Question:
Is it rational & brilliant or simply illogical & obtuse for the government to purchase the Kinder Morgan Pipeline (KMP) project?
Answer:
After researching and asking many people, I am honestly convinced, that the average Canadian has not got the slightest clue if the purchase by the Liberal government of the KMP project is a good or bad idea. Of course, everyone seems to have their own “educated opinion”, but the bottom line is that it is an uneducated opinion. Why? Well, it is not that the average Canadian is uneducated per se; it is essentially a matter of total lack of full information disclosure and information transparency provided by third parties. And yes, sometimes political media distortion of reality to manipulate people.
Federal Announcement (Economic Development vs. Environmental Sacrifice):
The Liberal government announced on May 29th, 2018 that the Federal government would purchase the existing Trans Mountain Pipeline from Kinder Morgan for $4.5 billion. According to Conversations for Responsible Economic Development (credbc.ca, a non-profit organization), the government will invest another $9 billion to finish the construction of the troubled pipeline expansion. In addition, they require $1.5 billion towards a new Ocean Protection Plan and another $2.1 billion in financial assurances (i.e.: financial_assurances_fact_sheet). This budget does not contemplate delays, court costs, inflation, and any market shift against the price of bitumen. If we only add the above figures, we reach a staggering government expenditure of $17 billion for the near future.
Raw Facts:
1. If the KMP is purchased and built, the tanker traffic will explode from an average of 60 to more than 400 tankers a year. This is being propagated by the potential pipeline flow increase from 300,000 to 890,000 barrels per day. Some modern tankers make Exon Valdez look like a tiny toy boat. An average tanker can carry 2 million barrels of crude oil (84 million gallons of crude oil). The largest tankers can carry twice that and they are already lined up to show up at our BC coasts. Unfortunately, the breed of optimistic politicians and greedy private enterprises say that nowadays, technology is very advanced and reliable and that nothing will happen. But if it does, the odds are so extremely low; it’s not worth worrying about it. Guess what? The Australian government and their private conglomerates also had the same “optimistic approach” about their protection of the Australian Great Barrier Coral Reef (on the shores of Queensland) while exploiting their coal mines (and other minerals) and exporting the coal to China and other countries. Due to tanker accidents and the pollution caused by them in their ocean shores where the Australian Great Barrier Coral Reef is located, they have lost one-third of the coral reef to date, which is one of the places on Earth that has the most diverse marine life.
2. At 300,000 barrels per day, Albertans have already allowed the destruction of their environment while exploiting the tar sands. This is considered among the worst environmental disasters that have negatively impacted global warming, in its corresponding proportion of course. Imagine what will happen if they increase production to 890,000 barrels per day, regardless of their promises and commitments to be environmentally friendly using “cutting edge technology”?
3. The indigenous people in Canada are afraid of the 1,000 kilometres (620 miles) of more pipeline as an insult and direct threat to their lands. According to Rob Gillies (from The Associated Press), they are “echoing concerns raised by Native Americans about the Keystone XL project in the U.S.” Alberta’s Premier formally apologized on the 28th of May 2018 to the survivors who were taken from their homes during the ‘60’s Scoop. Also, on Nov 25, 2017, PM Trudeau apologized to indigenous people in the provinces of NF & Labrador, for the damage done to indigenous families in the 20th century and settled a class-action lawsuit paying $50 million to 900 former students of 5 schools.
It is a FACT that the Canadian government has relentlessly throughout history disregarded indigenous people’s rights and freedom, so it seems to me that PM Trudeau does not really care about their rights, their land and their ecosystem. His apologies seem to come easily and superficially, so he immediately jumps to the next chapter.
4. The Liberal government under PM Trudeau’s guidance has precariously increased Canada’s internal debt, against his own word and promises to the Canadian people during election time. Now, it seems he has lost total respect for those who voted for him, by using the people’s tax money to comply with what appears a political caprice (or hidden agenda) in the purchase of the Kinder Morgan Pipeline project.
5. According to Robyn Allan (economist and former CEO of CIBC) “thanks to clever US owner, Kinder Morgan Pipeline pays minimal taxes in Canada, sometimes none.” In fact, they also receive big tax refunds, debunking the position of the Liberal government about collecting millions of dollars in corresponding taxes from the pipeline in question. For proof, please refer to:
http://www.robynallan.com/wp-content/uploads/2014/11/Trans-Mountain-Big-Bucks-Minimal-Taxes-November-17-2014.pdf
The average Canadian individual only reads the title or a paragraph or two and makes an “informed decision.” Let me evaluate that so-called “informed decision.” Why? Because as an economist and an MBA with a background in finance, I myself had a real challenge to understand the complex schemes of the financial and tax haven (shelter) in which Robyn Allan based her conclusions and with which I agree. I invite the reader to try and understand Kinder Morgan’s financial shelter in the following link (Trans Mountain Pipeline TAX SHELTER), to realize that the average Canadian has no clue, and I repeat, has no clue of the so-called “economic development” a project like this will bring to our Province or our Nation.
6. Instead of promoting the development of capital-intensive industries to create jobs and push for economic growth, the Liberal government is just focusing in exporting Canadian natural resources, and in this specific case, the exportation of oil (bitumen from the oil sands deposits), which is nefarious to our environment. In fact, the real impact cannot even be fathomed by an average person because of lack of information and their own lack of time to read said information if it became available. To prove my point, please refer to point 10 ahead.
7. PM Trudeau bailed out on his promise that Canada would commit to the strict stipulations of the Paris Accord Agreement. But just like President Trump, PM Trudeau has turned his back to reduce the production of carbon dioxide and the green gas emissions into our atmosphere. How? By allowing Premier Rachel Notley in Alberta to keep exploiting the tar sands with the proposed purchase of the KMP, which directly affects global warming, and by exporting the oil and promoting other countries to burn fossil fuels instead of renewable energy ….. BUT ….. Wait ….
…. Eye Opener and Amazing Degree of Hypocrisy & Lack of Integrity:
Canada will indeed try its best to commit to the agreement with the carbon tax regarding its impact on promoting a national reduction in the consumption of fossil fuels. They are also supposed to reduce taxes in other areas such as electric cars. Overall, the government will “try to achieve” a carbon-tax neutral impact, so Canadians do not spend more out of pocket money. All this, while trying to keep the CO2 and overall green gas emissions at bay, including the tar sands (which is highly doubtful). BUT the real important point is that Canada is promoting worldwide pollution and helping to push the global warming to dangerous levels. Countries like China and the US (with President Trump) have no shame of affecting others’ life as long as they profit themselves, but PM Trudeau is tagging along with them now. In the Liberal government’s “twisted logic”, if we export bitumen and others burn it causing more greenhouse gases, the weather and overall global warming will automatically and by magic will respect our Canadian territory. Let me explain; the excessive heat and fires, lack of fresh air (air pollution), mudslides, torrential rains, extreme tornados, storms, snowfalls, etc. will most certainly be stopped by Customs Canada in their tracks from entering our Canadian territory, because they are detrimental to our health, well-being, security and all future generations …. If there is a future for them?! Yes, I am being sarcastic.
The degree of lack of ethical responsibility and professional morals is absurd, because we are fighting WORLDWIDE the destruction of our planet, that optimists and narrow-minded and greedy people cannot see, do not care or believe nothing will ever happen. Please refer to point 12 ahead to understand the real concept of “human optimism.”
On another note, Canadians are contributing to Mountain-Top-Clearing through their mining industry in our own territory and in many other third-world countries. Canadian mining companies are destroying the livelihood of locals by poisoning their land and water, along with corrupted deals with local authorities in those countries. But wait, it is the fault of the other corrupted countries, so as Canadians, we should walk confident, proud, and with our heads high, correct?!
B E F O R E the Pipeline project in Alberta and British Columbia
A F T E R working the Tar Sands
Without being pessimistic BUT realistic, British Columbia can potentially suffer any of the following situations at any time:
8. According to some interviews done by CBC News, 59% of British Columbians believe we should build the KMP, because of its economic impact on the economy of BC and Alberta. I guess nobody read that when the pipeline is finished, only between 45 and 55 jobs will remain in BC. But in the meantime, the owners of the KMP will be paying very high dividends to their investors, whom by the way, the great majority are foreigners. Oh, I forgot, the refineries will buy our oil cheap due to quantities of scale, and will make a good profit by reselling us the refined products such as gasoline. That Amigos, sounds like a “good business deal”, doesn’t it?
9. Regarding crude oil accidents, Alberta and BC have a long list of accidents already. In relation to KMP, it is NOT a matter if something is going to happen, but a matter of WHEN will it happen. Accidents always take place regardless of the security measures and our cutting-edge technology. The consequences of that potential accident are not worth the risk of building the KMP. British Columbia has the most pristine backyard in Canada and around the world. Our government wants to play Russian roulette with our environment, our ecosystem and above all, with the peace, pride, and the environmental natural treasures of future generations of Canadians. Respect for life has been unethically swapped for the relentless search for growth and profits. The Liberals are placing at great risk our underground and above ground watersheds (rivers, lakes, and oceans). We still have what happened in the Burrard Inlet and its beaches with the oil spill that took place on April 8, 2015 fresh in our minds. It caused a lot of damage to our marine life, birds, coasts and tourism industry. See image below provided by the Globe and Mail.
10. Potential and impressive real disaster possibilities with tankers working in the straight of Juan de Fuca (between Vancouver Island and the mainland) and the Burrard Inlet, in Vancouver, BC are bound to happen, and they will. Make no mistake. Some readers might think that I am either exaggerating, unrealistic or simply put, pessimistic. Well, I challenge the reader to visit a very realistic and accurate article published by the Globe and Mail this past May 30, 2018, in their section called ‘Explainer’. Please visit: https://www.theglobeandmail.com/news/british-columbia/kinder-morgan-trans-mountain-pipeline-bc-coast/article35043172/
11. In an article published on Nov 4th of 2015, Canada’s National Observer stated “Liberals promised to invest $100 million more each year in cleantech that creates jobs, and has also pledged to:
- Put $200 million into greening technologies in energy, mining, forestry, fishing and agricultural sectors.
- Add electric vehicle charging stations at federal government parking lots, and rapidly expand the federal fleet of electric vehicles.
- Create a “Canadian Energy Strategy” to protect “Canada’s energy security” and encourage conservation.”
It would be interesting to find out how much of their promises, if any, they have delivered. But rest assured, that it is absolutely insignificant with the “initial out of pocket $4.5 billion” to buy the KMP project when this initial investment alone is a drop in the bucket to the total project when finished. Like governments usually do, they will go into deeper debt to try and justify their actions. Unless the Liberal government has a magic money-making tree, they are leading us to an economic debt crisis.
12. Imagine if the Liberal government were really to stick to their promises, and instead of investing those $17 billion in the KMP project, they were to invest them in bringing the internal debt down, in affordable housing projects, child care space availability and affordability, arts and culture, immigration and refugee realistic and viable programs, promote and support of our educational system, improve our health industry, stimulate renewable energy programs, foster the creation of new industry jobs within the value added industrialized sector, and above all, in the protection of our environment and our climate to try and keep global warming under control, but be honest with Canadians and avoid pushing third parties to break the rules of the Paris Accord Agreement, by enticing them to burn more fossil fuels beyond our frontiers.
13. In regards to the environment, people tend to suffer a distorted sense of “optimism”, which makes them trust, believe and delegate responsibilities. That is a dangerous game because reality always catches up. But these people in the meantime live in a sense of peace surrounded by an oasis of ignorance and denial, until reality slaps them in the face, but by then, it might be too late to correct their placid and passive-aggressive lack of action.
Why? Because of four main reasons, which are:
- OPTIMISM IS THAT NOISE YOU MAKE BEFORE YOU DIE DUE TO LACK OF OR DISTORTED INFORMATION. (ANONYMOUS).
SOURCE: forums.spacebattles,com
2. ALBERT EINSTEIN ONCE SAID: “ONLY TWO THINGS ARE INFINITE, THE UNIVERSE AND HUMAN STUPIDITY, AND I AM NOT SURE ABOUT THE FORMER.”
SOURCE: izsmile.com
3. OSCAR WILD ONCE WROTE: “IF YOU PRETEND TO BE GOOD, THE WORLD TAKES YOU VERY SERIOUSLY. IF YOU PRETEND TO BE BAD, IT DOES NOT. SUCH IS THE OUTSTANDING STUPIDITY OF OPTIMISM.
SOURCE: quotefancy.com
4. BUT MY FAVOURITE ALSO FROM OSCAR WILD IS: “NEVER ARGUE WITH STUPID PEOPLE, THEY WILL DRAG YOU DOWN TO THEIR LEVEL AND THEN BEAT YOU WITH EXPERIENCE.”
SOURCE: scontent.fath3-1.fna.fbcdn.net
Conclusion:
When people, in general, do not have sufficient information to make an informed and intelligent decision, then everybody should proceed as follows:
- Collect the little information in hand from different sources,
- Use the acquired knowledge to engage in critical thinking, while reaching for common sense and logical thinking in the overall picture, and above all,
- Listen to their own inner gut feelings that should go in parallel with their well-being, survival instincts, and not their short-term wallet reach.
If you do not value nature, if you do not place importance in our ecosystem, if the enjoyment of our outdoors by yourself and your children is irrelevant, if the air you breath is also irrelevant and in disregard with your main values, then vote for the KMP project.
Final Note
I want to send my sincere congratulations to the Premier of British Columbia Mr John Horgan for his relentless fight to protect the land and future of each British Columbian. Thanks for bringing to mind the following image and message:
ABOUT THE AUTHOR
Born and raised in Mexico City (D.F.) from 1958 to 1987, Rafael Carreras studied for his undergraduate degree in Economics (Mexico City) followed by a Master of Business Administration (MBA) in a joint programme between Notre Dame University (USA) and the London Graduate School of Business (England).