Why social license (or legitimacy) is critical to pipelines, the Canadian oil sands

BC-First-Nations-pipelineEco-activists, BC First Nations eroded NEB and industry legitimacy, which must now be restored before new pipelines are built

Why is the idea of social license so important to the oil sands industry? Because the Harper government and industry stood on the sidelines for the past decade while eco-activists and BC First Nations destroyed the legitimacy of the national regulator, pipelines, and the oil sands.

And they could do the same in Ontario and Quebec for the Energy East project if something doesn’t change.

Keith Brownsey, Mount Royal University.
Keith Brownsey, Mount Royal University.

This is not a popular argument in Alberta or among industry boosters. In fact, no one is making it.

Supporters prefer to make industry players out to be victims. Victims of American environmental charities, who fund the eco-activists. Victims of supposedly corrupt First Nations who withhold pipeline support until they are “bought off.” Victims of municipal politicians (think Vancouver Gregor Robertson and Burnaby’s Derek Corrigan) who are deluded by visions of fossil fuel free future. Victims of climate change ideologues like the Rachel Notley NDP and the Justin Trudeau Liberals, who are out to destroy the oil sands, regardless of repeated vocal support for pipeline projects.

The Canadian oil and gas industry is a victim of only one thing: Its own political incompetence.

I recently interviewed political scientist Keith Brownsey of Mount Royal University for this Canadian Business magazine piece about Trudeau and Canadian pipeline projects. Brownsey says social license is nothing new, just an extension of the old political science concept of “legitimacy,” which means voters give their consent to both government and its institutions (like the National Energy Board).

Ph: 432-978-5096 Website: www.mapleleafmarketinginc.com Email: miket@mapleleafmarketinginc.com
Ph: 432-978-5096 Website: www.mapleleafmarketinginc.com Email: miket@mapleleafmarketinginc.com

Since the mid-2000s, when the Enbridge’s Northern Gateway pipeline project was launched, Brownsey says eco-activists and BC First nations aggressively and systematically undermined the legitimacy of the oil sands crude (which it called “toxic”), the ability of pipelines to safely carry dilbit (bitumen diluted with 30% light hydrocarbons) over sensitive forest ecosystems, and the NEB (which it claimed was just a rubber stamp for Big Oil).

Industry and government failed miserably to counter those campaigns on at least three fronts:

One, Prime Minister Stephen Harper took a very old school, 1950s approach to the Northern Gateway controversy, according to Brownsey. He refused to defend the Canadian government’s exclusive constitutional authority over the approval of inter-provincial pipelines.

“The Conservatives were so constrained by their ideology they couldn’t imagine any sort of direct interference with the market,” Brownsey said. “They have such a strict view of the federal-provincial jurisdiction that they wouldn’t touch natural resources. They left everything up to the provinces and to the oil and gas sector.”

The Harper government did such a poor job of consulting aboriginal groups (“duty to consult” is required by the Constitution) that Cabinet’s approval of Northern Gateway was thrown out by the Supreme Court of Canada in July. Harper’s idea of politically supporting the pipeline project was to send then Natural Resources Minister Joe Oliver around the country making speeches.

Click here to see production manager Dave Kuhnert explain how EndurAlloy™ production tubing has cut Crownquest Operating LLC’s Permian Basin well operating costs and extended well run-times.
Click here to see production manager Dave Kuhnert explain how EndurAlloy™ production tubing has cut Crownquest Operating LLC’s Permian Basin well operating costs and extended well run-times.

For the Canadian government, saying you like pipelines and everyone else should like them too is not the same as doing the hard work on the ground with premiers, First Nations, and communities to build support for pipelines.

Two, industry groups like the Canadian Association of Petroleum Producers and the Canadian Energy Pipeline Association were beyond incompetent. To understand just how poorly they (still) manage the politics and communications around pipelines and the oil sands, compare their outreach efforts to the American industry, which supports many state and local groups that engage eco-activists head on with public relations and ground campaigns to organize support for hydraulic fracturing or production activities. Voters deserve to hear both sides of an issue and in the United States they get it.

Not so in Canada.

I can’t remember the last time CAPP or CEPA called out Greepeace or Forest Ethics Advocacy on an oil sands or pipeline issue. Industry is just too timid. The engineers, lawyers, and accountants who run energy companies fear controversy. They stand on the sidelines wringing their hands while eco-activists and First Nations organize protests on the lawn of the BC legislature.

CAPP is the worst. The advocacy group cleaned house in 2014 and actually went backward, replacing long-time CEO Dave Collyer with Tim McMillan, Saskatchewan energy minister under Premier Brad Wall, and well respected communications VP Janet Annesley with industry mouthpiece Jeff Gaulin. Despite hiring a BC communications advisor two years ago, CAPP still does not have an active political or public relations campaign on the West Coast.

Mike Truitt, Maple Leaf Marketing, Midland, Texas.

Another house cleaning is probably in order if CAPP is ever to become relevant to the national debate over pipelines and the oil sands.

Three, eco-activists and First Nations critics seriously damaged the credibility of the NEB pipeline review process in British Columbia, and to a lesser extent in other provinces, so much so that in Jan. the Trudeau government announced it would undertake a major reworking of the national energy regulator. That process began last week.

Permian Basin oil and gas producers are switching from rod pumps to plunger lift, with significant cost savings.
Permian Basin oil and gas producers are switching from rod pumps to plunger lift, with significant cost savings.

The NEB says an expert panel will be formed to consult with “Indigenous peoples, key stakeholders and Canadians across the country and providing advice on potential reforms that need to be undertaken.” The need for social license was explicitly recognized by the government, as the NEB acknowledged on its website: “Modernization of the NEB will ensure it is able to continue to effectively regulate energy developments in Canada in a way that has the confidence of Canadians.”

The Liberal idea of modernizing the NEB is at odds with industry’s view, which according to Brownsey is still that the “oil and gas companies want the national government to remove these impediments [opposition from eco-activists, First Nations] , get them out of the way. I’d say the majority of the oil and gas industry – be it in pipelines or exploration and production companies, whatever – still feel that way.”

During a recent interview with Canadian natural resources minister Jim Carr, I asked him how the Trudeau government would fix these issues. He replied that the Liberals would consult extensively with the many stakeholders affected by pipeline projects, fulfill Canada’s “duty to consult” and repair necessary relationships withFirst Nations, reform legislation and processes (like the NEB), then approve pipelines and stand behind its decision.

“The Prime Minister has said many times that it’s a major responsibility of the Government of Canada to move our natural resources to market sustainably. That’s our objective and that’s why we have established this way of coming to a contemporary answer to what sustainability means,” he said.

Why is the idea of social license important to the oil sands industry?

Because once all these changes have taken place, and the Liberals decide they have restored enough legitimacy to proceed, Prime Minister Trudeau will announce that pipeline projects like the Trans Mountain Expansion in BC and Energy East from Alberta to New Brunswick will be approved and built.

Without that political legitimacy – call it social license, if you want – nothing will be approved or built.

Ph: 432-978-5096 Website: www.mapleleafmarketinginc.com Email: miket@mapleleafmarketinginc.com
Ph: 432-978-5096 Website: www.mapleleafmarketinginc.com 

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