PIPELINE OBSERVER WINTER 2016

PIPELINE

WINTER 2016

CANADIAN ASSOCIATION OF ENERGY AND PIPELINE LANDOWNER ASSOCIATIONS

OBSERVER

FACE TO FACE AT THE FARM GATE

How the relationship between landowners and industry is evolving A HUNGRY MONSTER

Examining the expropriation leviathan

SATISFYING SETTLEMENTS CAEPLA negotiates win-win business agreements

MANITOBA HYDRO

PCs embrace NDP Bipole III boondoggle CAEPL A .ORG

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RESPECT Our country thrives on mutual respect. Planning a pipeline works when different communities discuss and agree on a path forward. Learn about how pipeline companies work to engage the public, hear concerns and find the best solutions.

Delivering Canada’s energy. Every day.

Learn more about pipelines in your life at: aboutpipelines.com 2

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WINTER 2016

CONTENTS

CANADIAN ASSOCIATION OF ENERGY AND PIPELINE LANDOWNER ASSOCIATIONS

04 CAEPLA’s Commitment 06 Consultation Nation 08 Streamlining Damage Prevention 09 Expropriation Unlimited 14 Do We Still Need the NEB? 16 Business As Usual 19 A One-of-a-kind Inline Inspection Tool 20 Preventing Pipeline Corrosion 22 First Nations and Property Rights 28 More Economics, Less Politics 30 Protecting the Environment Together 32 Walking a Fine Line on Safety 35 More Questions About Bipole III 36 Betrayed by PCs 38 What is Social Licence?

40 Alberta Tax Dollars Boost U.S. Energy 41 Working Together Respect for property rights

Stakeholders sidelined by regulatory regime

Standardized regulations make pipelines safer Taking on the expropriation leviathan

Federal regulator lacks public trust

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New Manitoba government supports Bipole III Ultrasonic “smart pig” a safety innovation

How operators employ inspection technology Landownership from a historical perspective Property rights and industry paralysis

Sound science and respect for property rights How government ruins safety culture

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Cover photo: iStockphoto.com

There is little doubt that Hayek would diagnose “social licence” to be one of the worst “weasel words” of our time

Why have Manitoba’s PCs embraced boondoggle Farmers react to bullying by Manitoba Hydro Examining an abused term

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Meanwhile, politics paralyzes Canadian pipelines How pipeline landowners can work with companies

Pipeline Observer is a publication of the Canadian Association of Energy and Pipeline Landowner Associations (CAEPLA), 257, 918 Albert St., Regina, SK S4R 2P7; 306-522-5000.

All contents copyright ©2016 CAEPLA. Advertising information: advertising@caepla.org | Editorial: editor@caepla.org Administration: admin@caepla.org | caepla.org | Twitter: @CAEPLA

Media & Marketing Solutions

Published by RedPoint Media Group Inc., 100-1900 St. S.E., Calgary, AB T2G 3G2, 403-240-9055, redpointmedia.ca Pete Graves, President & CEO | Sandra Jenks, Client Relations Manager | Ian Doig, Senior Editor David Willicome, Art Director | Mike Matovich, Production Manager | Rob Kelly, Audience Development & Reader Services Manager Printed in Canada by Transcontinental LGM | Statements and viewpoints expressed herein do not necessarily represent the views of the publisher.

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BY ANNETTE SCHINBORN

CAEPLA’s Commitment to Win-Win Business Agreements Respect for property rights is good for companies, the economy and the environment

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arlier this spring, alongside our local landowner committee, CAEPLA negotiated a win-win settlement agreement for a group of landowners from the Peace River area of northern B.C. and Alberta on a pipeline project that is 88 kilometres in length. The project was certainly smaller than the 1,659-kilometre Enbridge Line

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3 Replacement Project that CAEPLA negotiated with Enbridge in 2015, but the issues affecting the landowners are largely the same.

Similarly, a few months ago, CAEPLA also negotiated another win-win business agreement with a power company in Alberta on one of its smaller power corridor projects. This was one of a number of successful agreements negotiated with the same company over the past few years.

Landowners are pro-development.

They use energy every day in the production of the food that all of us enjoy and depend upon. Their land is their livelihood, and they are stewards of the land, meaning safety and environment are constantly top of mind.

As such, landowners are concerned about the many legitimate issues that affect their property when an energy company proposes a project on their land.

iStockphoto.com

“With these energy projects, the relationship between the property owner and the company is more than a lifetime commitment.”

Issues like soil construction methodology and restoration, how deep the pipe is buried, bio security, liabilities and a myriad of other issues that affect the families, businesses and property of these directly affected landowners who live and work on the land 24/7/365.

While some energy transport companies are beginning to change their ways and see landowners as the partners they really are, landowners in Manitoba are

continuing to fight for their property rights to be respected by Manitoba Hydro, a Crown corporation that refuses to respect the property rights of Manitoba landowners. This Crown corporation has expropriated their property and continues to refuse to negotiate a win-win business agreement with these landowners.

With such energy projects, the relationship between the property owner and the company is more than a lifetime commitment. To start that interaction by disrespecting the landowner and stealing his/her property does not sow the seeds of a good relationship. From the beginning, there is resentment when a landowner’s property rights are ignored.

As landowners are the company’s “first line of defense,” some companies are realizing that a happy and satisfied landowner makes for a better long-term relationship.

The win-win business agreements that CAEPLA negotiates on behalf of landowners on projects like the ones mentioned above, are just that, a win-win.

The company and the landowner start off their relationship on the right foot.

And the contract holds the company and its contractors accountable to ensure the project is done right.

This is good for the company, good for the landowner and also good for the public.

When CAEPLA promotes property rights, it is not only for the benefit of landowners, but for their neighbours, surrounding communities and for industry, too. We believe this is the basis for a prosperous economy and peaceful society.

A win-win business agreement helps

remove the stress and anxiety from the landowner, and it gives the public confidence that the project is safe. After all, if a directly affected landowner who is living near the pipe is comfortable that the project is meeting his safety and environmental concerns, a Canadian who is living nowhere near the pipe can have confidence and peace of mind.

CAEPLA looks forward to negotiating more of these win-win agreements that are good for everyone.

Through all the projects CAEPLA is involved with and from the launch of Pipeline Observer last year, we have been receiving an incredible amount of feedback, almost all of it positive.

As a result, we have decided to feature your feedback in these pages going forward. If you would like to comment on any of the stories you read here, or have issues you want to bring to the attention of the pipeline landowner community and the industry at large, feel free to reach out to us at editor@caepla.org or 306.522.5000.

We look forward to hearing from you! 

Annette Schinborn is COO and Director of Landowner Relations at CAEPLA. Before joining the team at CAEPLA, Annette worked with grassroots nonprofits including the Canadian Taxpayers Federation, the Prairie Centre and the Western Canadian Wheat Growers Association. She has worked closely with farmers, ranchers and other landowners on issues such as tax and agricultural policy and now energy transport and property rights.

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BY AMANDA ACHTMAN

Consultation Nation 6

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Activists, opponents and whiners ignore real-world while stakeholders sidelined

he latest controversies surrounding former Quebec premier Jean Charest’s involvement with the National Energy Board (NEB) underscore a deeper problem: the charade of consultations.

Companies and property owners alike are being forced to operate within a regulatory regime that

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treats landowners as government-mandated interest groups instead of business partners. The only “consultation” required should involve legitimate business offers made to landowners and their chosen representatives, such as Canadian Association of Energy and Pipeline Landowner Associations (CAEPLA).

Alamy Stock Photo and iStockphoto.com

“More than ever, it is necessary to be wary of property rights arguments being usurped by environmentalist groups outright opposed to all pipeline development on ideological grounds.”

Across the East Coast, environmental propaganda posters adorn street posts and coffee shop bulletin boards. The anti-Energy East posters read: “Our Risk, Their Reward” and the affiliated website says “the Council of Canadians aims to stop these pipelines, calling instead for a national energy strategy and a transition off fossil fuels.”

Such limitless, Utopian visions are precisely what prevents constructive negotiations from taking place when regulatory boards, filled with no impartial spectators, replace market negotiations between true players. Since the environmental ideologues oppose industrial development in every respect, they are not focused on real-world principles like markets or property rights, but rather on fanciful “green” schemes.

Distinctions therefore need to be made between legitimate groups of proponents and opponents and paid activists, and between interested stakeholders and professional whiners.

We know that governments are not subject to proper market mechanisms since taxpayer subsidies are theoretically endless. On the other hand, private companies and citizens have real budgets and constraints, needing to negotiate properly and legally. Landowners and property owners have legitimate interests in pipeline projects. Environmental organizations can best promote the good of the environment by seeking to affirm the rights, freedoms and opportunities that exist for property owners to control their land, whether they are farmers, landowners or First Nations.

Meanwhile, the Atlantic provinces have the highest sales taxes in Canada and the largest public sector per capita. Many people are returning to the

Maritimes from Fort McMurray after the oil downturn, the carbon-pricing NDP and the devastation of the wildfires. They would be prime candidates for jobs on pipeline projects such as Energy East.

However, they are being denied these jobs since nearly all pipeline projects are being stifled or banned by politicians succumbing to the interests of ideological environmental organizations, often based in Toronto and Ottawa.

Ultimately, the current regulatory regime is threatening both property rights and the environment. On the one hand, landowner property rights have historically been suspended by the NEB to make takings for projects easier. On the

Nations, farmers, landowners, residents and workers at risk. There is no duty to “consult” them.

For the reasonable parties involved, there must be concrete standards and thresholds that outline adequate review processes and provide clear definitions of the specific conditions to be satisfied.

Otherwise, there will be no end to the “consultations” which will, in the end, prove to have been all a masquerade, only serving to successfully stall business and, more importantly, prosperity.

Currently, we are seeing one of the most politically hostile situations to industrial development in ages. Big government political parties throughout

Lost opportunity

“Many people are returning to the Maritimes from Fort McMurray after the oil downturn, the carbon-pricing NDP and the devastation of the wildfires. They would be prime candidates for jobs on pipeline projects such as Energy East. However, they are being denied these jobs since nearly all pipeline projects are being stifled or banned by politicians succumbing to the interests of ideological environmental organizations.”

other hand, the same regulatory body is partly responsible for the property rights of energy transport companies being suspended due to the politicized paralysis of the sector by environmentalist NGOs with their celebrity activists and lawyers.

More than ever, it is necessary to be wary of property rights arguments being usurped by environmentalist groups outright opposed to all pipeline development on ideological grounds. Nobody who commits criminal acts of tampering, vandalizing, trespassing, occupying and sabotaging pipelines can be taken seriously as a defender of the environment or land. Such criminals put First

Canada, new fervour for so-called “carbon pricing” schemes, and the ideological refusal to update and upgrade pipeline technology to be safer, more reliable and more environmentally efficient are the factors with which we all contend. It is clear that what we need is not more consultations, but better market mechanisms that uphold foremost both property rights and the rule of law. 

Amanda Achtman is a CAEPLA contributor. She holds a BA in political science and is currently pursuing an MA in philosophy.

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BY MIKE SULLIVAN

Streamlining Damage Prevention Standardized regulations will make pipelines and other underground infrastructure safer

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hen the goal of a multi-stakeholder group is a single outcome, a common starting point is critical, and simplicity is key. The more complicated a process gets, the greater the likelihood of a scattered and ineffective result. For example, consider the common stop sign. We all know precisely what to do when we encounter one. The word on the sign is almost meaningless thanks to the sign’s common octagon shape and red-and-white colouring. Any subtle change to the sign, perhaps to its height or size, and our brains take an extra few milliseconds to process the difference in order to generate the sign’s command.

How effective would the common stop sign be if it was a different colour, size and shape in every city, province, state and country around the world?

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It would be far less effective than it is.

And, if it didn’t exist at all, the risks would be unimaginable Damage prevention legislation is like that. It requires consistency across jurisdictions to be effective; and when it doesn’t exist, the risks are tangible.

Ultimately, underground infrastructure provides the necessities of our existence. Yet, there is little consideration given to how it must be protected from ground disturbance.

One-call, or notification centres, exist from the Pacific to the Atlantic but for the most part, registering buried facilities with those centres isn’t mandatory. There is a lack of legislative governance mandating registration with a notification centre and requiring any person digging to request a locate from that centre. This

unnecessarily increases the risk of damage to Canada’s critical buried infrastructure, creates needless safety risks for Canadians and is a burden to Canada’s economy.

The Underground Infrastructure Safety Enhancement Act aims to change that.

The Act is based on three fundamental principles: federally regulated underground infrastructure must register with a notification centre (one-call centre), locate requests must be made to a notification centre prior to ground disturbance; and, response from the underground infrastructure owner in relation to those locate requests is required. It sounds simple enough—and in many respects, it is— but there is a lot more to the damage prevention process than these three fundamental points. Without a locate request to trigger the damage prevention process, the unseen efforts behind the scenes to protect pipe, cables, wires and telecommunication systems never get a chance to occur.

Now that the act has been tabled, it provides other jurisdictions in Canada with all encompassing damage prevention language to achieve regulatory symmetry. Whether a cable or a pipeline is federally or provincially regulated, there is little need to be different. The more similar the language, the better chance it has to be effective—just like the stop sign. 

Mike Sullivan is the president of Alberta One-Call Corp. and executive director of the Canadian Common Ground Alliance.

This page: Lloyd Sutton / Alamy Stock Photo; facing page: iStockphoto.com

“Underground infrastructure provides the necessities of our existence.”

BY ELIZ ABETH BRUBAKER

Expropriation Unlimited

Pipeline companies are not the worst offenders when it comes to legal land theft in Canada >>>>

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n the Russian film, Leviathan, a corrupt mayor expropriates the home of a car mechanic.

The process is rotten to the core. Leviathan is of course a modern metaphor for an all-powerful state. Its roots lie in the Book of Job, where a monster of that name claims that “everything under heaven belongs to me.” Resistance to Job’s leviathan is futile: “If you lay a hand on it, you will remember the struggle and never do it again! Any hope of subduing it is false.” That’s a troubling vision of a state. But it perfectly describes the state’s power of expropriation—not just in Russia, but in Canada. Everything ultimately belongs to the state, and any hope of subduing the state is false. If the state wants your property, it can take your property.

Most assume there are limits to takings. They assume that takings occur only for public purposes and only for projects that are necessary and economically sound. But, in fact, these limits are fictions. In the name of economic development, job creation and the generation of tax revenues, expropriation is often used to promote private projects. And to make matters worse, these projects are often unnecessary and economically unsound.

Of course, the Canadian Constitution (unlike that in the U.S.) doesn’t limit takings to public uses. It doesn’t limit takings at all. Any limits would have to be found in legislation—and they’re just not there. The expropriation acts in B.C., Alberta and Ontario have no public purpose requirement. They don’t even include the words “public purpose” or “public use.”

There’s a widespread presumption that takings will be in the public interest, but it’s nowhere in the law.

The acts that do refer to public purpose don’t define the term and don’t provide any meaningful restraints. For example, the federal Expropriation Act authorizes the Crown to expropriate any interest in land that “in the opinion of the Minister, is required by the Crown for a public work or other public purpose.” This power is completely discretionary and

all-encompassing and is not subject to judicial review.

And then there’s the New Brunswick act, which explicitly allows expropriation for private purposes, including commercial and industrial purposes.

So, expropriation is not restrained by our constitution or by our legislation. As a result, it is routinely used for private economic development projects. And our courts are fine with this. A number have confirmed that promoting economic development is a legitimate reason to expropriate. This was an issue in a case about expropriation for a Toyota plant in Woodstock, Ontario. In 2005, Oxford County expropriated a shopping mall for the plant. The owners went to court.

In 2014, an Ontario court found: “It is clear that Oxford expropriated the mall lands for a valid public purpose” i.e., “to

Where’s the backlash?

We don’t talk about this much in Canada. In this, we’re very different from the United States.

We have plenty of outrageous takings here in Canada, but we don’t have the backlash. The issue attracts very little public debate, almost no academic attention and almost no comment from policy institutes. Usually, it’s only directly affected citizens who object to expropriation—and their concerns rarely extend beyond their immediate situations.

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Leviathan (2014 Russian film)

Set in the fictional town of Pribrezhny, Russia, the film’s plot follows the tragic series of events that affect, a hotheaded car mechanic, his wife and teenage son. The town’s crooked mayor undertakes a legal plot to expropriate the land on which the family’s house is built.

Facing page; AF archive / Alamy Stock Photo, copyright Film Company Pyramide Distribution; this page: Alamy Stock Photo, Behemoth and Leviathan, Book of Job, illustration by William Blake, 1826

promote economic development.” The court went further, saying that it would be “absurd” to limit the available tools to pursue economic development. Higher courts agreed. Last year, the Supreme Court dismissed the plaintiff’s application for leave to appeal.

Frankly, what strikes me as absurd is that the Toyota plant was considered a good project. The province and the feds gave the plant $125 million in financial help back in 2005. And they chipped in another $100 million last year. The Canadian Taxpayers Federation called that a “cruel joke on taxpayers.” They figured it amounted to paying $1.7 million per job created.

It gets worse Expropriation can be for an unknown economic development. One of the clearest statements of this came in a 1978 case involving the development of the Halifax waterfront, which included undetermined projects to be carried out by the private sector. The judge wrote, “The ultimate use of the lands was not really a necessary consideration at the time of expropriation…. [I]t is surely not necessary to have a specific use in mind for each particular property that is subject to expropriation.”

The Supreme Court reached a similar conclusion in 1991. In that case, the town of Val-Bélair, Quebec, had expropriated land for a so-called “land reserve”—defined by one judge as “a bank of land the use of which is not yet known.” The Court found that municipalities can act as land developers. They can acquire land “for the purpose of resale or leasing, and what is more, those operations can be carried out for the benefit of third parties.”

In fact, almost anything can be a legitimate purpose. In 1978, an Ontario court hearing a dispute concerning Windsor’s expropriation of lands for a private housing project made an astonishing finding: “Much was made in argument that the lands in question were not expropriated

Leviathan (from the Book of Job)

Its roots lie in the Book of Job, where a monster of that name claims that “everything under heaven belongs to me.” Resistance to Job’s Leviathan is futile: “If you lay a hand on it, you will remember the struggle and never do it again! Any hope of subduing it is false.”

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Takings

The Canadian Constitution (unlike that in the U.S.) doesn’t limit takings to public uses. It doesn’t limit takings at all. Any limits would have to be found in legislation—and they’re just not there. The expropriation acts in B.C., Alberta and Ontario have no public purpose requirement. They don’t even include the words “public purpose” or “public use.” There’s a widespread presumption that takings will be in the public interest, but it’s nowhere in the law.

for public purposes. The short answer is that once the power to expropriate is conferred it would seem inconsequential whether or not it was for a public purpose.”

With court decisions like that, it’s hardly surprising that expropriation for private economic development is so common. Let me give you a very recent example. Just last month, Windsor expropriated two houses near its airport.

It wants to consolidate this land with nearby land slated for industrial development. The city admits it doesn’t need the land now. But the taking, in the mayor’s words, puts the city “in a position to talk about future development.” The owners protested that their land would never be needed—their 1.6 hectares (four acres) sit on the edge of 81 hectares (200 acres) that can be developed. Also, Windsor has hundreds of vacant commercial and industrial properties. Why wouldn’t a developer simply purchase one of those?

In addition to being unnecessary, the taking makes no economic sense. It’s part of an “Economic Revitalization Community Improvement Plan” that calls for an array of subsidies, including municipal property tax breaks and development charge offsets.

Windsor should know better—it’s had

some very bad experience with economic development takings. First there was the expropriation of land for an arena that never got built. That land sat vacant for 20-some years, as politicians proposed one failed plan after another.

And then the city expropriated a block of historic buildings for an office tower to house the headquarters of Daimler-Chrysler. That was a disaster. There was no demand for the office space, and much of it sat vacant for years. The city itself leased a couple of floors, and then sublet it for less than a third of what it was paying. Other landlords in the area complained they couldn’t possibly compete. So, we’re talking about the destruction of an historic neighbourhood, a $50-million bill for taxpayers and a wrench in the local real estate market.

Here’s what the Windsor Star had to say about this last year: “There is a lesson in this … [G]overnments make lousy real estate investors. They make lousy developers. They shouldn’t compete with the private sector in businesses they have no business in, because they mainly succeed only in making conditions worse for everybody concerned.” Unfortunately, Windsor hasn’t learned that lesson.

Meanwhile, many provinces have a public process that’s supposed to ensure

Landowners can challenge the compensation they get. But as for a taking itself, they have no recourse. Under our current laws, resistance is futile. Which means that we need new laws!

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that takings are fair, sound and necessary.

Those who face expropriation can request a public inquiry. Many believe that the inquiry will give them a fighting chance to defeat the proposed taking. They are wrong—these inquiries are a sham.

First of all, a province may waive the requirement for an inquiry. Second, the scope of the inquiries that do go ahead is very limited—the inquiry officer isn’t allowed to question an expropriating authority’s objectives. But all that doesn’t really matter, since the findings of the inquiries are routinely ignored. The party approving the expropriation must “consider” the inquiry officer’s report, but it need not follow its recommendations.

An interesting example of this comes from Fort McMurray. In 2013, an inquiry looking into expropriation for an arena found that the proposal was “not sound.”

The inquiry officer explained, “there is no reasonable assurance that the project will ever proceed, and accordingly, the expropriation of the lands is not reasonably necessary at this time.” That didn’t deter the municipality, which went ahead and expropriated. But the inquiry officer was right. The arena never got off the ground. It was supposed to be privately financed, but the municipality learned that it might be on the hook for $580 million.

Last fall, council put the project on hold.

Unfortunately, that was after spending $47 million turning viable businesses into vacant lots.

A public inquiry isn’t going to save anyone. And the courts are, once again, of no help here. Back in 1973, the Supreme Court decided that as long as an expropriating authority considers an inquiry officer’s report, there’s no legal recourse.

It ruled that the Ontario legislature has “left little room for judicial supervision of an approving authority’s discharge of its duty to approve or disapprove an expropriation … The Court is given no role to review the merits of an expropriation proposal…. [The approving authority] is invested with the widest

Unrestrained expropriation is a serious public policy failure— and yet, one that’s widely ignored. How can we change that?

They’ve done it in the U.S. But is there any hope for Canada? discretionary power to determine, subject only to considering the inquiry officer’s report, whether an expropriation should proceed.”

Landowners can challenge the compensation they get. But as for a taking itself, they have no recourse. Under our current laws, resistance is futile. Which means that we need new laws!

The U.S. example Here’s where the U.S. experience becomes so important to us. In exploring options for reforms in Canada, we can look to the massive experiment that’s been conducted south of the border in the last decade. Following the Kelo decision, 45 states passed laws limiting the use of expropriation.

Some states now explicitly prohibit expropriation for private purposes or for economic development projects. Michigan specifies that public use doesn’t include the enhancement of tax revenues. Virginia specifies that job creation is not a public use. Other states have made it more difficult to transfer expropriated property to private parties. Still others have left it to judges, rather than politicians, to determine if a use is public or private.

The question for us To what extent can the U.S. experience guide reforms here? Obviously, some of the mechanisms that have been used to bring about change in the U.S. won’t apply here in Canada. Constitutional

challenges won’t work here—at least, not until our Constitution protects property rights. One mechanism that was particularly successful in the U.S. was the citizen-initiated referendum. Those are much rarer here.

But what about more traditional approaches to provincial and federal law reform? In the U.S., the reforms came in response to citizen pressure. There was a huge public backlash against the Kelo decision. In one survey, 95 per cent of the respondents disagreed with the decision.

In another, 81 per cent. Would Canadians ever feel that strongly about takings?

Would there ever be that kind of pressure for new laws? Is that part of our culture?

And would new laws even be effective? Experts point out that many of the U.S. laws are just window dressing, and place the blame on wide-spread political ignorance. Voters often can’t tell if a law will be effective. So, law-makers can cater to public outrage and at the same time serve those who benefit from takings.

More worrying, public attention to the issue seems to be flagging, and some reforms are actually being rolled back. For these reasons, the courts may well have an important role to play in restricting takings. But what role can the courts play here in Canada, when they have made it so clear that anything goes?

Unrestrained expropriation is a serious public policy failure—and yet, one that’s widely ignored. How can we change that? They’ve done it in the U.S. But is there any hope for Canada? 

PROPERTY RIGHTS IN THE DEFENCE OF NATURE

By Elizabeth Brubaker Drawing from cases in Canada, the U.S. and England, this book illustrates how the common law has been a historical tool of environmental protection.

The author contends that contemporary statutes have, in contrast, allowed the pollution of public and private lands. With stronger property rights, she argues, individuals and communities can preserve the environment.

Elizabeth Brubaker is executive director of Environment Probe and author of several books, including Property Rights in the Defence of Nature, an investigation of the extent to which the property rights regime developed under the English common law can serve as a force for environmental protection.

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BY C. KENNETH REEDER

Do We Still Need the National Energy Board?

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Canada was building pipelines long before we ever regulated them

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he Trudeau government has talked a lot about “modernizing” the National Energy Board (NEB) and restoring confidence in how major energy projects get reviewed and approved. A recent protest at the NEB’s Energy East hearings in Montreal is yet another illustration of why that’s probably impossible.

Back in August, a corpulent protester and his entourage barged into the NEB’s public hearing and caused a “violent disruption.” They were removed by police.

Alamy Stock Photo

“The NEB is an anachronism born from the wartime central planning mentality. It really has no purpose in the modern world. The lack of trust in its review processes is a symptom of that.”

Apparently these protesters thought the NEB panel was suspect because two members had met with former Quebec premier Jean Charest while he was working as an energy industry consultant. No one seems to know what was discussed in that meeting, but the disruption was effective—the NEB cancelled a week of further hearings.

Then about 10 days later, the NEB submitted to criticism and all three members of the Energy East panel stepped down. This was to “protect the integrity” of the National Energy Board and Energy East review.

The interesting part of all this is how it doesn’t even matter whether the protesters’ complaints were motivated by a genuine scandal or desperation to seize on anything that can stop pipeline construction altogether.

Meaning it’s obvious a lot of people have trust issues with the NEB, which is perceived to be subject to political interference at every turn.

The pro-pipeline side thinks it’s held hostage by the whims of radical environmentalists. Anti-pipeline environmentalists think it takes its orders from the energy industry.

Landowners are caught in the middle—they either get bullied by the NEB or get stuck with older, less-safe pipelines crossing their land because environmentalists impede modernizing upgrade projects (as is the case for the Enbridge Line 3 replacement). They certainly don’t trust the NEB at all.

How do you restore public confidence in the NEB?

The main challenge of democracy is having good institutions and decision-making processes. More than that though, we want institutions and processes that tend to produce good outcomes.

Due to whatever biases we have, we tend to be suspicious of an institution that produces results we dislike, even if it should be a good system in theory.

The NEB can’t make everyone happy.

If it approves a project, people are mad. If it rejects a project, people are mad.

This is an intractable problem, but the lesson to be learned here is not that we need to restore trust in the Board, but instead energy infrastructure decisions should be more local with less involvement from Ottawa.

The best way to “restore trust” in how major energy projects are evaluated is to remove unnecessary federal interference and keep the decision process linked to legitimate stakeholders—property owners, energy companies and provincial and local governments.

The NEB itself is unnecessary. It uses its elaborate “consultations” and “reviews” to apply a veneer of legitimacy to a process that doesn’t need the extra layer of bureaucracy.

Every additional step of federal approval actually opens the door for more political interference by one group or another. The very existence of the NEB creates distrust.

Canada’s Constitution gives Ottawa the power to make laws and regulate interprovincial and international projects like big pipelines. That doesn’t mean they actually have to exercise that power the way they do now.

Remember, the NEB doesn’t really approve anything. It simply makes recommendations to Ottawa about whether the government should permit a project after the NEB’s review.

Ottawa could have a streamlined process to approve something that the provinces want based on their own consultations and processes.

The NEB was created in 1959, but Canada has had pipelines for over 150 years. Unsurprisingly, pipelines that crossed provincial and international borders were still built before the NEB existed and the world didn’t fall apart.

The NEB is an anachronism born from the wartime central planning mentality. It really has no purpose in the modern world. The lack of trust in its review processes is a symptom of that.

People’s distrust of government institutions seems higher than ever. Ottawa believes that it’s possible to “overhaul” the National Energy Board and regain public trust. But if we’re honest with ourselves we see there is no practical way for that to happen. 

C. Kenneth Reeder is a Calgary financial analyst providing mergers and acquisitions advisory services for mid-sized, privately held companies in Western Canada.

He works with many clients in the oilfield services sector. He is also the editor of CanadianMarketReview.com.

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BY MARTY GOLD

Business As Usual

Manitoba landowners discover new Pallister government happy to keep property stolen for the NDP’s Bipole lll boondoggle

A

big part of the decisive sweep to power by Brian Pallister’s Progressive Conservative Party of Manitoba in the April election were the spiralling costs and controversy surrounding Manitoba Hydro’s Bipole lll transmission line.

Former NDP Premier Greg Selinger ensured his eager-toplease appointees on the board ordered a longer route around the west side of the province that alone added $900 million to

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the megaproject and put some of Manitoba’s most prosperous farmland in Bipole’s path.

Under cover of a pricey report from Boston-based consultants (reportedly costing taxpayers nearly $4 million), the Pallister government has concluded the project will proceed as planned.

Landowners battling the behemoth provincial power monopoly were shocked.

Dozens of farm families who had held out and been expropriated, and who had kept faith in Pallister PC promises to repeal the Bipole boondoggle are quickly discovering it’s business as usual

under the Tory controlled Manitoba Hydro.

Following a series of discouraging letters sent to landowners

by Hydro prior to the newly appointed Manitoba Hydro board’s public relations push at a series of open houses across the province in October, Pipeline Observer sat down with Jurgen Kohler, chair of the Manitoba Bipole Landowners Committee (MBLC), a local CAEPLA affiliate.

We asked Mr. Kohler about the letters, and if anything had changed in the treatment of his members by Hydro under the new Pallister-appointed board.

istockphoto.com

PO: Recently, Glenn Penner (Manitoba Hydro division manager transmission construction and line maintenance) sent a letter with a two-page colour brochure to landowners impacted by construction. Has MBLC verified that their biosecurity procedures and dismissive attitude towards landowners has changed?

JK: On October 14, 2016 we sent a letter to the new chair of the Hydro board outlining and emphasizing that very point.

We are awaiting his response, which will tell us whether their dismissive attitude has changed.

PO: The CEO of Hydro, Kelvin Shepherd, also wrote to landowners and referred to instituting “a variety of additional measures to ensure compliance

with required construction and bio-security measures.” Have you received any explanation of what these measures are and why these protections to farmland were not in use under the NDP? JK: No we have not yet received any explanations on what the measures are.

Bottom line is that those procedures need to be negotiated with the real stakeholders—the affected landowners. That has not happened. It needs to happen before construction resumes. Our negotiator, CAEPLA, is ready to start this process.

PO: A letter from Hydro board chair Sandy Riley to MBLC referenced how “80 per cent of landowners have already committed to voluntary easement agreements” despite the fact many of

those were for low-value or unproductive farmland, which is a far different case than the remaining dissidents. MLBC recognized many of the agreements were hardly voluntary, signed in fear of an expropriation process that had an “enormous impact” on the mental and physical health of farm families. What do you feel can be done by Hydro to restore a sense of justice to the people who were treated with disdain?

JK: Manitoba Hydro needs to recognize and show respect for our property rights. They can do this by recognizing our fundamental right to associate with CAEPLA. CAEPLA is our legally authorized representative, and Hydro needs to come to the table and negotiate in good faith a

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“Manitoba Hydro needs to recognize and show respect for our property rights.”

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business agreement that addresses all of our many legitimate issues and concerns with this project.

PO: In light of the Boston Consulting Group, do you have an estimate of the preliminary costs for CAEPLA to represent your members in negotiations?

JK: CAEPLA has suggested Hydro cover a legal budget of $70,000 to show that they intend to be serious in negotiating a “win-win” business agreement.

Spending $70,000 with the return of saving at least $4 Million in Land Value Appraisal Commission admin costs seems like a no-brainer to me. Mr. Riley should be very interested given Mr. Pallister’s most recent comment that Hydro needs to look for efficiencies first and not hint at a bailout package from the province, PO: What kind of reception do your causes receive now that policy is in the hands of the Progressive Conservatives?

Has there been any signal that Premier Pallister and his new government will uphold landowners’ property rights and freedom of association and to collectively bargain with their chosen legal representative, CAEPLA? JK: The Pallister government has yet to show leadership on this file. They supported us while in Opposition and during their election campaign. But now they are silent. They need to step up to the plate and show that they are serious about property rights and our right to choose CAEPLA as our negotiator. They need to walk the talk by issuing a directive to Hydro to negotiate with us in good faith. 

PCs talked tough in opposition

W

hile in opposition, the

collective bargaining with Manitoba Hydro to

Progressive Conservative Party

address the many concerns landowners have

of Manitoba—starting at the

with Bipole III? … Mr. Speaker, since when

very top—talked tough when it

is expropriation part of collective bargaining?

came to defending the rights of landowners

Pipeline companies are engaging in collective

affected by the construction of transmission

bargaining with landowner representatives, but

towers on their property for Manitoba Hydro’s

Manitoba Hydro only resorts to expropriation

Bipole III project.

rather than collective bargaining.

Is this what the landowners on the

Manitoba Hansard, Question Period, March 24, 2014: CAEPLA Negotiations, Government Intention

Manitoba-Minnesota transmission line have to look forward to? Every project that Manitoba Hydro wants to do in the future, is expropriation the only way they’re going to do it?

Mr. Brian Pallister (leader of the official

Why not sit down with landowners? Why

Opposition): … The Canadian Association of

not deal with the Bipole landowner committee?

Energy and Pipeline Landowner Associations wants to negotiate on behalf of its members, many of them here today. They want to do it because they want to work together to protest the abusive treatment they’ve received by this government, abusive treatment of Manitoba farm families and Manitoba farmers because of

Outside the Legislature, the Tories professed to fully support the farmers who are the foundation of their massive rural base.

the Bipole route and the way in which it’s been

Ralph Eichler (Lakeside): The government

mishandled by this government.

feels they’re doing enough to compensate the

But the Province refuses to recognize them

farmer. What they seem to forget is that if you

and refuses to come to the table … How can

have an irrigation system, use airplanes to

you deny collective bargaining? How can you

crop dust, or even seed for that matter, that

deny the principle of collective bargaining to

land isn’t just the little piece of tower (the

the people of Manitoba who want to exercise

government) pretends they took, it’s also that

the principle of collective bargaining?

line that goes across the property that limits them in their ability to do what they want to

Marty Gold has been the leading voice of alternative media covering public affairs in Winnipeg for a decade. He hosted a unique drive-time talk radio program on Kick-FM and hosted City Circus TV. He is also a specialist in Freedom of Information filings. Contact him at martygoldlive@gmail.com.

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do … these farmers won’t be bullied, beat up

Manitoba Hansard, Question Period, June 23, 2015: Bipole III Transmission Line, Landowner Concerns

Mr. Blaine Pedersen (Midland): … Why is this minister of agriculture not assisting the Manitoba Bipole III Landowners Committee in

or penalized for it. They’re pushing back, and that’s their right.

BY GUEST CONTRIBUTOR

Enbridge develops one-of-akind inline inspection tool There’s building a better mousetrap.

And then there’s building a better pig

A

t Enbridge, we’re constantly harnessing the latest technology to boost safety across our pipeline network.

Inline inspection tools, known as “smart pigs” in the industry, are sent through our pipelines at regular intervals, inspecting the pipe millimetre by millimetre—with a level of detail similar to that provided by MRIs, ultrasound and X-ray technology in the medical industry.

But how do you handle inspections for a unique line like Enbridge’s Line 4, which consists of 28 segments of varying sizes—some of them 91 centimetres in diameter, and some 122 centimetres—as

it travels nearly 1,765 kilometres from Edmonton to Superior, Wisconsin?

You create a better pig—an ultrasonic pig. A dual-diameter pig.

“We needed a tool that could inspect all sections of Line 4 using complementary ultrasonic techniques. And because of Line 4’s unique design, we needed a tool that could expand and contract multiple times without losing the inspection coverage,” notes Garry Sommer, a manager in Enbridge’s Pipeline Integrity division, who led development of this specialized tool.

“...harnessing the latest technology to boost safety.”

Ultrasonic pig

“We needed a tool that could inspect all sections of Line 4 using complementary ultrasonic techniques. And because of Line 4’s unique design, we needed a tool that could expand and contract multiple times without losing the inspection coverage.”

Sommer and his colleagues approached Germany’s NDT Global, an international leader in the production of ultrasonic pipeline inspection equipment, to develop a tool that could meet the unique challenges of Line 4.

After years in the design, development and testing phases and a $4.4-million investment by Enbridge, NDT Global produced a dual-diameter inspection tool that uses an ultrasonic inspection technique. Because it expands and collapses within the line like an umbrella, sensors on this dual-diameter tool provide 100 per cent coverage of the pipe wall in both its diameters.

Inspection of all 28 segments of Line 4 was completed in 2014. And after results from field excavations verified data collected from the dual-diameter pig’s travels, we were able to lift a self-imposed pressure restriction on Line 4 this spring. That means fewer operational outages, more cost savings and decreased pressure cycling.

Ultimately, the development of this dual-diameter pig produces more valuable knowledge about running ultrasonic inspection tools on heavy crude lines. It also serves as another example of our ongoing investment in advanced technology to optimize safety and operational reliability. At Enbridge, we believe all incidents are preventable—and we’re aiming for 100 per cent safety.

The dual-diameter inspection tool is currently being stored in Nisku, Alberta, allowing for quick access should it be needed. While it’s designated as a “dedicated” Enbridge tool, meaning other pipeline companies require Enbridge approval to use it in their systems, our approach to safety is based on collaboration. We don’t compete when it comes to safety.

At Enbridge, we’re committed to helping advance pipeline industry safety and technology, and the dual-diameter pig is helping us get there, one millimetre at a time. 

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Safety | Environment | Tech | Industry Insights | Integrity First

how do pipeline operators prevent corrosion? myth myTh VS. fACT

All pipelines corrode.

Pipeline corrosion

fACT: With proper maintenance and monitoring, a pipeline can be safely operated for many decades.

Transmission pipelines cover 119,000 kilometers of Canada, going through different types of terrains (farmland, rivers, wetlands, mountains and urban areas). A pipeline operator’s job is to safely deliver the oil and gas products that Canadians rely on, and that means that pipelines need to be properly protected from potential threats like corrosion.

Corrosion is a naturally-occurring phenomenon that happens when metal is exposed to air and the environment it’s in, such as water or soil.

It’s a gradual process – one common example of corroded metal is rust. Left untreated, corrosion will impact the strength and appearance of metal.

But corrosion is preventable, and pipeline operators are committed to protecting pipelines from corroding using different techniques, including cathodic protection.

A layer of protection Pipelines are made of high-quality steel, and one of the most effective ways to prevent pipelines from corroding is to prevent the steel itself from 20

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myth diluted bitumen causes pipeline corrosion.

myth Retired pipelines are left to rust.

fACT: Diluted bitumen fACT: Retired doesn’t have transmission pipelines Pipcharacterelmore i n istics that cause e prev operare subject to specific e corrosion – it’s virtually requirements ator n t D asSconventional corr regulatory s sure they the same P ostoiomake ad n safe. crude oil. remain

SmART PIgS

These in-line inspection tools allow operators to identify problems that may be difficult to see from outside the pipeline.

1 Pipeline 2 Smart Pig

having direct contact with the water or soil that can cause corrosion. That’s why pipeline operators apply a protective coating on the pipes when they are being manufactured or during construction.

The most common type of coating is an epoxy coating, which is a paint-like substance that seals the surface of the pipeline. The epoxy prevents the metal pipeline from being in direct contact with the environment.

Because pipelines go through such diverse terrain, operators will use different coatings for different environments. For instance, if a pipeline

did you know?

Cathodic protection is also used to prevent corrosion on the Christ the Redeemer statue in Rio de Janeiro, Brazil and the Eiffel Tower in Paris, France!

About Pipelines

Corrosion hoW IT WoRkS

Cathodic protection Rectifier (Power Source)

(-)

A specialized piece of metal (anode) is placed alongside the pipeline (cathode) in the ground or body of water. Both the pipeline and the anode are connected to a power source called a rectifier.

(+)

Electrical Current

Pipeline (+)

1

2

Anode Ions

(-)

The rectifier charges the pipeline (cathode) with i n e op prev erat released electrons e n ors the anode.

DPS t corr os from a Anode Pipe Bed l

d

3

The deal with diluted bitumen

The electrical discharge in the anode is higher than the electrical discharge in the pipeline, and therefore the electrons pass to the pipeline in order to balance the electrical current. This basically consumes the electrons out of the pipeline and draws the corrosion away from it.

•

•

•

•

ion

•

is going through a river, a pipeline operator may use a cement coating that prevents corrosion from occurring, while also weighing the pipe down and protecting against mechanical damage during installation.

Scrapers – Large wire brushes rotate through the pipeline, cleaning the pipe and preventing product build-up. As extra protection, sometimes a substance called a corrosion inhibitor will be used during this process.

With the current

In-line inspection tools (smart pigs) – Inserted into the pipeline, these large plunger-like devices have digital sensors. As they move through the pipe, they detect cracks, deformations and metal loss on the pipe’s surface. If an irregularity is detected, the operator will take action to repair or replace that section of the pipe.

Pipeline operators also prevent corrosion from occurring using a technique called cathodic protection. Corrosion is an electrochemical process, and cathodic protection basically drains the electrons out of the metal to inhibit its potential to corrode.

A clean sweep Corrosion is more likely to occur on the outside of the pipeline than the inside of the pipeline because the outside is exposed to a corrosive environment, such as soil or water. Pipeline failures caused by corrosion are extremely rare because pipeline operators thoroughly monitor and maintain their pipelines, using tools and techniques like:

Visual surveillance – Pipeline operators have employees who walk the pipeline right-of-ways, looking for signs that something is out of the ordinary, like changes in the environment or leaking product. Aerial inspections also give operators a birds’ eye view of the right-of-way.

If there are any signs that the pipeline’s integrity is at risk, the operator will immediately investigate the situation and repair the affected pipe.

Diluted bitumen has been transported in Canada for 30 years It’s a heavy oil product mixed with a diluent to lower its viscosity (thickness) so it can flow easier through the pipeline The diluent is made up of natural gas condensates such as naphtha The characteristics of diluted bitumen are no more corrosive than other forms of crude oil Numerous scientific studies have concluded that diluted bitumen is no more corrosive than other forms of crude oil Read the report on diluted bitumen here: bit.ly/WCSBcV

geT InfoRmed

CEPA aboutpipelines@cepa.com @aboutpipelines facebook.com/aboutpipelines aboutpipelines.com

aboutpipelines.com/en/safety/pipeline-integrity/ CAEPL A .ORG

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BY TERRY ANDERSON

First Nations Were No Strangers to Property Rights They also put economic development ahead of the environment

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O

ver the past several decades, the environmental movement has promoted a view of First Nations people as the “original conservationists.” References to this image abound: “The Indians were, in truth, the pioneer ecologists of this country,” former U.S. secretary of the interior Stewart Udall once said.

“For many thousands of years, most of the indigenous na-

istockphoto.com

tions on this continent practiced a philosophy of protection (first) and use (second) of the forest,” says Herb Hammond in the Sierra Club book Clearcut. “In scientific terms, we recognize that their use of the forest was ecologically responsible— meaning that it kept all the parts.”

Appealing as this image of a Native American environmental ethic is, it is not accurate. The spiritual connection attributed to Native Americans frequently does not mesh with the history of First Nations resource use.

By missing this history of indigenous

institutions—by which I mean the traditions, rules, laws and habits that guided aboriginal societies—many environmentalists’ interpretations deprive aboriginals and non-aboriginals alike of a full understanding of how we can conserve our natural heritage.

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Ted Perry

In a movie about pollution, Ted Perry, a scriptwriter paraphrased a translation of the speech that had been made by William Arrowsmith, a professor of classics. Perry, not Chief Seattle, wrote that “every part of the Earth is sacred to my people.”

Chief Seattle was a Suquamish Tribe (Suquamish) and Dkhw’Duw’Absh (Duwamish) chief. A prominent leader among his people, he pursued a path of accommodation with white settlers.

A vision imposed on Chief Seattle The impression that American Indians were guided by a unique environmental ethic is often attributed to Chief Seattle.

“All things are connected like the blood which unites one family,” former U.S. senator John H. Chafee quoted him as saying. “Whatever befalls the Earth, befalls the sons of Earth.”

Yet the words in the oft-quoted speech are not those of Chief Seattle.

They were written by Ted Perry, a scriptwriter. In a movie about pollution, he paraphrased a translation of the speech

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that had been made by William Arrowsmith, a professor of classics. Perry, not Chief Seattle, wrote that “every part of the Earth is sacred to my people.”

The romantic image evoked by the speech obscures the fact, acknowledged by historians, that American Indians transformed the North American landscape. Sometimes these changes were beneficial, at other times harmful.

But they were a rational response to abundance or scarcity in the context of institutions that governed resource use.

Like people everywhere, aboriginal peoples responded to incentives. For example, where land was abundant, it made sense to farm extensively and move on.

It was common for peoples such as the Choctaw, Iroquois and Pawnee to clear land for farming by cutting and burning forests. Once cleared, fields were farmed extensively until soil fertility was depleted; then new lands were cleared.

Wherever Indian populations were dense and farming was intense, deforestation was common. Indeed, the mysterious departure of the Anasazi from the canyons of southeastern Utah in the 13th century may have been due to depletion of wood used for fuel. Similarly, where wild game was plentiful, Indians used only the choicest cuts and left the rest.

Aboriginal peoples also manipulated the land to improve hunting. Upland wooded areas were burned to remove undergrowth and increase forage for deer, elk and bison.

The demand for meat, hides and furs by relatively small, dispersed populations put little pressure on wildlife. But in some cases, game depletion resulted in

the “tragedy of the commons.” This term, coined by biologist Garrett Hardin, describes what happens when no one owns a resource and anyone has access to it.

Wild animals represented a “commons.” They belonged to no one until they were killed. If anyone left an animal, in the hope that it would be there later, someone else was likely to kill it. Without ownership, no one had an incentive to protect the animals. Anthropologist Paul Martin believes that the extinction of the mammoth, mastodon, ground sloth and sabre-toothed cat were directly or indirectly due to “prehistoric overkill” by exceptionally competent hunters.

Historian and author Louis S. Warren debunked the “living in harmony with nature” myth: “Indians often manipulated their local environments, and while they usually had far less impact on their environments than European colonists would, the idea of ‘preserving’ land in some kind of wilderness state would have struck them as impractical and absurd. More often than not, Indians profoundly shaped the ecosystems around them….”

Getting the incentives right While there were exceptions that led to the “tragedy of the commons,” most aboriginal peoples understood the importance of getting the incentives right.

Personal ethics and spiritual values were important, but those ethics and values worked with private and communal property rights. These rights strictly defined who could use resources and rewarded good stewardship.

Facing page: Chief Seattle, United States public domain; this page: istockphoto.com

It is sometimes difficult to fit the pre-Columbian Indian institutions into the modern context of law, government and property rights. The lack of familiar modern institutions, however, by no means implies that Indians lacked rules, customary or formal. Pre- and post-Columbian Indian history is replete with examples of how property rights conditioned the human interface with the natural environment. Consider the following:

Land and water rights, both communal and private Indian land tenure systems varied considerably, “ranging from completely or almost completely communal systems to systems hardly less individualistic than our own with its core of fee simple

tenure,” according to one historian. The degree of private ownership reflected the scarcity of land and the difficulty or ease of defining and enforcing rights. American anthropologist Julian H. Steward concludes that “Truly communal property was scant” among American Indians.

Because agriculture required investments, and boundaries could be easily marked, agricultural land was often privately owned. However, unlike most private land today, Indian property was usually held by families or clans.

For example, families among the Mahican Indians in the Northeast United States possessed hereditary rights to use well-defined tracts of garden land along rivers. Away from the rivers, however, where the value of land for crops was low, it was not worth establishing ownership.

“The spiritual connection attributed to Native Americans frequently does not mesh with the history of Indian resource use.”

In the Southeastern United States, where aboriginal peoples engaged in settled agriculture, private ownership of land was common. Private garden plots were common in the Eastern United States, as were large community fields with plots assigned to individual families. Harvesting on each plot was done by the owning family, with the bounty stored in the family’s own storehouse.

Fruit and nut trees, which required long-term investment, were privately owned and usually inherited. “So important were the piñon resources that groves

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Unfortunately, the white man’s law usurped these secure aboriginal fishing rights and replaced them with a system that encourages the tragedy of the commons.

It was “economically inferior to the property system originally established by the tribes.”

of trees were considered family property in several locations” within the Great Basin area of the Western United States, says one historian. In one case a Northern Paiute reflected that his father “paid a horse for a certain pinon-nut range,” suggesting that the property rights were valuable and tradable.

Avoiding the “tragedy of the commons” Where Indians depended on hunting and fishing, it was imperative that they controlled access to hunting territories and to specific harvest sites. Hunting groups among the Montagnais-Naskapi of Quebec between Hudson Bay and the Gulf of St. Lawrence recognized family and clan hunting areas, particularly for

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beaver. Similar hunting groups and rules existed in other regions.

Quoting Indian informants, anthropologists Frank G. Speck and Wendell S. Hadlock report that for Indians in New Brunswick, it was an established rule “that when a hunter worked a territory no other would knowingly or willfully encroach upon the region for several generations.” Some of the men held districts that had been hunted by their fathers and presumably their grandfathers.

They even had a colloquial term that translates to “my hunting ground.”

In western North America, each distinct Apache band, says anthropologist Keith H. Basso, “had its own hunting grounds and, except when pressed by starvation, was reluctant to encroach upon those of a neighbour…. Each local

group had exclusive rights to certain farm sites and hunting localities, and each was headed by a chief who directed collective enterprises….”

Customs and norms regulated the harvest. There was a district headman who determined where and when to hunt based on his knowledge from the past.

Well-defined fishing rights In the Pacific Northwest, Indians had well-defined fishing rights. To capture salmon returning from the ocean to spawn in freshwater streams, Indians placed fish wheels, weirs and other fixed appliances at falls or shoals where the fish were naturally channelled. Their technology was so efficient that they

Tragedy of the commons

This term, coined by biologist Garrett Hardin, describes what happens when no one owns a resource and anyone has access to it.

could have depleted salmon stocks, but they realized the importance of allowing some of the spawning fish to escape upstream.

Relying on salmon as their main source of food, the coastal Tlingit and Haida Indians established clear rights to fishing locations where salmon congregated on their journey to spawning beds.

The management units could exclude other clans or houses from their fishing territories. When territories were infringed upon, the trespasser was required to indemnify the owning group or potentially face violent consequences.

The yitsati, an eldest clan male who was the “keeper of the house,” had the power to make and enforce decisions regarding harvest levels, escapement, fishing seasons and harvest methods. The upshot was that salmon runs were sustained by rules made locally.

Unfortunately, the white man’s law usurped these secure aboriginal fishing rights and replaced them with a system that encourages the tragedy of the commons. It was “economically inferior to the property system originally established by the tribes,” one scholar concludes.

Additional positive incentives

istockphoto.com

Even where activities were communal, positive incentives, including incentives quite similar to ownership, made success in these endeavours possible.

On a buffalo hunt, the successful hunter was “entitled to keep the skin and some choice portion of the meat for his family,” writes Steward. An elaborate nomenclature was used by the Omaha to describe rewards for those who killed and butchered buffalo. “To the man who killed the animal belonged the hide and one portion of tezhu [side of meat] and the brains.” Other portions were as follows: “To the first helper to arrive, one of the tezhu and a hind-quarter; to the second comer, the ugaxetha [includes the stomach, beef tallow and intestines]; to the third, the ribs [tethi ti].”

In sum, faced with the reality of scarcity, aboriginal peoples understood the importance of incentives and built their societies around institutions that encouraged good human and natural resource stewardship. Ethics and spiritual values may have inculcated a respect for nature, but an elaborate set of social institutions that today would be considered private property rights rewarded stewardship.

Non-Indians also will do well to stop promulgating myths as a solution to modern environmental problems. Especially in a multicultural society where worldviews vary widely, devolution of authority and responsibility offers the best hope for resource conservation. Rather than shunning property rights solutions, we should embrace them, as did our predecessors on this continent. 

Terry L. Anderson is a senior fellow at the Property and Environment Research Center (PERC, a non-profit, free-market environmental research institute in Bozeman, Montana and a senior fellow at Stanford University’s Hoover Institution. His books include Unlocking the Wealth of Indian Nations (Lexington, 2016) and Free Market Environmentalism for the Next Generation (Palgrave, 2015).

PROPERTY RIGHTS WHAT ARE YOURS WORTH? Support CAEPLA

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The Canadian Association of Energy and Pipeline Landowner Associations (CAEPLA) is a federally incorporated not-for-profit fighting for the property rights, environmental stewardship, and business interests of farmers, ranchers and other landowning Canadians for nearly two decades. Make cheques payable to: CAEPLA, 257-918 Albert St, Regina, SK, S4R 2P7.

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BY DAN LEROY

More Economics, Less Politics

T 28

Suspension of property rights has paralyzed the pipeline industry, too

he problem with the “dismal science” is well known to politicians and the special interests to whom they cater. Economics mercilessly exposes and dispels the myths conjured to justify central planning and government interventionism. It puts parameters on people’s romantic longings for coerced Utopias. And it is why many dreamy, peeved individuals disparage economists who understand the importance of private resource ownership and unimpeded market processes and why mainstream media outlets are so

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careful when it comes to which pundits they call on to discuss public policy.

Moving oil and gas through pipelines in Canada provides a contemporary example of what happens when authorities try to suspend market processes for political gain.

Transportation by pipeline, truck, rail or ship is aimed ultimately at satisfying the wants of final consumers for the innumerable goods made from oil and gas that make our everyday 21st century lives possible. This criti-

cal activity is in the crosshairs of politicians and bureaucrats eager to “do something.” The “something” in this instance includes, but is not limited to: protecting competing firms in the oil and gas industry, protecting lakes, rivers, streams and underground aquifers, protecting land, preventing climate change, creating opportunities for indigenous peoples, choreographing the pattern, method and quantity of conventional heavy oil and oil sand bitumen extracted, refined and distributed, and generating a politically

“The current paralysis in the pipeline industry is a consequence of a combination the absence of privately owned property and of restrictions on individuals regarding the use of things that belong to them: land, labour, equipment and their entrepreneurial acumen.”

acceptable revenue stream for various levels of government.

The range and types of challenges being faced, for instance, by the TransCanada Energy East project and the Enbridge Northern Gateway project therefore extend far beyond the daunting physical and financial ones.

Entrepreneurs and owners of resources (land, labour and equipment) are all subject to expropriation by the various levels of government to the degree necessary to carry out one or more of the policy objectives above.

Implementing them presumes

it, Mises made clear this indisputable fact: in the unhampered market forces are at work which tend to put every privately owned means of production to the use in which it is most beneficial for the satisfaction of human wants.

When an authority interferes with this process in order to bring about a different use of productive factors it can only impair supply, not improve it.

Individuals belonging to special interests that seek to use the coercive power of government to limit or ultimately shut down industry know this well. The

Ludwig von Mises

Facing page; © Alamy Stock Photo; this page: Ludwig von Mises Institute

In the unhampered market forces are at work which tend to put every privately owned means of production to the use in which it is most beneficial for the satisfaction of human wants. When an authority interferes with this process in order to bring about a different use of productive factors it can only impair supply, not improve it.

that private property is subject to majority vote and that privately owned resources and the lives of individuals ought to be directed in particular ways against their wills. Not surprisingly, this leads to problems larger than those the original policy aimed to resolve.

Ludwig von Mises, better than any other economist of the 20th century, identified and delineated the consequences of assaults on the institution of private property and interfering in exchanges between consenting adults.

Despite all attempts to invalidate

current paralysis in the pipeline industry is a consequence of a combination the absence of privately owned property and of restrictions on individuals regarding the use of things that belong to them: land, labour, equipment and their entrepreneurial acumen. The reason why

central planning inevitably fails is that no one knows better how to use their scarce resources than the owners of the scarce resources themselves.

Elected officials and bureaucrats have an important role to play, but not in the way they would have you believe. That role is not to approve of projects that are in some specious conceptualization of a “national interest.” It is not to define special terms and conditions from review panels.

It is not to assume a “leadership role” if the legislated regulatory review process with regard to a particular project becomes bogged down. It does not require working with stakeholders to resolve impasses or introducing special legislation. Interventionism is the problem, not the solution.

Many Canadians, unaware of what they are truly asking for, pressure politicians to just “do something” to resolve perceived problems. They clamour for action, not realizing the best course of action for politicians is to do nothing other than to respect and refrain from interfering with the decisions of individuals over their persons and their property as they pursue their separate self-interests. 

Ludwig von Mises, better than any other economist of the 20th century, identified and delineated the consequences of assaults on the institution of private property and interfering in exchanges between consenting adults.

Danny LeRoy, PhD., is an economics professor at the University of Lethbridge where he is also coordinator of the Agricultural Studies program. Areas of research include commodity production, marketing and trade, government interventionism and Austrian Economics. He occasionally blogs at Mises.ca.

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BY ANDREA DE ROO

The Best Way for Landowners and Industry to Protect the Environment Sound science and respect for property rights are key, says a young agrologist

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30 to 40 per cent

istockphoto.com

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t is my belief that farmers are arguably some of the best environmentalists around. How could they not be when they live where they work, drink the water and depend on healthy landscapes to support their families?

The 2011 Census of Canada shows a mere two per cent of Canada’s population are farmers. While there is a growing trend amongst growers to rent land over purchasing, many are still passionate about environmental issues affecting the land, their business and the local community. Additionally, farm demographics on the Prairies show we have a greater percentage of young farmers (under 40 years old) than the eastern and Atlantic provinces combined; 39.3 per cent versus 27.3 per cent, respectively.

Enrollment in the College of Agriculture and Bioresources at the University of Saskatchewan has also increased significantly over the years, suggesting the opinion of the younger farm generations should be heard.

As agricultural research provided better information on improving land quality, farmers adapted new practices such as no-till and manure management systems to improve soil health. No-till practices alone increased from seven per cent in 1991 to 56 per cent in 2011.

Statistics have also shown growers are continually adopting best management

Our own farm experience with cropping land disturbed by a pipeline has shown up to 30 to 40 per cent yield loss in some crops in extreme cases.

practices when it comes to pesticide and fertilizer use, water management and land use. Many facets of agricultural and environmental research continues to develop better practices, technologies and resources for land management and I have no doubts farmers will continue to use this information to better their land.

From a business perspective, the co-operative efforts of both landowners and energy corporations are ideal for the formation of effective agreements.

Energy companies need use of the land for safe transportation of commodities like oil and gas, and most landowners depend on their land for the production of

“Agricultural and environmental research continues to develop better practices, technologies and resources for land management.” agricultural goods. The loss of crop yield after pipeline disturbance is common.

Our own farm experience with cropping land disturbed by a pipeline has shown up to 30 to 40 per cent yield loss in some crops in extreme cases (Note: This is a yield-monitor observation estimate, and not scientifically proven yield loss. Num-

bers vary on land characteristics, environment and farm practices). While some loss is not surprising due to disturbance to soil properties, the loss of potential yield when inputs are blanketed across the field can influence the bottom line of income on that land. Understanding what limits exist on the land and the proposed use can ease concerns on both sides.

Today’s farmers face many new challenges, but their continued dedication to the health and security of the land is unwavering. For other organizations and businesses to think otherwise and show no respect for property rights is disheartening.

As a young farmer and ag scientist myself, I feel the best way to ensure good environmental practices from landowners and pipeline advocates is through sound science with respect for property rights.

Including the voices of new generations in line for their family farms is also imperative, so continued civil discussions can take place as the landscape of agriculture, oil and gas and mining industries grow.

Public scrutiny in agriculture and energy production is increasing. Meaning both groups—landowners and energy producers—need to take care of the land to maintain positive relationships, with the understanding food and energy systems depend on each other to advance. 

Andrea farms with her family on a mixed grain and cattle farm in southeast Saskatchewan. She defended her master’s thesis in May of 2016 and obtained her professional agrologist designation in September of 2015. She is currently working at the Indian Head Agricultural Research Foundation while continuing to farm.

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BY TIM MOEN

Walking a Fine Line on Safety A safety professional explains how government ruins safety culture

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“There are two ways to promote safety. One way is to teach, to practice, to promote good judgment, to explore principles, to make mistakes and learn from them, to lead from the front. Then there is the lazy way; write down a rule and threaten to punish disobedience.”

Mike Moran / Alamy Stock Photo

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n Memorial Day 2011, San Francisco fire fighters stood on a crowded beach for over an hour and watched Raymond Zack drown in chest deep water.

It was against department policy to go into the water without the official water rescue course and the firefighters knew they could lose their jobs if they tried to enter the water.

On the surface, the policy seems reasonable. Fire chiefs are required by government to make rules like this.

Unfortunately, this rule backfired in an unintended way and a man died. The firefighters were put in a bad situation; they could try and save a suicidal man or they could keep their jobs.

We make trade offs between perfect safety and getting work done all the time.

What if these firefighters had been free to act and find the balance between their own personal safety and saving a life?

As a firefighter, I can guarantee you that my team is going to find a way to save Raymond Zack and bring everyone home safely if you give us freedom. This freedom is something we are steadily losing.

Imagine it’s your job to make rules for

a fire department. It would make sense to have a rule that says, “Don’t do stuff you’re not certified to do.” A rule like this would prevent you from getting in hot water with the government. Now imagine a different environment where it’s your job to figure out the best way to serve the needs of your fire department clients.

In this case, it would make sense to try and imagine all the possible scenarios you might encounter and find innovative ways of overcoming these emergencies with the resources available. It would make sense to encourage firefighters to always exercise their best judgment in serving citizens and lead them in the discipline of constant practice so that more options occur to them in an actual emergency.

There are two ways to promote safety. One way is to teach, to practice, to promote good judgment, to explore principles, to make mistakes and learn from them, to lead from the front. Then there is the lazy way; write down a rule and threaten to punish disobedience. One method results in the internalization of safety and job performance and encourages positive unintended consequences like innovation and novelty and the

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other way results in negative unintended consequences as employees seek to avoid punishment rather than do good for goodness sake. Following the rules does not necessarily prevent tragedies, and can in fact cause them unintentionally.

Nowhere is this top down, lazy, punishing approach more common than in government. Government has one job and that is to use force, to wield a big stick and whack people with it if they step out of line. Because of this, it is not likely to

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produce the kind of culture that leads to positive, unintended consequences, innovation, good customer service and an internalized safety culture.

I’ve spent time working in safety departments on large oil and gas projects and have seen how top-down control by

Tim Moen grew up on a farm in northern Alberta. He is a firefighter-paramedic who views safety as a risk-management practice. Leader of the Libertarian Party of Canada, Tim is also a public speaker, film maker and businessman.

istockphoto.com

I have seen how much of a worker’s day is spent jumping through hoops. Bureaucrats are hired to help the company meet government obligations and their job is to make hoops for workers to jump through—and then workers spend more time jumping through hoops and less time getting the actual job done.

government affects industry. I have seen how much of a worker’s day is spent jumping through hoops. Bureaucrats are hired to help the company meet government obligations and their job is to make hoops for workers to jump through—and then workers spend more time jumping through hoops and less time getting the actual job done. Is it any wonder that projects almost always run over the allotted time and budget?

Imagine how pipelines might be developed if they were built without threat of a big stick. Imagine an environment where energy companies have to balance their own corporate safety (liability and reputation) with serving their customer.

Imagine an environment where energy transport workers are no longer practicing punishment avoidance, but are focused solely on providing innovation and finding win-win solutions for all stakeholders.

Imagine no landowner had the threat of expropriation hanging over their head and they were free to negotiate in good faith with pipeline companies to develop safety practices that do more than satisfy bureaucrats, but that actually work efficiently in the real world?

Imagine a pipeline landowner who has maximum input over environmental standards, routing of the pipeline and accountability. In other words, imagine what would happen if people were free.

What kind of innovative solutions might emerge?

We are all better off when people are free and empowered to innovate and create. We need to respect individuals enough to not impose on their activities and their property; we need to put our big sticks down. This requires we strike the root from which all these big sticks emerge—big government. 

BY GRAHAM LANE

More Questions About Bipole lll Why have the Pallister PCs embraced the NDP’s transmission-line boondoggle?

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anitoba Hydro spreads ratepayer money across the north, building unneeded dams and questionable transmission lines. The utility uses contractors, lawyers and consultants.

While Manitoba’s auditor general found much wrong with the former NDP government’s east-side road efforts, he has yet to plumb the depths of Hydro’s actions.

Why audit the east-side effort but not Hydro? While the east-side authority spent hundreds of millions of

If misdeeds were found and publicized, one can only speculate as to whether or not it would affect funds to flow from the continuing boondoggle to the new government’s coffers, or hurt an upcoming carbon tax gambit being planned by the PCs involving Hydro.

Rumours abound about questionable actions of Hydro, its contractors and agents. Closing in on a billion on “negotiations” with First Nations and another $7 billion already gone on building Wuskwatim (finished), Bipole

“The Pallister government, having decided to continue the NDP-originated boondoggle, has yet to order an audit of Hydro’s northern actions.” our money, Hydro spends billions.

The east-side authority has been wound up, the manager dismissed and operations rolled into the government’s infrastructure department.

Disclosing misjudgments of the NDP’s east-side organization makes good public and political sense. As for Hydro, the Pallister government, having decided to continue the NDP-originated boondoggle, has yet to order an audit of Hydro’s northern actions. Not hard to figure out why: while making Hydro theirs, best not to risk finding out and publicizing their utility’s misdeeds.

III and Keeyask (well underway, with another $8 billion yet to flush), billions pour through the hands of Hydro’s contractors, lawyers and consultants. Never before in Manitoba’s history has so much been spent by a government agency. Yet no audit, no inquiry, no review.

Avoiding independent scrutiny, Hydro lives a charmed life. The utility’s former risk manager—named the New York whistleblower—raised alarms 10 years ago, well before the bulk of the boondoggle expenditures were spent or committed. She warned of the risk of betting billions on long-

term export contracts with American utilities to cover rising expansion costs. She reported her concerns: first to Hydro management, then to its board, then to the then-auditor general (who, having been a Hydro director and audit committee chief before being named to the position, declared a conflict of interest), then to the then-ombudsman, police, Manitoba Public Utilities Board and, finally, a New York court. All to no avail.

The whistleblower was fired, no independent review conducted. Hydro spent over $4 million defending against her claims. Why? To avoid scrutiny? Trouble is, if she had been taken seriously, ratepayers wouldn’t be in the disaster we now have.

BBE Constructors, a joint venture led by American giant Bechtel managing Hydro’s $7 billion-plus Keeyask project, is currently defending claims of unsafe working conditions and unfair labour practices, claims sustained by quickly terminated Keeyask workers. BBE’s defence has been assisted

by Hydro; the Province’s workplace health and safety and labour agencies; even the Workers Compensation Board of Manitoba. Whistleblowing is not healthy for complainants. The disaffected, terminated workers have been blocked at every turn, their complaints rejected and ignored. Rumours abound of questionable actions by Hydro’s agents, some working to keep First Nations happy with the utility.

There’s lots more about untendered bush clearing and other gilded, gifted contracts. Where is the auditor? Value for money?

More puzzling, why do the Tories want to wear this NDP mess?  Graham Lane leads Manitoba Forward. A retired chartered accountant, he served for eight years as the chair of the Manitoba Public Utilities Board.

Read more at ManitobaForward.ca.

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BY ESTHER LENZ

Farmers frustrated by continued bullying from Brian Pallister’s Manitoba Hydro

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supported the Progressive Conservatives. I have known Blaine Pedersen for a while, and know Ron Schuler from the German Society of Manitoba. At least I thought I knew them and their party.

The Bipole lll landowners’ committee and CAEPLA have tried to communicate with Manitoba Hydro for years now. We have emailed, phoned, tried to talk and confronted them on the steps of the Legislature.

Despite our best efforts to get Hydro to come to the negotiating table, we were not treated well, and ultimately our land was expropriated.

So, too bad for the farmers, because we generally do not vote for the NDP—that was the government’s attitude.

Now with the new Pallister government, no change—Manitoba Hydro still refuses to meet with our chosen negotiator.

Since when do I live in a communist province?

Hydro believes they are above the law, they are freaking bullies and everybody knows it. But if the abuse doesn’t happen in your backyard, it seems no one cares.

Hydro stole my land. They “acquired” it at a bargain price. The credit union says today my land is worth $4,200 per acre—easily. Hydro offers me $2,200. Hydro says they will do all the protocol regarding bio-security—BS again.

I have been watching exactly what they have been doing on my land.

Hydro hires security for themselves

“So, if you want to treat me like a stupid farmer, OK, that is the Pallister government’s choice.”

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Esther Lenz owns the farmland she farms near Brunkild and is on the Manitoba BiPole lll Landowners Committee (MBLC). She holds a bachelor of physical education (Manitoba) and bachelor of science (Ottawa).

Lloyd Sutton / Alamy Stock Photo

Bipole lll Landowner Betrayed by Progressive Conservatives

and bullies farmers. They force bogus easement agreements on us, expecting us to accept liabilities from towers we never asked for.

And the BS from Manitoba Hydro never ends. The bullies intend to bulldoze their way through the very centre of my farm. I was in Minnesota this past summer and guess what?

Their huge towers (just like ours and bigger) were right beside the interstate! My, what a concept. But not here in our province—now we will have to work around the poles.

So if you want to treat me like a stupid farmer, OK, that is the Pallister government’s choice. They have chosen to continue bullying farmers, people who faithfully voted for them. The party in power may have changed, but the NDP policy of land theft hasn’t.

If I could, I would sell my farm in two minutes and get the hell out. But everyone knows, the farmers cannot just up and move their business—because our business is the land itself.

My neighbours and I want a new law in Manitoba. One that guarantees our property rights. Expropriation favours the government, not landowners.

Because of the current laws in this province and the Crown monopoly, every lawyer in this province is too busy kissing the ass of Manitoba Hydro. And when we join CAEPLA, the government—including the supposedly “new” Pallister government, refuses to recognize our legal agent.

A message to the Pallister government: Do not expect anything nice from me anymore. 

FARMS DON’T RUN On SOlar POwer

StOP the

Carbon Tax A CARBON TAX is a tax on everything but especially on farming. Farms do not run on solar or wind power. For farmers, Gas is a MAJOR expense and a TAX on carbon would be DISASTROUS to their businesses.

Maxime Bernier Member of Parliament, Beauce QC

maximebernier.com

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BY AMANDA ACHTMAN

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What is Social Licence?

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Friedrich Hayek

There is little doubt that Hayek would diagnose “social licence” to be one of the worst “weasel words” of our time given the consequences this sly expression is having on clear thinking, the rule of law and ordinary relationships between members of political and economic communities.

I Granger Historical Picture Archive / Alamy Stock Photo

t s l ? s l ? s l ? t s l ? t s l ? s l ? s l ? t s l ? s l ? s l ? t s l ? s l ? s l ? t s l ? s l ?

n 1988, economist Friedrich Hayek argued that the adjective “social” has “probably become the most confusing expression in our entire moral and political vocabulary.”

He even provided a list he compiled of more than 160 nouns qualified by the adjective “social.”

“Social licence” was not on this list.

Yet, there is little doubt that Hayek would diagnose “social licence” to be one of the worst “weasel words” of our time given the consequences this sly expression is having on clear thinking, the rule of law and ordinary relationships between members of political and economic communities.

Like “social justice,” who could possibly be opposed to such a nice-sounding phrase as “social licence”? The answer: Anyone who cares about words actually meaning something.

In brief, the problem with “social licence” is that it is unlimited and thus incapable of definition. The intentional ambiguity of the term means that there is no way to determine when “social licence” has been achieved. Without limits, there can be no serious goals.

The linguistic silly putty of the term is perfect, however, for the environmental movement and other revolutionaries.

Of revolutionary movements, political scientist Eric Voegelin says, “A movement lives in that it moves. The radical revolutionary must make the revolution into a permanent condition; there can be no compromise or stabilization of the achievements at a definite point.” A movement thrives on unrest, which is why we almost never hear environmentalists themselves proposing concrete goals. Instead, environmentalists prefer to rally for utopian ideas such as “No Pipelines” or “Stop Climate Change.”

As MLAs Prasad Panda and Leela Sharon Aheer pointed out recently in the Calgary Herald, “Barely under a year since endorsing Premier Rachel Notley’s plan for a $3-billion carbon tax and cap on oil sands emissions, Forest Ethics, now known as Stand, has remained fiercely against any new pipelines. Stand is now going as far as demanding the NEB be blown up entirely (not a terrible idea, despite their motives. —editors) and to hit the reset button on every new pipeline proposal. It’s becoming obvious the path to building new pipeline projects does not begin with a naive attempt to buy social licence from some of the most extremist fringes of anti-pipeline activists across the country.”

In July 2015, Prime Minister Justin Trudeau said in Fredericton, “We need to

“Like “social justice,” who could possibly be opposed to such a nice-sounding phrase as “social licence”? The answer: Anyone who cares about words actually meaning something.”

get our resources to market and more oil by rail is a bad idea. We need to do it in a responsible way, and that means pipelines. But those pipelines have to achieve the public trust and the social licence that is necessary.”

But what is the threshold of “public trust” and “social licence”? What does it even mean?

And then there is the whole problem of whether “social licence” is gained, earned, won, bought. Who knows?

When the Canadian Association of Petroleum Producers (CAPP) made a million-dollar contribution to the Museum of Civilization in 2013, Andrea Harden-Donahue, energy and climate campaigner with the Council of Canadians, complained, “Tar sands producers are desperately seeking the social licence that partnerships with prestigious cultural institutions can bring.” Another activist expressed concern that CAPP was “using this sponsorship to whitewash their dirty tar sands projects.”

Is it really “society” that grants “licence” anyway? Or, is permission for pipeline projects, for example, granted by legitimate regulatory authorities within a democracy, subject to the forces of supply and demand within a free market economy, grounded in certain principles like private property and the rule of law?

Those are the principles of Canadian society, and they have boundaries and mechanisms with limits, checks and balances. We ought not let vacuous weasel words replace them. 

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BY C. KENNETH REEDER

Alberta Tax Dollars Boost U.S. Energy Transport Meanwhile, politics paralyzes Canadian pipeline industry

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n August, a boring press release floated through the news stream and no one seemed to notice, but it should disturb anyone who supports Canada’s energy industry.

The release was an announcement from Alberta Investment Management Corporation (AIMCo), proudly declaring that it was making a $500 million investment in a U.S. company called Howard Energy Partners.

OK, so what? Well, let’s look at this with some broader context.

AIMCo is a Crown corporation that invests money for Alberta government pensions and endowments, as well as the Heritage Fund. This is a major investor with $90 billion in assets under management.

Essentially, all the money AIMCo invests is directly or indirectly

taxpayer money. It’s either Heritage Fund money (which is about $18 billion in assets), or it comes from money paid to public institutions or as compensation to government employees like nurses and teachers.

Now what exactly is Howard Energy Partners? It is an American midstream energy company—in other words, they provide energy infrastructure. Things like processing plants, liquid storage terminals and pipelines.

Yes, pipelines.

Which means AIMCo is investing hundreds of millions of Alberta taxpayer dollars into U.S. pipeline companies while Canada’s pipeline sector is essentially paralyzed.

Think about this for a minute: While Canada’s pipeline industry is caught in the web of endless hearings

“AIMCo is investing hundreds of millions of Alberta taxpayer money into US pipeline companies while Canada’s pipeline sector is essentially paralyzed.”

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and reviews and suffocating regulations, the U.S. has built the equivalent of 10 Keystone XL pipelines since 2010.

Meanwhile, as reported by folks like Vivian Krause, the anti-pipeline movement in Canada is largely funded by U.S. interests as a protectionist strategy that reduces America’s competition.

But on top of that, as per this new AIMCo investment, the U.S. even has the pleasure of having Canadian capital invested in its own pipeline companies.

Some might say, “AIMCo should invest in Alberta!” But there are obvious reasons why AIMCo cannot and should not invest in Alberta itself—it poses a clear conflict of interest if a government can manipulate markets to boost the investments of a government fund manager.

That isn’t really the point. Instead, this situation highlights the bafflingly frustrating situation in Canada’s pipeline sector.

Does Canada really want to be a country that strangles its own energy industry while its Crown corporations pump huge amounts of tax dollars into foreign pipeline companies?

It’s not just an isolated incident with AIMCo. Earlier this year, OMERS (a massive Ontario pension fund for government employees) made a significant investment in a Spanish pipeline company. This happens time and time again.

How does that make sense to anyone?

Canada’s policy towards energy infrastructure is clearly deranged.

AIMCo’s $500-million investment perfectly illustrates why our country’s approach to this issue is incoherent, impoverishing Canadians and enriching other countries and their businesses. 

B Y D AV E C O R E

How Can the Pipeline Landowner Movement Work With Companies?

Ending expropriation and recognizing landowners as part of the energy transport industry is the first step

This page and facing page: istockphoto.com

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or too long, landowners have been seen by industry and government as outsiders— not as partners in, members of, or suppliers to—but too often as adversaries or problems for energy transport.

There are a few reasons for this.

Without going into too much historical detail, the fact is this country was set up very much to facilitate economic and industrial development, whether it was the fur trade, or railways, or hydroelectric projects, or pipelines, government reserved the power to

take land from whomever was using it and give it to those behind these types of projects.

This was always said to be done for the so-called “greater good,” even though most of our economic prosperity for the last few centuries has come from voluntary exchange and respect for property rights.

The power to expropriate, the power to acquire the use of somebody else’s property for private and even public industrial projects, is not only not necessary, but is in fact harmful to our economy and society.

Especially today, when it comes to pipeline projects.

For most of their history, pipeline projects have been very much “out of sight, out of mind,” as far as the public is concerned.

But today, as a result of the unprecedented success of radical environmental activists, in the media and with government, pipelines are very much top of mind for Canadians.

Pipelines have been completely politicized. So politicized that the entire industry has been virtually paralyzed in recent years.

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work with their families and business operations and have pipe on their property 24/7/365, CAEPLA members know what safe and environmentally friendly pipelines look like, and need to look like.

Pipeline landowners, like most farmers and ranchers, take their roles as safety advocates and environmental stewards very seriously. I would suggest most of the public respects farmers and ranchers in these roles, too.

Which is why, in this age of politically paralyzed pipeline projects, in this age of so-called “social licence,” there is nobody better placed than pipeline landowners to create leverage for industry. To certify industry, if you will, in terms of safety and environment.

When it comes to winning the public relations battle industry is faced with today, when it comes to winning the all-important “social licence,” landowners are the best friends pipeline companies will ever have.

Dave Core is founding president and CEO of the Canadian Association of Energy and Pipeline Landowner Associations.

Dave has been active in the pipeline landowners movement for nearly three decades.

istockphoto.com

This political paralysis has pushed economically important—some would say urgent—projects like Northern Gateway and Energy East into such uncertainty that some fear both may be dead.

That this has been done in the name of safety and the environment should concern everybody who really cares about safety and the environment.

That’s because the safest and greenest societies are the richest societies and the richest societies are the product of carbon-based economies.

It’s also because the safest and most environmentally friendly pipelines are new, state-of-the-art pipelines.

So, as long as we want to remain a wealthy society, we will keep a carbon-based economy while we continue to look for efficient renewables or other energy sources.

And as long as we want to remain a safe and green carbon-based society and economy, we need new, state-of-the-art pipelines.

As intensive energy users, nobody knows this better than food producing farmers and ranchers.

As farmers and ranchers who live and

“By respecting property rights, from the farm gate to the pump station, as partners, we can convince Canadians that we are all in this together.”

To get pipelines built in 2016 and the years to come, it will be necessary to re-imagine industry’s relationship with farmers, ranchers, woodlot operators, acreage residents and other rural and semi-urban property owners. I would include First Nations communities, too, as they share many of the same concerns as all other landowners, but the sad reality is our individual indigenous fellow citizens too often enjoy even fewer property rights than the rest of us, and are subject to a separate legal regime.

And we have seen indications recently that Enbridge is very serious about this, and we believe TransCanada is exploring ways to improve their relationship with landowners, too. We are not saying that either company did not previously care about landowners—we are simply saying that as times change opportunities to do things in new and better ways arise.

The first step in re-establishing and renewing the relationship with landowners is as simple as it may at first seem difficult: abandon National Energy Board expropriation.

Voluntarily end the practice of legal land theft, and the threat thereof.

This approach is based on respect for property rights. The property rights not just of farmers and ranchers, but of all Canadians, including pipeline companies themselves.

Think: the power to expropriate landowners on demand for pipeline projects is the same power to carry out pipeline expropriation on the demand of environmental activists. Not a far fetched notion in today’s political climate.

But by respecting property rights across the board, from the farm gate to the pump station, as partners, we can convince Canadians that we are all in this together. 

CAEPLA WorkshoP sEriEs

A day of essential information for landowners on topics that matter.

1.

IntegrIty DIgs: What they are, what’s involved and what landowners should know

2.

Bio Security: How developing and enforcing a bio security protocol protects your land

RegistRation includes dooR pRizes and a fRee hot lunch Saskatchewan | Manitoba | Ontario Spring 2017 Dates and locations to be announced soon. Register early to save your place RSVP for this free workshop to: admin@caepla.org | 306-522-5000

Don’t miss this opportunity to learn anD get answers

Brought to you by Enbridge and CAEPLA, Canada’s leading advocate for landowner safety and environmental stewardship.

CAEPL A .ORG

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Enjoying the ride. We didn’t convince your best friend to go on an adventure.

Or cross something off your bucket list. But we did fuel the road trip that reminded you that you’re only as old as you feel. When the energy you invest in life meets the energy we fuel it with, exhilarating moments happen.

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PIPEL INE OBSERV ER CAEPL A .ORG