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Impacting Unimpaired

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Issue: 48 Section: Features Geography: USA, West Alberta Topics: labour, trade agreements, social movements, war, tar sands

January 7, 2008

Impacting Unimpaired

New agreements like the SPP and TILMA are aimed directly at unimpeded extraction in the tar sands

by Macdonald Stainsby

Police launch tear gas at demonstrators during a Security and Prosperity Partnership (SPP) meeting in Ottawa last August.

Photo: Stefan Christoff

Demonstrations against the Security and Prosperity Partnership (SPP) began in the Summer of 2007, but several of the issues raised by anti-SPP organizers invoked déjà vu for many observers: informal agreements, secret talks, plans to do away with layers of national sovereignty in favour of corporate rules of engagement set to supersede labour organizing, environmental regulations or human rights. The laundry list of rule changes sounded a lot like debates of years past--the FTA, MAI, APEC, FTAA and NAFTA.

However, a deeper look at the driving force behind the new acronyms tells a different story, one of a world with new dynamics like peak oil, tar sands and the extreme measures that North American governments are attempting to use in the tar sands to keep an oil-dependent economy going.

Before the SPP became a larger issue nationally and continentally, the Trade, Investment & Labour Mobility Agreement (TILMA) had already been passed in British Columbia and Alberta. The agreement, having passed as legislation and set to be "phased in" by April 2009, plays a role complementary to the SPP and continues to be similarly criticized by many organizers for the anti-democratic way it has been implemented.

According to an analysis published by the Canadian Union of Public Employees, TILMA "encompasses provincial and local governments, regional districts, school boards, health and social services.

"Nearly every action by a government, now and in the future, is potentially constrained unless expressly excluded in the agreement. Measures are defined broadly and include any legislation, regulation, standard, directive, requirement, guideline, program, policy, administrative practice, or other procedure."

CUPE also describes the SPP as "another attempt of corporate America, in partnership with their political and corporate allies in Canada and Mexico, to reduce the power of government to protect citizens from profit-hungry business.

"Their intention is to scale down government regulations and controls that try to protect our society, culture and environment. Specifically, the SPP will minimize controls in areas like immigration, food and agriculture, natural resource exploitation, public services and entertainment."

TILMA is a new set of limitations on government's ability to regulate and the SPP is the removal of a pre-existing set of regulations. Both TILMA and the SPP have specific aims that go beyond the usual attempt to enshrine investors' rights and protect corporations from government regulations.

Both agreements pave the way--in many cases literally--for the largest industrial project in history to move forward: a project that calls for the extraction of over 170 billion barrels of recoverable oil from the tar sands of Alberta's Athabasca, Peace and Cold Lake regions.

The SPP and TILMA have anticipated popular resistance and preemptively removed the ability of governments to control the massive supply of energy, land, water and labour needed in the tar sands. They similarly preempt governments' ability to regulate the destruction and pollution that the "gigaproject" will create.

The Communications, Energy and Paperworkers union (CEP) is concerned.

"As energy workers, we are compelled first of all to respond to the SPP energy agenda," the CEP said in a statement. "Through the SPP and the North American Energy Working Group, the governments of Mexico, United States and Canada have formed an unprecedented collaboration with energy corporations to promote the continental integration of our energy industries and infrastructures."

The result has surprisingly few benefits for Alberta or Canada. A massive, ecologically rich region will be reduced to an industrial sacrifice area. The synthetic crude that it renders will go south to the US. Royalties for Albertans and Canadians are minimal, and communities living in the vast area that will be strip-mined--Indigenous and settler alike--will be dismantled.

The "Oil Sands Experts Working Group," a part of the 2006 SPP meetings in Houston, calls the tar sands "a significant contributor to energy supply and security for the continent." According to the group, it was founded "when the three countries agreed to collaborate through the SPP on the sustainable development of the oil sands resources." The working group includes the US, Canadian and Alberta government representatives.

What does "sustainable development of the oil sands resources" consist of? The same SPP report says that it requires expanded "integrated long distance pipelines," plans for which are "already in place" to accommodate "the certain doubling of oil sands production to two million barrels per day by 2010.

"The five-fold expansion anticipated for oil sands products in a relatively short time span," the report says, "will represent many challenges for the pipeline industry."

To accomplish this, the report concludes, "Governments are encouraged to streamline the regulatory approval process and better manage the risk to both pipeline and energy projects.

"Canadian governments have already gone a long way to co-ordinating and streamlining the environmental and regulatory approvals, but more needs to be done."

TILMA sets up a free trade zone between Alberta and B.C. that "breaks down barriers" for all industries. April 2007 saw the official beginning of the TILMA agreement, sold as giving Alberta and B.C. a "competitive" way to deal with Ontario's vast size advantage. In reality, TILMA turns the provinces into locations where corporations can sue any person or entity that tries to legislate or otherwise invoke regulations that would make investment more "troublesome." The agreement bans measures which "impact or impair" investment and allows even an individual investor the right to sue governments to knock down such "impediments" and receive compensation for loss of revenue.

What can be seen as an impediment under TILMA is extensive. Under NAFTA, corporations can "challenge" legislation that affects their profits. A third party then rules on the "dispute" at hand. This has seen Canada paying to maintain some of its legislation around tobacco and environmental regulations, for example.

TILMA, however, starts on the assumption that the investor is correct. Unlike the resolution process seen in Chapter 11 of NAFTA, the current agreement includes an automatic up-to-$5 million penalty for a government body (at any level other than federal) that violates the rules of "free access" for capital. For example, if a city blocks the construction of a building for reasons of heritage, costing a corporation a projected $4 million, then the governing body that invokes the regulations "impacting or impairing" owes that corporation $4 million.

Article 3 of TILMA reads, in part: "Each Party shall ensure that its measures do not operate to restrict or impair trade between or through the territory of the Parties, or investment or labour mobility between the Parties." The agreement has specifically designed protocols for hearings to be held if one or more of the signatories are in breach of the agreement.

These secretive deals and agreements are taking place during the single largest energy policy shift in North America since the peaking of US domestic oil production in the seventies.

Internationally, the US is in a scramble for remaining oil reserves. Chinese demand for oil continues to grow. Disasters such as hurricanes and war--and the fact that only one barrel of oil is discovered for every nine that are used--have brought oil prices to record highs since the US invasion of Iraq in March 2003. With an economic and military structure that needs vast supplies of hydrocarbons everyday, North American energy concerns have found the oil "boom" in Northern Alberta that was expected in the aftermath of a regime change in Iraq.

In response to Chinese interest in the tar sands, US energy expert Irving Mintzer blurted out, "The problem with the Chinese is that they don't know that the Canadian oil is ours. And neither do the Canadians." In the same breath Mintzer noted, "One provocation for rethinking US energy policy will be when Chinese investment in Canadian tar sands and Venezuelan oil development make it increasingly difficult for us to get access to the resources."

That hypothetical situation has come about more quickly, since the Iraqi resistance has cut off access to "stable" flows of petroleum and Venezuela has reduced its contribution to US energy markets by one third. The US has shifted their boom from Baghdad and Kirkuk to Fort McMurray and Grand Prairie. Many Venezuelans who oppose their country's socialist government have re-settled in Alberta.

Whether led by Liberals or Conservatives, Canada has been more than willing to help this shift. Approvals for tar sands operations and newly designed agreements help to take Tar Sands development to unfathomable levels of expansion.

The industry that extracts bitumen and then crude oil from tar sands was once aiming to get to production levels of one million barrels per day (bpd) by 2012. Last year, the average already surpassed 1.3 million. The swiftly rising price of oil and the near-impossibility of a long term drop in price has suddenly allowed a major shift towards producing this oil, which is only profitable at a barrel price of at least $30.

The production process of the synthetic oil is unlike anything else: there are huge labour and energy needs currently unavailable to the producers, needs that are being drawn up and planned through TILMA and the SPP.

The US Department of Energy and Natural Resources Canada had another secret meeting, along with US energy corporations, in February 2006. Some details of the meeting were leaked earlier this year to the CBC. The agenda: to reduce labour and environmental rights in order to ramp up production from the Athabasca, Peace and Cold Lake tar sands to five million barrels per day.

The United States has reorganized their long-term plans for petroleum energy by setting a goal to get up to 25 per cent of their daily oil from tar sands based operations (in addition to Canada's conventional oil). In 2003, the US Department of Energy began declaring tar sands reserves part of their calculation of oil imported from Canada. This will include massive pipeline construction across territories within British Columbia, made nearly impossible to block by TILMA.

The SPP is setting the stage for the creation of a series of "super highways" that may extend from as far as Panama City north to Edmonton and branching off to the three "hot spots" of the Albertan Peace and Athabasca Regions and northeast British Columbia.

Along with the reduction in labour rights across both provinces through TILMA, the SPP will provide much-needed labour through the expansion of the "temporary foreign workers" program. The growth of Alberta's economy has already exceeded the available population of workers. Workers from the Maritimes are paid to fly to Fort McMurray from Moncton, Halifax or St. John's and work in camps in the tar sands.

The energy needs of production in the tar sands process--whether the strip-mining operations or the "in-situ" underground "Steam-assisted gravity Drainage" (Sag-D) procedure--are equal to almost a third of what is produced. (For comparison purposes, the crude in Iraqi reserves produces about 100 times the energy that is needed to pump it out.) Sag-D consumes more energy and water than strip-mining operations, setting the stage for the requisite equivalent of four to five billion cubic feet of natural gas per day required in tar sands operations if they become fully operational.

This reality is what is leading Energy Alberta to promote nuclear power for the Peace Region, where Sag-D has barely even begun to operate.

The two maps included show the plans for this vast expansion, both in terms of the importation of labour by highway and the construction of needed energy supplies by pipeline to get to the planned five million bpd.

The first one shows the flow of goods and labour. The aim of TILMA and the SPP is the immediate creation of far more labour inflow from places such as Mexico and China, most of it ultimately destined to work in the tar sands. Canadian Natural Resources Limited (CNRL) began using 500 Chinese labourers on a "guest worker" program at their Horizons Oilsands Project last year. The SPP is a cost-effective means of importing needed labour and keeping costs down at the same time, through enacting 'labour mobility' and allowing non-citizen workers to be exploited at rates currently unreported.

The Alberta Federation of Labour points out that 2006 was the first year that the number of people admitted into Alberta who were not even allowed to apply to become landed immigrants (let alone citizens) exceeded the number of new immigrants. With agreements like the SPP in place, this will increase sharply. With TILMA, every time a labour right is undermined, it becomes the new bottom line.

According to Gil McGowan of the Alberta Federation of Labour, "Employers are using temporary foreign workers as a way to suppress wages and working conditions and to avoid legitimate unions...we oppose the importation of hundreds of workers just to complete a job and then sending them back home. That is exploitation."

The truly daunting reality is that the production level being proposed will have no other option: the only way to keep up with projected production rates is to bring in people from outside.

The guest worker programs keep non-status workers in camps where they are not allowed visitations by any union. The only means by which such a "guest" will be allowed to stay beyond the term of their contract (up to 24 months) is if the employer applies, not the individual. Figures on pay and to whom it is delivered are not available and have not yet been obtained by organized labour in Alberta--we simply do not know how much migrant workers in the tar sands are being paid.

The "guest workers" may not end up only in the camps. The proposed size of tar sands expansion is such that constructing infrastructure for vast new energy "inputs" will take thousands of workers as well. Two pipelines of various gas are needed "in" to the tar sands for every pipeline going "out."

NAFTA trade corridors will be used to import labour and move equipment and goods to the tar sands.

The energy needed to go into the tar sands are slated to come from the natural gas in such places as Alaska's north slope, coal-fired mega plants in Alberta, proposed nuclear reactors in the Peace Region and near Whitecourt, along with the industrialization of the Mackenzie Valley (and much more). The outward shipping of bitumen-sludge (later converted to mock oil) entails corridors across Saskatchewan and Manitoba, the Dakotas, Nebraska, Kansas and more, all the way to Texas and Louisiana. These schemes, in particular the one known as the Keystone Pipeline headed by TransCanada, is already causing the AFL to warn of dire consequences for job loss and deregulation of currently union-run operations.

The other corridor for sending sludge to refineries is slated to be across British Columbia, over the lands of the Carrier, Gixtsan, Haisla, Tsimshian and other unceded nations to a yet-to-be-constructed port to operate out of Kitimat, where oil could theoretically be shipped to California, Japan and China. The same port would serve to import "diluent" from Russia, a kerosene-like substance used to make the thick mud of bitumen flow like oil in a pipe.

"Pipeline ruptures happen, they're inevitable," says Gerald Amos of the Haisla Nation from Gitamaat Village on the Coast of B.C., where the construction of a Liquid Natural Gas (LNG) port is being planned.

"We just don't know the location yet...All of the proponents of the Gateway project and all the other pipelines which would mean more tanker traffic here point out that we've had tanker traffic here, big ships coming in for about 40 to 50 years now. I think you are talking about a substantially different ball game when you talk about supertankers."

This project, the "Enbridge Gateway," is currently delayed due to lawsuits launched by seven First Nations, Indian Act-mandated governments and the China National Petroleum Company's withdrawal from the project.

Other pipelines heading southward are the Alberta Clipper Project and the Spearhead Expansion Project, also led by Enbridge, a self-described "leader in energy transportation." In June of this year, the first new refinery in the United States in decades was announced. The map shows only some of the refineries planning to receive tar sands bitumen.

Under the Alberta Energy and Utilities Board, every single project in the Athabasca, Cold Lake and Peace River tar sands region has been approved. TILMA will streamline the regulations in line with these projects across all of B.C. and Alberta. It will also mean the elimination of a long-time moratorium on oil and gas offshore tankers on the central coast of B.C.

Kitimat and Gitamaat Village, currently host to major Gray and Humpback whale migration, would see 330 super tankers of oil and gas a year migrating offshore, according to the Dogwood Initiative. Nations up and down the proposed corridor would see a loss of forest cover in areas where giant grizzlies still roam near ranchlands.

The oil and gas going to and from the tar sands would cross rivers and streams and the tankers will come near 1,000 salmon spawning areas. Upon completion, the entire 1,200-plus kilometre pipeline systems would provide 75 full-time jobs. Enbridge has quietly shifted gears towards building the infrastructure to send the current bump in oil production to Texas, promising to complete this project at a later date.

That later date may well coincide with the B.C. government's other "Pacific Gateway Strategy," designed to use TILMA, the SPP, the 2010 Olympics and vast tar sands export growth to make the West Coast of Canada a major hub of de-regulated trade with Asia.

It could soon be illegal and not 'merely' politically difficult to regulate how these constructions go ahead. Environmental regulation, revenue for nations who approve the use of their lands, taxation for reclamation purposes, requirements on unionization for the construction--all of these things are being legislated and signed away.

With TILMA, Alberta and B.C. have united to ensure that the oil dug out of the earth is sent south, at an incomprehensible rate. The primary legacy of the project will be run-away climate emissions, the second fastest rate of deforestation on earth, the dismantling of previously won workers' rights, a sacrifice area in Alberta the size of Florida and the removal of meaningful democratic oversight at the community level.

The usual critiques of the SPP and TILMA are not inaccurate. Placing new developments in a global context, however, changes our understanding of what is driving this latest set of deals. Instability around the planet, dwindling reserves of oil, a collapsing American dollar and more are exposing imperial economic structures to a level of insecurity unknown in a generation. By lurching headlong in 2003 towards the Albertan tar sands, the US has made the rising price of oil work to their advantage, rather than its opposite; when the price of oil goes up, those who invest heavily in expensive, unconventional oil gain a larger foothold in market share.

The SPP and TILMA have been drawn up to increase and integrate this into a decades-long strategy for North American economic stability, a strategy that does not address our dependence on oil. Understanding the true nature of these plans allows people to make informed decisions about what to do during the rapid changes in energy politics--changes that will affect the entire population of North America (and the planet) for decades to come.

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