To the Enbridge Joint Review Panel: Can we Justify This??

by Kai Chan

What follows are my comments to the Joint Review Panel (JRP) for the Enbridge Northern Gateway Pipeline, on Jan 18 2013.

Intro

Good morning, panel members, and thank you very much for hearing me today. My name is Kai Chan. I am an associate professor and Canada Research Chair in the Institute for Resources, Environment and Sustainability at UBC. I want to clearly distinguish my comments as those based on my values and those based on my science. So, I first speak to you as an impassioned BC resident, a father of two little girls, and a lover of this coast and province. I came to BC for a year when I was 7 years old, and the place got under my skin then. These spectacular coastal systems—human communities included—are a part of me. Eight years ago, this deep connection to this place lured me back and has kept me here since.

Citizen

-->

Figure 1. Kai Chan (the author) in front of a ferry terminal on
the BC coast.

I am not a knee-jerk environmentalist. I believe in a sustainable future, in which my children and my children’s children, and so on, can all live in a world as beautiful and giving as ours, undiminished by our actions. But I know that such a future includes resource extraction, so I accept—even welcome—such extraction and transport under some conditions in some places. For me, the Northern Gateway Pipeline is not one of those cases.

As a citizen, it seems that at its simplest, we are asked to contemplate the economic benefits of the pipeline against the risks that it poses to forests, watersheds, the coasts, and the myriad human activities and benefits that depend upon those.

Of course I care about the economic well-being of the province, and of the country. Of course, I’m affected by the economic signals that politicians pay so much attention to. We’re deeply attuned to such information, which is so measurable, so constant, so here & now. But I know that in the long-term, even the most optimistic promises of economic benefits can yield only tiny boosts to my well-being, or that of BC residents in general. I will return to this point.

On the other hand, I’m deeply afraid of the very realistic scenario of a large oil spill on this coast. Following Enbridge’s own numbers, I accept as a reasonable start Gerald Graham’s estimates of 8.7 – 14.1% risk of the one or more tanker spills of 31,500 barrels over a 50-year period (a spill in the range of the Exxon Valdez).

This is a very sizable risk of a tremendous harm to birds, at-risk (federally listed) sea otters, other marine mammals, fish, and shellfish—and to the thousands of British Columbians who depend on these animals and ecosystems for their livelihoods. Not to mention the millions of us who have this wild living coast as a part of us, whose identities are intricately intertwined with this coast. At the larger pipeline size, with a risk of 14%, that’s effectively the same risk as in Russian Roulette. That’s loading a six-shooter with a bullet, spinning the chamber, and holding it to your head. I don’t play those games, and I’m here to ask you not to let others play them with our coast, and with our children’s and grand children’s coast.

Scientist

As a scientist, I’m trained in the natural sciences, policy sciences, and also in ethics. I did my PhD at Princeton University in ecology and evolutionary biology, and also received a certificate in public policy. I also have training in conservation biology and ecological economics, as a postdoctoral fellow from Stanford University. My research and training directly pertains to the environmental impacts of human activities, and the corresponding consequences for people and the things that people want, need, and cherish.

In this capacity, I wish to make three specific comments, and one multi-faceted one.

First, I already referred to the Exxon Valdez spill, which caused billions of dollars of damages to the Alaskan coast in 1989. It’s crucial to note that marine spills associated with this pipeline project could be far more damaging yet. This is a result of what is being shipped. In the case of the Valdez, it was crude oil. In the case of the current pipeline, it is diluted bitumen—with a much higher tar content (hence the term ‘tar sands’), and including a solvent (most commonly naptha—which must also be shipped back from Asia into Kitimat, so that it can serve as a solvent for the next shipment of bitumen). These differences of diluted bitumen make it likely to be both more toxic, and much more difficult to contain, than crude oil (click here to read about the first major spill of diluted bitumen, in the Kalamazoo River).

Figure 2. Sea otter with pup.

Second, I mentioned sea otters. For the past four years, I have been leading a major multi-collaborator NSERC grant investigating sea otters and their interactions with other marine organisms. The story of the return of sea otters to the west coast of Vancouver Island is an inspiring one (e.g., see here). These charismatic animals captivate tourists, and now that sea otter populations have expanded into Clayoquot Sound, there’s a real possibility of otters becoming a true BC icon and a driver of eco-tourism and economic development on the BC coast, just as they are in California.

It’s critical to note that sea otters—just like the marbled murrelet and the short-tailed albatross—are seriously threatened by oil spills. These (listed) threatened species have globally significant populations in BC, and the single greatest listed threat is oil spills (e.g., for otters). The federal sea otter recovery team has noted that a single large oil spill could kill so many sea otters as to tip the balance for this species, and potentially lead to its extinction. A spill would likely not kill all otters, but it could make them rare enough, and so negatively impact their condition (by killing their prey and forcing them to eat highly contaminated shellfish) that it pushes them over the brink of no return.

Such a loss would likely reverberate around the world. More than 18 million people watched the YouTube video of sea otters holding hands at the Vancouver Aquarium. Millions would likely see pictures of oil-drenched and oil-drowned otters, potentially damaging BC’s brand as a ‘super natural’ vacation destination.

Figure 3. An image courtesy of Tourism British Columbia, reflecting
our Super, Natural province. If tankers and associated spills undermine
this $13.4 billion industry, it could wash out the benefits of the pipeline.

Third, I study the cumulative impacts and risks of various human activities on marine ecosystems and the benefits they provide people, so I know that the cumulative risks associated with this project alone are considerable. Not only are there the large spills I’ve focused on thus far, there are the smaller leaks, the tanker traffic and its associated noise pollution and ship strikes. With such drastically expanded vessel traffic on the coast, there is a real possibility that whale populations could avoid whole stretches of the coast. Whales are currently one of the biggest drivers of wildlife viewing in BC, an important contributor to the tourism sector.

--> And tourism is a $13.4 billion industry (by 2010 numbers), generating an estimated 127,400 jobs—so even a modest dint in tourism associated with the pipeline could undo any gains from the pipeline.

As members of this Joint Review Panel, you three are effectively asked to weigh whether the economic gains outweigh the social and environmental risks and impacts. On this issue of benefits and costs, I have three further comments. (I leave it to others, such as Robyn Allan and Rashid Sumaila to question the merits of the economic-benefit calculations.)

-->

Figure 1. A friend from the Kyuquot First Nation,
holding kelp--a traditional resource and foundation
for marine ecosystems. © Kai Chan

(A) Key purported benefits of the pipeline are to ensure that Canadian oilsand producers get a fair price for their oil, citing a large price discount of some $30/barrel that has been the norm in recent years, a putative cumulative loss of billions of dollars (recently, from the Financial Post). Such a forced price discount due to oversupply would generally be considered a glut and would generally be blamed on resource mismanagement on the part of the relevant industry and their overseeing regulators. (Thanks to Hadi Dowlatabadi for this point.) One might conclude therefore that the federal government and oilsand industry have effectively fettered this current decision through this mismanagement.

In ethics, any benefits that stem from such wrongdoing must be heavily discounted when considering the comparison of benefits and costs of a given decision. I am not a legal scholar, so I leave to you the question of how much ‘discounting’ should occur in the context of your own deliberations for the JRP.

(B) A key consideration in the consideration of benefits and costs is the different nature of each. In a benefit-cost analysis, both economic benefits and costs are routinely aggregated each into a single number. This cannot be done here for three reasons.

       i.         As a researcher of environmental values in BC, I know that many of the pertinent costs are non-material, in the sense that they cannot be appropriately expressed in dollar terms (like species extinction and losses of cultural identity associated with losses of traditional resources). Although they are intangible, such risks and impacts can be crippling to human well-being.

      ii.         Because many of the benefits accrue to wealthy shareholders and oil executives, whereas the costs accrue to land-based, resource-dependent, cash-poor people, this becomes a social justice issue. This inequitable distribution is intrinsically problematic in any consideration of whether the benefits exceed the costs. 

Figure 5. An example of the levelling-off of well-being
metrics with per-capita income. From GapMinder (click here).

     iii.         Furthermore, economic gains to already wealthy people appear to yield minimal or undetectable gains to their well-being—based on a litany of well-designed scientific studies, measured by a broad suite of subjective and objective metrics. On the other hand, sizeable, even non-material losses to poor people can be devastating. Accordingly, understanding this issue of costs and benefits in terms of well-being (which I presume to be appropriate given the wording of “benefits to Canadians”), the benefits should be greatly discounted in relation to the costs.

(C) Whenever considering the appropriateness of a project that entails net costs to some parties and net benefits to others, the issue of compensation is central. If we can’t justify imposing large livelihood impacts on the poor to achieve (apparently) large economic gains to the wealthy, there must be fair compensation. One of the first rules of fair compensation is that the compensation given must have been negotiated with the affected parties, and deemed acceptable. And yet, you have heard from several speakers that no money could compensate for the kinds of risks to First Nation and coastal community identities and ways of life that are being imposed (e.g., from Kyle Clifton of the Gitga’at, whose perspective is explained here). Economics is sometimes understood as teaching us that such a hardline position is irrational. Of course that claim is debunked by the literatures I alluded to earlier, which effectively show that—beyond the poverty line—money can’t buy lasting happiness.

This isn’t to say that appropriate compensation could not be found. But for now, it is nowhere in sight.

Close

To close, as a citizen I ask you to deeply ponder the heart-felt comments of myself and thousands of fellow citizens who have spoken of their love for this coast and their horror at the risks at hand.

As a scientist, I ask you to remember the countervailing factors that would suggest a need to heavily discount the benefits of the proposed pipeline and to take extremely seriously the risks and costs. It’s hard for me to imagine, from where I sit, how it could be reasonably argued that the benefits to Canadians outweigh these costs, but I leave that momentous decision to you.

Thank you.