Sacred Economics: Shylock as Anti-Christ

by Eric Walberg / August 7th, 2024

Money vs the gift
Sacred Economics 100
Deconstructing the Story of Self/ the World
Life without prisons

Marx’s ‘death knell’ of capitalism, revolution, was the first answer to capitalism’s ills, after which the state would wither away, and we would live in a utopian bliss. The 20th century put paid to that vision, as revolution, as most revolutions do, disappointed, mostly unravelled, and predatory capitalism took hold again. Are we stuck with a system that’s quickly leading us to the cliff edge with seemingly no turning back?

Happily, no, and happily no need for messy revolution, though there is already growing hardship from (and growing resistance to) our economic system’s gross injustices, insanities. The transition to a new economic logic is already underway, and we can all help nurse it into reality. In Sacred Economics: Money, Gift and Society in the Age of Transition (2021), Charles Eisenstein draws on anthropology and the prophetic writings of 20th century social critics to provide the way, hidden in plain sight. To return to the gift economy, to get rid of usury, debt money. For 90% of human history, that was how we lived, not in a mindset of artificial scarcity, where even the wealthiest pinch pennies, but one of abundance, where selfishness was despised, and ‘trade’ was a way of fostering peace, not ‘war by other means’.

Basically an ecological communism, where moneyS are based on real wealth and prices include all the environmental costs of your product. We have to make most of nature (land, water, air) a ‘commons’ again, as in feudal times when most land was commons, under the authority of lords but not an alienable commodity to be bought or sold.

Eisenstein picks up where Marx left off, or rather he takes out the rhetorical flourishes and puts the economy back into ecology, and in the process, establishes the underlying laws of the human-nature nexus. The Law of Return the most fundamental: Everything you consume is consumed somewhere else in nature. The uroboros. Pioneer species pave the way for keystone species, which provide microniches for other species and circle back to benefit pioneer species as they move into new territories. Actually a tautology but one that we’ve ignored until violating its logic has brought us to the brink of catastrophe.

Uroboros vs Sorcerer’s apprenticeMoney vs the gift

First, chuck out your guns-and-butter Eco 101 text. We must look at not-so-innocent words like money, interest, profit, investment, goods&services, and put them to work for us and the world, not against us and the world.

The real human economy for at least 100,000 years was a gift economy, with daily life needs, division of labor, ensured through tradition rather than a punch-clock and cash. Money was originally used ceremonially, in a complex system of exchange to ensure trust between tribes, and as tribute. Social currencies were for consolidating relations (marriages, funerals, blood money, intertribal peace).

With the rise of agriculture, money transformed, secularized, as a form of credit (tallies of loans denominated in common unit of account, periodically settled by deliver of commodities). This conflation quickly led to debt peonage i.e., slavery, and the demotion of women. Behind every ledger is a man with a sword/gun. The world was no longer sacred, and man part of it, worshipping it. Our spiritual connection with nature was sundered, our spirit thin and now identified with gold-as-fetish, not with God. A king-god must be carried aloft, high above lowly earth. Man became divorced from nature, culminating in Descartes’ lonely ‘I’. We were already transforming nature 4,000 years ago, creating empires, replacing ‘sinless’ God with ‘sinless’ gold, a lethal case of misplaced concreteness.

This ushered in the Age of Separation – spirit-matter, mind-body, human-nature. This Story of Self/ World, the Ascent of Humanity,¹ as Eisenstein called his earlier book dealing with this separation. It starts with the farming virtues of hard work, thrift, accumulation, but also the darker master-slave relation where slaves were often debtors who would never be able to pay. That isn’t in the Storybooks. Instead we have the story of isolated individuals rationally maximizing ‘utility’ (pleasure, which is still unmeasurable).

This Story as depicted in economics textbooks makes a bizarre kind of sense in a scientistic, timeless Newtonian world of atoms, but it has nothing to do with how we live our lives. What is it but a denial of spirituality, embodied mind, humanity itself? So the ‘ascent’ is a delusional one from the start, actually the opposite, as we see all around us today. If this is the crowning achievement of science, we would be healthier, happier in some (almost any) precapitalist society, absent money, certainly absent money as a hoarded store-of-value, and interest, a pointless and dangerous attempt to annihilate time-space. Of course, this is impossible. We live in space-time. You can’t go back in time, and the ‘space’ is already taken. We are long overdue for a Story that reflects us-in-the-world. Heidegger calls that dasein.

Reimagining our economy means first of all gaining control over our simple, elegant, now global money system which lets you do everything, everywhere, all at once. i.e., the antithesis of ceremonial money, which was attached to time, place, giver and receiver, as part of reinforcing that traditional way of life, with money as a sacred binding force. Now, instead of a simple, functional broom, we have the sorcerer’s apprentice. A hammer to kill a fly. Unnecessary power over everything, everywhere, all at once, which imprisons us in unreal fantasies and requires prisons for trigger-happy types.

Key reforms immediately suggest themselves:

• Return us to localized, ritualized methods of exchange. Reinvent the fly swatter to deal with fly problems. That looks ridiculous to our individualistic mindset, captivated by the supercharged power of money, gold-as-god. Most precapitalist societies worshipped the sun as god, or all of nature. What we can call ‘the collective West’, formerly the imperialist power, latched on to gold as the ideal money by the 15th century, when Europeans travelled the Earth, invading and stealing wealth, especially gold, wherever it was found. That obsession marks the great divide in human history, total war of conquest of the planet, fittingly symbolized by gold. Inert, eternal, beautiful, heavy (i.e., important).

• Following on the Law of Return, internalize all costs of whatever you produce/ consume. Right down to working conditions in the DVD factory in Bangladesh if that’s where your DVD player is made. Immediately it is clear that the majority of what we now produce and consume won’t make sense anymore. You will produce and consume more and more locally as the Age of Transition gets under way.

Eisenstein (and Keynes) argue that the short reign of gold as THE currency (1870–1932 and 1944–1971) was perhaps a necessary stage in our maturing as a species, but that it has outlived its purpose and, as we have witnessed over the past century, has already been replaced, though it is still a totem, a fetish that we secretly worship, many convinced that a return to the gold standard would solve all our problems. The fetishism is now secularized and represents the vast fortunes of Wall Street as if in a separate, disembodied realm. We need to take money off its pedestal, to invent new forms of money that will encourage good hoarding (of the commons) not the bad version (destruction of the commons).

The conquerors laughed at the cowrie shells that Polynesians carried thousands of miles by canoe to ‘trade’, seemingly senselessly, with other tribes. Or the wampum beads of Turtle Island natives. Even the most warlike tribes lived more or less peacefully, with their interactions centered on this ritual giving, before ‘we’ arrived with guns and declared total war of conquest on the world, inspired by gold.

It proved easy to unravel the complex, ritualistic societies outside Europe, once the Europeans launched their world war in search of gold for their very special and lethal money. ‘We’ ruined the complex web of world culture (just like we destroyed the anti-capitalist Soviet Union), and are quickly ruining what’s left of nature and now humanity itself, with total all-out war (not our low-grade ‘cold wars’) threatening like a Damocles sword over all our heads. And it is our very bloody form of money, or rather its pretend substitute, electronic money) that now governs a godless, global reality on the brink. Goethe’s (and Disney’s) sorcerer’s apprentice.

But our neurotic fetish is also responsible (everything is connected and money has been our hammer for everything) for the explosion of knowledge in the past five centuries. As we clear-cut the precious legacy of the our social evolution, the dazzling mini-civilizations everywhere on Earth, our scribes, anthropologists (or better, morticians) document(ed) the fast-dying remains of precapitalist civilizations, their (to us) bizarre customs, revealing discoveries about precapitalist societies every bit as marvelous as the potato, rubber trees and other gifts. ‘We’ quickly adopted the potatoes etc as they were profitable, ‘produced’ more gold, adapted to our industrial ‘civilization’, and wiped out the giver, the keeper of that miracle food.

As for the cultural wealth of those other civilizations, who cares? If they don’t make more gold, they are the enemy to be conquered or eliminated. Even the great thinkers of the 19th century, Hegel, Darwin, Marx assumed that these ‘primitive’ societies would be wiped out. But thanks to our morticians, we have salvaged some of what we realize now are precious gifts from the past. Most important of these human cultural artifacts is the gift culture, the social glue that let humanity prosper for millennia with destroying their world, Earth.

We must return to the gift, our traditional way of relating to nature and each other, but at a higher level. Thatcher’s TINA. There is no alternative. Just as tribes and nations have a cyclical rise and fall and, transformed, rise again as a new civilization, so does mankind’s trajectory from hunter-gatherer to agriculture to industry to information age, also have a grand overarching cycle, returning to the natural order after our spectacular but lethal bursts of creative innovation, which took us so far from the natural order.

Sacred Economics 100

Law: Everything is sacred. In the first place, money. Money has magical qualities, the power to alter human behavior and coordinate human activity. The simplest way to inspire belief is to appeal to our instinct of self preservation, ‘me first’. So ‘greed’ is a kind of default attribute for money, a lowest-common-denominator money, supposedly appealing to our natural state. Like a person stuck at the level of a two-year-old, ‘ME!’ is then our belief system, which our money reflects, urging us to hoard, take by force.² And what better than using an inert metal that never decays? So gold.

But this was much later. Hunter-gatherers actually grew up without gold, not stuck at the ‘terrible twos’, never ‘greedy’. Their money was constantly exchanged as part of their foreign relations. They couldn’t hoard anything and didn’t need to. Any accumulation was seasonal. They lived in abundance and shared everything, treated everything as a gift, promoting generosity and gratitude, not greed and war. So they had no need of this base money, our money.

We have learned that early humans did not see themselves as apart, above nature. They were part of a complex world of man-nature, matter-spirit, where everything is sacred. Everything. including our consciousness is a gift. For Muslims this is our God-given nature, fitra. We dismiss this worldview of the world as a huge gift as a charming metaphor, but the gifters were serious.

For atheists this is a problem. Who to thank? For me, my existence alone is enough proof of a higher order reality. If I’m right, then I should be thanking God every second of the day and night. Sufis strive for that mindset. For Muslims, praying 5 times a day is a religious duty. And the implication is you must treat every gift with respect. Use it and leave nature as rich and beautiful as it was before. So the Alberta tarsands, a huge toxic wound on the beautiful gift of the land and resources, is sacrilege. The guilty parties are traitors to our heritage and deserve the highest punishment. Instead, we laud them and give them billions of dollars to poison more of our gifts. ARGH.

Some things are more sacred than others (thunderstorms, waterfalls, rainbows, orchids), that were there to remind us of the sacredness of all things. With the rise of agriculture and greed money, we became progressively more divorced from nature, culminating in our modern economy, where gold is valued above all else, though, apart from sitting in vaults, hoarded for its magically quality, it is useful only as ornament. Ditto mankind as a kind of secular embodiment of gold, the supreme living creature as ‘golden boy’, is valued above all else to the point of destroying all else.

The rot really set in with Descartes’ disembodied soul, divorced from the body, observing but not participating in the world, which is run by a robotic Newtonian watchmaker god. As if Descartes was intuiting what the best Story of the Self was for our Story of the World, modern capitalism, governed by the abstract, now secular spirit, money. Your soul, mind is outside of science and not that interesting in a materialist, secular world anyway.

Shakespeare, writing at the birth of the new secular, capitalist order, made the usurer Shylock the archetype for the new man of finance: cruel, ruthless, paranoid, greedy. Shakespeare’s most compelling villain. The Merchant of Venice is the only play focusing on the economics of society, on an abstract idea, usury. Shylock loses everything including his daughter, who steals her inheritance and converts to Christianity. The play was problematic from the start, Jessica seen as a schemer betraying her father. Philosemitism runs deep in Britain, a product of the Protestant Reformation and the condoning of usury as good for business.

Shakespeare wanted us to detest the usurer, but already usury was an integral part of the now accelerating commercial and industrial revolutions. His audiences had usurers among them, and the immortal words of Shylock and Portia calling for tolerance and mercy have been emphasized, without Shakespeare’s anti-capitalist message. It took Marx and a century of anti-capitalist revolution for Jessica’s rejection of Shylock’s clear villainy to be appreciated for what it is, Shakespeare’s genius at penetrating to the heart of the new order and warning us. The answer is there in the rejection of usury, the demonetization of hoarded wealth, i.e., Jessica’s jewels revert to baubles, not capital, Christianity (still outlawing usury in the 17th century) the already ineffectual antidote to the usury of the Jew.

Paradox: Even as we realize the evil of usury/ interest, we outlaw criticism of Jewry for its adoption of usury as the basis of Jewish world power, such is the power of money. It force-feeds us illusions and forces us to spout lies to maintain the system. For all that, The Merchant of Venice is Shakespeare’s most popular play in Israel. (Only Jews in their Jewish state are free to be ‘anti-semitic’.)

Marx argued that money has become a world power, and, as the practical Jewish spirit, has become the practical spirit of the Christian nations, which became the spirit of the capitalist age. A Jew himself, he identified the Jewish practice of usury as the source of the evils of the day, and assumed Jews would disappear as a persecuted race once usury was abolished. He wrote before the secrets of past civilizations had been documented and jumped to ‘revolution’ and a very abstract communism as the one-size-fits-all answer. Another hammer to kill a fly.

We have built our lives as autonomous individuals worshipping this secular, material god, rather than the traditional spiritual god. We see the world crumbling before our eyes, we know the culprit, but, like a druggie, we just keep looking for our next fix, our disembodied soul no help at all.

So first, rewrite our economic textbooks, demystifying money. Money’s ‘natural’ purpose is to connect human gifts to human needs. Now money is based on artificial scarcity and rationality. Nothing about gifts, abundance. Our thinking too must change, though the change is just a reversion to our naturally/ socially evolved generosity and gratitude, adult emotions that we have suppressed as we live out our ‘terrible twos’, still dressed in diapers, unable to metabolize what we take from nature in a civilized way.

Deconstructing the Story of Self/ the World

Our Story of Self as autonomous individuals governed by instinct (mistakenly called greed) breaks down with observed reality. We are all found under the proverbial cabbage leaf. Our lives are given to us. A gift. Let that sink in. We are walking miracles! So our default is gratitude. Even in our Age of Separation, we still honor our parents for the gift of life, which we can never repay in money. That is the truth of our existence.

I still need to pause and reread that. We are so totally programmed to blot out that essential truth. Our new Story of the Self and consequently our Story of the World must start there. Life as a gift, ‘the gift of life’, gratitude to parents, responsibility to pass on the gift of life and the gifts of nature to the next generation (natives think in terms of seven generations). No wonder ancient religious thinkers said God made the world, and gave it to us to enjoy, i.e., gave us reflective consciousness. So the basic ‘units of account’ in economics should be humility and gratitude not selfishness and egotism.

The Big Bang is like God’s humongous gift – everything for nothing. As if the universe was created for us to see and reflect on (and be thankful for). Does any of this sound like today’s Eco 101? It starts with separate selves competing for scarce resources to maximize self-interest. Our bankers create money and divvy it out to profit-maximizers, so that we can maximize our utility in this world of efficiency.

This turns out to be as depressing and destructive as it sounds. It is a neurosis-inducing Story of the People, robotic, defying our natural emotions. Ditto with the Story of the World, on the surface rational and profitable, but with scarcity and fear lurking at the unconscious level. Barter and comparative advantage in a Hobbesian brutish and nasty world. New stories, please!

Rule of the gift: What comes to you is not kept for oneself unless one cannot do without it.

Rule of the gift: Everything is related, so economic relations are mutual, we always owe someone/ nature for our taking. Toaripi, Arabic, Chinese, German, Japanese have only one word for borrowing/ lending. The Arabic din means religion and debt. The Lord’s prayer used to be ‘forgive us our debts, as we forgive other’ until capitalism got a hold of it and changed that to ‘trespasses’.

Modern money transaction are closed, no obligation, at most a ‘money-back’ guarantee, but the buck stops there. The gift is open-ended, a relationship between participants. With a gift, you give some of yourself. Now you are just sell a ‘good’, which could be bad, and which has nothing to do with you.

Even today we go all soft in ceremonies of giving presents, without the hard edge of money involved. The gift still embodies something special that money kills – the sense of uniqueness and relatedness (the self expanding to whole community) that we all know we are, not the diminished robotic self that buys and sells as the ‘greatest good’.

Law: In the money economy, more for me is less for you. Zero-sum game. In the gift economy: more for me is also more you. Positive-sum game. I.e., those who have give to those who need. Gifts cement the mystical reality of participation in something greater than oneself. Axioms of rational self-interest do not apply, as the self has expanded to include some of the other.

There is no need to distinguish between work and play, business and personal relationships. Think hunter-gatherer: you do what you have to each day which takes a few hours, all the time social networking, telling Stories. Work and play are one. Economics was linked to cosmology, religion, psyche. You, John, need x from me. So you give me wampum, which means: ‘John met the needs of others in the past and earned gratitude.’ So I can give John’s wampum later when I am gifted by someone. The Story of the gift. Now, instead of giving me wampum, I get money, which no longer satisfies the need-gratitude problem, which has no story behind it. There’s no one to thank, not even God. Today, especially not God.

When the division of labor exceeds the tribal or village level, there is the need to extend the range of our gifts. Yes, trade, progress. Comparative advantage. Eco 101. By facilitating trade, we reward efficiency in production. Money facilitates trade and should enrich life.

So what happened that turned trade-as-nice-novelty into a weapon of mass destruction, destroying entire nations through boycotts, enriching others obscenely? Now money is the source of anxiety, hardship, polarization of wealth. The US boycotts, sanctions a third of the world for daring to disobey orders, killing as many as actual warfare and bombing.

Paradox. Dollar bills still show deified presidents, ‘out of many one’, ‘in God we trust’. Not. We need a true Story of wholeness and harmony, return to the hunter-gatherer, our most successfully evolved social organism, at a higher level.

Our ‘gifts’, given by God have some of Him in them. Prometheus’s fire, the Apollonian gift of music, agriculture, all ‘made in His image’. We have the desire to develop those gifts and give from them (from Him) to the world. Nothing beats the joy of giving.³ You are playing God in the best sense. Rational self-interest does not apply in our interactions with others. Just our innate generosity. You can’t live a fulfilled life without developing those gifts, sharing them with others. But our gifts are mortgaged to the demands of money, survival. We fret about the ‘cost of living’, we are ruled by the specter of scarcity.

Where did this ‘scarcity’ in a world of plenty come from? It invaded our epistemology of i/ biology with ‘selfish genes’, ii/ socio-biology with competing selves. It is more a projection of our own capitalist culture of artificial scarcity than an understanding of nature. Recent advances in biology shows that nature gives primacy to cooperation, symbiosis, merging of organisms into larger wholes, with competition playing a secondary role. And there is no stasis in nature. Everything is always in motion, evolving, living/ dying. The world is alive.

Nature is both complex and radically simple. Human nature is the same. In nature headlong growth is sign of immature ecosystems, followed by renewed interdependency, symbiosis, cooperation, always returning, recycling of resources. Ditto human societies. We have lived through a few centuries of wild, uncontrolled exploitation of nature and this is coming to an end even as I write. Money is already frayed and will continue to unravel as our lives take on more and more the properties of gift, as we return to our true nature, our fitra. The economy will shrink, our lives will grow. What a rousing, cliff-hanger Story of Transition this will make.

Law: In a dynamic system, there is no equilibrium but a state of controlled disequilibrium, infinitely complex.

Life without prisons

Our Stories’ economics axioms: scarcity + rational maximization of self-interest. Result: Wealth makes you greedy. We need prisons to prevent greedy people from being too greedy.

Money’s basic function is to facilitate exchange, connect human gifts with needs, from each according to his ability to each according to her needs. That’s right. Communism. But also any religion worth its salt. And ‘we’ turned money into a corrosive agent of scarcity. Starvation a constant for much of the world, though there’s more than enough for everyone, and most people want to help, but can’t because there’s no money in it.

Indigenous Turtle Islanders from the start shook their heads at their dangerous visitors. They had no problem of greedy people (though the Europeans saw their disdain for things as sacrilegious), no need for prisons. None voluntarily joined the Europeans’ cruel, arbitrary society of violence and slavery. Many whites ‘went native’, enjoying the freedom and beauty of moneyless society and had to be dragged back or killed. No room for traitors.

Basically, capitalist society was/is a system of warfare, a zero-sum game where the natives lived life as a positive-sum game. Captured debtors and thieves like POWs, requiring prisons. Natives understood that if you have a good community, you don’t need prisons, or (today) a complicated maze of private daycare at $10,000+ a year (nice prisons to control your children).

Natives were so busy enjoying life, they don’t have time to get bored. No one got ‘bored’ before the word was invented in 1760 at the dawn of assembly lines, mass production urban ghettoes devoid of community, no contact at all with nature.

‘Bedouins can sit for hours in the desert, feeling the ripples of time, without being bored.’⁴ Boredom, the yearning for stimulation, distraction, for something (rather than a relation) to pass the time. Life is not about things, but relations. But we are isolated automatons in our Story of Self. We don’t need relations, but as a result we are stuck with things to soothe the existential pain of separation, lack of relations. Camus.

Now we get bored in an instant. We demand to be entertained. Reality is boring, alien. Media is more real.

As for economic growth, the mantra promising greater happiness, really just means the economy, the commons, life in general, is more and more monetized, colonized, producing lots of things to soothe us. But when everything is monetized, a scarcity of money makes everything scarce, even when drown in a sea of ‘goods’. Nothing has changed in the real world, but now you starve. Magic.

‘Evergreen’ container ship blocked Suez Canal for a week in 2021

From Perpetual sacrifice

by William Wordsworth

Men, maidens, youths,
mother and little children, boys and girls,
enter, and each the wonted task resumes
within this temple, where is offered up
to Gain, the master idol of the realm,
perpetual sacrifice.

Wow. Buddhism sees spiritual value in suffering, but that’s in pursuit of enlightenment. To commit someone to ‘perpetual sacrifice’, wage slavery, in the service of profit is about as low as you can go. We have reached the physical limits of our Stories, where abundance is cloaked in artificial scarcity, where the engine of growth is greed. How did our natural impulse of giving, generosity, turn into its opposite? Greed doesn’t make sense, even in the context of real scarcity. We naturally share especially in times of danger. We need scarcity to penetrate into our minds, emotions, so we will discard, repress our higher impulses, our social instincts, honed over millennia, in favor of the more primitive self-preservation instinct we are taught to call ‘greed’. Greed must be built into our Story of Self, and taught in schools and universities, so that there are no traitors to the cause.

Contrary to Eco 101 wishful thinking, there is no biological gene to maximize reproduction of a self-interested, economically rational actor. Greed is not written into our biology, but is a symptom of the perception of scarcity. In a psychology experiment a group of poor vs rich were given $1000 to share. Guess who is more generous? That’s right, the poor. You knew that ‘instinctively’, 2 times more generous! When you’re rich, anxiety is always there, scarcity just a step away. It’s not greed makes you wealthy, but wealth makes you greedy. I.e., they are so ‘invested’ in their wealth, they can’t let go. Pity poor Midas.

ENDNOTES:

• 1
  Charles Eisenstein, The Ascent of Humanity: Civilization and the Human Sense of Self , p21, 2007.
• 2
  But children quickly move beyond that, naturally sharing when they’ve had enough.
• 3
  Readers joke I intentionally get lost on my biking adventures to feast on the selfless generosity of strangers.
• 4
  Ziauddin Sardar, Cyberspace as the darker side of the West, 2000.Facebook

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Eric Walberg is a journalist who worked in Uzbekistan and is now writing for Al-Ahram Weekly in Cairo. He is the author of From Postmodernism to Postsecularism and Postmodern Imperialism. His most recent book is Islamic Resistance to Imperialism. Read other articles by Eric, or visit Eric's website.

UCP ALBERTA

Indigenous Environmentalists Slam AER and Federal Inaction Over The Kearl Mine Leakage

Story by The Canadian Press •6h

 (ANNews) – Indigenous climate advocates are harshly criticizing an Alberta Energy Regulator (AER) report into Imperial Oil’s Kearl mine leaking 5.4 million tonnes of contaminated water, which concluded that the oil company followed all required regulations, even after it failed to notify members of the downstream First Nations. 

While it was initially reported that the AER concealed the leakage from Athabasca Chipewyan First Nation and Mikisew Cree Nation for almost a year until contaminated water surfaced in February 2023, the regulator knew about the leakage for years prior, according to reporting from The Canadian Press. 

Groundwater reports Imperial submitted to the AER in 2020 and 2021 acknowledge that tailings were seeping from the ponds intended to contain them. 

In May 2022, the First Nations were first informed that discoloured water had surfaced from the pond, but Indigenous leaders were then kept out of the loop until February, when the AER issued an environmental protection order against Imperial after 5.4 million tonnes of toxic water escaped from the pond. 

Mandy Olsgard, an environmental toxicologist who worked with nearby First Nations, said the regulator would have known about the seepage since 2019. “They knew there was seepage to groundwater,” said Olsgard, adding that the AER and Imperial decided to “just manage it internally,” rather than notify the public. 

The seepage continues, with hydrocarbon levels in test wells exceeding provincial guidelines, CP reported.

“There is no indication of adverse impacts to wildlife or fish populations in nearby river systems or risks to drinking water for local communities,” Imperial spokesperson Lisa Schmidt told CP.

An AER report said Imperial followed all existing rules in reporting the leak, but acknowledged the rules have major shortcomings. 

Mikisew Chief Billy-Joe Tuccaro, who has called for a stop-work order at the Kearl site, said he has no reason to trust Imperial or the AER.

“They say they have contained the seepage. They have not. The fact that they did not tell us about the seepage for nine months is the tip of the iceberg,” he told CP.

A statement from Athabasca Chipewyan First Nation, which has called on the federal government to intervene, expressed similar doubts about the AER’s integrity. 

“We do not believe that the Kearl leak was an isolated incident, and we do not believe the regulator would inform the public if another incident occurred,” the band told CP.

Indigenous Climate Action (ICA) issued a blistering Sept. 27 news release decrying a lack of accountability from the AER. 

“They don’t live there, they don’t drink the water. Oil and gas groups have spent millions, if not billions, aiming to weaken policies so they can continue to get away with destroying our planet," said ICA executive director and Athabasca Chipewyan member Eriel Tchekwie Deranger.Their only interests are their bottom lines—our community and our rights mean nothing to them."

Deranger added that the AER’s conclusions “are unfortunately not surprising.” 

“It only affirms that spills, leaks and overflows are considered acceptable and normal within the Canadian colonial system,” Deranger said. “Standard ‘business as usual’ holds no consequences for industry. It’s the land, waterways and the people that are expected to shoulder the consequences for them.” 

The release noted that the AER report came days before the annual Day for Truth and Reconciliation across Canada.

“We can’t truly work toward reconciliation until the whole truth is told about the oppressive colonial systems and practices that caused, and continue to cause, harm to our lands, waterways and rights of our peoples,” said ICA engagement manager Jamie Bourque-Blyan, a member of Buffalo Lake Metis Settlement. 

She called the Kearl spill, and ensuing coverup, just “one example of these harms,” with Athabasca Chipewyan and Mikisew Cree nations “left in the dark about the tailings breach and increase in toxic chemicals in the waterways and environment often used to practice inherent Indigenous and treaty rights, including those of harvesting foods and medicine, and practicing land-based ceremonies.” 

The report also came a week after the UN Climate Ambition Summit in New York, where Prime Minister Justin Trudeau promised to “build a cleaner and more prosperous future for all.”

Despite his rhetoric, Trudeau continues “to miss the mark when it comes to upholding human rights, including Indigenous rights,” said ICA digital media coordinator Katie Wilson, a member of Peguis First Nation. 

“Not once did Trudeau mention Indigenous rights in his address last week and this report from the AER further demonstrates the sincere lack of interest by colonial governments in upholding Truth and Reconciliation, as long as it impacts industry wealth,” Wilson added.

Jeremy Appel, Local Journalism Initiative Reporter, Alberta Native News

Opinion: Coal mining company won't take no for an answer

Opinion by Lorne Fitch•

A third-party report into the release of millions of litres of oilsands wastewater at Imperial Oil's Kearl mine has found Alberta's energy regulator followed all it rules and procedures in keeping the public and area First Nations informed.

Money talks. It says, “Bend over.” The persistence of Benga, now renamed Northback, an Australian mining company owned by mogul Gina Rinehart is testament to never accepting no for an answer. Money has paved the way for an intensive lobbying effort with Alberta politicians and bureaucrats, only exceeded by the effort displayed by the petroleum industry.

The now infamous Grassy Mountain coal mine proposal has already been turned down by a joint federal/provincial panel, on environmental, economic, social and health grounds. The proponent, believing they had the fast track to a mine based on promises from the UCP government, was furious and appealed the decision. The courts refused to hear the appeal, no doubt believing this had already been dealt with in the panel proceedings.

Channelling Mark Twain for a moment, in terms of his view of mines, Grassy Mountain has become a metaphorical hole in ground, into which power, influence and money are poured. From that hole in the ground the owners hope for an answer that does not include “no.”

Northback must believe firmly in the proposition that heads they win, tails they get to flip again. It must be so, because they are back, flipping under a new name (as if that makes any difference) and applying for a new exploration permit, for the same thing they were turned down on in 2021.

If nothing else, they deserve credit for brass and chutzpah.

The Alberta Energy Regulator (AER) is currently accepting statements of concern about this resurrected mine proposal from Albertans. This is the same agency that failed to advise downstream residents of a serious leak in a tarsands tailings pond for months, until confronted by the issue. In the case of this coal exploration proposal, they are subjecting Albertans to a flawed form that the agency laughingly calls “user-friendly.” Virtually at the beginning of the form, you are told you have to be directly and adversely affected by the activity to register a concern.

Woe betide you if you are a downstream water drinker, breathe air coming from the proposed mine site, are an angler, a hunter, a camper, a naturalist, a rancher or any Albertan who has already emphatically said no to coal development in the Eastern Slopes. You will not penetrate the economic cordon imposed by the AER.

Mind you, you shouldn’t have to since we’ve been through this; a decision has been made and nothing, absolutely nothing has changed, except maybe the drought has heightened our concern over water. This might matter, except in Alberta where you have to endlessly parse the fine print for wiggle room, exceptions and deviations.

The 2022 ministerial order restricts coal projects but does allow for exceptions for “active coal mines, for advanced coal projects and for safety and security activities.” However, the definition of “advanced” means a project is already moving through a regulatory process. The current application for coal exploration on Grassy Mountain does not meet this test.

One needs to sift through this with a large degree of incredulity. This project is not in a regulatory process and none of the conditions of the 2022 ministerial order have yet been met. Why it is even being considered by the AER is a mystery. I would agree it is an “advanced” project, one that has advanced through a prior legitimate process of review and scrutiny. It has advanced to the point of rejection.

The fumbling by the AER and the government of Alberta on this file defies belief and suggests several things. Is there an attempt to subvert both the ministerial order and AER process? It raises serious questions on whether lobbying efforts have been successful at circumventing government policy related to coal exploration and development. One hopes that when money talks, policy and the broader public interest don’t walk.

It also calls into question how many times “no” has to be applied before it sticks.

Lorne Fitch is a professional biologist, a retired fish and wildlife biologist and a former adjunct professor with the University of Calgary.

Enbridge CEO calls for national Indigenous loan guarantee program

TO INVEST IN TARSANDS & PIPELINES

The Canadian Press
Fri, October 6, 2023 


CALGARY — The CEO of Enbridge Inc. is calling on the federal government to create a national Indigenous loan guarantee program to help First Nations communities in Canada acquire equity stakes in major resource and infrastructure projects.

In an interview following a speech to the Toronto Region Board of Trade on Friday, Greg Ebel said Canadian energy companies are increasingly willing to offer equity ownership stakes to Indigenous communities whose traditional lands are crossed by pipelines and other infrastructure projects.

But he said Indigenous communities often don't have the necessary access to capital. While Alberta, Saskatchewan and Ontario all have provincial programs offering financing to Indigenous communities for commercial partnerships, Ebel said a pan-Canadian solution is required.

"The problem is, much of our infrastructure in this country crosses jurisdictions, it crosses boundaries. So therefore you need a national program," he said.

"It's hard for a province to provide loan guarantees for the benefit of people who live in a different province."

While private companies have been partnering with Indigenous communities on infrastructure projects for decades, early agreements typically involved guarantees of construction jobs or other financial benefits for the community and fell short of offering Indigenous people a full equity stake.

That’s changing, however. Last fall, Enbridge signed what was at the time North America's largest energy-related partnership between a private company and Indigenous people. The deal saw the Calgary-based company sell an 11.57 per cent interest in seven northern Alberta pipelines to 23 First Nation and Métis communities — a $1.1 billion-deal that was backed by a $250-million equity loan guarantee from the Alberta Indigenous Opportunities Corp.

Several Indigenous-led groups have also indicated interest in purchasing an equity stake in the Trans Mountain oil pipeline, which is currently owned by the federal government.

In addition, Indigenous communities have been investing heavily in wind, solar and other clean energy projects. The not-for-profit organization Indigenous Clean Energy Social Enterprise recently estimated that Indigenous communities own, co-own or have a defined financial benefit agreement in place for almost 20 per cent of Canada's electricity generating infrastructure.

The growing tendency for Indigenous communities to get involved as full equity partners comes at a time when Canada has committed to reconciliation with Indigenous people, a commitment that includes the recognition of Indigenous people's right to economic self-determination.

But Niilo Edwards, CEO of the First Nations Major Projects Coalition — a group of more than 130 Indigenous nations working to ensure First Nations communities get a fair share of the benefits from projects that cross their territories — said Indigenous communities are at a significant disadvantage when it comes to seeking financing through mainstream capital markets.

"The main reason is, the Indian Act does not enable First Nations to use their land and other assets as collateral," Edwards said.

"This has historically precluded First Nations from participating in the mainstream of the economy, and therefore when our members are presented with these opportunities, they don't have the level of at-risk capital required to secure a good interest rate."

Edwards said without access to competitive interest rates, Indigenous communities often have to forgo participating in equity partnerships — even when they are hosting infrastructure projects on their lands.

"For those Nations who choose to pursue equity ownership, the financing supports have to be there," Edwards said.

"There has to be a fair return for the value (First Nations) are bringing to the table."

In its 2023 budget, the federal government committed to lending affordable capital through the Canada Infrastructure Bank to Indigenous communities to purchase equity stakes in infrastructure projects in which the bank itself is also investing.

However, the Canada Infrastructure Bank is only mandated to invest in clean power, green infrastructure, broadband, trade and transportation, and public transportation.

Enbridge, which is advocating for the role of natural gas and LNG (liquefied natural gas) as a transition fuel in the global energy shift towards a lower-carbon economy, believes any federal loan guarantee program should be sector-agnostic.

"You can’t just single out one or the other, because I think, again, that limits the opportunities for Indigenous communities to participate," Ebel said.

Making it easier for First Nations to purchase equity stakes in infrastructure projects will also go a long way in creating the social license required to get these projects built, he said.

That, in turn, could ease the regulatory and permitting process which has made building major projects in Canada costly and cumbersome, he added.

"I think with things like the Inflation Reduction Act in the United States, Canada has to constantly find new ways to be competitive," Ebel said.

"And I don't think there's any doubt that if we can find a way to involve more Canadians, and particularly Indigenous people, that puts us in a very nice competitive position. It sends a very strong message to our customers, whether they’re domestic or global, that we’re serious about getting infrastructure done and doing it in a manner that’s sustainable."

This report by The Canadian Press was first published Oct. 6, 2023.

Companies in this story: (TSX:ENB)

Amanda Stephenson, The Canadian Press

 

NOVA SCOTIA

RALPH SURETTE: The carbon tax is needed to stiffen our backbones to face what’s coming

Ralph Surette · Columnist | Posted: 20 hours ago SaltWire

The fuel delivered by tanker trucks now comes with new levies intended to put a price on pollution. - SaltWire file

OK, let’s try the long view on this carbon tax business. Not that it will do much to dampen climate change in the short run, I admit.

What it might do, however, is put some much needed iron in our flabby souls when it comes to facing climate reality.

Yes, Trudeau has dumped on our summer fun, but in fact the carbon tax is just reality in one of its many increasingly ominous forms. (And, yes, there might be alternatives but there’s no serious political voice to make the case, the Poilièvre Conservatives being, at their core, a tarsands party.)

Will this shock be the one that finally gets us to change our ways, which we so fiercely resist?

These shocks have happened repeatedly since the original one in 1973, when the OPEC cartel was formed and put oil prices temporarily through the roof. Climate change wasn’t the issue then, but environmental destruction was (and our vulnerability to oil shocks).

And every time oil prices spiked, a certain sobering kicked in, both at the societal and governmental levels.

But inevitably prices drifted down again and the practice, the philosophy, the justification of energy waste as a way of life, both individually and in the way we organized our physical infrastructure and our general economy, just got worse and worse, tracking the deteriorating climate.

At the local level, here in Yarmouth County, I’m always astonished at how casually some people will drive a monster truck 10 kilometres for a cup of coffee, drive three hours to Halifax to shop a few hours then drive back, or drive to Halifax and take a plane to see a ball game or a concert in Toronto as though this is normal life disconnected from environmental reality. And heaven help the nasty Trudeau if he puts a crimp in all that.

Keep in mind that in our perverse way of measuring progress, all this is good for the economy — more people spewing carbon is good for economic growth, although at the cost of both environment and climate.

On the larger scale, there’s what’s being called revenge travel, people prevented from travelling during COVID and now itching to go.

In the U.S., this July 4 holiday saw more cars on the road than ever and huge numbers clogging the airports, even though thousands of flights were cancelled because of violent, climate change-driven weather, which makes an ironic point. (Another ironic point: July 4 was the hottest day ever recorded on Earth — so far.)

Granted that this sudden tax jolt (plus an increased refinery levy to go with it) is a problem for many: small businesses, delivery people, people who have to drive, renters with oil heat and so many others caught in many ways.

However, this is only half a story. The argument that Maritimers are older, more rural and still more dependent on oil for home heating, therefore more vulnerable than other Canadians, needs a tweak.

This will vary but, in my experience, I’ve found many older people who just hang on to oil no matter the cost, perhaps partly out of habit but mostly because they figure they won’t be there for long so why bother.

These are people who own their own homes, like most rural Maritimers, and are not as poor as they are sometimes made out to be. In fact, as old-time Maritimers they’re quite resilient and could probably teach you something about dealing with life’s problems instead of whining about them.

The attitude seems to be that the pension money, the energy rebates, the savings cover it, so why bother changing? In one case, I’m told of an elderly person who last winter paid $10,000 for oil, an amount that would have, in one year alone, either insulated the leaky old house or bought a couple of heat pumps.

These are not cases that need — or are looking for — sympathy or Premier Houston’s woeful song. Time and/or rising prices will take care of that one. And rising prices are in fact the proper thing to make most of us think twice about some of our loose energy habits, and for governments and institutions of all stripes to address at last, after 50 years of procrastination, the need to gear what we build to the climate emergency.

Speaking of the climate emergency, which is what this is all about, I was intrigued by last Saturday’s paper, which was full of complaint about the carbon tax, capped off by an article among the obits entitled Climate nears point of no return, say experts, outlining the speed at which the situation is deteriorating, with this year’s deadly heat waves already the worst ever throughout the U.S. South, parts of Europe, and India and China.

Sobering indeed.

Vivian Krause to ‘Oil Mafia’ Supporters: ‘the Environmentalists Have Won’

The researcher who inspired Alberta’s Energy War Room isn’t done with the alleged conspiracy to landlock Canadian fossil fuel.

April 14, 2023 by DeSmog 

LONG READ


By Taylor Noakes on Desmog

Vivian Krause may well claim the title of the Canadian woman who launched a thousand op-eds.

For over a decade Krause’s claim — that American philanthropic organizations are influencing Canadian environmental groups — provided the basis for hundreds of editorials alleging a far-reaching conspiracy to landlock Canadian oil and gas resources. Columnists pointed to Krause’s research as evidence that American-backed eco-radicals had taken over federal and provincial governments in Canada, halted major pipeline projects, and “played right into the business interests of U.S. billionaires by becoming their useful idiots.”

In recent years Krause has selectively pushed back against such claims, taking legal action against some publications that suggested she linked U.S. oil interests to anti-pipeline efforts. While Krause maintains that she never explicitly stated there were commercial interests behind environmental campaigns against the tar sands, she has nonetheless stated her belief the American economy has benefited considerably. Canadian Press issued a correction and apology to Krause for a 2021 story that made this link more explicit. But most of the high-profile columnists and politicians who referenced her work went unchallenged when concluding environmental protest constitutes foreign political and economic interference, or benefits the American energy sector.

Krause’s research laid the foundation for a $3.5 million public inquiry into anti-Alberta energy campaigns and their funding. She’s been credited by Alberta premiers Danielle Smith and Jason Kenney for inspiring the $30 million Canadian Energy Centre, also known as the Energy War Room, which aims to counter what it has described as “domestic and foreign-funded campaigns against Canada’s oil and gas industry.”

Alberta’s public inquiry found no wrongdoing by environmentalists, yet Krause continues to entertain speculation about foreign-funded radicals unwittingly serving the interests of international producers in online spaces run by fossil fuel industry supporters.


Krause rolled out a familiar set of research during a talk to an online group calling itself the Canadian Oil Mafia. Krause told supporters that environmentalists have won the public relations war for Canadians’ hearts and minds, and did not challenge any conspiratorial ideas raised during the hour-long session.

Krause’s claim that environmentalists have won was out of step with the tens of billions of dollars in annual subsidies still paid out to the fossil fuel sector by governments in Canada, the Trudeau government’s purchase of the TransMountain pipeline in 2018, the fact that Canada’s oil sands production hit a record high of 3.6 million barrels a day in the first half of 2022 — largely due to new pipeline capacity across North America — and the record-smashing profits that Canadian oil producers are posting these days, to name just a few examples.

Moreover, according to the U.S. Energy Information Administration, in 2021 Canada was responsible for 51 percent of total U.S. petroleum imports, including crude oil, and 62 percent of its total crude oil imports, making Canada far and away the primary source of foreign oil to the United States.

Krause’s talk, which took place on Twitter Spaces in June 2022, was hosted by Sohaib Abbas and kicked off with, appropriately enough, the Chad Cooke Band’s song Oil Man.

Abbas is the organizer of the Canadian Oil Mafia, whose stated mission is: “To have a positive impact educating others on the Generational Opportunity in the Canadian Energy Industry.” The group consists of people who have made investments in the fossil fuel energy sector, or who otherwise support it. The Canadian Oil Mafia consists of a Twitter Spaces group and, up until a few months ago, a website that sold merchandise featuring pro-oil slogans. Abbas regularly hosts online events featuring speakers commenting on the fossil fuel industry.

Krause’s June presentation was titled: “Sabotaging of Canadian Oil and Gas.” Twitter recorded 679 people tuning into the event, with an average of about 200 participants throughout Krause’s talk.

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After the musical introduction a co-host identified as Mark provided a summary of some of the difficulties experienced by the Canadian oil patch in recent years, from the vantage point of people who feel the Canadian fossil fuel sector has been denied fair access to the global oil and gas market.

The introduction went over some well-trod (if misleading) claims about how Canada “couldn’t get its oil to tidewater” before veering off into speculation about Hollywood celebrities allegedly partying with the Saudi Royal Family while attacking Canada’s oil and gas sector. In fact, Canadian oil exports are at all-time highs, nearing $14 billion CAD in June of 2022, with oil sands production reaching 3.5 million barrels per day in 2021, much of which was pumped south to the Gulf of Mexico through new pipeline infrastructure, including Enbridge’s Line 3.

Asked to comment on this discrepancy, Krause wrote in an emailed statement to DeSmog that “the fact that the industry has recently been profitable does not change the fact that Northern Gateway, Energy East and Keystone XL were canceled.” Though all three of these proposed pipelines were controversial and elicited strong opposition from environmentalists, Northern Gateway’s cancellation was caused in large part by the Federal Court of Appeal rejecting the project due to insufficient consultation with Indigenous groups. The latter two were both canceled by TransCanada Energy (now called TC Energy).

Despite the presentation’s title, Krause did not directly demonstrate who was responsible for allegedly sabotaging Canada’s fossil fuel sector. Participants seemed to already believe the sector had been sabotaged and that environmentalists were responsible.

What Krause offered was the insinuation of guilt by association, and much of that was based on what Krause claims to have discovered about campaigns against the salmon farming industry in British Columbia, and not the fossil fuel sector.

Krause said the issue of salmon farming was particularly contentious in British Columbia in the 1990s, as farming practices were damaging wild salmon habitats (arguments that have been confirmed by recent research). The BC government instituted a divisive moratorium that had the support of environmentalists, including the David Suzuki Foundation.

Krause claimed that she had found evidence suggesting wild salmon had greater concentrations of mercury than farmed salmon, and that studies issued by the Suzuki Foundation — concerning the negative environmental impacts of salmon farming — were flawed. She stated that her efforts to bring this to the attention of the foundation were rebuffed, and this caused her to split with Suzuki, whom she said she once supported. This she claimed was the moment that set her on a course to investigate the money trail behind prominent Canadian environmental groups.

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Krause was emphatic that “…the same organizations using the same strategies, the same tactics, and sometimes involving the same scientific journals, the same activists, the same people with the same approach that had sabotaged salmon farming in British Columbia (…) were now turning their eyes to Alberta oil,” but never provided any specific proof.

One host asked whether Krause believed an increase in the number of applications or approvals from the Alberta Energy Regulator starting in 2010 had “tipped off” environmental activists.

Krause responded that the Rockefeller Brothers Fund had been funding the Suzuki Foundation on matters related to the north coast of BC and that, after the California energy crisis and the September 11th terrorist attacks of 2001, that the fund began reorienting its focus toward energy security. Krause said that the Rockefeller fund then became more involved in advocacy and activism circa 2004, providing money to set up meetings in Canada as well as to “develop a strategic plan to address oil and gas development in B.C.” Krause also said the same fund gave “Canadian environmental groups $100,000 each” though without specifying which groups were funded, which she said was “…to prevent the development of a pipeline and tanker port on the north coast of B.C.” She continued, saying that the same funder then provided millions more in the middle aughts to what she termed activist groups.

“Those of us who have a different vision for our country, our future, we need to realize that we’re in a battle of ideas,” Krause said. “It’s not just the best ideas that win. It’s the team that works the hardest. The people that wanted to sabotage all these projects, they worked really hard. They raised a lot of money. They’re winning right now.”

Krause reiterated that environmental activists have successfully sabotaged the “projects that could have enabled our country to be part of the global energy market.”

Krause described how the best intentions of the environmental movement had, as she described it, negatively impacted the lives of ordinary people. “That is one of the things that motivated me — I have no time for people who falsely malign hardworking people. And we saw an entire industry that’s been falsely maligned, unfairly smeared,” said Krause.

Krause again used fish farming examples to support her allegations of manipulation of the fossil fuel sector. She said that the environmentalist effort against the BC salmon farming industry had been done specifically to aid the Alaskan commercial salmon fishing industry: “Alaska had a flourishing commercial salmon fishing industry. And then there was the competition from the farmed salmon. What happened is the Packard Foundation put this program together to help the Alaskan commercial fisheries reposition their product. And they did it by de-positioning or de-marketing the competition,” Krause said. “This was about market access and what they were doing by funding the activist groups was blocking market access. So they were mitigating the trade impacts by exaggerating the environmental impact.”

Krause alleged that the same groups turned their attention to Alberta oil in 2010, and adopted the same strategies for the same purpose. This, Krause explained, was done all while being mindful not to offend Saudi Arabian interests, and so it was Canadian oil that came to be demonized by American ENGOs.

“They didn’t want to talk about the geopolitics, especially after 9/11,” Krause said. Instead, she claimed the US built up its alternative energy supply “in the name of saving the planet rather than in the name of getting off Saudi oil.”

Canadian tarsands oil first surpassed imports from Saudi Arabia in 2004, a consequence of the American invasion of Iraq. By 2014, the United States was importing less oil and petroleum products than at any time in the previous two decades, but this was a consequence of reduced demand and increased domestic production, not a transition to alternative energy sources. Increased American production resulted in a global oil glut by the end of 2014. At Saudi Arabia’s insistence, OPEC maintained their production rate, pushing the price of a barrel of oil down to below $50 by early 2015. This in turn caused both American and Canadian oil production to plummet. It led to major layoffs in the oil patch and contributed to the chronic difficulties experienced by Canada’s fossil fuel sector in subsequent years.

Krause was asked why American philanthropic organizations chose to focus their energies on landlocking Canadian oil and gas, to which she responded Canada was the only country that could help the United States transition off of imported Saudi Arabian oil, which she claimed ranged from 40 to 60 percent of all the oil consumed in the United States.

While Canada did replace Saudi Arabia as the primary foreign source of oil imported into the United States in 2004, Saudi Arabian exports to the United States were already declining, falling from a high of 1.77 million barrels per day in 2003 to 530,000 in 2020. Similarly, U.S. oil imports from the Persian Gulf fell over the same period, from an all time high set in 2001, when imports from the region accounted for 23 percent of the U.S. total, down to less than 16 percent in 2018. Current data reveals that Saudi Arabia only accounted for 5 percent of total American petroleum imports, including crude oil. Canada, by contrast, accounted for 51 percent in the same year, continuing a more or less consistent trend that reaches back to the 1990s.

These facts undermine Krause’s claims that the conspiracy to sabotage Canada’s oil and gas sector was successful. As a percentage of its total oil import, the United States is more dependent on Canada today than it has been on Saudi Arabia at any point in the last four — nearly five — decades.

Krause opined that the other reason American philanthropic groups targeted Canada is because, in Krause’s words, “we’re easy to push around,” which was readily accepted by the audience.

“We’ve made ourselves an easy target by never fighting back and never pushing back (…) that’s why I talked so much about salmon farming, because if you want to know the future of the activism against Canadian oil, look at salmon farming. They had just shown that you can bully an industry, an entire industry, and have it discontinue investing in a particular country. It worked on fish. Why not try it on oil?”

The Canadian Oil Mafia latched on to this narrative in particular, with the cohost identified as Mark stating: “We are such a punching bag.”

Given reports that the Canadian government provided more than $18 billion in verifiable subsidies to the fossil fuel sector in 2022, Krause’s claim that the environmental movement has won anything is difficult to believe.

Taylor C. Noakes is an independent journalist and public historian.

—

Previously Published on desmog

Trudeau’s Pipeline Scandal

Shameless spin can’t excuse the burgeoning boondoggle and ‘global warming machine’ called TMX.

Andrew Nikiforuk 

Today

TheTyee.ca

Vancouverites protesting in 2018 after Trudeau pledged $4.5 billion to buy Kinder Morgan’s Trans Mountain pipeline expansion. The public cost has leapt to $30.9 billion. 

Photo by Darryl Dyck via the Canadian Press.

Well, the transfer of billions of dollars from ordinary Canadians to wealthy oil companies continues unabated.

The cost of the obscenely over-budget Trans Mountain pipeline expansion, as The Tyee predicted last fall, has increased again by a whopping 44 per cent from $21.4 billion to now $30.9 billion.

Brace yourself. The costs will likely go higher because the twinning of the 980-kilometre-long pipeline, which will transport bitumen from Edmonton to Burnaby, is only 80 per cent complete.


The Trans Mountain Corp., of course, blamed the cost overruns on the usual suspects: global inflation, supply chain challenges and get this, “challenging terrain and geography.”

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Back in 2019 even the Canada Investment Development Corp. which oversees the Trans Mountain Corp., recognized that the costs for a highly risky pipeline expansion could be a runaway train due to “difficult terrain” and “risks of cost overruns.”

Robyn Allan, the brilliant independent economist who predicted this sorry debacle, wasn’t impressed by the corporation’s latest revelations:

“This is nothing short of a disaster and it continues to shock me that Ottawa can present a boondoggle as good for the economy, and a global warming machine as something Canadians should be happy to pay for,” said Allan, who headed the Insurance Corp. of British Columbia.

If you’ve lost track of the cost overruns, consider this brief chronology:

In 2013 Kinder Morgan first promised to twin the pipeline for $5.4 billion. When project costs escalated, it bailed and sold to the Canadian government in 2018.

Trudeau then promised to build the project for $7.4 billion. That figure, as Allan warned, soon ballooned to $12.6 billion in 2020. Last year it climbed to $21.4 billion. It now stands at $30.9 billion and counting.

“All the while Alberta’s oil producers capture the financial gain through subsidized tolls without any accountability or apology,” noted Allan.

The Canadian Taxpayer Federation, a group whose financial support and membership are murky but presents itself in the media as defender of the public purse, is supposed to raise hell about such blatant fiascos. Yet is has hardly said boo about this particular hemorrhaging of public funds.

But Allan has spoken doggedly. She repeatedly warned that the controversial mega-project was never financially viable and that’s the real reason why Kinder Morgan, an indebted Texas company, shrewdly sold the project to the Trudeau government which did not do its due diligence.

She also argued that if bitumen companies such as Suncor and Cenovus wanted to expand the pipeline then they should have shouldered the risk and financed it themselves. Where’s free enterprise when you need it?

But why would bitumen miners do that if a gullible government not only buys and constructs the damn expansion for you, but offers to subsidize tolls, setting them so low that no reasonable cost recovery can take place in our lifetimes?

Allan isn’t the only one who has warned about the project’s failings.

The Institute for Energy Economics and Financial Analysis also concluded last year that Canadians would never see a return on their billions because the tolls have been set too low to ever recover costs.

The Office of the Parliamentary Budget Officer was just as blunt in its 2022 report. Given escalating costs, it concluded that “the government’s 2018 decision to acquire, expand, operate and eventually divest of the Trans Mountain assets will result in a net loss for the federal government.”

Last year an exasperated Allan wrote another detailed report on rising losses for taxpayers. It was published by West Coast Environmental Law.

“I knew there would be a further jump in construction costs, and let’s be clear, the main reason for this outrageous increase is gross project mismanagement from Trans Mountain, CDEV and the federal government,” Allan told The Tyee.

“An almost 45 per cent jump is staggering when you consider that the project was well underway and hence costs should have been relatively locked in when Trans Mountain announced last year they had skyrocketed to $21.4 billion,” she said.

In making its bad news announcement on March 10 (a Friday of course), the Trans Mountain Corp. tried to soften the blow by offering “an economic impact assessment” by the accounting firm Ernst & Young LLP.

Before we open the glowing five-page report, readers should know that Ernst & Young is one of the Big Four firms who do accounting for governments and corporations around the world.

You should also know that it was recently the accountant for three major firms: NMC Healthcare, United Arab Emirates’ largest private health-care provider; Luckin Coffee Inc., China’s largest coffee chain; and Wirecard, a German payments company. Despite glowing reports from Ernst & Young, all three companies exploded in major financial scandals.


What’s at Stake with the Trans Mountain Pipeline Expansion?

READ MORE

The British High Court of Justice, which awarded $11 million to an Ernst & Young company whistleblower in a related lawsuit in 2020, noted that EY’s conduct put the firm “in breach of the principles of integrity, objectivity and professional behaviour.”

Last year the U.S. Securities and Exchange Commission fined the company $100 million for more fraudulent behaviour.

“It’s simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams of all things,” said the SEC director of the enforcement division, Gurbir S. Grewal. “And it’s equally shocking that Ernst & Young hindered our investigation of this misconduct.”

The U.S. National Whistleblower Center recently concluded that the globe’s Big Four auditors including Ernst & Young had “little incentive to stay competitive by demonstrating effective auditing abilities.”

So that’s a bit of background on the accountant Trans Mountain hired to produce an “independent” report.


The Trans Mountain Boondoggle: Taxpayers Lose Billions, Oil Companies Win

READ MORE

The report defies belief. It tells you that the spending of $30 billion worth of tax dollars has paid for lots of wages, created jobs and contributed to the GDP. Therefore, we should all be happy.

Stunningly, the report does not mention the history of persistent cost overruns or lack of cost controls. Apparently there are no accounting issues when a government promises that it will build a pipeline for $7.4 billion and then ends up spending more than $30 billion on the sucker.

No private firm would consider such shoddy budgeting a glorious achievement for spending on wages and jobs.

Tellingly the EY report makes no mention of multibillion liabilities in Canada bitumen mines.

The pipeline will expand mining in the tarsands and thereby accelerate the production of toxic mining waste stored in more than 300 square kilometres of tailing ponds that have been leaking into groundwater and the Athabasca River for decades.

Cleaning up this deadly waste and other infrastructure will officially cost $33 billion and other credible calculations put the real figure closer to $130 billion. But industry has only set aside $1 billion for the job as of September 2022.


Canada’s Dirty $20-Billion Pipeline Bailout

READ MORE

Why wouldn’t Ernst & Young mention the pipeline’s connection to that inconvenient liability?

“The EY report is nothing short of silly,” concludes Allan. “It is telling us that if a project goes from $5.4 billion to $30.9 billion somehow this is better for the economy. They should be ashamed.”

The last word, here, should go to Allan. Let’s remember that she warned us that Kinder Morgan wasn’t an honourable player. She warned us that the buyout was scandalous and that the government overpaid for rusty old infrastructure only worth a billion dollars. She also warned us that the tolls had been set too low by so-called regulators. She warned us about rampant cost overruns and other lousy accounting by the Canadian government.

So here’s Allan’s bottom line, and don’t say you weren’t told. “Trans Mountain is not profitable or commercially viable so by definition it cannot have a positive impact and represents a huge taxpayer-funded economic drain.

“It doesn’t matter how many consultants Ottawa pays to spin a different story. The truth is there is no manner by which this project is a benefit to Canadians or the Canadian economy.”

 

Tyee contributing editor Andrew Nikiforuk is an award-winning journalist whose books and articles focus on epidemics, the energy industry, nature and more.