The federal government must announce a decision on whether to allow Enbridge's Northern Gateway pipeline to proceed by the end of day Tuesday, and all three possible options have big political price tags attached to them.
"It is a no-win politically. If they back off Northern Gateway it's a significant loss to their resource development. If they push forward, it's at great political risk to the future of the Harper Conservatives," says University of British Columbia political scientist George Hoberg about the pipeline that is supposed to carry oilsands crude from Alberta to waiting tankers on British Columbia‛s remote north coast.
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The decision on Tuesday, which is expected to come after the close of markets, could be the final step in a regulatory process that began in May 2010, when Enbridge submitted its application to the National Energy Board. There was a Joint Review Panel that heard from communities along the proposed route. It ended with the NEB‛s approval of the project but with 209 conditions.
Now the federal cabinet must make one of three decisions:
- Reject the pipeline.
- Allow the pipeline to proceed along the NEB's lines.
- Delay a decision and send it back to the NEB for more consideration.
Reject or approve?
The first and most unlikely option — an outright rejection — would be unexpected to say the least. The Conservative government has made no secret of its support for resource development in general and the oilsands in particular.
"The Canadian economy has been bolstered by resource revenue, and it's important that we continue to see that revenue sustained and grow," said Finance Minister Joe Oliver after meeting with private sector economists on Monday in Ottawa.
To do that, the Conservative argument goes, Canada needs to diversify its markets beyond the United States by exporting oil to Asia. The most direct route is through B.C. to the Pacific coast, and the safest and cheapest way to do that is by increasing pipeline capacity.
Rejecting Northern Gateway at this stage would signal an inconceivable break with Conservative policy. It would cut the feet out from under the oil industry and enrage the party base in Alberta.
Next on the options list would be to accept the NEB's recommendations and allow the pipeline to proceed, which would keep the Conservative base and the oil industry happy, but fuel a raging political fire in B.C.
Hoberg sees a province where almost two-thirds of the people are against the project or want to delay it. He compares Prime Minister Stephen Harper's predicament with that of Pierre Trudeau and the National Energy Program in 1980, when a federal Liberal government imposed its plan for energy on Alberta.
"Federal Conservatives know very well what happens if a federal government tries to force its will against a reluctant or opposed province," said Hoberg.
The big problems for the project on the West Coast are a non-committal provincial government in Victoria and motivated environmentalists. But there is also major First Nations opposition to the project, and that seems to worry Ottawa the most.
B.C. Premier Christy Clark is opposed to the pipeline as it currently exists and she has her own five conditions for getting her government onside with Ottawa. One of them is a "fair share of the fiscal and economic benefits." Recently, though, the B.C. government has been quiet on the subject.
On the environmental front, advocacy group the Dogwood Initiative is pushing for a referendum on the pipeline, while a coalition of anti-Northern Gateway groups called Enbridge21 is aiming a letter-writing campaign at the Conservatives' 21 MPs in B.C. A green light from Ottawa on the project could add support to both campaigns and threaten the election prospects of federal Tory candidates in B.C. in 2015.
Vancouver Island Conservative MP James Lunney said he has received letters on both sides of the issue, but he is worried about the country as a whole.
"I'm a Canadian first. I think British Columbians should think of Canada. We're part of Canada. We should think strategically," he told CBC News on Monday.
B.C. environmentalists also have two cases related to Northern Gateway before the courts, and at least two B.C. First Nations are challenging the pipeline in court.
First Nations challenge
First Nations opposition to the project is a major preoccupation for Ottawa. It also poses the greatest political threat. B.C. is largely unceded territory. Most First Nations in the province have never negotiated treaties with the Crown, meaning rights to the land the pipeline would traverse are unclear.
First Nations support is a major concern for the Tory plan of "responsible resource development." A recent report for Ottawa by special representative Doug Eyford suggested numerous ways of getting B.C.'s natives on board with its plan and also said that it is "never too late to engage."
Four years into the process, the government is finally recognizing that advice.
"First Nations form a significant part of the natural resource sector in terms of their contribution for jobs and the employment opportunities it offers them. The success of this sector, in fact, depends on their full participation," said Natural Resources Minister Greg Rickford in the House of Commons Monday.
Should cabinet give the OK, that could be interpreted by First Nations as giving short shrift to the idea of meaningful consultation. In B.C. that could lead to protests, road blockades or worse. None of that bodes well for Conservatives in the province.
Throwing it back to the NEB
All of which leads to the third option: delaying a decision.
Pollster Nik Nanos thinks it would be more politically savvy for the prime minister to delay the decision.
"If he decides to say he supports the project wholeheartedly but that he would like to slow things down a bit, that would probably give him enough political cover to send the signal he supports the Northern Gateway pipeline but would like British Columbians to sort through a solution," he told CBC News earlier this month.
But even that option has political costs.
After demanding for years that U.S. President Barack Obama quit delaying and make a decision on Keystone XL, the irony of Harper delaying a decision on the Northern Gateway pipeline would be hard for his critics to overlook.