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  June 24, 2017

Canada's Fossil Fuels Lobby Issues Dubious Data in a Bid for More Pipelines

Adam Scott of Oil Change International offers a critical analysis of new data from the Canadian Association of Petroleum Producers
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Adam Scott is an energy and climate policy expert with extensive experience tracking the tar sands industry. He is a senior advisor to Oil Change International, a research and advocacy organization working to expose the true cost of fossil fuels.


DIMITRI LASCARIS: This is Dimitri Lascari for The Real News. In 2016, only months after signing on to the Paris Climate Accord and pushing for an aggressive goal of limiting the global temperature increase to 1.5 degrees Celsius, the Trudeau Government in Canada announced its approval of two major tar sands pipeline projects. The first of these projects is Kinder Morgan's proposed expansion of its trans-mounted pipeline, which runs from Alberta to the west coast of Canada, and the second of these projects was Enbridge's proposed replacement of its aging line three pipeline, which runs from Alberta to the western tip of Lake Superior.

The Trudeau Government's approval of these pipeline projects generated considerable controversy. For example, a leading environmental figure in Canada, Dr. David Suzuki, has condemned Prime Minister Trudeau as a liar, while Bill McKibben of recently authored an op-ed in The Guardian in which he argued that Justin Trudeau is "a disaster for the planet."

In the face of intense opposition to these pipeline projects, the tar sand's industry is, predictably, fighting back. In Canada, the main business lobby group for the oil industry is the Canadian Association of Petroleum Producers, or CAPP. On June 13th, CAPP published data that purported to show a desperate need for new pipeline capacity. This is an annual ritual that CAPP performs to make the case for new pipelines in Canada but this year Oil Change International, a research and advocacy organization that is focused on facilitating a transition to clean energy, took a hard look at CAPP's data and came up with some interesting conclusions.

Now here to discuss this analysis with us is Adam Scott. Adam is a senior campaigner at Oil Change International and he joins us today from Toronto, Canada. Thanks for coming back on the show, Adam.

ADAM SCOTT: Great to be here.

DIMITRI LASCARIS: Adam, before we get into the nuts and bolts of your analysis of the CAPP data, please talk to us about what that data purported to show and how the data is being used by CAPP to promote its agenda.

ADAM SCOTT: Right. I mean CAPP, which represents all of the major oil companies in Canada, but especially the large tar sands producers, is really in the business of trying to show Canadians that all of this growth in this sector is inevitable and that it's absolutely essential. They've been projecting this false view of the future that continues to see the oil industry grow for decades and decades to come. Of course, this is why strictly in the face of everything that's needed to do with global climate crisis, the impact these operations are having on people upstream living among tar sands operations and as well as indigenous rights all of these communities that are having infrastructure and pipelines forced through their territory.

CAPP has been doing this for a long time, trying to sell the industry as this massive and ever-growing entity, but in recent years as the oil prices crashed, the industry has been struggling and CAPP has really also struggled to try to keep this myth alive. Their most recent analysis really shows, again, they're trying to argue that we're going to see another million and a half barrels a day of new tar sands production over the next ten, fifteen years. It just flies completely over the face of reality.

DIMITRI LASCARIS: This, according to CAPP, this expected, or they say, expected increase in production is going to necessitate the creation of new infrastructure to deliver the product to market.

ADAM SCOTT: Right. This is the sixth year in a row that we've tracked. CAPP put as in their report every single year in June. It's the sixth year in a row that they've said, "We're about to run out of pipeline capacity. We're this close." Only this year, they actually implied that we ran out of pipeline capacity six months ago. Of course, there's no evidence to suggest that that's the case. The differential, the discount that is applied to Canadian crude oil is actually it spikes every time you see pipeline capacity get really tight. Right now there's no evidence of that happening.

CAPP is crying wolf and really intentionally misleading Canadians for a really long time, just trying it again this year.

DIMITRI LASCARIS: Oil Change [International] published an analysis of this data and found a number of other inconsistencies and oddities in the data. What else did the analysis of Oil Change show?

ADAM SCOTT: One of the things we found is that their estimate of how much space the pipeline system has to move oil has actually been shrinking, for some reason. In previous years, they'd actually listed a higher ability to move oil through pipelines than exists now. That's in spite of the fact that the pipeline system has actually expanded in recent years. New pipeline capacity has been added in a few places but they're clearly trying to manipulate the numbers in a way that allows them to keep making this ridiculous claim that we're almost out of pipeline capacity.

As well, we've found that they don't fully account for all of the refineries that exist in Alberta, Saskatchewan that use oil domestically and there's quite a bit used in those two provinces. They never fully account for all of that. That allows them to sort of say there's much less capacity in the system than there actually is.

DIMITRI LASCARIS: Now Oil Change has done its own detailed analysis of the actual pipeline system capacity, which I understand is called the Integrated North American Pipeline Model. How does this analysis differ from the CAPP analysis and what does this analysis show?

ADAM SCOTT: Well, from everything we can see, our model is far more sophisticated than what the CAPP is using. Our model actually looks at the entire pipeline system, including in the US. It looks at where all the bottlenecks in the system are. The total capacity of the system isn't just where the pipelines hit the border, it's where the pipelines actually connect the market.

We're able to see a very clear and transparent picture of where the capacity is in the system, where the oil can get to, where it's being used by refineries, where rail is being used. All of these sort of more complicated questions. The CAPP analysis seems to ignore a lot of that. It seems to really simplify things and it also seems to manipulate the data in order to reach the conclusion that they want to reach.

Our model actually has been showing that there is actually enough pipeline capacity in the system to accommodate all of the growth that is planned in the tar sands in the foreseeable future. At the moment, with the crash in oil prices, the growth has basically come to a halt after what's currently being constructed has finished being built.

As a result, there's not this long-term need for new pipeline. It just makes no sense. In fact, many within the industry have already been noting this and you've been seeing if you actually check carefully the statements made by oil company executives, a lot of them sort of openly questioning whether or not all of these pipeline proposals make sense.

DIMITRI LASCARIS: What is your sense of how policymakers of Canada are treating the CAPP data? Do you think that they're accepting at face value or do you think that analysis like those of Oil Change International are being given the consideration they deserve by the Trudeau Government?

ADAM SCOTT: Yeah, I think we've been saying this for a while and we haven't been fully listened to. I think the problem is with the oil price crash, the oil industry's been in rough shape. Politicians are always looking for a way to show that they get that or that they're trying to be supportive of the industry. To many workers who are legitimately concerned about what's happened to their jobs. There are a lot of layoffs in the sector and that's important.

Politicians are struggling to find a way of looking supportive. The way that they've been doing it is to say, "Well, we'll get you a pipeline," which is going to do nothing to help the economics of the industry at the moment. It isn't going to bring back those jobs, isn't going to really do anything but it's a very symbolic way of doing that.

That's sort of the big issue we've been seeing is this is an oil industry lobby group. This doesn't represent the actual workers in the field, this doesn't represent the communities that are impacted by the industry. This is just the PR firm, basically, trying to sell a narrative that is really out of date. Canadians still, by and large, are thinking that oh, this industry can be the engine of our economy. Well, that ceased to be the case a long time ago. The growth in the future cannot continue, especially if we want to actually meet our commitments and try to fight the global climate crisis.

CAPP is getting more and more desperate like a cornered animal. They're lashing out and they're getting more aggressive. That's why that we see in this bleak inability of the industry to acknowledge reality. It's very disappointing to see politicians buy into that. They're going to end up looking really silly, in the end.

DIMITRI LASCARIS: Well, this has been Dimitri Lascaris speaking to Adam Scott of Oil Change International about new data from the Canadian Association of Petroleum producers that purports to show a need for additional pipeline infrastructure. Adam, thank you very much for talking to us, again.

ADAM SCOTT: Thanks for having me.

DIMITRI LASCARIS: This is Dimitri Lascaris for The Real News.


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