For much of the last decade, a not insignificant number of Canadians have become engrossed in a peculiar conspiracy theory. It goes something like this: U.S. philanthropic organizations have paid Canadian environmental groups to hire anti-pipeline protesters, sapping support for Canada’s oil and gas industry. As such, pipelines have not been built, and Canada’s vast energy resources remain landlocked and inaccessible, denying the country an incredible fortune.
If it were true, this would be the most effective environmental protest movement in world history. A handful of demonstrations by a few thousand protesters would have managed to hamstring an industry that’s responsible for about 11 percent of Canada’s nominal GDP and that, just a couple years ago, directly employed nearly 300,000 people. The theory—almost exclusively promoted by Canadian conservatives—asks its believers to imagine a world where all it takes to cripple an industry backed by multinational energy companies and valued in the hundreds of billions of dollars are a few protests, some bad public relations, and the postponement or cancellation of a few pipelines.
The theory hasn’t just ensnared the public. The government of the oil-dependent western province of Alberta launched a multimillion-dollar public inquiry in July 2019 to prove their predetermined conclusion that the United States is trying to sabotage the Canadian oil and gas sector. So far, the inquiry has only produced a handful of reports by known climate change denialists, all of whom were paid for with public funds. Alberta Premier Jason Kenney also allocated roughly $25 million to create the Canadian Energy Centre, a publicly funded propaganda operation meant to counter what is supposedly “misinformation about Canada’s oil and gas sector” and “foreign-funded special interests.”
So it’s no surprise Canadian conservatives, particularly populist provincial premiers, were none too pleased with U.S. President Joe Biden’s decision to revoke construction permits for the Keystone XL pipeline, the fourth phase of the Keystone Project, a pipeline system that connects western Canada’s oil fields with refineries in Illinois and Texas as well as with oil tank farms in Oklahoma. Keystone XL, which has been thoroughly denounced by environmentalists and a growing number of politicians, was supposed to take a shorter route through Baker, Montana, where U.S. oil would be added to the pipeline. The president’s decision was one of about 100 executive orders signed on his first day on the job that were meant to roll back the destructive environmental policies of his predecessor. That day, Kenney called the decision a “gut punch” and an “insult.” Other premiers were less diplomatic, saying Canada should go to war with the United States over the issue.
Remarkably, it’s not Biden but Canadian Prime Minister Justin Trudeau who has faced the greatest criticism over the pipeline decision. Conservative leaders blamed Trudeau for not standing up to Biden and thus not protecting Canada’s economy. Progressives, meanwhile, have pointed to Biden’s cancellation of the pipeline as more proof that Trudeau’s generally pro-oil policies have backfired and the United States is jockeying for the role of global leader in the fight against climate change.
Biden’s decision to take back the pipeline’s construction permits exposed some of the harsher truths about Canada’s energy export sector—namely, it has always been dominated by U.S. interests, and—try as they might—Canadians cannot escape the global trend away from fossil fuels. This is a double-edged sword for Trudeau: On one hand, it absolves him of responsibility for the cancellation of a beleaguered project; on the other hand, he’s facing political fallout in a year of mounting criticism, declining popularity, and growing scandals. Since 2015, Trudeau’s position has been to try meeting Paris Agreement goals while also pumping billions of dollars in corporate welfare to the oil and gas industry. But as the world continues to move away from fossil fuels and the Canadian right becomes ever more implacable, it’s clear Trudeau must stop trying to chart a middle path and, instead, finally let a moribund industry go.
For decades, Canada has tried to walk the same fine line that Trudeau is now by attempting to reap the benefits of its oil and gas wealth, proven for the first time in 1947, while also being a responsible steward of the world’s second largest landmass and largest collection of freshwater lakes. Yet even before environmental issues appeared on the public’s radar in the 1960s, Canada’s vast reserves were problematic. As the oil crisis of 1973 to 1974 showed, there’s a major structural issue with Canada’s oil sector: It’s located about 2,000 miles away from the bulk of Canada’s population across some of the world’s most rugged and least hospitable terrain.
Because of this constraint, much of eastern Canada relied on cheap oil imports from the Middle East and North Africa until 1973. The Organization of Arab Petroleum Exporting Countries’ oil embargo threw much of the global economy into chaos—including Canada’s densely populated and industrialized Quebec City-Windsor Corridor, where half of Canada’s population resides. Meanwhile, oil from western Canada, where nearly all of the country’s oil and gas deposits are—and where the bulk of Conservative Party support is—was suddenly a hot commodity for the United States.
In response to the twin oil crises of the 1970s, then-Prime Minister Pierre Trudeau, Justin’s father, instituted new policies that would seek to develop Canadian oil resources primarily to serve Canadian consumers. His government funded a new publicly owned, vertically integrated oil company that acquired a number of oil exploration firms. The goal was to eliminate the nation’s dependence on foreign oil imports while also increasing the nation’s energy efficiency, so Canada could maximize oil exports and the wealth derived from it.
Pierre Trudeau’s bold initiative was spelled out in the 1980 National Energy Program, designed to make the country energy independent within a decade. It was a politically astute plan that most Canadians liked; although the oil industry and their partners in provincial governments were livid. But within just two years, it became clear there was a global oil glut, one that would benefit Canadian consumers more than oil nationalization. By 1985, Pierre Trudeau was out of office, the energy program had been dismantled, and there was little new interest in Canadian crude.
Canadian oil production finally began to increase around the turn of the 21st century. After the invasion of Iraq in 2003, world oil prices began to soar and tar sands oil production—one of the most environmentally devastating forms of oil production—took off in Canada. The extraction process from tar sands doesn’t just destroy vast forest areas and consume large quantities of freshwater. It also requires immense amounts of energy to extract and process, energy that’s typically derived from natural gas. In short, fossil fuels are burned to extract fossil fuels. The country’s oil and gas sector had a solid decade of growth fueled by record high prices before the price of oil plunged worldwide in 2014. The sector has struggled ever since despite massive subsidies, tax breaks, and other industry-friendly government incentives.
Despite these efforts to keep the industry afloat, Canadians tend to have a high opinion of themselves as strong environmentalists, and Canada’s oil and gas lobby routinely argues Canadian fossil fuels are the greenest in the world, even though these claims have been discredited.
Justin Trudeau himself has become a symbol of the country’s dissonance. In 2018, his government purchased the Trans Mountain pipeline from Houston-based Kinder Morgan after a five-year battle over the pipeline’s expansion resulted in a brief trade war between the provinces of Alberta and British Columbia, when the former accused the latter of dragging its feet on the project. At once, the government that had committed itself to fighting climate change made all Canadians de facto participants in a controversial pipeline expansion project lambasted by environmentalists. Indigenous groups, who were not adequately consulted, also made multiple objections to the decision in Canadian courts.
It was more of the same old Trudeau balancing act: Buy the pipeline to appease the industry, settle differences between two warring provinces, and prove to the right he’d prioritize the economy lest he be mistaken for a tree-hugger. His government made the announcement less than 24 hours after he said Canada was facing a national climate emergency. Trudeau was the environmental announcement’s public face and his former finance minister, Bill Morneau, the face of the pipeline project.
Although Trudeau recently committed Canada to a 45 percent reduction in emissions by 2030, this falls short of the 52 percent reduction needed to meet Paris Agreement commitments. He has not put forth any kind of plan to phase out fossil fuels to a significant degree. The plan, however unlikely it may be, is to reach these targets while capitalizing on Canada’s oil and gas reserves.
Despite Trudeau’s best efforts to appease the oil and gas crowd, the long shadow of his father’s National Energy Program has been difficult for him to escape. The failed program was viciously opposed by some western Canadian politicians who saw it as a federal intrusion into resource management, and it became a symbol of “eastern elites” intervening in areas of provincial jurisdiction.
The once popular bumper sticker slogan “Let the Eastern Bastards Freeze in the Dark” has become something like a political philosophy that’s popular among even mainstream Canadian conservatives. First, they blamed the ills plaguing Canada’s oil and gas on a global elite environmentalist conspiracy, and then Trudeau’s election in 2015 fit right into this overarching narrative.
After Trudeau’s reelection in September 2019, some western Canadian politicians immediately began talking about the need for a “Wexit.” His time in office has perfectly overlapped with tectonic shifts in the global energy market, and regardless of his actions, the fact that a barrel of oil today costs roughly half of what it was seven years ago is completely beyond his control.
Instead of pandering to conservatives without any real success, Trudeau would be wise to stop propping up a failing industry and instead take advantage of global energy market changes and commit to combatting climate change with Biden. Conservative leaders, such as Kenney and Ontario Premier Doug Ford, are among the least popular politicians at present, largely for their poor performance in pandemic mitigation. And now that Canada’s 2021 budget has been approved, a snap election seems unlikely, which means Trudeau faces fewer disincentives to take bolder steps on climate.
Although Kenney and his supporters want Canada to retaliate against the United States, Trudeau and Canada’s ambassador to the United States, Kirsten Hillman, have said they’re disappointed, but it’s time to move on. Sure, there are tangible losses from the cancellation of Keystone XL: About 1,000 construction jobs on the Canadian side of the border will be terminated, and Alberta will potentially lose the $1.3 billion it had invested in the project last year in addition to billions of dollars more in loan guarantees.
It’s perhaps an unpromising way to begin a new working relationship between two of the closest nations on Earth, but with an energy export sector dominated by U.S. interests, Canada never really had much of a hand to play in the first place. The fortune the country’s reserves could contain would come at an impossible environmental cost anyway, and it seems Biden may have based his decision more on the environmental harm of the pipeline than any other factor.
The existential threat of anthropogenic climate change can no longer be ignored, and although Trudeau may know this, he must finally put Canada on a progressive environmentalist course. In other words, Canada needs to live up to the climate reputation it largely gave itself.
Biden’s opening move isn’t so much a challenge to Canadian sovereignty as an open door to badly needed changes in international environmental policy. This is not to say either man has earned a reputation for bold climate policymaking, but one has, at the very least, attempted to plot a course for the next four years. Trudeau should follow in his footsteps.
