There are some people in certain professions I’ve always had some empathy for, and one of those is sports reporters. The reason for that empathy is pretty simple and straightforward; they will watch a game and have a story ready to go for shortly after it’s done, only to see something huge and breathtaking happen right at the end, sending them for a massive re-write. It’s part of what comes with the territory of the work for sure, but I can understand that frustration.
I was thinking of that last night into this morning about some big news that broke regarding the approval or rejection of the Teck Frontier Oil Sands project. I had started to write a good piece on the proposal, which was supposed to face a final decision from the Federal government on its fate. I had looked at all sides and thought I was writing a good piece on it. But then last night happened and it all went out the window, as this story took an unexpected twist, but one that has a huge effect on this story:
The decision by Teck to shelve this project was unexpected, as they had brought it to this point so you’d think that after years of work on this, it wouldn’t walk away now. But when you read the letter from Teck CEO Don Lindsay you can see the reasons why this happened. Despite what Federal approval or rejection that came on the merits of the project itself, this letter makes it clear that the financial underpinnings of the project itself were never strong, which makes all the national drama from all sides on this all the more frustrating.
In that piece I had started to write, I was going to suggest that the Prime Minister approve the project for a couple big reasons. The first being you could make good legal arguments supporting its approval, including the environmental mitigation piece, the conditions that were agreed to and the broad support from the Indigenous community. But the other reason I was going to suggest that the PM approve it is because the odds were, at best, 50-50 that this project would ever get built.
The Globe and Mail had a piece out yesterday before this news broke, talking about all the financial hurdles this project had to face to ever get built, let alone be profitable. They pointed to the fact that the only other oil sands project that Teck is involved with, in partnership with Suncor, wasn’t bringing in close to the returns that were expected. They pointed to the fact that the company just took a near $1 billion write down last week because of other company issues. They pointed to the fact that the proposed project itself would cost $20.5 billion to built today, which is more than two times the actual cash value of the entire company. The piece also pointed to how so many in the financial sector when evaluating Teck were not even counting the Frontier project because they never expected it to be built for all those reasons. If anything, they expected Teck to self a majority share of it to someone else.
That piece adds to the fact that Mr. Lindsay himself said publicly weeks ago that at current oil prices, this project probably wouldn’t get built. When they started to plan for this project, oil was at $95 a barrel and Teck has said they would need about $75 a barrel for this project to break even. Today the price of oil is barely over $50 a barrel, and we haven’t seen prices that would make this economical in years. There are also high doubts we will ever see those prices again in the near future.
For all those reasons, the odds were highly stacked against Frontier, no matter what any level of government did, which is why I felt the PM should just approve it and get out of the way. And honestly, we’re seeing exactly why in the fall out of what’s happened since. We are seeing Alberta Premier Jason Kenney attacking the Liberals, saying this is all their fault when there was nothing they could do to make it economically viable without basically artificially propping up the price of oil, which they can’t. Kenney also tries to avoid any blame for the comments that Lindsay makes around the policy on climate change, which points a big finger in the direction of the UCP government he leads. I’ve believed that regardless of what Trudeau did, if this failed Kenney and Co. were going to blame him no matter what, no matter how unreasonable, and they have stayed true to form in that. But on the other side of this, I’ve been made to feel cold by the reaction of some on the other sides of the political fence, specifically this comment from a newly elected NDP MP from British Columbia, one that’s just as damaging as Kenney’s rants:
Sorry, regardless of the merits of the project, it’s never a “great day” to see any potential project that could employ thousands and that had support from Indigenous leaders fail. I’ve seen too many in my party and in the environmental movement cheering and doing a victory lap over this, just pouring salt in the open wounds of resource communities that are suffering. Instead of taking a responsible, solemn tone that feels the pain of those who will be stung by this decision (regardless of if it was ever to be built of not), comments like these just add to the bad feelings and tensions. They show no sympathy for those in the resource sector and just add to the “Us vs. Them” situations we’ve been seeing play out across the country. It’s dangerous to our country when Conservatives do it and it’s just as back when progressives do, and should be called out as such. Furthermore, this is the kind of crap that shows a party to not be a serious one, seriously trying to govern this large and diverse country. It shows them to be as serious as Andrew Scheer venting on Sunday afternoon about Paw Patrol. That’s a bad look for them, and will only serve to hurt those parties and the environmental movement down the road. Now was not the time for triumphalism, it was time for empathy on their part, and they missed that mark by a lot.
In the meantime, each side is trying to use this turn of events to advance their own narratives and goals, regardless of what the facts actually say. It’s disappointing to see and at some point, you have to wonder when we stop hoping that these parties will actually do better. I’d love to see a party come out on this today with a real, tangible, credible proposal going forward that could come from this situation. But that seems about as like to happen as the Tooth Fairy showing up today to give me Easter eggs. We’ll see what the rest of this week brings but if it’s been like the last two, hope of any better will just continue to drain away.