By Briony Penn, February 2012
Stephen Harper’s government doesn’t want “socialist billionaires” messing with Canada’s resources unless they’re from China.
Why is the Canadian government behaving so bizarrely over the Enbridge Northern Gateway pipeline? That’s a hot topic as the pipeline hearings unfold. At the heart of the issue, many argue, is Canadian sovereignty over energy. As journalist and UVic lecturer Terry Glavin wrote in the National Post after the opening of the Enbridge hearings in old Kitimaat:
“If there were a global competition for the most brazen and preposterously transparent attempt by a ruling political party to change a necessary subject of national debate with alarmist distractions and hubbub, the Conservative escapade engineered in Ottawa these past few days really deserves some kind of grand prize.”
The “alarmist distractions” were Minister of Natural Resources Joe Oliver’s claims that “radical” environmentalists were being fuelled by “socialist billionaires” from the US intent on “demarketing” Alberta’s tar sands.
The fact is there are 10 foreign oil companies registered as intervenors at the hearings into the pipeline—but not a single foreign environmental organization. While $20 billion has been invested in the tar sands by foreign companies over the last three years, foreign donations for conservation over the last 20 years don’t amount to even a fraction of one percent of that. As Gerald Amos, the Haisla First Nation leader who kicked off the hearings in Kitimaat, stated in his open response to Joe Oliver, “The fact that our conservation leadership has attracted the support of conservation funders should be a source of pride for British Columbians. We do not follow the lead of anyone, we assume and take responsibility for our lands and lead others in that regard.”
Not surprisingly, Minister Oliver’s attempts to distract backfired spectacularly and provided a flurry of activity amongst journalists, researchers and democracy-watchers alike to get to the bottom of the real motivation behind his ridiculous accusations.
George Hoberg, political science professor on energy policy at UBC writes: “The notion that foreign influence is on the side of environmentalists and in opposition to corporate interests in resource development is bizarre” and points to the crucial need to steer the discussion back to the real issue—foreign influence on Canadian resource policy. He cites an example in a Bloomberg article on Alberta energy minister Ronald Liepert wanting to push policy through on the pipelines because of Chinese investor pressures.
But what is such pressure going to mean for a long-term national energy policy? Especially in light of the fact that eastern Canada buys its oil from vulnerable Middle Eastern suppliers while the West sells its oil at bottom dollar? With at least $20 billion of foreign investment in the tar sands in the last three years—and set to double in the next three—it’s important to ask who, or what, holds that influence?
They call them the Big Four. First is Sinopec, the second-largest petrochemical company in the world behind Exxon and owned by the state of China. Sinopec has invested billions in the tar sands along with PetroChina, Chinese Investment Corporation (CIC), and China National Offshore Oil Corp (CNOOC), and is one of the backers of the Northern Gateway project. They are putting $10 million into Enbridge for the “pre-stage work and support” for the pipeline, presumably to secure their recent investments of $4.65 billion in Syncrude and their $2.2 billion takeover of Daylight Energy. Meanwhile, CIC has bought up PennWest (no relation) Petroleum for $1.25 billion; CNOOC spent $2 billion on securing Long Lake from OPTI Canada; and PetroChina spent just a tad less securing control over McKay River.
As I sit down to write this, one week into the Enbridge hearings, Conoco Phillips, the Texas oil group, has announced they are looking for a buyer for half their tar sands assets, worth $20 billion, hinting strongly at Chinese investors—who seem the keenest on buying into the planet’s dirtiest oil. The six properties being offered by ConocoPhillips include 715,000 acres of Canada and promise more than half a million barrels a day when up and running. Tim Bryant, the vice president of ConocoPhillips’ Canadian division, states in the Financial Post that “These are world-class trophy assets.”
One interesting aspect of this issue is the absence of real data. How much of our “world-class trophy assets” are owned by countries, China in particular, to which the bitumen is destined to flow? And what effect will that play in influencing democratic process? According to the most recent (three years old) data from Stats Canada, 35.3 percent of the oil-and-gas-extraction-and-support industry was already foreign-owned, with 51 percent of all oil and gas sector revenues going to foreign-owned companies. Carl Meyer, a business writer with Embassy Magazine, thinks foreign ownership of the tar sands is on the upward trend—which means we could have reached the 50 percent mark.
I contacted the Pembina and Polaris Institutes, the Centre for Canadian Policy Alternatives (CCPA), and the Dogwood Initiative, and their researchers all pointed to the lack of hard data on the topic of ownership. Nathan Lemphers, Senior Policy Researcher with Pembina, laughed when I asked if he had been tracking the foreign investment trends and said, “Unfortunately, we don’t have socialist billionaires funding this type of research, but it needs to be done.” Marc Lee from CCPA said Minister Oliver’s attacks have galvanized their organization to get accurate data out to the public on all aspects of this deal, but on the question of ownership they are starting with nothing but the 2009 data that includes other conventional oil and natural gas industries as well. Lee notes “Given the Chinese investment in the pipeline and rising investment in the tar sands, and that China is the ultimate destination for the bitumen, it is a fair question to ask: Is our government more obligated to meet the demands of the Chinese Communist Party than its own citizens?”
Nobody seems to be able to answer that question—certainly not the federal government, which, when you think about it, is more likely to be the dangerous-radicals-influenced-by-socialist-billionaires-threatening-national-security than any of the intervenors.
Harper has already made it clear in his tax rules that foreign-owned oil exploration companies are welcome—with open arms. They receive additional domestic financing; a 100 percent write-off and indefinite carry-forward for exploration and development expenses; a 30 percent amortization of the cost of acquiring resource properties; and gain access to the accelerated capital cost allowance on green-field mines and major expansions.
Such largesse leads Terry Glavin to charge: “Canadians are being expected to provide Beijing with a steady supply of bitumen in a closed loop from Beijing’s own oilsands properties in Alberta, through Beijing’s own pipeline to oil tankers to its own refineries back in China, so that the black comedy of ‘world trade’ can keep unfolding the way Beijing wants. Not only that, we’re all supposed to be bloody grateful for it.”
With the recent rejection by President Obama of TransCanada Corp’s Keystone XL project that would have seen bitumen flow south of the border, the federal government will be even more determined to provide China access to the tar sands via Kitimaat.
Says Marc Lee of the Canadian Centre for Policy Alternatives: “The bizarre letter by Oliver shows that they’re losing. They are desperately trying to frame it around ‘the foreign environmentalists,’ but it is the First Nations that hold the power and they are united.” Even the Gitxsan First Nation, recently widely trumpeted in Canadian media as supporting Northern Gateway, have now made clear their opposition to it.
The buzz around the coast is that Sinopec will be carrying out their own little community visits to chiefs and council to influence their decision-making.
They will have their work cut out for them. Jess Housty of the Haisla First Nation went to the Kitimaat hearings and will be helping with community engagement on February 2 and 3 when the hearings come to Bella Bella. “I have never seen people united over an issue like this before. It is incredible seeing the energy that this has brought to our community to fight. If this pipeline were to happen and I know it won’t, it would be the greatest travesty of justice in Canada today.”
Briony Penn PhD is a naturalist, journalist, artist and award-winning environmental educator. She is the author of The Kids Book of Geography (Kids Can Press) and a A Year on the Wild Side.