Northern Gateway decision has implications for Heartland

Ain’t nobody got time for Northern Gateway.

That’s the consensus on the proposed pipeline coming from activists nationwide, who are hailing a June 30 decision by the Federal Court of Appeal to overturn the previous federal government’s approval of the project as its final nail in the coffin.

But not so fast, activists.

Indeed, while the court’s decision is a major setback for the project, it’s not completely a done deal. Prime Minister Justin Trudeau’s government must now decide whether to appeal the federal court’s decision or scrap the project all together.

So what does this mean for Alberta, and more importantly (for us anyway), for Alberta’s Industrial Heartland?

For one, our neighbour Bruderheim won’t be seeing the major construction project kick off anytime soon. But the broader trend of pipeline approvals seeing excruciating red tape and excessive political posturing will have significant consequences for our region, for our province and for Canada’s entire energy industry.

The Canadian Association of Petroleum Producers has stated that Canada’s oil supply will soon greatly exceed its current pipeline capacity. Valuable resources aren’t that valuable if you don’t have anywhere to send them.

The prime minister is in an interesting position when it comes to pipelines. He has not opposed them in principle (in fact, he supported Keystone XL).

But he hasn’t come out as an enthusiastic cheerleader either. Sustained public pressure from premiers Rachel Notley and Brad Wall, as well as the entire province of Alberta, led to Trudeau kinda sorta saying pipelines made sense if they respect the environment and local communities.

But as someone who included rebuilding the federal government’s relationship with First Nations as a key plank of his election platform, Trudeau must tread carefully.

What can’t be denied is that global demand for non-renewable energy is declining. According to Neil Shelly, executive director of Alberta’s Industrial Heartland Association, the demand for petrochemicals and products derived from petrochemicals is growing at a faster rate than the demand for raw resources.

Furthermore, a June 2016 report by Bloomberg New Energy Finance forecasts that coal and gas costs will remain low over the next 20 years. And while power from non-renewable resources is slated to attract $2.1 trillion in global investment over the next two decades, renewables are expected to see a whopping $7.8 trillion in investment over the same period.

Going forward, we can expect governments to continue to move away from fossil fuels in favour of renewable energy investment. By 2040, renewable energy plants are expected to generate 70 per cent of Europe’s power.

And while fossil fuels are not going to simply disappear overnight, consider this – the same report says, as a global generation source, gas will be overtaken by renewables in 2027.

Pipelines are important for Alberta, and indeed for all of Canada. But equally important is the need for Alberta to diversify its economy, particularly its energy sector, if we are to be a competitive entity on the national and global stage.

And that’s no pipe dream.


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