August 1, 2012
By Matt Palmer
One does not have to look hard these days to find the death notices for Enbridge‘s Northern Gateway pipeline. And, although southern sections of TransCanada‘s Keystone XL have received approval, getting the cross border sections of the line built seems far from a sure thing.
A year ago, few would have predicted this current scenario of major pipeline projects, the lifeblood of the oil and gas industry, being in dire threat of not getting regulatory approval. While environmental groups ratchet up their attacks on the pipeline companies, and those same companies continue to fail in being able to engender genuine confidence in their ability to operate safely, there is a big question all of us must now grapple with: what happens if big pipeline projects are not built?
Our world relies on pipelines to deliver oil and gas safely to refineries where it is turned into hundreds of different products, beyond transportation fuels, allowing us to benefit from modern science miracles, leading edge technology, robust food production, and the list goes on. Without a reliable system to deliver oil and gas to refineries our modern world as we know it stops. Period.
The current spate of pipeline spills is alarming and unacceptable. The pipeline industry’s response to these spills to date have been far from effective, or at times even appropriate. For years, and especially during the sales job for Keystone and Gateway the companies have downplayed the risks, and continue to give assurances that the new pipelines will be built to the highest possible standards – the safest pipelines ever built. But, when the sales pitch is not working, it turns out they can spend more money to make the pipelines even safer. Leaving one to wonder what “highest possible standards” means? Bad optics, bad tactics – but this is where bottom line business practices lead.
Environmentalists will applaud if projects like Keystone and Gateway are not built. Their big dream is a world built on the widespread availability of sustainable low-carbon energy. This is a dream we should all embrace, but building an alternative low-carbon energy system will come with its own costs and impacts, many of which have not been considered, or calculated. Alternative energy systems will help manage carbon emission problems, but introduce new environmental challenges.
Getting there requires building massive amounts of new infrastructure including wind turbines, solar panels, transmission lines, power plants, battery storage, etc. Can any of these be done with out the feedstock materials from fossil fuels? And, even if alternative feedstocks are found, developed, and become cost-effective, what will be the impacts from harnessing those sources?
This is not to be contrarian, rather to suggest these changes involve challenge, risk, and cost. Yet change we must.
The economic crisis of the last few years has illuminated many tragic business practices that put profits above all else. Is a pipeline built to the “highest possible standards” really the safest, or is it a calculated risk assessment designed to keep costs as low as possible – hedging safety against the bottom line? Especially when it turns out more money will make it safer.
No matter what the answer is to that question, at the end of the day, society needs these pipelines for many decades to come. And, there will be more spills. That is a sad reality, so the is the strategy to shut them all down? Or do we enter a new phase of industrial development where the most valuable stock is the environment not quarterly dividends? We need pipelines to work, and to have full confidence that the safety measures are credible and actionable.
Our environmental systems are under great stress, yet these stresses are manageable. Bold leadership can take us there. Who will be the politicians, the corporate leaders, everyday citizens who will take up this challenge to push the status quo that most of us are complicit in? The challenge to change the ethos of profit above all else. The challenge to adjust our patterns of consumption.
Profit is important, but we should question if expectations of companies for continuous double digit growth are reasonable, or sustainable?
The Environment is not just a buzz word or a fad. A healthy environment is the life blood of all that is, including all corporations that harness resources from the earth. Companies make environmental disasters at their own peril. Banks are not the only corporations that are not too big to fail. BP may have survived the Gulf disaster, but the landscape is changing.
Should Gateway be built? Keystone XL? If the environmental risks are judged too great, government may say yes, but citizens may say no. If companies continue to say the risks are minimal, because in fact, the risks are quite real, and serious to those who live in their pathway, citizens will say no. Ask the people who live along the Kalamazoo River if the risks are minimal, or people along the Gulf Coast. So, how do we make pipelines safer? How do we ensure better response mechanisms are in place?
The lumber industry knows well how blockades of projects can change the landscape. If the Federal Government pushes through approval for Northern Gateway will Aboriginal and Environmental groups make Clayquot Sound protests look like a picnic?
How many of us understand what pipelines do? How they work? Their importance? Do most people know how many millions of miles of pipeline operate every day without incident? How they fit into the overall energy infrastructure? Do we understand that pipelines have importance beyond energy?
I suppose one option for all these pipelines if they are not used for transport oil and gas – they would make for the biggest waterslide park in the world. Tally ho!