Honourable senators, I rise to speak to Bill S-245, An Act to declare the Trans Mountain Pipeline Project and related works to be for the general advantage of Canada.

Resulting from the project’s environmental impact assessment, Kinder Morgan formally committed to specific mitigation measures. Provided the Governor-in-Council approved the project, the National Energy Board attached 157 conditions to the new certificate. These cover environmental protection, consultation of those affected, including Indigenous communities, and safety and integrity of the pipeline.

I have read numerous reports and articles from government, industry and think tanks and considered these sources in relation to the environmental impact assessment and other issues. My comments today are based on a thorough analysis of facts.

The TMEP project is underscored by three concrete but solvable issues: the underestimation of environmental impacts; the overestimation of economic benefits; and the insufficient consultation with owners and stewards of the land.

The burden of proof for these prerequisites are the responsibility of Kinder Morgan, a company that operates but has never built a pipeline in Canada. Despite important voids and imbalanced circumstances as evidenced by the 157 conditions, the NEB gave its approval. To respect the rule of law is to go forward with construction of the pipeline expansion project.

However, can we blame British Columbia for wanting to protect its coastal waters? Is it clear why Alberta and Canadians must support the TMEP project? Can we blame the Indigenous people for demanding thorough consultations and fair conditions for consent? Is Bill S-245 the correct approach to solve a disagreement between two Canadian provinces?

[Translation]

Alberta’s economy has been through a lot of ups and downs in recent decades and is just now recovering from a slowdown. Alberta’s economy is expected to grow by 6.7 per cent this year, which is much more than all the other Canadian provinces. According to the Conference Board of Canada’s latest 2018 projections and the Government of Alberta’s 2017 projections, this growth will be led by agriculture, the agri-food sector, renewable energy, tourism, the financial, real estate and insurance sector, and retail sales — not oil. Alberta’s growth has boosted job creation by 18.4 per cent.

[English]

An increasingly diversified economy is very good news for Alberta. A diversified economy provides the broad base for growth that is crucial to sustaining long-term economic stability. Those who hold dear the stable development of Alberta must support growing economic diversification in the province, particularly in view of the major changes occurring in Canadian and worldwide oil, gas and energy sectors.

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In 1971, there was a single oil sands operation at Fort McMurray which produced 30,000 barrels per day. Since the 1990s, only 40 per cent of oil sands are extracted by Canadian companies, with the remainder by American companies and more recently by foreign corporations.

In 2014, oil sands production was 2.3 million barrels per day, representing close to 30 per cent of Alberta’s $300 billion GDP. According to Statistics Canada, 98.5 per cent of the crude oil from oil sands is exported to the U.S. With this reduced diversity and a single product buyer, the economy is subject to the high volatility of crude petroleum. The prices of crude oil decreased from US$140 per barrel in 2009 to US$30 a barrel in 2016. Last December, the Western Canadian Select prices dropped to a low of US$20 a barrel. Alberta’s old mono-economy struggled to thrive in a US$50 per barrel world. In 2016, more than 3 million barrels per day of Canadian crude were sold to the U.S. at bargain basement prices.

Divestment from fossil fuel is another major concern for oil sand business. Norway’s trillion-dollar sovereign wealth fund will fully divest of fossil fuel holdings, which may impact Canadian oil and gas equity shares which are valued at US$2.86 billion. This move could impact 61 Canadian oil and gas equities including Suncor, TransCanada, Enbridge, Canadian Natural Resources Ltd., Encana, Cenovus and Imperial Oil. The retreat comes at the same time as large scale sell-offs by international oil sands producers totalling $30 billion, including ConocoPhillips, Royal Dutch Shell, Statoil. And just yesterday, HSBC, the largest bank in Europe, announced that it will no longer finance oil sands projects.

The International Energy Agency stated in its World Energy Outlook report that the U.S. could be a net exporter of oil within a decade and is set to become the world’s dominant oil and gas production leader for the following decades. The U.S. is moving from being our partner to being our greatest competitor.

Can landlocked unconventional oil sands, which need special refining conditions, compete with lighter conventional crudes from the U.S. which are easier to refine?

[Translation]

Considering the history of the oil sands, it is rather troubling that fewer than five Canadian refineries can use the oil sands as raw material, while refineries in the Gulf and in the American Midwest have undergone modifications to be able to do so. The new mega-refineries currently being built in Asia and the Middle East have been specifically designed to export refined products. This gives them the flexibility needed to accept the heaviest forms of sulfur-containing crude oil. Given that older refineries are gradually shutting down, complex refineries account for the vast majority of the global refining capacity.

The main reason behind the Trans Mountain pipeline expansion project is to maximize prices by getting the oil sands to tidewater. However, this oil, which could be sold in Asia, commands a lower price than in the United States, considering the high transportation costs. Furthermore, the OECD recently revealed that growth in Asia has slowed and will remain stable. At the same time, renewable energy consumption in Asia has doubled in a little over two decades. According to the International Renewable Energy Agency, China is investing US$364 billion in renewable energy production.

[English]

Now, given that the petroleum companies themselves are divesting, that the U.S. will become a net exporter, that Canada does not have oil sands refining capacity, that potential buyers in Asia are moving to renewable energies, that refineries and pipeline companies are foreign owned, and Alberta economic diversification is on a good track, are new pipelines sound decisions or political decisions from an economical perspective? Maybe, but this has to be proven with transparency and due diligence.

The proposed $6.8 billion Texas-based Kinder Morgan TMEP and tanker project would triple capacity to 890,000 barrels per day and would increase tanker traffic nearly 700 per cent in Vancouver’s harbour, passing by hundreds of kilometres of beaches, islands and coastal wilderness.

Are the economic benefits of the TMEP sufficient to justify the increased risk of environmentally disastrous spills on the B.C. coastline and the additional contribution to climate change resulting from increased bitumen production?

The Alberta government advertises that 37,000 direct, indirect and induced jobs will be created per year of operation, as well as 15,000 construction jobs and 1,300 marine sector jobs, while the Conference Board of Canada estimates the creation of 34,000 jobs annually for 20 years. These estimates differ largely from what Kinder Morgan mentions in its own Volume 5B of its NEB submission of 2,500 jobs per year for two years. One thing is certain: When compared with similar pipeline projects, most job creation occurs over the two- to three-year construction period and is around a few thousand.

The 60-year-old existing Trans Mountain pipeline has already spilled around 5.5 million litres in 82 separate incidents. It needs replacing. Ships carrying fuel have recently spilled into B.C.’s coastal waters exposing a deficient marine spill response. A spill could put 98,000 coast-dependent jobs, salmon rivers, wildlife, tourism, and the health of coastal residents and ecosystems at great risk.

The initial NEB review did not consider either the upstream or downstream greenhouse gas emissions of the project. GHG emissions from oil sands are between 8 and 37 per cent higher than conventional crude. The pipeline is projected to add 13 to 15 million tonnes per year from increased oil sands production.

In 2016, the U.S. National Academy of Sciences conducted a thorough study on diluted bitumen spills from pipelines. The study examined physicochemical properties from dilbit, environmental toxicity and spill response planning. To paraphrase the report: dilbit is substantially different from other crude oils in its high density, viscosity and adhesion properties. These chemical and physical properties are relevant to environmental impacts and require modification to regulations for spill response plans and cleanup.

Environment Canada jointly with Fisheries and Oceans and Natural Resources Canada have also noted the unique chemistry of oil sands, namely the presence of complex compounds such as n-alkanes, PAH/APAH and saturated biomarkers.

[Translation]

A report presented to Transport Canada in 2014 by the consortium WSP/SL Ross assessed the risks associated with oil spills caused by ships in Canadian waters south of the 60th parallel after conducting a risk analysis. One of the main observations was that one of the zones with the highest probability of a large oil spill occurring is the waters around the southern tip of Vancouver Island, and that those spills have the potential to cause significant damage in the very sensitive areas along the southern coast of British Columbia.

Before the project was even proposed, elevated risks and vulnerabilities had already been identified along the path of the pipeline.

Furthermore, the Government of Canada has the responsibility to “consult and accommodate” the First Nations before allowing such a project to go forward on their ancestral lands. However, that does not translate into veto power over a project. Some First Nations are opposed to the Trans Mountain project.

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In a recent ruling against Kinder Morgan Canada and the federal government, the Federal Court of Appeal found that the government did not act in the best interest of the Coldwater Indian Band when it failed to modernize the 1952 ruling that allowed the original pipeline to be built on the reserve.

[English]

I hope this analysis has shown you that there are genuine concerns and issues, but they can be resolved by increasing transparency and attenuation or compensation measures if, despite solid arguments, politicians and corporations want to go ahead and build this pipeline.

Bill S-245 could have longer-term unintended consequences for industry and Canadian citizens. It could irreversibly damage interprovincial relations and could result in undermining provincial powers. One thing is certain. Pouring oil in the already burning fire between two sister provinces is neither an advantage nor in the interest of Canada. Thank you.