Death by regulation


The writing is on the wall and the numbers are distressing to say the least. Foreign investment is fleeing from Canada and we are becoming an international investment pariah.

Sadly, this trend should not surprise anybody as our national regulatory environment for large projects in the energy industry went from onerous to outright obscene. The Trudeau government is obsessed with adding unreasonable requirements for new business ventures and they have pushed things to the tipping point. Private enterprise can no longer do large projects. We are losing billions though lost development and price markdowns due to lack of infrastructure.

I spent four years working in the Arctic back in the early 2000s. The area was booming as people trained and looked forward to development of a local industry. There is a massive oil and gas deposit in the Mackenzie Delta that would bring billions if not trillions into Canadian coffers over generations if we could only get the product to market. We spent decades and countless dollars in drilling wells and acquiring data in the North in anticipation of a pipeline which would run a relatively short distance from Inuvik down to Norman Wells in the Northwest Territories. There are literally thousands of capped wells just sitting up there waiting to be brought into production.

Pipeline discussion began in the 1970s. In the early 1990s cost estimates for such a pipeline ran around $1 billion. After nearly two decades of studies, permit applications, hundreds and hundreds of public hearings and infrastructure investments into the Mackenzie Delta area, the projected cost for a pipeline had ballooned to an astounding $20 billion dollars.  Regulations had utterly destroyed the viability of the line.

The Mackenzie Valley pipeline consortium finally, formally pulled the plug this year after 40 years of wasted time and billions of dollars. Inuvik, Aklavik and Tuktoyaktuk now languish as impoverished communities dependent on government welfare with no realistic local industries to develop. The hopes that they had for a prosperous future died when the pipeline did. There is no viable fishery, forestry or mining in that area. Just a little tourism and some sustenance hunting. Many will end up having to move down south to make a living while leaving behind one of the richest energy deposits on the planet.

It was in watching a government employed lawyer spouting off on twitter about how it was natural market conditions as opposed to regulation that killed the Energy East pipeline project that I found inspiration to write on this issue. Not enough people understand just how much our bloated regulatory environment harms our energy industry. Misinformation from parasitic, taxpayer employed lawyers who thrive on an ever increasing bureaucracy spreading self-serving pap about what does or doesn’t harm industry isn’t helping.

Massive LNG projects have vanished while pipelines in all directions are either cancelled or stalled while every level of government adds to the hurdles already killing development and investment in Canada.

The Trans Mountain pipeline expansion is the last one left and few people feel much confidence that it will be built. This isn’t even a new pipeline, it is an expansion upon an existing line which has safely operated since the fifties. Rather than cut regulation and streamline the process, the Trudeau government bought the pipeline project before it could be cancelled. Just today we are hearing that the cost of the pipeline has gone up by almost $2 billion. 

How on earth is this or any other large project going to get done until and unless we truly cut and gut our regulatory burdens? In British Columbia alone, the Trans Mountain line needs 1187 permits! 1187!

That is just one aspect and one level of government. How could so many permits possibly be required? How many studies? How many applications? How much time to wait for approvals? How many revisions get called for? By the time the last permit gets approved, the first ones will have expired. It is nothing less than madness.

Today we see a government in shock as Saudi Arabia cuts ties to Canada over a tweet. Some are trying to dismiss things by pointing out that Saudi Arabia only supplies 10% of Canada’s oil imports. 10% of an entire nation’s oil imports is no small amount folks. The vast majority of Canada’s imported oil is coming from the USA. Trudeau hasn’t exactly been endearing himself with the American government lately so we remain vulnerable on that energy front too.

Canada has more than enough oil and gas to supply the entire nation with domestic sources. What we lack however is transmission infrastructure. We can’t even build a bloody pipeline across our own nation due to regulatory burdens. It appears that the government would rather see foreign tankers of oil travel up the Saint Lawrence river daily than see a pipeline come out from Alberta.

The situation is absurd and it is untenable. Sadly nothing will change or improve until we admit that our regulatory system is out of control and then make a serious effort to fix it. I won’t hold my breath.

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