With his climate plan on life support and Trans Mountain stalled, Trudeau’s grand bargain seems like a Liberal attempt to be all things to all people.

I met Jim Lahay during a drive across the prairies in 2016, when I followed the route of the proposed Energy East pipeline from Alberta to New Brunswick. Lahay, a retired trucker from London, Ont., was a support driver for a group of cyclists peddling coast to coast in a cancer fundraiser. He had done the drive several times, an experience that he said gave him a broad and generous view of Canada — and of the pipeline debate polarizing the nation.

“Alberta and Saskatchewan definitely need it to get their product to market, a market other than the US, the international market,” he said during a rest stop outside a railway museum in Herbert, Sask. “But going through Ontario and Quebec, I also see where they’re very concerned about where it’s going to cross the water, and what that may do if a break happens in the pipeline. And I also see New Brunswick could use the jobs to support themselves down there. So I see all sides of it.”

Lahay was articulating the theme of the book I was researching, Pipe Dreams: The Fight for Canada’s Energy Future. I was interviewing people along the route to learn if a national consensus was possible on the issue of climate change, oil and pipelines. Lahay believed it was: “Yes, we have our different ideas,” he told me, “but when it comes to the good of the country, this country has always come together. We are Canadian.” He was the kind of voter Justin Trudeau was trying to reach with his balancing act, a calculus based on the hope that climate action would clear the way politically for pipeline approvals — and vice versa.

Two years after we met, Lahay’s optimism appears to have been misplaced. Energy East is dead and Trans Mountain has been stymied; Justin Trudeau’s Conservative opponents blame him for killing one pipeline while environmentalists attack him for trying to save another. With his climate plan now on life support, the Prime Minister’s grand bargain now appears to have been a typically Liberal attempt to be all things to all people.

Yet I’m not sure he had any choice.

The twists and turns of the pipeline debate since Trudeau took office and attended the Paris climate summit have put his incrementalist strategy under severe pressure. When TransCanada withdrew its Energy East application in October 2017, the Liberals fought the perception that the decision was a consequence of their climate plan. The company blamed the new criteria established by the National Energy Board (NEB), including an assessment of both upstream and downstream emissions. And the board, though operating independently as a quasi-judicial body, had been clear it was taking its cues from the Prime Minister: the new rules were inspired by “increasing governmental actions and commitments” on climate, it said. Liberal ministers argued, with some justification, that changing market conditions had doomed Energy East.

The project was conceived early in this decade, when oil prices were soaring and the Keystone XL pipeline to the US and Northern Gateway, to the Pacific Coast, were political nonstarters. By 2017, Keystone XL and Trans Mountain were moving ahead, and there was no longer enough projected oil sands production to warrant a third pipeline. Many neutral observers agreed with Trudeau, including the business columnist Terence Corcoran: Energy East, he said, “grew out of a set of circumstances that were temporary.” With extraction growth in Alberta slowing, the case for the longest, most costly and least far along of the three proposals collapsed.

But, as I observe in the book, the slowing of oil sands development was itself a response to the global momentum for climate action, so “it was possible to see the new NEB criteria and world market conditions not as mutually exclusive theories of a pipeline’s demise, but as two manifestations of the same reality — that oil’s status as the most vital, defining commodity on earth was now in question. The new rules reflected the reality of climate change and the possibility of peak demand, and were nudging Canada to adapt.”

The Prime Minister still hopes to see Trans Mountain built, as does Alberta NDP Premier Rachel Notley. Yet within both governments there is a recognition that a global shift to renewables is raising questions about oil’s future. Environmentalists may slam Notley for her unequivocal championing of pipelines, and for an emissions cap that comes nowhere near Paris targets.

I discovered a more nuanced perspective in my interview with Shannon Phillips, Notley’s environment minister. She was candid about the NDP government’s need to recognize “the actual meat and potatoes of what the economy is in this province…We have to make sure that the folks who elected us are seeing the benefit of how we’re starting to move the ship of the economy.” Industry leaders themselves, however, are “looking at a post-combustion future,” she said. While there will always be demand for oil, “carbon pricing will reach a point where it will become too expensive to do something silly like combust it because [oil] will be too valuable. That’s a long-term vision.” And this is not a radical leftist view: in recent years, major business news outlets such as the Financial Post and the Financial Times have explored the same hypothesis.

Trudeau has been getting similar advice about the long term. In 2016, a report by an internal federal government think tank, Policy Horizons Canada, warned that oil “could lose its commodity status” in a world in which renewables became increasingly affordable; pipelines, it said, “could be at high risk of becoming economically unviable as prices in renewable electricity further decline.” The report warned that the federal government might be forced to bail out wrong-headed fossil fuel investments. Alternatively, it said, Ottawa could encourage a shift away from the oil sands to less expensive and less dirty conventional crude — a “niche market” product in this imagined future — and spur renewables to help shape a “carbon-constrained global economy.” Jim Lahay, the prototypical, even-handed Canadian I met in Herbert, Sask., understood this. “In 5 to 10 years’ time, we’re going to see a great transition to alternative energy, be it solar, be it wind,” he said. “The cars are getting progressively more hybrid, more electric.” An oil pipeline, he predicted, “is not going to serve its full lifetime use.”

Seen through that prism, the ongoing crisis over Trans Mountain seems less urgent. Not viable without government intervention, blocked by the courts, the project begins to feel like a last gasp. Even if it is eventually built, it will limp to completion, possibly as Canada’s last major export pipeline, winning the race to export a product with an increasingly dubious future.

And with or without Trans Mountain, the talk of peak demand makes Trudeau’s grand bargain on climate look like an attempt to heed the signals the world is sending — to establish a new set of assumptions and ground rules, then let the market sort out which individual projects could withstand climate scrutiny — and to do so carefully, without alienating too many political constituencies or ripping the country apart. It is, perhaps, a clumsy attempt, a too narrowly focused attempt, a typically Liberal incremental attempt. Given that emissions are still forecast to grow, it may even be a wholly inadequate attempt. But it is an attempt.

Photo: People hold artwork of various marine life and youth during a rally celebrating a recent federal court ruling against the Kinder Morgan Trans Mountain pipeline expansion, in Vancouver, on Saturday September 8, 2018. The Canadian Press, by Darryl Dyck.


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