I have to say that this recent, so-called approval has a kind of ‘please come to our destination wedding’ feel to it. You know what that is, right? Seinfeld’s unvitation. A wedding invitation given out with almost the express purpose of limiting attendance to those with the financial wherewithal to attend. The more remote the venue, the better. The unvitations can be spread far and wide to people the happy couple doesn’t even like because the chances of them showing up are virtually zero. They think that at least they extended an invitation. They didn’t forget you. They absolutely, positively thought about you a little bit. They’re registered at Tiffany’s in the unlikely event you’re unable to make it.
Smiling politicians in Ottawa, Edmonton and Victoria will be slapping each other’s backs about how they were finally able to get a pipeline through the Rube Goldberg contraption (with apologies to Mr. Goldberg) that is the Canadian pipeline approval process. But it’s an approval – rather, an unvitation – to build a pipeline that virtually nobody in their right mind will build right now. But when anybody talks about future approvals going through – or more likely not going through – this is the one to which the politicos will point. We did that, they’ll say. They’ll point to a map and show us where the pipeline would have gone if it had made any sense to actually build it.
This whole thing reminds me of the Mackenzie Valley pipeline, first proposed in the early 1970s. Hey, did you know the Federal cabinet finally approved it in 2011?
Oh, yes, and check the fine print a few paragraphs down from that cheery headline. There are 190 legally binding conditions attached to the approval all of which have to be met, I presume. You know that somewhere, buried in there, will be something that will be sufficiently onerous – or maybe just vague – that it will have the potential to set the project back years. This is where you realize that beautiful wedding ceremony is going to be just past the minefield in a box canyon with the sun going down. I think I’ll pass. I’ll send a donation to the entirely fictitious Human Fund in your honour.
Pacific Northwest LNG was first announced – also with a cheery headline, I’m sure – in the heady days of 2013, a year before the oil crash which, of course, continues virtually unabated. The business case is so out of date given subsequent events it would seem that Petronas will go back to the drawing board in terms of whether or not they want to proceed. The world is awash in cheap energy. The Petronas leadership in Malaysia – and make no mistake about it, that’s exactly where they are in this case – may or may not think that Canada is a good bet for the future. At the moment, they have a ton of options everywhere in the world. Starting with a blank sheet of paper with the luxury of absolutely no time pressure whatsoever is something that Petronas would be crazy not to do.
Also, keep in mind that this is a British Columbia project. There are relatively modest benefits for Alberta and the rest of Canada even without what will undoubtedly be a bias towards BC-based suppliers. Why shouldn’t there be? I once had a field engineer tell me that Northeastern BC gas was the best field he had ever worked on but “too bad it’s in the middle of nowhere.” So this pipeline would help with that, in theory. If I were a politician in BC, however, I would already be making plans to keep as much of the benefit of the pipeline – if it does get built or even started – in BC, of course. Votes can be expensive.
Surprisingly, this is not intended to be an argument either for or against the pipeline. That’s an entirely separate discussion. I am much more concerned with the lack of a frank and honest discussion that has a beginning, middle and end conducted between reasonable people equipped with hard facts. If, collectively we are for pipelines, then let’s get on with it. If we’re against them, let’s stop pretending we are and move on to other things. The status quo only creates the patina of progress, when what we actually have is just rust.
Back to the notion that “at least it’s something” that everybody-but-everybody has been so desperate to hear. Sounds kind of like the weather reader on TV giving up on the hard numbers and just forecasting a chinook; because people are so sick and tired of hearing about the lousy winter we’re having. Wishing the chinook were here sooner, or that winters in Alberta weren’t six months long, is the same self-delusion that allows us to purchase all season tires and not wear a proper winter jacket.
But above all else, let us not allow ourselves to believe that this approval does what it absolutely does not do, which is cover up the fact that Canada is a day late and dollar short in this business even in the unlikely event that this pipeline ever gets finished, let alone started. Many days and many dollars short to be exact.
The best thing we can do right now is finally (finally!) take a good long hard look in the mirror after the blackout beer binge and figure out what it is we have to really have to do to survive. Make no mistake, we have only ourselves to blame for our current predicament.
Terence C. Gannon has been an information technology professional for 36 years, the last 27 of those in the Calgary oil & gas industry at companies such as NCO, Sceptre, Fracmaster and Trican. Mr. Gannon founded Intellog in 2008. Intellog is dedicated to applied research and developing disruptive products. He regularly contributes industry commentary on Medium.