 years of economic history to try to understand the dichotomy of why, on the one hand, so many take for granted all the conveniences and advantages of modern life while, on the other hand, remaining steadfastly opposed to their advancement.

By world standards, we’re rich. But people don’t seem to understand why that is, how it came to be, and what we must do to maintain this privileged position in the world.

About economic progress, Foster cites steady progress including, and this is a long list but I think it bears quoting, “an ongoing revolution in agricultural production, mass-produced cotton clothing, railways, the telegraph, electric light, indoor plumbing, a phalanx of domestic appliances, flushing toilets, sewage systems, the telephone, radio, television, automobiles, 100-storey buildings, stunning advances in pharmaceuticals and medical technology, plastics, refrigeration, air travel, air conditioning, space flight, supermarkets with 50,000 products, computers, the internet, the Blackberry, the iPod, the iPad, Google, Facebook, etcetera.”

The intangible benefits have been declining hunger and poverty and vastly reduced child mortality rates.

Due to advances in nutrition, health care and safety, people are living longer than ever before.

And every one of these improvements is to some degree powered by energy. Today’s society is utterly dependent upon it. This includes oil, the world’s primary transportation fuel. Most people could not conceive of life without a car or without airplanes. Those who don’t have either want both.

The other more recent phenomenon is the disproportionate air time afforded to the vocal minority of naysayers. There’s always been a NIMBY crowd – but never before have they been so interesting to the media.

And in a world where perception is reality, this presents a real challenge. I go back to Peter Foster’s conundrum. What future does a society so utterly dependent on energy and economic growth have when it is increasingly opposed to both?

When you want to build, you have to ask. But today, the answer from the grumps in the NIMBY crowd is increasingly “no.”

No pipelines. Too dangerous.

No plants. Too toxic.

No ports. Too big.

No roads. Too noisy.

No power lines. Too ugly.

No shopping centres. Too much traffic.

No cell phone towers. Too many signals.

No tall buildings. Just too tall.

It’s almost reflexive. Growth has somehow become inherently bad.

And as a pro-growth optimist who believes in the power of progress, this really does trouble me.

They say all politics is local. Everything in modern Canada has become a conflict between the macro-benefit of economic development – like developing the oilsands and selling the product to Asia – versus the micro-inconvenience of having this or any industrial commercial activity occurring anywhere near my house. Or your house. Or Dave and Sheila’s house. This is a big problem, one that we must address sooner than later.

The rise in this kind of grassroots opposition has happened a lot quicker than political leaders have adapted to.

Historically, such matters have been dealt with by planning boards or government agencies. Politicians like this. They don’t have to take sides which can cost votes. They turn the process over to “expert panels” then abide by their decision.

Take the National Energy Board, for example. Because new pipelines cross inter-provincial boundaries, the hearings to adjudicate such activities are held by the NEB. They are public, as they should be.

But because politicians are so far behind on this file, regulators are forced to deal with issues not in their mandate.

Much of the opposition to Northern Gateway, for example, is rooted in a belief that we should no longer use oil as an energy source.

The City of Vancouver has recently requested that the hearings into the expansion of Kinder Morgan’s Trans-Mountain pipeline explain the economic impact of future climate change caused by increased oil production that will result from the completion of this transportation link.

Econometric modeling is tough enough, but I sure wouldn't want to be the person assigned with trying to model that.

The NEB is clearly frustrated.

In a rare interview with the Financial Post on April 21, outgoing NEB chair Gaetan Caron spoke candidly about the role of the NEB in the new era of energy development activism.

In conditionally approving Northern Gateway – the sole purpose of which is to carry bitumen to export markets – the NEB did not pass comment on the merits of whether or not oilsands should or should not be developed. This is beyond the NEB’s mandate, according to Mr. Caron.

Unlike the U.S. State Department which has connected the approval of Keystone XL to growth in oilsands production and carbon emissions, the NEB has not ventured into this arena.

Mr. Caron said, “It would become a trial of modern society’s reliance on hydrocarbons, and that’s clearly way beyond the mandate (of the NEB). It’s clearly a policy question. That belongs to the world of policy-making and politics, in which we are not involved at all.”

Well, I am involved in the world of policy-making and politics. I plan on being Premier of Alberta and I’m here to tell you this:

We are going to have to step up to the plate and do something here.

You know all those times politicians talk about leadership? Well, this calls for it. Desperately.

Here comes the pipe dream:

I believe we should start discussing a national market access strategy that creates dedicated commercial corridors for transportation and industrial activity.

Imagine this: A nationally negotiated transportation, commercial and utility right of way going from northwest Canada from Northern Ontario and Manitoba – through Saskatchewan and Alberta – all the way to the West Coast.

These would be major pre-planned routes in which commercial ventures would not only be permitted but actively encouraged.

Rather than have industry come up with a multitude of ideas, proposals and routes that would ultimately wind up in a series of endless hearings, politicians would take the lead and settle as many issues as possible in advance.

But we don’t need six or eight or twenty routes. We probably only need one, providing that commercial corridor is wide enough to accommodate what we know will happen in the next ten years and hopefully what may take place in the following twenty or fifty years.

Instead of being 100 metres wide like a typical pipeline right-of-way – or even less, like a railroad hugging a cliff in a canyon – this corridor could be up to a kilometre wide.

The distance from the U.S. border to the North West Territories is 1,224 kilometres. I'm willing to wager that Western Canadian provinces would be glad to use 1/1200th of their real estate for this kind of certainty.

So assuming that our provinces are about the same length from north to south, politicians would be asking residents to set aside less than one tenth of one percent of its land mass in a more or less lateral direction which would contain the bulk of the transportation infrastructure west to the Pacific, and east to Ontario.

Imagine the potential. A swath of land dedicated to the movement of our most precious and valuable natural resources.

At this point I should recognize the leadership of Premier Brad Wall. Premier Wall has been a clear and consistent advocate not only for additional rail capacity for grain but also for additional pipeline capacity. To his credit, he recognizes that the more product that gets to market, the more Saskatchewan can capitalize on the increased value of that product.

That’s why he’s pushed so hard for Keystone XL, and why he’s taken such a strong position in favour of Northern Gateway – even though it doesn’t directly affect your province.

These are critical projects for our collective economic future – and they’re too important to have bogged down in piecemeal regulatory nightmares.

Think of the possibility for Saskatchewan: A highway or a rail line or both connecting Flin Flon through the Clearwater region to Fort McMurray and on to the Port of Prince Rupert, opening up a brand new frontier of economic development.

But it needs to happen in more than just Saskatchewan. Some Manitoba-based or Northern Ontario-based resource of the future shouldn’t be held hostage and prevented from realizing its potential because of political intransigence somewhere else.

This is a national project. It requires national leadership.

Now some may accuse me of being naive. As I said before, I am an optimist and occasionally that does lead to some idealistic endeavours.

Certainly – given the intersecting interests of powerful activists across the spectrum – a single right-of-way stretching across four provinces could fall into that category of being excessively idealistic.

The federal government would almost certainly have to do the heavy lifting because the bulk of the negotiations would have to involve agreement and buy in from our First Nations as a starting point.

It would deal with river crossings and protecting environmentally sensitive habitat. It would not be for the faint of heart or weak in spirit.

But where would we be without ideas?

These kinds of large-scale, nation-building enterprises are exactly why the provinces of British North America agreed to confederation.

The government of Canada was originally created to make all provinces richer through the benefits of a transcontinental railway.

In the 1950s, the Government of Canada embarked on a similar project when it developed the St. Lawrence Seaway with Ontario, Quebec and the United States.

Now, Sir John A. Macdonald never had to contend with the 24-hour news cycle and MacKenzie-King surely didn’t have misinformed Hollywood celebrities campaigning against him on Twitter – but now is the time to act. The time to lead.

A trans-national commercial corridor through the north of western Canada will be for this century what the St. Lawrence Seaway Project was for the previous one and maybe even what the Canadian Pacific Railway was for the one before that:

A unifying venture that will define a generation and lay out the foundation of our economic prosperity for decades, even centuries to come.

The ideal route of this commercial corridor would be identified almost entirely by the absence of objection. In other words, pretty much the exact opposite of the process today.

Nobody lives there? Perfect! That’s where it will go.

And once it exists and is clearly defined, people who don’t want anything industrial occurring in their neighborhood - whether it's a new TransCanada northern highway, or a new rail line, or a pipeline, or a transmission line or a cell phone tower or a refinery - would know where not to live.

Or if they want a good paying job, they would know exactly where to move.

Would the route be a straight line? Probably not. But ask everyone trying to build a pipeline today if they wouldn’t gladly reroute north or south by a few hundred kilometres if they could be assured of progress and a positive outcome.

And then there are the process improvements. One set of aboriginal land claim negotiations. One set of hearings. One set of community impact statements. All up front. Sure, it would be lengthy and arduous and at times frustrating. But once it’s done, it’s done.

The only losers would be the lawyers and lobbyists. I’m sure they’ll find work elsewhere.

In today’s world – where the process for creating jobs, wealth and tax revenue is becoming burdensome to the point of unworkable – it is time for those of us elected to lead to actually lead. From the front, with courage and resolve.

Macdonald did it. King did it. Why can’t we do it? Why can’t we do something great that the next generation will thank us for?

As I said before, the word ‘no’ is becoming all too commonplace when we talk about such things.

 ‘No’ doesn’t get us to where we need to go. ‘No’ doesn’t build. It doesn’t accomplish. It doesn’t achieve.

I know all of the reasons why this idea is difficult. But to be honest, the time for excuses about why it can't be done is past.

Let’s talk about all the reasons why this idea is necessary. And then let’s see where we go from there.

I’m pleased to answer any questions you may have.


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