A Tar Pipe to China and The Ethical Oil Lie

The following interview is special; not only because it reveals that a senior member of Harper’s Cabinet does not subscribe to the marketing moniker of “ethical oil” when referring to process tar from the Athabaska Tar Sands, but also how far mainstream private media, in this example CTV News Channel, a property of the omnipresent Canadian communication conglomerate colossus,  BellMedia, no longer even pretend to impartiality when the subject is the Tar Sands.

What you may consider a trivial but telling example: the co-hosts of the program National Affairs refer to the Tar Sands using the government and industry misnomer “Oil Sands” when in the Tar Sands you find mostly tar-coated sand, rocks and gunk – bitumen to be exact – which requires copious amount of fresh water, heated by even more copious amount of natural gas to separate the tar from the sand, rocks and gunk, leaving behind copious amount of polluted water and polluted air – and we have not even started the process of refining the tar into crude – the amount of pollutants created giving the appellation of oil from the Tar Sands, the well-deserved appellation of "dirty oil".

The hosts for this edition of the CTV News Channel program National Affairs, from which the following transcription was made, were Scott Reid and Tasha Kheiriddin. My comments are in italics.

Reid: PetroChina, the state-owned oil and gas behemoth, recently made a purchase here in Canada, yesterday, announced it is going to be purchasing the Mackay River Project, it is now going to own 100%. This is triggering a bunch of concerns among people who are saying: “Look we reviewed the potash deal why shouldn’t we be reviewing, and shouldn’t we be concerned about the hollowing out of the oil and gas industry, particularly the oil sands industry. Is it a strategic asset, is this something we should be concerned about?” And we have exactly the right person to give us the answers on this question; we get to welcome the Minister of Natural Resources, Joe Oliver. Happy New Year Minister.

Oliver: Happy New Year to both of you.

Kheiriddin: Thanks for joining us in the studio as well.

Oliver: Happy to be here.

Reid: So, is this latest transaction by PetroChina, its investment in the oil sands, is this of concern to you? Is it something we ought to be reviewing, or do you think there is a trend that in time we may need to review the purchase, particularly of [I believe he meant “by”] state-owned enterprises from China?

Oliver: Well, of course, we had to review the project initially, this was just the trigger of an option which was, of course, contemplated in the original purchase, so the review …

Reid: It took it from 65 to 100% or something.

It was 40%, for which PetroChina paid $ 680 million to exercise its option.

Oliver: Yeah, that’s right. But look, the issue is we’re dealing with the largest industrial project in the entire world and, of course, it needs an enormous amount of capital. We don’t have all the capital it needs here in Canada and we’re accessing capital from foreign companies around the world. The Americans are heavily involved, so are the British, the French and the Germans, and now the Chinese.

The author of Wealth of Nations warned that “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public.”

At this point, Kheiriddin will attempt to get the Minister to agree to a type of laisser-faire economics, her type, which even Adam Smith would find reckless.

Kheiriddin: Can you say then that you will not stand in the way of foreign acquisitions by Chinese firms the way you stood in the way of BHP Billiton on the potash deal that was, many people said, a political decision, not economic. Here, are you going to let economics, and the well-being of the Canadian economy run the day and allow these transactions to happen?

Oliver: We always look at it from an economic perspective, and it’s up to the Minister of Industry to make the determination whether it is a net benefit for Canada …

We skip this portion of the interview which is not central to the Tar Sands, but about what or where, if any, are the regulations pertaining to the determination of what is a “net benefit” to Canada

…

Reid: We heard the Minister of the Environment, Peter Kent, talk about ethical oil and pick up that mantle and say: “you know what, that it is a label we’re going to market, and we’re going to declare that our oil is ethical and the oil sands in particular, and we are going to get them that of others (sic) to say that it isn’t.” Now, China is a country that has been condemned at times because of its human rights practices precisely for the same sort of abuses that are being condemned by the government when it talks about other oil jurisdictions. Is it okay that China can purchase into the oil sands; does not [that] also trigger an ethical oil concern?

Are we about to be meet a Minister in Harper’s cabinet who will not tell a lie?

Oliver: Well, firstly, I personally haven’t used the word ethical oil; I’ve talked about reliability as a source of energy, and …

Kheiriddin tries to get Oliver to agree that the government slandering other oil jurisdictions as unethical, is not the pot calling the kettle black, but Oliver will not repeat the lie, even when Reid returns to the issue of so-called ethical oil.

Kheiriddin: But you do support that argument though, that Canadian oil is more ethical than that of other countries.

Oliver: Well, uh, I think, that, uh, it is very clear that we, uh, we have a system here of laws, we don’t discriminate against women, we treat people equally, we support democracy, and human rights, so our record stands and we don’t have, it’s there for all to see, and we don’t have …

Reid: But are you worried when …

Oliver: … to talk too much about that …

Reid: … when Canada …

Oliver: When I talk about, from an economic perspective, business perspective it the reliability of our oil. Now, we are, we are open for business, encouraging investment, and investment will come from a number of countries which will have different political systems.

Reid may be somewhat facetious in his response, but Oliver should be given credit for not uttering the lie.

Reid: Eh, and, frankly I like your answer, for what it’s worth, and I am sure it gives you a great sense of satisfaction but now…

Oliver: Always.

Reid: The ethical oil argument is being employed by the government and so I'll just follow one more time with it because, it seems to me that [if] you are going to say that some jurisdictions are unethical; if you are going to attach that …

Oliver: I am not, I’m not saying that, I don’t particularly want to pursue that line of, of, of, of argument here …

Reid: Cabinet colleagues have employed it …

Kheiriddin: Yes, I heard them say that, the government has used that term …

Oliver: We we, look, I talked about the, the, the nature of the country we have, a (sic) Canadian values are very important to me and to our government and I think to most, to most Canadian citizens. It’s a big world out there and we’re, we’re operating in it …

Kheiriddin will try, and succeed in changing the subject to Keystone, where again she makes her views known. In this case, the Minister does not need to lie, but only exaggerate, to agree with her.

Kheiriddin: Eh …

Oliver: … and we can’t …

Kheiriddin: Speaking …

Oliver: … and we can’t speak for every other country.

Kheiriddin: Speaking of that big world Minister, we don’t have a lot of time but I want to get your sense of where, how does this fit in to the Keystone pipeline project because we know that Keystone is in trouble in the United States. It may not happen. Is this a sign, and would the government be more amenable to China investing in our oil sands because there is more of a market in the Asia Pacific Gateway than there is south of the border; that we are essentially saying: “look, Keystone may not happen the U. S. may not be the market of the future”?

Oliver: I remain cautiously optimistic about Keystone …

Kheiriddin: Cautiously only now, you’re not optimistic cautiously?

Both the Minister and Kheiriddin have a good laugh at her attempt at humour and Oliver picks up her Keystone theme.

Oliver: Well, I’ve been cautiously optimistic for a while. Maybe I should have been more cautiously optimistic, but the point is, I do think that the reasons are so overwhelming for the Americans in term of national security and jobs and economic growth that I think they will ultimately decide in favour of it, but diversification is a fundamental strategic objective for our country and there are a number of reason for that; one is that we only have one customer right now; secondly, we want to get international prices which are considerably higher and which will bring hundreds of billions of dollars more money into the country and thirdly, we’ve got a vast amount of resources and frankly one country may not be an adequate market for it.

Reid jumps on the band wagon, and it's unanimous. Sycophantic Canadian journalism at its best.

Reid: Absolutely! Minister Oliver, you’ve been great, this has …

Kheiriddin: You ought to come here more often.

Oliver: I’d be delighted.

Reid has to remind his co-host that Oliver is somewhat of a regular.

Reid: You’ve been on the show four or five times. If we had mugs, we’re going to get them, we would give you one, thank you very much for coming on today.

Oliver: Thank you so much for having me.

Closing comments

I believe that Canada has been getting world pricing for its oil since the National Energy Program NEP (of which I was a small part, read An Appalling Indiscretion was abandoned under the Mulroney Conservatives. Harper could be considered to be continuing what Mulroney started.

As to having plentiful resources; Albertans have not learnt anything from pissing away, for a pittance, the clean crude that came gushing out of the ground. This is is why they are mining tar for oil and destroying their environment, and perhaps bringing the human race to the brink of extinction, now that conventional, easy to get at clean oil is almost exhausted.

Oliver stays clear of making any wild predictions about jobs for Canadians (he will not tell a bold-faced lie, if his refusal to repeat the lie of ethical oil is any indication) as his Department's analysis has to show that the Gateway must sooner, rather than later, lead to massive job losses for the Canadian economy.

Yes, the Tar Pipeline to China will bring in billions, not the exaggerated "hundreds of billions of dollars" but, according to University of Calgary’s School of Policy, a more modest gross $131-billion over a 15 year period – significantly less when you factor in the substantial exploitation and environmental cost.

These billions will make billionaires of millionaire pipeline and oil and tar company executives and greater billionaires of large shareholders, including bring billions to conglomerate investors such as Bell Canada Enterprises BCE, but it will inevitably result in a net job loss for the Canadian economy. The pipelines, the Gateway in particular, is about making the rich richer at the expense of jobs for Canadians and the environment.

The Gateway will not be shipping crude oil to China but unprocessed tar; the reason for a second pipeline which will pipe low octane fuel (from incoming supertankers) from the West Coast port of Kitimat to the Tar Sands to be mixed with the tar so that it can flow in the “tar pipeline”, the second pipeline to the port of Kitimat. This of course means that the potential for a catastrophic leak is not just over 731 miles of pipe but more like 1,500 miles. But environmental catastrophes are not the most worrisome.

The Tar Pipe to China will, in my estimation, result in massive loss of opportunities and jobs. The extraction of tar requires enormous amount of fresh water and natural gas but not much labour. The labour comes from the refining (fuels, lubricants, petrochemicals ...) and transformation (think plastics, and such) processes, and these are the jobs the Gateway we will be exporting to China along with the tar.

China is paying for the Gateway – a bargain to rival the Alaska purchase (if not the island of Manhattan) considering the jobs it will generate in China and the commercial and military advantages to be gained – but it is Canadians who will have to pay for the pipeline to the Arctic (Mackenzie Delta) to replace the trillions of cubic feet of natural gas burnt to extract the tar to fill the Tar Pipe to China. This is bound to lead to an increase in the price of natural gas, not only to heat homes, but for industry which will make it even less competitive with a Chinese economy fueled by the Tar Sands, and more layoffs will follow.

In the economic decisions our politicians make concerning the best use of our natural resources, Canada has to rank as the most stupid short-sighted nation on earth.

Bernard Payeur, Jan 11, 2011