Crude Oil Awakening

In hindsight, Stephen HARPER's new fight against the world's oil sands detractors was a long time coming.
In hindsight, Stephen HARPER's new fight against the world's oil sands detractors was a long time coming.

Crude Oil Awakening

In hindsight, Stephen HARPER's new fight against the world's oil sands detractors was a long time coming. Last November in Vancouver, the Prime Minister gave a local television interview in which he warned that "significant American interests" would be "trying to line up against the Northern Gateway project," Enbridge's proposed $3.5-billion double PIPELINE from near Edmonton to a new port at Kitimat, B.C.

"They'll funnel money through environmental groups and others in order to try to slow it down," Harper told his hosts. "But, as I say, we'll make sure that the best interests of Canada are protected."

In early November, U.S. President Barack Obama announced he was putting off final approval of TransCanada's $7-billion Keystone XL pipeline until after this November's presidential election. Harper has long viewed Obama as an unsteady ally. Now he'd had enough. "I'm sorry, the damage has been done," he told CTV before Christmas. "And we're going to make sure we diversify our energy exports."

Harper picked the second week of January to kick his game into gear. The government released a letter signed by Natural Resources Minister Joe Oliver, warning of "environmental and other radical groups" seeking to "hijack our regulatory system to achieve their radical ideological agenda"--by lining up to speak against the project at the National Energy Board's Joint Review Panel environmental hearings.

Two days after Oliver's letter, Harper welcomed Chinese ambassador Zhang Junsai to his office to announce he'll visit China in February. The Harper government is mobilized to make sure Gateway goes through, and it is using familiar tactics honed in three federal elections to rally public opinion against anyone who would stand in the way.

It is also being mightily helped by a loose constellation of staunchly conservative activists, operatives and journalists inside the government and outside it. Their guiding text is a book that has turned into a movement, the Calgary-born lawyer, Sun News TV host and all-around gadfly Ezra Levant's Ethical Oil: The Case for Canada's Oil Sands.

Levant's thesis is simple enough: compared to most of the world's oil sources, northern Alberta is a veritable bastion of stability, political enlightenment and environmental responsibility. It didn't influence the Harper CONSERVATIVES in new directions so much as it put their long-standing convictions into words. Four months after the book was published in September 2010, Harper's new environment minister, Peter Kent, began using the phrase "ethical oil" to describe Canada's petroleum exports.

But Ethical Oil might have been nothing more than a book if Levant hadn't won the National Business Book Award in May. The award was bestowed by a prize jury that included CBC News chief correspondent Peter Mansbridge, and it came with a $20,000 prize.

That money caught the eye of Alykhan Velshi, 27, a Toronto-born lawyer who was coming off four years as a spokesman for Immigration Minister Jason Kenney and two months as a strategist in the Conservatives' election war room. Velshi figured he'd had enough of government, though not of politics. He told Levant that, in return for the $20,000 prize money, he would launch an Ethical Oil blog that would form the basis for a political movement.

Like a lot of blogs, Velshi's had a button viewers could click if they wanted to donate some money. Ethical Oil's donate button got a lot of clicks. By July Ethical Oil had released a suite of highly provocative ads, contrasting life in "Conflict Oil" countries--say, a picture of women being stoned to death--with life in Canada, illustrated by a photo of Fort McMurray's elected Mayor Melissa Blake.

And by November, at almost precisely the moment Obama announced the Keystone delay, Velshi announced he was on his way back into government--in the PRIME MINISTER'S OFFICE, where he serves as director of planning, a role that combines long-term planning on policy and political strategy.

His replacement as Ethical Oil's spokesman is Kathryn Marshall, a University of Calgary law student and former junior Conservative political staffer. On Jan. 2 she launched a new website,, which argues that "countless ... foreigners from Europe to South America and a long list of foreign-funded lobbyists" are "hiring front groups to swamp the hearings to block the Northern Gateway pipeline project." This one's got a donate button too.

Both the Ethical Oil website and were built and maintained by Go NewClear Productions, a boutique ad firm run by Marshall's husband, Hamish Marshall. Hamish Marshall used to work in Harper's PMO. Go Newclear runs websites for several Conservative MPs. Its own website boasts it is "experienced in the development of both conventional and unconventional online weaponry" to "blow away your competition." Its ads have aired "in both Canada and Australia" and its client list includes "expertise on social networking in Russia and Iran."

Now the company is helping family and friends spread the message that foreigners must not interfere in Canadian resource decisions. Whose money is paying for the campaign? Ethical Oil's website proclaims that, "Unlike most anti-oil sands organizations," it "does not accept any money from foreign donors like Greenpeace International, the U.S. Tides Foundation or the Kingdom of Saudi Arabia."

The organization does accept money "from individuals and companies, including those working to produce ethical oil"--phrasing that appears to acknowledge Canadian oil firms are donors. The site says the "median size" of its donations is $38, an artful wording that reveals nothing about the size of its largest donations.

Ethical Oil, and Harper's entire Gateway campaign, depend on delicate distinctions between what's local and foreign. Many firms active in the oil sands have their headquarters in Texas, France, the United Kingdom and China. Canadian firms and Harper's own government lobbied Washington for months on the Keystone pipeline.

Velshi declined a request for an interview. Conservatives familiar with Ethical Oil say his role in the PMO is broad and does not have anything directly to do with selling Canadian bitumen abroad. "I'm 100 per cent sure that there's no coordination between Alykhan and Joe Oliver's office," one Conservative said. The connection is loose and cultural, not conspiratorial: "This government has narratives, and this"--the virtue of the oil sands, suspicion at the motives of its opponents--"is one of them."

Indeed, one hardly needs to be plugged into the mains of Conservative power to share the government's perspective. Calgary pollster Marc Henry found last autumn that 81 per cent of the province's residents are "proud of Alberta's energy resources" and that 73 per cent agree with the statement, "If it weren't for Alberta's energy sector, I wouldn't enjoy the quality of life I do today."

In pushing an Ethical Oil narrative for Canada's oil sands exports, Harper is accomplishing two political goals in addition to his policy aims. First, he's reassuring Albertans, especially in the oil patch, that he's one of them. Second, he's betting Canadians outside Alberta will side, in greater number, with the petroleum industry's proponents over its foes. "This is us being pro-Canada, pro-middle class," the Conservative staffer said. "Anybody who looks at this says, 'Should we export more stuff? Should we diversify our markets?' Of course we should."

The business case for Enbridge's $5.5-billion, twinned Northern Gateway pipeline, which would send Canadian crude bound for Asia to the B.C. coast, seems sound: the project could inject $270 billion into Canada's GDP while fetching $10 more per barrel than the oil gets when transported south, to the country's current, lone oil customer. But politics, it became clear as an environmental review launched last week in Kitimat, B.C., may yet derail the pipeline dream--its importance to the country's financial future notwithstanding.

Ottawa's smoke-and-mirrors strategy of bashing the project's foreign critics, which was timed to the hearing's launch on B.C.'s soggy, northwest coast, allows Canadian politicians to avoid pointing fingers at what really stands in their way: British Columbia First Nations, empowered by a decade and a half of legal victories that have granted them a significant say over land in their traditional territories. The powerful Wet'suwet'en, who vigorously fought a land claim over 13 years, culminating in 1997's landmark DELGAMUUKW ruling establishing the existence of Aboriginal title in B.C., are among dozens of bands that oppose the project, and call its proposed, 1,176-km route home. "It's going to get ugly," says Terry Teegee, vice-tribal chief of the Carrier Sekani Tribal Council. "Battle lines have been drawn."

Legally, experts say, B.C. bands have more clout than those outside the province, thanks partly to an accident of history. Few entered treaties with the Crown, unlike First Nations elsewhere in the country; and since they never signed away title, courts now require their input when resources are extracted from their traditional lands.

Look no further than 2007's Tsilhqot'in ruling to understand what that means, even for projects the government considers fiscally necessary. The B.C. Supreme Court found the First Nation had proved title over 2,000 sq. km of valuable real estate northeast of Vancouver, stopping just short of granting it full ownership. That ruling put a stop, in the short term, to clear-cut logging plans, since they would interfere with the band's trapping rights.

The decision's longer-term impacts surfaced last year. Years ago, Taseko Mines Ltd., a mining firm based in Vancouver, applied to develop one of the country's largest copper-gold deposits near Williams Lake, in B.C.'s struggling central interior. The proposed $3-billion mine, however, required the draining of Fish Lake, which the Tsilhqot'in consider sacred. Although B.C. approved the massive project, which received the backing of two premiers and promised tens of thousands of new jobs, Ottawa, in November 2010, rejected it because it would impact the Tsilhqot'in, and fish stocks. Legally, the government didn't have much of a choice.

Contrast this with economic development in B.C.'s Treaty 8 area: one of the few corners of the province under treaty. The region, east of the Rockies, is crisscrossed with oil and natural gas pipelines, and has a 20-year history with the industry.

Given the pipeline's entire proposed route is across untreatied land, and how disruptive and potentially harmful the Northern Gateway project portends to be, this battle, even if it receives the environmental okay, will inevitably be fought all the way to the Supreme Court, taking years to resolve, says Carleton University's Rodney Nelson. Indeed, chiefs representing more than 20 First Nations contacted by Maclean's acknowledge they're planning to file suit if the project is allowed to proceed.

Litigating a multi-year court fight would be extraordinarily costly, but several front-line environmental opponents said their organizations and private donors are being lined up to help fund potential suits on behalf of First Nations. Direct action is also in the works. Supporters, along with "little, old grannies" from Aboriginal communities across the province have volunteered to be arrested, according to the Wilderness Committee's Ben West; plans to erect traditional longhouses along the length of the proposed route are being readied. Clearly, B.C., which saw a grassroots uprising overturn the harmonized sales tax a year ago, is gearing up for its biggest environmental battle, an international cause célèbre that would make 1993's epic fight for Clayoquot Sound look like child's play.

This time, opponents say, the stakes are even higher. "One spill," says Art Sterritt, executive director of the Coastal First Nations, "would spell the end of life as we know it in the Great Bear Rainforest," a wild, misty stretch of jagged inlets and moss-cloaked trees, rich with whales and wolves, running 400 km along B.C.'s coast to the Alaska border.

But a larger stakeholder than even the several thousand natives living in its path has yet to weigh in: Victoria. Perhaps the only question more complex than the legality of the megaproject is the tangled domestic political equation facing B.C.'s pro-development, pro-business, Liberal government. What seems an uncontroversial decision to Alberta, which stands to gain almost all the pipeline's rich rewards, is tricky for B.C., which is being asked to swallow most of the risk--a tanker spill or burst pipe.

Premier Christy Clark, who is legally bound to go to the polls by next year, has yet to take a public stance. "We have to get the facts out on the table," she said last week, claiming not to want to "prejudge the outcome" of the ongoing review. With three-quarters of British Columbians opposing oil tankers on the coast, it would seem a pretty safe place to ride out what promises to be a bruising debate.

Except Clark's Liberals rely on a fractious alliance of federal Liberals and Tories. The coalition faces a surging Conservative party on the right, its greatest threat since the '90s, when the so-called free enterprise alliance collapsed, paving the way for an NDP rout.

Happily benefiting from Clark's absence, for now, is Conservative party leader John Cummins. The former Tory MP is heading up the pipeline's local support squad, helping him pick off Liberal votes in hard-fought rural ridings where even a few hundred Tory ballots could tip the balance in favour of the Opposition NDP.

Liberals are "frankly terrified of Cummins," says Simon Fraser University's Royce Koop; the Conservative party has been polling at 20 per cent since he took over six months ago, up from single digits, where it languished throughout the past decade.

The right-wing bickering plays nicely into the hands of the NDP and its popular new leader, Adrian Dix, says University of British Columbia political scientist Michael Byers. The party, which opposes the pipeline, sits at 40 per cent in the polls, ahead of the Liberals at 31 per cent.

The Liberals took the last election by neutralizing the NDP; in implementing a carbon tax, they earned the support even of Greens like David SUZUKI. This time around, the NDP, which is already putting out slick, direct mailers pairing images of rusty, hulking tankers with pristine coastline, is making sure the Green vote remains with New Democrats.

For now, Clark, seeking a rare, fourth term for the Liberals, is working on strengthening her position, without coming off the Gateway fence. In the last week, she named long-time Alberta Tory strategist Ken Boessenkool her new chief of staff, and announced a social conservative with deep Reform-Tory roots will contest a Fraser Valley by-election. She punctuated that right shift by bringing Stephen Harper to her son Hamish's atom hockey game, highlighting their growing comfort.

Two days later, on CBC's The House, Clark deviated from her carefully neutral Northern Gateway path, attacking the project's critics as "foreign groups, coming in and meddling in our politics."

The reality is that even as Harper suggests Canada is on the cusp of a boom, regional politics and Aboriginal opposition could mean he will be an old man before the pipeline proceeds. Consider the endless debates over the MACKENZIE VALLEY PIPELINE through the Northwest Territories. There, too, the federal government was pushing hard for development, notes Byers, promising vast riches, if only Canada could get its gas to the international market. There, too, the greatest impediment was Aboriginal rights. Laws governing those rights have grown more, not less, complex since the '70s. That pipeline never got built. It's far from certain the Northern Gateway pipeline ever will, either.

Maclean's January 30, 2012