Following a contentious few months, the Canadian Federal Government bought out Kinder Morgan’s interest in the Trans Mountain Pipeline expansion stretching from Edmonton, Alberta to the Pacific Coast north of Vancouver. For a price of $4.5B, the pipeline switches from private to public control, with all that entails. It does not necessarily mean that the pipeline even gets built, however, as British Columbia continues to raise environmental objections that caused the delay in the first place and resulted in Kinder Morgan’s bailing out of the project.
Bucking continued Court victories by Kinder Morgan, threats from the Province of Alberta and the wishes of both the Canadian Federal Government and a majority of Canadians polled, British Columbia still refuses to relent. Had the pipeline asset sale not been completed, Alberta Premier Rachel Notley was prepared to enforce Alberta Provincial Bill 12 which would have seen one Canadian Province embargo oil and gas shipments to another. This would have raised fundamental issues of Canadian federalism and the basic concept on which the Canadian nation rests. Instead, Canadian interprovincial trade seems to be preserved, and B.C. Premier John Horgan now has a tougher foe to face. His opposition now is the Canadian Federal Government, not an American pipeline company or a sister Canadian province.
It’s very hard now to see how Horgan comes out ahead in this dispute, but indeed the entire matter is filled with degrees of losers and no real winners. For Canada, $4.5B in private investment in the country simply evaporated. Now in Federal hands, no one knows how or when the pipeline assets will be sold. The business climate in Canada to attract private direct investment has taken a huge hit. Alberta still is a long way from seeing the pipeline built, and Alberta needs the revenue to balance its budget. Finally, Kinder Morgan Canada watched its shares tumble on the Toronto Stock Exchange as Trans Mountain provided its main source of growth potential.
Perhaps Chris Bloomer of Canadian Energy Pipelines Association said it best. “We can’t do this again and we need to look forward to how we don’t get into this situation again.”
We in the United States should be watching the Trans Mountain controversy very closely. It provides a case study of what happens when the national good gives way to parochial interests, but simultaneously those interests don’t trust the national government to strike the proper balance to preserve legitimate parochial rights. We are dangerously approaching that point in the Northeast. It would be helpful if all would pull back from their apocalyptic political pronouncements, as neither side’s political statements hold water when subjected to critical analysis.
A perfect example is the claim by certain political leaders that we need to move immediately to a “100% Renewable Energy” future. Politicians who state this don’t understand what that really entails. Indeed, they shield their eyes to the downside of even attempting to put that aspiration into practice given the state of modern science.
Central to the concept of “100% Renewable Energy” is the reliance on batteries to store and transmit the energy produced from sources like solar and wind. Batteries use lithium and are dependent on a process involving cobalt. Last month CNN, and this week Greentech, reported on how the world’s cobalt supply is dependent on child labor from the Democratic Republic of the Congo (DRC). One analyst predicted that the percentage of the cobalt supply expected to come from the DRC will increase from its current 66% to 73% by 2023.
The DRC is an extremely poor, politically unstable country. Despite claims that cobalt merchants are trying to ensure their supplies don’t come from mines known to exploit children, nearly all agree this simply isn’t sufficient.
There is no way around the conclusion that the greater reliance on “renewable” sources of energy means the greater mining of non-renewable minerals such as lithium and cobalt to store and transmit the renewable power. That means more abuse of child labor in mining the non-renewable sources.
It’s not a pretty picture. When you factor in the unreliability of some of these renewable sources and the environmental degradation that will come from converting millions of acres of pervious land to the impervious coverage needed to house the massive solar and wind farms and other infrastructure this “100% Renewable” world would require, you begin to question the environmental foundation on which such a plan rests.
There is a need for increased use of solar, wind and other “renewable” energy, and there is value in spending billions of tax dollars on research to improve our energy generation, storage and transmission. However, given the state of modern science, the idea of converting all of our energy use to renewables is not sustainable, renewable or environmentally beneficial. Some serious discussion on all of these points without the simplistic name calling would be a very useful exercise.
Questions? Let Dan know.