Pipeline Observer SUMMER 2020 by CAEPLA

PIPELINE

SUMMER 2020

CANADIAN ASSOCIATION OF ENERGY AND PIPELINE LANDOWNER ASSOCIATIONS

CONTINENTAL ASSOCIATION OF ENERGY AND PIPELINE LANDOWNER ASSOCIATIONS

OBSERVER

RECON$ILIATION NATION BETTER THAN EVER

Remediating the Line 3 Replacement corridor

TACKLING WASTE GAS Discover a viable alternative to flaring

How I Discovered Property Rights

Protecting Canadian landowners

Deep roots. We didnâ&#x20AC;&#x2122;t start learning to drive a tractor at 10 years old. Or rise to the challenge of running the family farm. But we do help power the machinery that will empower generations of farmers to come. When the energy you invest in farming meets the energy we fuel it with, sustaining a nation happens.

CONTENTS

SUMMER 2020

CANADIAN ASSOCIATION OF ENERGY AND PIPELINE LANDOWNER ASSOCIATIONS

04 07 08 10 12 14 16

Fight for Property Rights

It’s been a David vs. Goliath Struggle

Just Say No

Reasons to object to additional archaeological investigations

A Federal Windfall for Orphan Wells

But what about landowners with orphan pipelines?

The Nimble Market Response to Oil Storage Fears The government has licensed bad corporate behaviour

Recon$iliation Nation

A stealth assault on your property rights

Are Holdouts Really a Problem?

Landowners have a right to gain economically

Tackling Waste Gas from a Free Market Perspective Exploring a viable alternative to flaring

SPECIAL FEATURE

COVER: iStock/ gladassfanny

Another Quiet Revolution?

closer look at the Canadian Government’s hidden plan A to open your property up to First Nations occupation

“CAEPLA believes property rights matter, and the way government is attacking landowners affected by energy projects is deceptive and dangerous.”

28 30

Pipeline Construction Monitor Update

Alberta Taxpayers are the Owners of Another Pipeline

Gun Rights are Property Rights

38 40

A Pioneer Passes

Keeping an eye on contractors, saving soil and more

The Art and Science of Reclamation

he Line 3 Replacement corridor will be better T than it was before he Kenney government takes a page T from Trudeau’s playbook

he Government of Canada continues to erode T our ability to protect our property Stu O’Neil was a leader in the fight for property rights

How I Discovered Property Rights

Sharing CAEPLA’s message across the country

Pipeline Observer is a publication of the Canadian Association of Energy and Pipeline Landowner Associations and the Continental Association of Energy and Pipeline Landowner Associations 257, 918 Albert St., Regina, SK S4R 2P7; 306-522-5000. All contents copyright ©2020 CAEPLA. Advertising information: advertising@caepla.org | Editorial: editor@caepla.org Administration: admin@caepla.org | caepla.org | Twitter: @CAEPLA

Media & Marketing Solutions

Published on behalf of CAEPLA by RedPoint Media Group Inc., 100, 1900 11 St. S.E., Calgary, AB T2G 3G2, 403-240-9055, Toll Free 1-877-963-9333, info@redpointmedia.ca, redpointmedia.ca | Printed in Canada by Transcontinental LGM | Statements and viewpoints expressed herein do not necessarily represent the views of the publisher. | PM 40030911 CAEPL A .ORG

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BY ANNETTE SCHINBORN

The Fight for Property Rights Has Been a David vs. Goliath Struggle But pipeline landowners have had some giants on our sideâ&#x20AC;¦

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“By quarterbacking landowners working together as a team, CAEPLA has provided the only effective resistance against predatory government.”

iStock/ alashi

AEPLA has been built on the shoulders of everyday landowners who saw their property rights being ignored and took action to do something about it. They did not expect the government to fix it, knowing it was government that expropriated on behalf of companies in the first place. They did not wait for “somebody else” to address the problem for them. They took action on their own, taking on personal financial risk and the stress that came with it. Theirs is a David vs. Goliath story. You have read about these everyday people, the pioneers of the pipeline landowner movement, in previous issues of the Pipeline Observer (Summer 2016, Fall 2018, Fall 2019). Stuart and Jocelyn O’Neil, along with Peter and Jean Lewington, mortgaged their farms and their families’ futures and went to court in the 1970s. Their goal was never to stop energy development, as they understood how we all benefit from fossil fuel and that the best way to transport it is by pipeline. What they wanted was respect for their property, and for the pipeline companies, the regulator and the government to understand the

implications to their property, soils and environment. CAEPLA continues to advocate for that same respect to this day. We are pro-development, pro-pipeline and also pro-environment. But most importantly, we are pro-property rights.

A natural leader We have proven that respecting property rights is no impediment to getting energy projects built — efficiently, with adherence to strict safety and environmental standards, and without delays due to protest or other opposition. Our approach adds up to an across the board win for the public, the company and you, the landowner. Stuart O’Neil passed away in early June 2020. Landowners, pipeline companies and all Canadians have benefited from what Stu and his neighbour Peter Lewington, along with their wives and families, did “to preserve Canadian farmland and the environment from the ravages casually and arrogantly inflicted by powerful pipeline companies, outmoded laws, condescending government agencies and an indifferent judiciary.” As more landowners became involved and worked together to change the way they and their land were treated, Stuart was naturally chosen to be leader of the group —

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the Ontario Pipeline Landowners Association (OPLA) — in 1993. One of the landowners that Stu inspired was Dave Core. In 1999, Stu passed the torch to Dave, who served as president of OPLA until 2000, when he, along with landowners from other local pipeline landowner groups, formed the national organization, the Canadian Association of Energy and Pipeline Landowner Associations (CAEPLA). They realized that to continue to make the changes to protect the property of pipeline landowners, a national organization was needed to pull landowners together from across the country. CAEPLA is now Canada’s leading national grassroots property rights organization. Landowner-driven, CAEPLA advocates on behalf of farmers, ranchers, woodlot owners, acreage owners and other rural — and urban — landowners to promote safety and environmental protection through respect for your property rights. We also represent directly affected landowner groups in negotiations for mutually beneficial business agreements with pipeline and power line companies. CAEPLA is focused on finding solutions. That is what we provided for both landowners and Enbridge on the Line 3 Replacement Program pipeline (L3RP) that was built and put into operation in early December of last year. L3RP was built without any land being expropriated. Landowners concerned about the impacts of pipeline construction on their soil, bio-security and the many other issues that impact a landowner’s property were either mitigated or compensated for in a winwin business agreement. CAEPLA’s construction monitors, on the ground

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to ensure that the construction practices were adhered to, were another layer that gave landowners further peace of mind that their land was being respected.

Vigilance sowed the seeds of the landowner movement’s success Companies that have continued to operate the way they did 50-plus years ago, dependent on government regulators to expropriate lands from landowners who are unwilling to sign bad agreements, have created an environment for activists to oppose these energy projects. This has led to huge delays resulting in cost overruns for the company and hard feelings on all sides. These costs have not only affected the companies, they have economic impacts on the whole country. Perhaps the greatest cost is the loss of good faith, not just between the company and landowner, but all across the country as a business project becomes politicized and plays out on the nightly news where viewers, with no skin in the game, weigh in on the matter. Meanwhile, the Canadian Energy Regulator (CER), formerly the National Energy Board (NEB), is now literally the “fox guarding the hen house.” With the purchase of the Trans Mountain pipeline through the Canada Development Investment Corporation, we now have a government agency regulating

a government-owned pipeline. Landowners, beware! In addition, the new CER Act mandates the ostensibly independent regulator to promote the government agenda, including issues like Indigenous reconciliation, which is off the beat of a regulator that is supposed to be upholding the rights of all property holders. By quarterbacking landowners working together as a team, CAEPLA has provided the only effective resistance against predatory government regulators no matter what agenda drives them. And we have been doing it for over a quarter century now. As long as governments continue to encourage and facilitate the erosion of your property rights, and continue to politicize the energy transport industry and its relations with landowners and the public, CAEPLA will continue to be vigilant. We all enjoy the benefits from the hard work and personal risk landowners like Stu O’Neil and Peter Lewington were willing to invest to protect property rights and the environment. The pipeline landowner movement’s successes have been reaped from the seeds sown by pioneers like Peter Lewington and Stu O’Neil. Thanks to them, CAEPLA is here for you — but we can’t be here without you. Be sure to check out Dave Core’s tribute to Stu O’Neil on page 38. 

Annette Schinborn is chief executive officer at CAEPLA, having served previously as COO and director of landowner relations. Before joining the team at CAEPLA, Annette worked with grassroots non-profits including the Canadian Taxpayers Federation, the Prairie Centre and the Western Canadian Wheat Growers Association. She has worked closely with farmers, ranchers and other landowners on issues such as tax and agricultural policy, energy transport and property rights.

BY THE CAEPLA EDITORIAL BOARD

ASKED TO ALLOW ARCHAEOLOGISTS AND LOCAL FIRST NATIONS ACTIVISTS ONTO YOUR LAND? JUST SAY NO.

Things to consider Y our land was expropriated, or you signed an easement agreement — either way, the pipeline company took all the rights it needed for its project. W hy then are companies now asking for your permission to let additional archaeologists and Indigenous community representatives onto your land? W hy would the companies be making the request and not the archaeologists and others themselves? D idn’t the company already complete any archaeological investigation that was required under government regulation? W hat are the archaeologists and others going to do on your land? W hat happens if they find something? W hat are the consequences for your property, its use and its value? W hat happens if they "plant" something on your land?

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W hat’s the real agenda? There are way too many unanswered questions. Just say thanks, but no thanks. 

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B Y D AV E C O R E

A Federal Windfall for Orphan Wells

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But why is Ottawa abandoning landowners burdened with orphan pipelines?

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“If the federal government is cranking up the digital printing press to bail out oil and gas, it’s only fair to allocate a proportional amount of money for cleanup of orphaned pipe.”

eeding calls from the oil and gas provinces, the Trudeau government has announced a nearly $2 billion fund to accelerate the cleanup of orphan and inactive wells in Alberta, Saskatchewan and British Columbia. I do not support corporate welfare in any way, and the organization I work for, CAEPLA, is not in favour of government-created inflation or handouts either. Having said that, I was astounded by how easily the federal and provincial governments have been handing out counterfeit dollars during the COVID-19 panic. You may find this use of the word “counterfeit” to be inflammatory, but there is no other word to describe what is going on. Our government is simply printing money to cover all these handouts. This money is being created out of thin air, printed, in my opinion, fraudulently. Not only is it fraudulent, counterfeiting reduces the value of your savings. In other words, the government is devaluing your dollars to pay for its vote-buying spending. A tax. And it seems that everyone is on the take. My focus here, however, is the federal government’s bailout of the Orphan Well Funds of BC, Alberta and Saskatchewan. It is bailing these provinces out not only for their refusal

to hold their oil and gas sectors responsible for their abandoned wells, but also for having shut down their economies over COVID.

Why fund a make-work project for orphan wells but not orphan pipe? Because the billions for this bailout of provincial oil and gas is being funded via inflation — everybody is paying for it with the purchasing power of their Loonies. The prime minister says the orphan wells spending is intended to help landowners burdened with them. But what about pipeline landowners? There are thousands of kilometres of abandoned and orphaned pipelines in all three of these provinces that are left in the ground causing contamination, liability and safety issues. In fact the federal government’s own Canadian Energy Regulator (CER) is also responsible for thousands of kilometres of abandoned and decommissioned pipe — and many more that are being abandoned every day. Shockingly, but perhaps not unsurprisingly, the federal government is only collecting enough money to remove 20 per cent of that pipe while provincial governments collect nothing. If the federal government is cranking up the digital printing press to bail out the provinces and their oil and gas sector, I suggest it’s only fair

to allocate a proportional amount of money for research into the cleanup of orphaned pipe. The CER in its earlier incarnation as the National Energy Board simply ignored a pipeline abandonment fund until CAEPLA pressured it to take collection of a fund seriously. But not seriously enough. If freshly printed bailout bucks are to be part of the “new normal” post COVID-19, then why exclude pipeline landowners and the energy transport sector from the largesse? After all, they, and we, are all paying for the orphan wells make-work windfall. I understand that pump jacks provide government a great visual opportunity from a political perspective when handing out money. But this is short-sighted. Ottawa is already in the crosshairs for politicizing and mishandling pipeline issues. Imagine the backlash when the public and activists alike notice how the government missed a historic opportunity to restore pipeline corridors clear across the country, instead of just wells in a handful of provinces? 

Dave Core is managing partner at Dave Core and Associates, a consulting firm specializing in land management, property rights and agribusiness. He was president and CEO of CAEPLA from 2000 to 2018.

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BY SEAN CORBETT

The Nimble Market Response To Oil Storage Fears Government legislation licenses bad corporate behaviour.

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e were led to expect a full supply meltdown because of COVID-19. Thankfully, aside from the rare pinch on toilet paper and meat, that didn’t come to pass. And it’s not just down to the miracle of modern logistics. It’s simply amazing how fast businesses and people can pivot and reallocate resources as required. What’s not so surprising is that the state nearly always acts as if it must exert pressure on private actors to “do the right thing.” But just how necessary is it? Well, regardless of how you feel about hoarding, there was mass outrage over pictures and videos of shoppers buying “more meat/TP than they needed.” In my hometown, this quickly led to stores putting a limit on certain purchases. No regulations required. No new laws or penalties. We can wonder, then, what the response will be to a potential lack of oil storage in Canada.

iStock/ Bim

Oil storage levels in danger of reaching capacity A crash in crude and slumping fuel demand is ravaging oil production. Now the fear is that global storage levels are reaching capacity. Demand for incremental crude petroleum storage is high. Particularly

in Western Canada. We still need operational flexibility, even if the incentives for production are being tested. In an effort to maximize existing resources, Enbridge did look to a legacy section of Line 3 pipeline.

Enbridge prepared to provide temporary crude storage A portion of the Canadian Mainline, between Regina and Cromer, is set for decommissioning in 2021. This section of pipe has already been tested to meet safety protocols to be used as storage. They also ran an inline inspection tool and conducted integrity digs. It could allow the storage of 900,000 barrels (roughly four standard-sized tanks) for an eight-month term. This temporary solution, along with other efforts in the Enbridge storage tank program, has the potential to create about three million barrels of additional capacity for the rest of the year. Enbridge is positioned to respond to the oil storage need. There are continual moving parts and, at print, Enbridge is not proceeding with using the Line 3 pipeline for storage. Just another example of the nimble market response when a business is left to its own devices. 

Sean Corbett is an Okanagan writer and filmmaker who runs a marketing consulting company. He also operates the high culture publication Action-Result.com.

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BY BRIAN GEISBRECHT

Recon$iliation Nation

orty years ago, Liberal organizer Keith Davey coined the phrase, "Screw the West, we’ll take the rest.” The infamous quote from during the 1980 election

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brought forth Albertans’ retort, “Let the eastern bastards freeze in the dark,” which was plastered on bumper stickers across the province. Pierre Trudeau and his notorious National Energy Program (NEP) caused much damage to both Alberta’s and Saskatchewan’s economies — so

much so that senior Trudeau seriously aggravated the long-standing suspicion in the West that the Liberal Party was more vampire than friend. Pierre’s son, Justin, now Canada’s minority government prime minister, is doing it once again with Bill C-69. The legislation replaces the National

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Ottawa’s Aboriginal agenda is a stealth assault on your property rights.

“Thousands of town and rural landowners might soon be horrified to find out that they don’t own the land they thought they did, because their houses, farms and businesses are on something the government now chooses to call ‘Wet’suwet’en land.’”

Energy Board by adding to the existing mountain of regulations and other obstacles that now stand in the way of pipeline and other vital energy projects. With environmental and Indigenous “duty to consult” requirements — which are already onerous — Bill C-69 will make it almost impossible to initiate critically important projects. While the NEP was an assault on Alberta, it was not an attempt to destroy an entire industry. Bill C-69 is. The feeling is strong in the West that the Liberal Party’s extreme ideology — a belief that the oil and gas industry must be shut down to save the world — is the real reason for C-69.

Will the CER OK cultural ceremonies on your land? C-69 is murder by legislation of the fossil fuel industry. It will cripple economic recovery. And worse: C-69 is also a direct assault on fundamental property rights. The Canadian Association of Energy and Pipeline Landowner Associations (CAEPLA) concludes that under C-69, federal government inspectors are empowered to bring “Indigenous Monitors” onto private land, with the landowner having absolutely no right to object. “Indigenous Monitors” can unilaterally decide if something on your land is archaeologically valuable to them. They may also have the right to perform “cultural ceremonies” on your land. This applies to any landowner with a federally regulated energy

project located on their land. The landowner automatically becomes part of the federal government’s “Reconciliation Agenda.” Reconciliation sounds nice, but the ultimate goal of C-69 is expropriation. The astounding thing is that all of this is being done in secret, and with no input from the public. C-69 is a secret assault on property rights. And this should not surprise anyone who has been following the current federal government’s Indigenous initiatives. For example, consider the federal government’s recent deal with unelected people who call themselves “Wet’suwet’en hereditary chiefs.” This deal is so secret that thousands of town and rural landowners might soon be horrified to find out that they don’t own the land they thought they did. Why? Because their houses, farms and businesses — that they bought and paid for — are on something the government now chooses to call “Wet’suwet’en land.”

Landowners just another obstacle for Ottawa’s Aboriginal agenda Justin Trudeau’s minority federal government has also introduced a “Practice Directive.” It prevents federal lawyers from even properly defending the approximately 45,000 outstanding Indigenous claims if a proper defence would interfere with reconciliation — yes, there’s that “reconciliation” word again. Or should it be spelled recon$iliation?

And if you think that the federal government will be on the landowners’ side, think again. Trudeau’s government sees property owners as just another obstacle in the way of its extreme Indigenous agenda. Lawyer Peter Best is the author of There Is No Difference, a book that carefully details the unrelenting assault on Crown sovereignty carried out by an activist Supreme Court and the current ideological federal government. Here is how Best describes it: “Across the board the federal government has surrendered large parts of its sovereignty to Indigenous interests. Crown sovereignty is the foundation of our economy and of private property rights. Every surrender of Crown sovereignty brings about a corresponding economic harm and diminishment of private property rights.” C-69 is not only bad legislation, it is an unconscionable interference with property rights. It is also an attempt to sneak in through the back door what should be part of a constitutional debate. If the federal government is attempting to fundamentally change property rights, it should do so openly and honestly, and through a process that allows every citizen the opportunity to actively participate. 

Brian Giesbrecht is a retired judge and a senior fellow with the Frontier Centre for Public Policy.

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B Y D AV I D G O R D O N

Expropriation: Are Holdouts Really a Problem? Owners have a right to gain economically from projects proposed for their land.

minent domain (expropriation in Canada) gives the government the power to take over private property for public use. A popular argument that this interference with private property is needed goes like this: We can’t measure subjective utility, but we can take increases in wealth as a rough proxy for increases in utility. (This assumption is mistaken, but I won’t get into that here.) Suppose, on this assumption, that some public project will add a great deal of wealth to the economy. Unfortunately, someone owns a small parcel of land necessary to get the project underway. Often, a little old lady who refuses to sell her house, preventing a road from being built, is given as an example of the problem. You might be inclined to dismiss this argument immediately. Wouldn’t it be unfair to the old lady to take away her house, just so total wealth goes up? But supporters of the argument have an answer. They say, “Can’t we give the old lady enough money so that she is as well off as she was

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before? Then, the economy is better off and she is no worse off.” I have never found this argument persuasive. I think it suffers from a crucial flaw. Before explaining what that flaw is, let’s look at a statement of the argument by the distinguished classical liberal legal scholar Richard Epstein. In his book Simple Rules for a Complex World (Harvard, 1995), he says: “Often the government needs to obtain material resources from individuals in order to supply services to the public at large. . . . Holdout and coordination problems preclude that consensual solution for certain key assets, such as specific parcels of land needed for the construction of a fort or a public road. This problem is best met by government taking with payment of just compensation. Ideally, the individual citizen is left indifferent to the loss.” What is the crucial flaw in the argument? You might at first think

that it is the failure to take account of the non-monetary value of her house to the old lady. What if it has great sentimental value to her; maybe it is the house she has lived in all her life. Or what if the property taken is a religious shrine? To offer compensation based only on the real estate value seems unfair. This is an excellent point, but it isn’t the one I want to concentrate on here. The argument is still flawed, even if you disregard this type of value. Even if the owner attaches no sentimental or religious value to her house, but views the takeover in a strictly dollars-and-cents way, there is a problem that involves the compensation that is offered. The problem is this: When it is said that the owner has to be made as well off as she was before, something important is being disregarded. The property is now much more valuable than it was before the project to

“If you have a right to certain property, then it can’t be taken away from you and that is that.”

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build a bridge entered the scene. By hypothesis, the bridge adds immensely to the wealth of the economy. If the government had to buy the land from the owner in order to build the road, it would have to offer much more than the value of the property, leaving the bridge out of account. In brief, the owner could “holdout” in order to capture a substantial part of the economic gain from the project. Supporters of eminent domain have an obvious answer to this point. Isn’t the owner taking unfair advantage by holding out? Isn’t some sort of action needed to prevent the owner from exploiting the situation? Before I respond to this, one point of clarification is essential. From a Rothbardian perspective, the whole issue dissolves at once. If you have a right to certain property, then it can’t be taken away from you and that is that. Rights cannot be taken away

from you because total wealth would go up if they were. Readers won’t be surprised that this is my own view, but here I’m considering the argument just on its own terms. Those who don’t accept absolute property rights may say the case is that of the person who demands from a victim of thirst in the desert a million dollar fee for a drink of water. Isn’t someone who does this taking advantage of the victim’s misfortune in a morally unacceptable way? (Again, I am not questioning whether he has a right to act like this.) But the holdout case isn’t like this example. The owner is engaging in strategic bargaining. She is not taking advantage of anyone’s misfortune, other than the “misfortune” that those who would economically benefit from the bridge will have to pay more money and will end up with less of a net gain.

But suppose that you disagree with me about this. What if you think that it would be unfair for the owner to capture nearly all the economic gain from the bridge? It does not follow that she may be deprived of any gain at all. Why should all the profit from the bridge go to those who initiate the project and none to the owner? Isn’t she entitled to something more than being put back to her previous level of well-being? Practically no one finds my view persuasive, but, rightly or wrongly, that is usually not enough to get me to shut up. Whether it should in this instance I’ll leave to my readers to judge. 

David Gordon is a philosopher and intellectual historian. He is senior fellow at the Mises Institute, and editor of The Mises Review.

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BY SEAN CORBETT

Tackling Waste Gas From A Free Market Perspective Are landowners aware of this viable alternative to flaring? eeing a flare stack on or beside your property can bring a lot of uncertainty. Just what are the long-term effects on your livestock, crops or the air you and your family breathe? And will the

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neighbours complain about the flame, smoke and noise? Flares have been an expected part of the oil and gas landscape for years. But after the Alberta Research Council (ARC) released a study back in 1996, theyâ&#x20AC;&#x2122;ve caused a lot more concern and worry. The study found that flares only

combust about 64-85 per cent of the gas directed to them. And the emissions revealed more than 250 different compounds (including hydrogen sulphide and polycyclic aromatic hydrocarbons). Since then, other research has been done on waste gas harm to livestock in Western Canada.

Despite screeching from the media, most property owners have no desire to grind oil and gas production to a halt. But they do wish to work with landmen on options and procedures that will ensure the safety and health of their property and community. Enter the evolving technology of incineration.

Ensuring total combustion Few are aware of the difference between flares and incinerators.

An incinerator has no visible flame, and is not affected by crosswinds. Contrast that to the ARC study, which found that crosswinds reduce the combustion efficiency of flares. In a flare, the ignition takes place at the top of the stack — you have no pre-mixing of air and waste gas. Whereas a proper incinerator achieves near-total combustion by doing the burn inside the stack. It was with this in mind that a Calgarian by the name of Tom Wiseman set out to tackle a problem in the late 1990s. Rather than demonizing

big business or crying for regulators to attack, he used some engineering and ingenuity to solve well issues he was having in the Taber area.

TCI Incinerators use military-grade tech to solve local problems When Wiseman started getting complaints from neighbours, he jerry-rigged some equipment to form a makeshift stack on his well. This soon made him realize the potential for a flaring alternative.

What Are Externalities and How do You Manage Them? Property owners generally care about property rights. Any attack on someone else’s property, once allowed, could also possibly be turned against your property. So as a rising tide lifts all boats, firm support of all property rights tends to support your personal property rights. When transactions directly impact your property, let’s say with an energy company, this is where the issue of “externalities” pops up. For the sake of this discussion, we could say that an externality is an effect on other people’s property rights due to your transaction. So, an externality is defined as something not captured in a normal market transaction. These externalities can be positive or negative. A positive externality I hire a landscaper to plant a

flower garden on my front lawn. Even though I did it for myself, it turns out that most people on my block really enjoy the view and the smell. The landscaper didn’t charge me based on how my neighbours would react. A negative externality I lease my land to a company that wants to run an oil well. They flare the waste gas from production, and since it is not completely combusted, pollutants drift onto nearby farms. Also, the other residents are bothered by the sight of flames and smoke, as well as the odour. T he response Externalities are typically judged to be “inefficient.” Meaning that, for the external parties, either something is not being done enough, or something is being done too much.

The standard response to negative externalities is for the government to step in. They can levy a tax or penalty to the offending parties. This response is said to now “internalize” the cost of the externality. It can go the other direction, too, in the form of subsidies. When we give politicians control over externalities, we basically give them free run to apply this to nearly any case that exists.

GOVERNMENT ISN’T THE ONLY SOLUTION To use a silly positive example, let’s say we have a neighbour who tells great stories, and everyone in the area just loves to listen to him. Bureaucrats could say he is inefficient with his storytelling. I mean, we could all do with more of his stories! To get his story production up to an

efficient level, they could offer him a subsidy. You could say, well, that was obviously over-the-top. There are cases where two parties get together and screw over the rest of the community. Isn’t the State the only thing capable of tackling these external negative effects? Not so. The case of TCI Incinerators is a crystal-clear example of how the market can pinpoint negative externalities and solve them. And such technological innovation can be done in a cost-competitive way with existing processes. Even more interesting, this solution tackles more than one externality. Of course, emissions are the highest concern. But the equipment also deals with unsightly flame, smoke, and odour, which may have all been cause for external complaints.

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Share your message with Energy Corridor Canadians.

“Landowners should know there are other options for waste gas treatment."

Working out of his garage, he researched technology developed by the Department of National Defence to hide the infrared signature of heat coming from their battleships. From there, Wiseman figured out a burner and stack system: units would mix air and waste gas inside. Then the stack would be composed of sections that gradually increased in diameter on the way up, carrying more air each section, so that combustion would happen inside. No smoke, no visible flame, no odor, minimal noise — and a complete burn. He put his new equipment to the test at wells obtained from Petro Canada and Apache. They worked like a charm, and both companies ended up buying the equipment. In 1999, TCI Incinerators (or Total Combustion Inc) was born.

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As president of TCI, Wiseman set up headquarters in Red Deer in order to be at the centre of the service industry in Alberta. The company also has offices in Calgary and Colorado, and has supplied equipment around the world. While midstream organizations know of TCI’s technology, the company sees a lack of awareness among property owners. I reached out to their Sales Engineering Manager, Adesua Egbe, for comment. Here is what Egbe told me:

“Landowners should know there are other options for waste gas treatment. “‘Environmentally-friendly’ is a buzzword. But farmers and ranchers in the area sometimes stop in [to TCI] because they see our sign and are curious about our technology. They want to know if it really works. “And we can show that incinerators are a cost-comparable and much cleaner solution than flaring. “The body of our equipment is not hot, so it’s safe for plants and animals in the area. It doesn’t take up a lot of space, and we have mobile units for remote locations. “Of course the most important thing is the waste gas elimination. “But because it is odorless and smokeless, with an enclosed flame, if a unit is set up near other residents we usually get zero complaints. They can’t even tell the unit is turned on! “So I just want people to know they do have a right to ask that an incinerator be used on their land.” Of course, right now the oil and gas industry is hurting. Activity is way down. But when it inevitably comes back — as it always does — it’s best to be prepared ahead of time.  If you are a landowner and you want to know about your options for waste gas elimination, TCI has a few ways you can get in touch. •Y ou can call or email Adesua (‘ah-day-sue-ah’) Egbe:

587-803-4841 or ade@totalcombustion.ca. • O r

you can learn more about TCI by visiting

totalcombustion.ca.

BY THE CAEPLA EDITORIAL BOARD

Another Quiet Revolution? The Canadian Government’s hidden plan to open your property up to First Nations occupation under the guise of ‘energy regulation.’

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ack before COVID-19 took over, Canada’s news was dominated by stories about the occupation of railways, highways and pipelines by protesters, and about threats to the viability of Canada’s energy industry. Concerns continued to be voiced about Bill C-69, the legislation passed by the Trudeau Government to replace the National Energy Board (NEB) — the regulator responsible for federal energy projects like interprovincial and international oil and gas pipelines and electricity transmission lines — with a new Canadian Energy Regulator or CER. What you might not have heard then was that buried among all the legislative changes in Bill C-69 that made the news was a change intended to prevent private landowners from objecting to the government’s plan to open privately-owned lands to Indigenous occupation. The CER, like the NEB before it, has a mandate to protect the safety and security of persons, and to ensure the protection of property and the environment. The CER has specially designated inspection officers tasked with inspecting energy projects and ensuring that energy companies are operating in accordance with the law. Those inspectors are authorized by law to enter private property in order to inspect energy projects and ensure regulatory compliance. No search warrant is needed. What is new in the Bill C-69 changes is that the CER’s designated

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inspectors can now bring outsiders with them onto your farms, ranches and yards whenever they say it’s “necessary” to help them. Why this change? In the name of reconciliation, the Canadian government is now inviting “Indigenous Monitors” to accompany inspectors onto privately-owned lands — monitors who are lobbying to conduct archeological investigations and hold spiritual ceremonies. Prior to Bill C-69, the NEB had already begun to bring Indigenous

Monitors onto private properties, even though it was illegal at the time. CAEPLA challenged the government on this illegal practice. But rather than listen to the concerns of landowners, the government simply changed the law and gave the new CER the power to bring Indigenous Monitors onto private property. And landowners have no right to object. Pipeline and energy landowners need to know what’s going on. Over these next seven pages, CAEPLA will tell you the story.

Government Expropriation: The Gift that Keeps on Taking

The Canadian government is now using its authority to maintain the safety of pipelines and other energy projects to invite Indigenous Monitors onto private properties, without landowner permission, under the guise of environmental protection.

It’s expropriation all over again ow many times can Ottawa take the same land from you, and for how many different reasons? Why my property? How did I get caught up in the federal government’s reconciliation agenda? Simply put, if you have a federally regulated energy project on your lands, you’re now part of the government’s reconciliation agenda. Dig down a bit deeper, and the answer is expropriation. A pipeline or energy company wanted your land for its project. The Canadian government gave the company the power to take your land — expropriation. Whether or not you or a landowner before you signed an agreement with a company, it was the power and

threat of expropriation that put the energy project on your land. You did not choose the project, the project chose you. And the project comes with regulation. Energy companies must comply with federal laws and regulations, and the government has authority to enforce those laws and regulations through inspections and other activities. The Canadian Energy Regulator (CER) has designated inspection officers tasked with ensuring both the safety and security of persons and the protection of property and the environment. On its face, that means making sure that pipelines are being built and operated in accordance with required standards. It means investigating leaks and ruptures, instances of digging too close to a pipe, and other dangerous occurrences.

“CAEPLA believes property rights matter, and the way government is attacking landowners affected by energy projects is deceptive and dangerous.”

The government says that the CER is responsible for supporting the government in delivering on its commitment to support reconciliation with Indigenous peoples, and claims that the specific expertise of Indigenous Monitors in traditional land use, sacred sites, historical knowledge and the diversity of Indigenous traditional and cultural worldviews improve the ability of the CER to inspect construction sites, integrity digs, contamination cleanups and other activities on your property. CAEPLA is not anti-reconciliation. But CAEPLA believes that private property rights matter, and the way in which the federal government is attacking the property rights of landowners affected by energy projects is deceptive and dangerous. By equating the presence of a federally regulated project with a right of Indigenous communities and other interested parties to gain access to private lands, the CER is signalling that your private property and privacy rights are undeserving of respect. This is expropriation all over again, but this time the government’s not telling you.

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Energy Regulation is Not Just About Energy Anymore What is the IAMC and how does it affect you? he federal government has created a new type of organization called the Indigenous Advisory Monitoring Committee, or IAMC, intended to bring together Indigenous and senior federal representatives to provide advice to regulators, and to monitor the construction and operation of energy projects.

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The governmentâ&#x20AC;&#x2122;s regulatory arm, the CER, is now sending IAMC Indigenous Monitors out with its designated inspection officers to inspect energy projects, including on private lands. The CER says that inspections on private properties are necessary to hold CER-regulated companies to account to protect people and the environment. But the CER adds that inspections are also necessary â&#x20AC;&#x153;to

“Through Bill C-69, the government has given the CER and its inspectors wide open authority to bring anyone onto your property. And if you don’t like it, too bad. CAEPLA believes this violates the charter rights of landowners, not to mention other legally-protected privacy rights.”

protect Indigenous rights and interests” on privately-owned properties. The IAMC program has been given tens of millions of dollars in funding. The initial five-year overall funding envelope for the Enbridge Line 3 Replacement Project (L3RP) is up to $21.6 million. The initial fiveyear envelope for the Trans Mountain Pipeline Expansion is up to $64.7 million. And more funding is possible after five years.

Well-financed First Nations activists looking for a free-for-all on your property… The IAMC for L3RP has put forward a number of proposals to the government to increase access to privately-owned lands for Indigenous individuals and groups through the CER regulation of energy projects. The IAMC has told the government that it wants additional opportunities to identify sites of interest along pipeline rights-of-way, to conduct traditional land use studies and for Elders and Knowledge Keepers to perform ceremonies. It wants the government to use legislation and regulatory tools to provide legal access to rights-of-way on privately-owned lands. The IAMC also wants to ensure that CER inspectors don’t only bring

IAMC Indigenous Monitors onto private lands, but “representatives from all potentially impacted Nations.” And the proposals go even further. The IAMC has requested that the government introduce regulations requiring easement agreements between energy companies and landowners to include rights of access for members of Indigenous Nations, forcing landowners either to agree explicitly to Indigenous access to their lands or face expropriation. And all of this under the guise of regulating energy projects.

But what about your charter rights? We’ve already explained why CAEPLA thinks the government is wrong to use its authority to regulate energy security and environmental safety to expand Indigenous access onto private property. Rather than coming out and telling Canadians what it wants to do, and opening public debate on its proposal, the government is misusing its regulatory powers to open up private lands to Indigenous activities unrelated to energy projects. But the problem is more than just a government getting something in through the back door that it doesn’t want people to know about — the

government’s misuse of its inspection powers is also an illegal violation of the charter rights of landowners. Yes: Ottawa is violating the rights of private landowners to be free from unreasonable search and seizure, which is protected by Section 8 of the Charter of Rights and Freedoms. CER inspectors may be authorized to enter your property to conduct inspections of energy projects, but when they bring outside parties onto your property who have their own private agendas that have nothing to do with the regulation of energy projects, the inspection becomes an unreasonable and illegal invasion of your private property. CER inspectors don’t have to ask for your permission to bring outside parties onto your property. CER inspectors don’t have to tell you why they say they need to bring outside parties onto your property. Through Bill C-69, the government has given the CER and its inspectors wide-open authority to bring anyone onto your property. And if you don’t like it, too bad — landowners are prohibited from denying entry to anyone who is accompanying a CER inspector. Landowners will face prosecution and fines and jail time on conviction if they challenge the entry onto their lands of anyone accompanying a CER inspector, and even if they refuse to assist the inspector. CAEPLA believes this violates the charter rights of landowners, not to mention other legally protected privacy rights. Who knows what information the CER, Indigenous Monitors and other third parties will collect on your property, and what use they will make of that information? And here you thought you only signed up for a pipeline.

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Is Ottawa Encouraging Protests on Your Farm or Ranch? hat’s the big deal? CAEPLA is not opposed to reconciliation with Indigenous Peoples in Canada, so why is CAEPLA opposed to the CER’s Indigenous Monitors? Remember what was happening just prior to COVID? Supply chains in Canada were already being disrupted by protests on railways and other infrastructure allegedly in support of Indigenous opposition to the Coastal GasLink Pipeline project in British Columbia. What happens when protesters decide to use the IAMC and the CER to gain entry to private lands for their own purposes? Would you feel safe knowing that there is an

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open invitation to enter onto your property just because the government decided that an energy project should be built there? The government’s lack of respect for landowners’ property rights and privacy rights will expose landowners to entry onto their lands by individuals and groups who are a risk to the health and safety of landowners and their families. The government’s push to protect Indigenous rights and interests on private properties threatens to take anti-energy industry protests from railways and highways onto Canadian farms and ranches. This is short-sighted and irresponsible. The Canadian government needs to protect the safety, security and privacy of the landowners on whose lands it has allowed energy projects to be constructed. It’s doing exactly the opposite.

Illegal CER inspections – We want to hear your stories H ad an integrity dig on your property lately? Clean-up of historical contamination? D id CER inspectors come to your property? Who was with them? Were you even notified? CAEPLA is interested in hearing about your experiences with CER inspections and access to your properties by Indigenous Monitors and other non-CER invitees. As we’ve explained through this article, the government of Canada is now using its authority to regulate energy projects as a tool of reconciliation with Indigenous peoples at the expense of private property rights and your right to privacy. CER inspectors have been empowered to bring Indigenous Monitors and any other outside party they want onto your property “to protect Indigenous rights and interests.” CAEPLA believes this is a violation of your charter-protected right to be free from unreasonable search and seizure and is a violation of the government’s duty to protect your privacy. We would like to hear from you about how the CER’s new inspection powers have affected you and your property. CAEPLA is investigating the possibility of launching a charter challenge of the excessive investigation powers of the CER and the misuse of its authority on private lands for purposes which go far beyond the protection of people and the environment. Landowners should not be forced to play host to the government’s reconciliation initiatives. Unless it’s an emergency, landowners should have a choice about who may enter their lands, when, and for what purposes. You are prohibited by law from interfering with CER inspections; in fact, you’re obligated to assist upon request, and can be prosecuted if you refuse. But you don’t have to remain silent. Share your experiences and help us to let the government know that disrespecting and trampling upon private property rights is putting the safety and security of landowners at risk.

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Oh, and another thing – Regulatory control over your land by “Indigenous Governing Bodies” e have explained how the Bill C-69 changes to Canada’s energy regulatory regime have created a new Indigenous monitoring program on privately-owned lands. In fact, Bill C-69 went much further than just authorizing access to lands for Indigenous Monitors — it gave the government the power to shift full regulatory control over your land to “Indigenous Governing Bodies.” Under both the Impact Assessment Act and the Canadian Energy Regulator (“CER”) Act, the government will now be able to enter into agreements that authorize an “Indigenous Governing Body” to exercise powers and perform duties and functions in relation to environmental assessments, monitoring, compliance and enforcement on privately owned lands. The next step is for government to pass regulations creating the

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“Government will now authorize an ‘Indigenous Governing Body’ to exercise powers in relation to environmental assessments, monitoring, compliance and enforcement on privately owned lands.”

new regime. According to Natural Resources Canada: “The proposed regulations are expected to clarify how Indigenous jurisdictions may be engaged in matters such as involvement in assessments, monitoring, compliance and enforcement, as part of the Government of Canada’s efforts to advance reconciliation with Indigenous Peoples. This regulatory initiative is in the early stages of development. Early engagement is currently anticipated to begin this Fall (2020), if appropriate given the circumstances relating to COVID-19.” Depending on the regulations, “Indigenous Governing Bodies” may be given full regulatory authority over certain energy projects or over energy

projects within specified geographical areas. There’s no limit to which lands may be affected — it’s up to the government of Canada to decide. The government will also decide on the scope of powers granted to “Indigenous Governing Bodies.” One possibility is full replacement of CER-designated inspection officers with Indigenous Monitors — individuals who will have the authority to bring anyone else they “need” onto your land with them to exercise their powers. An “Indigenous watchmen program,” as described in submissions to the House of Commons on Bill C-69 by one First Nation. Big changes are coming to energy projects on your land, and they’re coming soon. 

Introducing caepla.org

Read the latest articles, discover upcoming community events, connect with other landowners and learn how CAEPLA is on the front lines of the fight for your property rights.

www.caepla.org

B Y D AV E B A S PA LY

Another season verifying quality construction and soil handling.

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AEPLAâ&#x20AC;&#x2122;s work on behalf of landowners along the Enbridge Line 3 Replacement Program (L3RP) has entered its fourth construction and reclamation year. This means weâ&#x20AC;&#x2122;re in the fourth year of reliance upon Infocus construction monitors to verify continued respect for landowner interests along L3RP.

iStock/ dogayusufdokdok

Pipeline Construction Monitor Update

“Our monitors will document the first shovel full of dirt removed until the last shovel full is replaced.”

Activity to place the land in as close to original condition as possible continues on all 9 L3RP construction spreads from Hardisty, Alta. to Gretna, Man. Soil handling and reclamation are being monitored carefully by Infocus personnel who have been documenting the quality of work throughout the project. When deficiencies occur — and they do on every project, no matter how well managed — our monitors record the area of concern and follow it until the problem has been completely addressed. To date, Enbridge has been very responsive. Yet, CAEPLA landowners and leaders must remain vigilant to document and notify Enbridge land agents about deficiencies which crop up long after Infocus monitors are gone. Sometimes soil subsidence and weed issues can persist for many years following construction. CAEPLA member landowners also negotiated with TC Energy (TC) to place Infocus monitors on the West Path Delivery Pipeline (WPDP), running north and south through Cochrane, Alta. That project began last year and is scheduled for completionsoil reclamation this year. Though TC has always proclaimed its intention to treat all landowners the same, to date, only CAEPLA landowners receive the benefit of construction monitors on TC projects. This is a significant difference from the Enbridge policy to fund independent monitors to cover all privately held lands — regardless of member affiliation. An Infocus monitor was present last fall on WPDP covering survey,

fencing, soil stripping, storing, pipeline trenching and backfilling activities on CAEPLA member lands. At each of these stages on any project, company actions either ensure the safe conservation of valuable soils or lead to their loss. TC Energy (in agreement with CAEPLA members) left the WPDP trench open to the elements over the winter while topsoil remained stored on the side. In most situations, this reflects best practice so that subsoils are allowed adequate time to settle with the help of fall, winter and spring precipitation, before topsoils are placed back on the trench line. As long as topsoils are stored carefully, this practice gives nature the best opportunity to achieve normal compaction of soils around the pipeline and minimize future subsidence. This practice minimizes the number of times soils are handled. Every time your soil is manipulated, there is opportunity for some to be lost to a combination of wind and water erosion or sloppy soil handling. These projects — L3R and WPDP — represent a tiny fraction of oil and gas industry activity taking place this season on privately held lands across Canada. The TransMountain Pipeline (TMX) is beginning construction. Every Canadian taxpayer has a stake in its careful, respectful and efficient construction and maintenance. To date, Infocus construction monitors have not been invited to play the key role they are trained and experienced to perform to ensure that landowner interests are protected.

A number of pipeline companies are conducting annual integrity digs this season to expose, examine and repair (if necessary) pipelines to ensure safe operation where instruments indicate there may be a weakness developing in the pipe. So far, none of these companies are employing independent monitors to ensure the protection of soils and landowner interests, which are placed at risk in every bit the same way as when a pipeline is initially constructed. Often these small projects are conducted with less scrutiny and care than major projects. You have a role to play in seeing that independent construction monitors become the standard for ensuring that your interests are protected. Join or become more active in your CAEPLA chapter. And speak to the land agents and company representatives for those companies operating oil and gas facilities in your area. Let them know that you are aware that independent construction monitors have played a vital role in making sure that recent projects have practiced respect for landowner concerns. Urge them to apply this same vigilance to your land and your interests. 

Dr. Dave Baspaly is an experienced corporate leader and a certified management consultant with a remarkable ability to help people increase performance and achieve strategic goals.

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B Y D AV I D C O L L

The Art and Science of Reclamation

The Line 3 Replacement corridor is expected to be better than it was before.

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nbridge’s newly constructed Line 3 Replacement Program (L3RP) pipeline runs for 1,070 kilometres in Canada, through parts of the three Prairie provinces from Hardisty, Alta., to the Manitoba-North Dakota border near Gretna. It crosses nearly 2,200 parcels, encompassing farm and pastureland, numerous creeks and wetlands and larger water bodies like the South Saskatchewan and Souris rivers. The Canadian portion of the new pipeline has been in service since December 2019 and most of the land along the project right-of-way (RoW) has already been returned to a pre-construction state. What remains to be reclaimed this season is a stretch of some 110 km in southeastern Saskatchewan and southwestern Manitoba (construction spreads 5, 6 and 7) that could not be completed last year before the early arrival of wet and cold weather conditions. Most reclamation occurs within the first year following construction. However, it can take longer, depending on weather and other environmental conditions. “Our promise is to restore the pipeline right-of-way to as good or better condition than it was before construction, and to minimize the long-term impact to the land along our pipelines,” says Allen Sawatzky, Manager of Construction for the

L3RP. “We continue to do what we said we would do.” Banister Pipelines is overseeing a crew of about 280 workers for the final reclamation, which began in mid-June and includes grading, replacing topsoil and final cleanup, out of a main base in Moosomin and a satellite office in Brandon. A critical component of right-ofway reclamation involves working with landowners, from the outset of a project, to reach agreement on propertyspecific items that will be addressed during and after construction.

Working with landowners During excavation for the Line 3 replacement pipeline, topsoil was separated from the subsoil to ensure the land remains productive for agricultural purposes after construction. The land was re-contoured to maintain drainage patterns, hay land and native prairie areas were reseeded, cultivated land was prepared for planting, and wetlands and watercourses were stabilized and revegetated to prevent erosion and ensure habitat is restored for the many plants and wildlife along the line. “Segregating topsoil during construction enhances restoration by returning the nutrients and seed back to the ground surface after construction,” says Sawatzky. “We also straw crimp, seed and monitor the right-ofway until vegetation is re-established. In some cases, we work with landowners

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“Land was re-contoured to maintain drainage patterns, hay land and native prairie areas reseeded, and cultivated land prepared for planting.”

and environmental agencies to enhance restoration, such as planting trees along streams or managing invasive species.” Although most temporary workspaces will be allowed to grow back, Enbridge generally maintains the permanent right-of-way free of structures, trees and shrubs so the pipeline is visible during aerial inspections and accessible in the case of an emergency.

Enbridge’s Reclamation Process: Five Main Steps Enbridge takes numerous measures to minimize the long-term impact along our pipeline rights-of-way. Here are the steps involved:

➥

After pipe installation but prior to topsoil replacement, environmental crews respond to subsidence and/ or drainage issues that create access problems for farmers or landowners, public safety issues or to prevent environmental issues such as erosion;

In mid-April, six weeks before this season’s final reclamation/topsoil replacement began, task-specific crews were already being deployed in other parts of the L3RP RoW, beginning what Enbridge refers to as ‘deficiency-warranty work’ — activities such as repairing ditches, fences, gates and signs, re-seeding areas of slow growth and adding straw crimping for erosion control in areas where the previous covering had seen stress with a strong spring wind. General ‘housekeeping’ activity will continue through the season. “We are always monitoring the right-of-way, particularly during and after spring breakup,” explains Sawatzky. “If there’s an issue because of our activities, we’ll come out and make the repairs necessary. We have much respect for all landowners. We are guests on their land.” This monitoring involves keeping an eye out for any new infestations of

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weeds along the RoW, in which case, with landowner approval, Enbridge will launch vegetation and weed management to control the spread of new weeds. Ongoing weed management is part of a comprehensive Enbridge biosecurity program developed with input from CAEPLA, landowners, provincial agriculture departments, researchers, and industry experts. Meanwhile, as of late June, the final L3RP reclamation was proceeding smoothly, thanks to cooperation from Mother Nature. It’s expected to take place over summer and into the fall. “We’re above ground now with the remaining works, not below,” says Sawatzky. “The pipe install work has been completed; there are very few issues now until completion — only weather,” says Sawatzky. “The weather affects us just like it does for farmers. “As I like to say: ‘If you can’t combine, you probably can’t pipeline.’”

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Reclamation begins by removing construction debris, access ramps and re-contouring the right-ofway to its original profile;

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Once the subsoil on the right-of-way is re-contoured, the entire right-of-way is de-compacted where heavy equipment has been working to prepare the right-of-way for the replacement of stored topsoil;

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Next, crews pull the stored topsoil piles back over the right-of-way and distribute it evenly over the area in which it came from, preparing the areas for seeding and revegetation;

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Finally, native prairie and hay lands areas are seeded, cultivated lands are straw crimped to prepare for the planting of the next crop and pastureland fences are repaired. 

iStockphoto.com; facing page: iStock/ Frankramspott

Input from CAEPLA

BY CK REEDER

Alberta Taxpayers Are Now the Not-So-Proud Owners of Another Pipeline Kenney government takes a page from Trudeauâ&#x20AC;&#x2122;s playbook and bails out another project.

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t was bad enough when Ottawa bought the Trans Mountain pipeline from Kinder Morgan. Now the Alberta government has jumped into the pipeline business. The Alberta government is making a huge investment in the Keystone XL project: $1.5 billion for an equity stake and a $6 billion loan guarantee for TC Energy (formerly known as TransCanada — back when “Canada” wasn’t a dirty word for investors). Given the political turmoil surrounding pipeline issues in North America, it’s hardly even surprising that Alberta premier Jason Kenney felt compelled to partially nationalize the project. No one cares about “social license” anymore. But understanding the motive is different than endorsing it. Despite the importance of Keystone XL to Alberta’s economy, the Alberta government’s ‘investment’ is a mistake. Political risk aside, the actual business case for the Keystone XL pipeline remains mostly unassailable. It is a massive project that will culminate with a 2,000-kilometre pipeline carrying more than 800,000 barrels of oil per day from Alberta to the Texas Gulf. It’s obvious why Alberta would want such a project. Alberta is the only major oil-producing jurisdiction in the world that completely lacks direct access to the ocean.

Why Americans want Alberta oil Canada consumes about 2.4 million barrels a day but produces about

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“We need major reform in this country so that these projects can be built without nationalization while respecting the rights of property owners.”

4.6 million barrels per day, about 80 per cent of which comes from Alberta. We have a lot of energy resources and can sell them to people who have fewer energy resources. That’s an easy argument to make. But many people wonder why the US, a country many analysts expect to soon reach oil self-sufficiency, would want such a project. It turns out our American friends have a very compelling need for it as well. The key is oil chemistry. A given oil refinery cannot take every different kind of crude oil product to process. These complex facilities are configured for specific kinds of crude. The Texas Gulf Coast refineries are optimized for heavy crude that is not readily available. For these refineries to make money with current capital investments, they require a supply of heavy crude. A great deal of this heavy crude has traditionally come from Venezuela, a country that has been able to charge higher prices because of insufficient competition. Keystone XL provides the means for American refiners to get the right product for a lower price while increasing the price Alberta producers can get. Win-win. And because a lot of American oil production is essentially uneconomical at the inflation-adjusted average price of the last 150 years, there is even a

strong chance the US will need more western Canadian oil in coming years as its own marginal producers go out of business. So what’s wrong with the Alberta government investing in the project? Isn’t it possible that they will make money on the deal? Yes, that is possible. However that doesn’t mean it’s a good investment, because the return must be commensurate with the level of risk. Unfortunately, the Alberta government ‘investment’ may have increased the likelihood that the project will eventually fail.

Alberta taxpayer dollars don’t eliminate political or any other risk Moral hazard describes when someone participates in risky activity knowing they are partly or wholly insulated from the risk and that costs can be shifted to other parties. Their incentives are therefore different from what they would otherwise be if they assumed all the risk themselves. Alberta’s investment increases the moral hazard for an already contentious project. That’s because by guaranteeing billions in project loans, they’ve reduced the pain TC Energy would otherwise suffer if they defaulted on their project loan themselves. TC

iStock/ tolgart

“Oil is a wonderful gift of nature — it is organic and biodegradable and using it to produce energy has made the planet cleaner and wealthier.”

is essentially on the hook for only onethird of the total cost. Alberta’s investment doesn’t make the political risk go away, and that risk is tremendous. Shortly after the Alberta government made its announcement, the all-but-guaranteed Democratic presidential nominee, Joe Biden, declared that he will revoke TC Energy’s permit granted by President Trump. In any case, the project is constantly fighting against politicians, environmentalists and property owners along the route. And in fact late in May a US appeals court effectively stripped the company of an environmental permit over concerns about water safety. It is easy to understand why some people believe this kind of government intervention is necessary. But we don’t want to live in this world we’ve created for ourselves. There shouldn’t

be so much riding on Keystone XL in the first place. But here we are, because we’ve handicapped our own pipeline industry. This is supposed to be a country that is fair and friendly to private enterprise, with systems and institutions rooted in the rule of law. We need to take a step back and evaluate why these projects are such a mess. We need major reform in this country so that these projects can be built without nationalization while respecting the rights of property owners. Contrary to the claims of radical environmentalists, oil is the lifeblood of the industrial civilization that makes our lives tolerable. This will be true for many decades to come. Oil is a wonderful gift of nature — it is organic and biodegradable and using it to produce energy has made the planet cleaner and wealthier. For the

sake of increasing prosperity, helping the environment, reducing global conflict over resources, exporting cheap oil from Canada through Texas is a wonderful thing. But in the face of political interference, regulatory chaos and all-around mismanagement, these projects can’t be completed purely on their business fundamentals. Canada needs to fix the mess it’s created so we never have to nationalize another big energy project. 

Clayton Reeder is a Calgary-based financial analyst who provides mergers and acquisitions advisory services for mid-sized, privately held companies in Western Canada. He works with many clients in the oilfield services sector. He is also the editor of canadianmarketreview.com.

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BY TIM MOEN

Gun Rights Are Property Rights The Government of Canada is continuing its erosion of property rights and our ability to protect our property with its latest ban.

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“Protection of the individual and their property is the basis of civilized society. You don’t get to expropriate someone’s property or ban them from owning property because you don’t approve of that property.”

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onsidering all that Ottawa has done to all but ban pipelines, I suppose we should not be surprised they are now banning another kind of pipe – the ballistic energy transport devices known as guns. I grew up on a farm in a relatively remote area in northern Alberta. Guns were a necessary tool on the farm. We didn’t just use them to harvest meat during hunting season. We used them to protect our property. A gun is both a piece of property and a tool used to protect property. The latest Government of Canada gun ban is an erosion of property rights in two ways. It is an arbitrary ban on property that looks a certain way, and it is a ban on specific tools used to defend property. A gun is also a legal tool. All laws, regulations and government orders are mandatory because they are enforced by people with guns. If you disobey and resist law enforcement, guns are the ultimate guarantor that you will stop breaking government rules. So, bans on owning certain types of property are essentially threats of state gun violence. We don’t see the state’s gun very often because the threat of the gun is more than enough to make us comply. So, it is easy for most of us to forget that when we demand the government “do something” we are demanding that they use threats of violence on our behalf. We have outsourced the protection of our life and property to

the state and, recent events notwithstanding, we don’t normally get to see how the sausage is made. This is partly why there is a clear rural/urban divide when it comes to the issue of gun ownership.

Banning guns at gunpoint Most city folk have not come face to face with a bear on their front porch. They’ve never watched their livelihood drain out of their grain bin thanks to a gnawing squirrel. They’ve never watched the crops they invested so much time and money into get torn apart by wild pigs. They’ve never watched wolves take down their prized livestock. They’ve never watched as trespassers drive down their driveway with their headlights off under the cover of night with the nearest police officer sipping coffee more than an hour away. Luckily these types of scolds and Nanny State devotees (now also known on social media as “Karens”) don’t face the threat of running into a bear at the water cooler. They take for granted that there are people with guns (police officers) all over the city using force to protect life and property. If bands of marauding wild pigs or looting trespassers were a regular threat in these Nervous Nellies’ office buildings or homes they might think twice about supporting gun bans. Ironically, when one of these perpetually high-anxiety individuals demands a gun ban to end gun violence, they are demanding armed men use their guns to disarm peaceful property owners.

Some gun ban proponents utter the refrain, “Nobody needs a semi-automatic gun!” None of these proponents have had a herd of wild pigs destroying their means to survive and thrive. If they did, they would understand why you might need to fire a few shots in rapid succession for protection. Many gun prohibitionists don’t even realize that the gun ban doesn’t even specifically ban semi-automatic guns, or specific calibres, or centre-fire carbine rifles, it just bans guns that look nefarious. Certainly, it is legitimate to own property that can be used for hunting and protection, even if the guns look scary to “Karen” — but what about owning property for other purposes like entertainment, hobby collection or sport? The gun ban has essentially killed sport shooting competition in Canada, for example. Protection of the individual and their property is the basis of civilized society. You don’t get to confiscate — expropriate — someone’s property or ban them from owning property because you don’t approve of that property. I have the right to own property, no matter your opinion, for any reason I want. Period. 

Tim Moen is a paramedic, writer and entrepreneur. Tim grew up on a farm in northern Alberta and became leader of the Libertarian Party of Canada in 2014. He has made regular appearances on FOX News and the pages of the Huffington Post and The Post Millennial.

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A Pioneer of the Pipeline Landowners Movement Passes Stu O’Neil was a teacher and a conservationist who would not back down. tu O’Neil was not only a pioneer in the fight for property rights but forged the first landowner association that inspired the formation of Canada’s only national property rights organization. He passed away June 9, 2020. He was 84. “The Book that Inspired CAEPLA” was a headline story in our Summer 2016 Pipeline Observer. Peter Lewington’s 1991 memoir, No Right-Of-Way: How Democracy Came to the Oil Patch, told the story of how Peter, along with his wife Jean Lewington and their neighbours, started the pipeline landowner movement. Peter and Jean Lewington and their neighbours Stu and Jocelyn O’Neil mortgaged their farms and families’ futures in the best interests of all Canadians — and ultimately, of the pipeline industry — and went to court. They understood the economic benefits of fossil fuel and the need to transport it by pipeline, but they

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suffered the consequences in the damage done to their farmland from the pipelines forced through their properties. The Lewingtons and O’Neils can be credited with some of the biggest environmental progress in the pipeline industry. Their efforts and those of the many people they inspired have helped make pipelines the safest way to transport oil and gas. Pipeline construction practices on agricultural land changed drastically as a result of their dedication and continue to improve today with CAEPLA’s input and lobbying. Though Peter died shortly after writing his groundbreaking book, Stu O’Neil continued his efforts. Born and raised on the soil of London Township, Ont., the farm was in Stu’s blood from the beginning.

He was educated at the University of Guelph, one of the most respected agricultural universities in Canada, and began his career as a science teacher at a number of post-secondary schools in London. This prepared him well for his lifelong passion for land conservation, and his dedication to the movement.

Founding president of the Ontario Pipeline Landowners Association In 1993, when an application was made to convert an oil pipeline to gas and create a new easement agreement and power of attorney for the company behind it, Stu decided to take action. Together with his wife Jocelyn and with much help from Marg and

“Stu was a positive influence…he mentored everyone who followed in his footsteps, not by doing things for them but by giving advice then expecting you to follow through.”

Jocelyn and Stuart O’Neil’s efforts helped pioneer the Canadian pipeline landowner movement. Stuart passed away in June 2020.

Dave Vance, Stu went on to organize nearly two hundred landowners along the very corridor immortalized in Peter’s book. He became the founding President of the Ontario Pipeline Landowners Association (OPLA), the first pipeline landowner association representing a large number of landowners on a major energy corridor in Canada. The sheer number of landowners compelled the regulator (the National Energy Board at that time) to listen, and the pooling of their resources allowed the landowners to hire legal counsel without having to mortgage their farms and risk everything. Stu and Jocelyn put everything on the line the last time they took on a

pipeline company, this time people all along the pipe backed them up. Stu served as President of OPLA until 1999 and represented the organization in a number of precedent setting negotiations. He and Marg Vance were requested to attend and participated in the NEB’s pipeline Stress Corrosion Cracking hearings. As Ian Goudy, another pipeline landowner pioneer mentioned in Peter Lewington’s book, says, “People would tell Stu that he would never get anywhere with their lawsuit but he never backed down and if you told Stu that he couldn’t do something, he would then simply dig in his heels. Stu was a positive influence, a teacher through and through, he mentored

everyone who followed in his footsteps, not by doing things for them but by giving advice then expecting you to follow through.” It was Stu’s experience and advice that provided the impetus for Ian to form two successful gas and water pipeline associations. “It’s good the world has people like Stu, look what was accomplished by not backing down,” Ian adds. After retiring from OPLA in 1999, Stu returned to work on his spruce and maple farm, focused on conservation and pursued his love of golf. He attended the founding meeting of CAEPLA and served as a conscientious advisor until his death. He will be sorely missed. 

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How I Discovered Property Rights Bringing CAEPLAâ&#x20AC;&#x2122;s message direct to landowners across the country.

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iStock/ ImagineGolf

have been fighting for property rights for most of my life and I didn’t even know it. I grew up with pipelines on the family farm, and I got used to the fact that the land over the pipelines didn’t grow good crops or, on some land, any crops at all. Where the pipes were, we spent hours as kids picking up rocks, hoeing weeds and later going back and forth with equipment to break up the lumps. I always asked my dad what he got out of dealing with this mess, and he always said “nothing.” Later, when the company wanted to put in another pipe, I suggested to my dad that he and my uncle should get a portion of the profits the company made from the pipeline, or at least be paid rent considering the extra work and loss of crop. He told me later that when he mentioned it to company people he was laughed at. None of this made sense to me but I was still young and did not yet understand the power of government. I could not grasp how this company had the right to cross our land and laugh at us when we asked to be treated fairly and share in the profits they were making off my family’s land. I had much to learn through many years of experience that I never would be taught in school. At the time I knew my dad owned the land we lived on. He said it was his property. I had never imagined he did not have the right to protect what was his.

Land agents just laughed at us Unfortunately, he told me, there was nothing that could be done; the government could just force farmers

“The power a millionaire might have over me and over my property is much less than what’s held by the smallest government bureaucrat or agent.” —Frederick Hayek

to accept the pipeline through their land. My dad and my uncle were good, law-abiding men and they had no will to fight the law — even if the law was wrong. Dairy farmers back in those days had little time for anything but work, and after the war they felt a patriotic duty to not question government. I didn’t think much about the pipelines after that, until later, when I had my own farm with the same pipeline corridor on it and the same company wanted to change the easement agreement across that property. I was as busy then as my dad was back when I was growing up, now with a young family of my own and a livestock farm to run. The land agent’s knock on the door was just another annoyance and continued to be extremely annoying as the months went by. So, I went with my dad to an open house. The company was doing its government-mandated expropriation consultation with landowners, whereupon we again suggested sharing in the profit. This time the company guys’ lighthearted dismissal really irritated me but my dad’s reminder on the way home — that the company could get the government to enforce what they wanted — defeated my resolve to just say no. When the agent later drove in to my laneway, after many visits, I simply became fed up and, between chores, signed his document and bid him a grumpy farewell.

A movement was born… After the fact, I was enlightened by a neighbour that what I had signed was misrepresented to me. The land agent had lied, and had provided power of attorney over my farm to the company. Fortunately, a few extraordinary people along that pipeline were making intense efforts to organize landowners. Under the leadership of Stu O’Neil, they formed the Ontario Pipeline Landowners Association (OPLA). This pooling of effort and finances provided us the wherewithal to show that we were lied to and prove the proposed project was unsafe, convincing the National Energy Board (NEB) to turn the project down. It was most embarrassing for the industry. But most importantly, it motivated a number of us to get educated on the legislation, regulations and mechanisms government can use to take our property, and then either give that property or the use of it to private interests rent-free. If we had not stood up for our rights, that project would have been rubber-stamped and many landowners’ livelihoods would have been lost. That fight, which began in 1993, coincided with a former minister of agriculture inviting me to get involved politically, specifically in backroom federal politics. This experience enlightened me on the influence lobbyists exert in Ottawa, which results in policies and legislation that compromises real property rights.

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CLOCKWISE FROM LEFT a photo of the Core family dairy farm from the 1950s; the Core family; an image of Dave Core’s turkey farm.

My real education had begun. And just as I was becoming disillusioned with politicians and all political parties, Stu O’Neil approached me to take over the presidency of OPLA. By 2000, a number of landowner groups that had formed as a result of OPLA’s success decided we needed a national organization and formed what is now known as the Canadian Association of Energy and Pipeline Landowner Associations (CAEPLA).

An expensive lesson on property rights We were all extremely busy farmers, but we believed we needed to do something to pull landowners together across Canada. As a group, we raised the money for a million-dollar class action lawsuit claiming compensation for rights taken from us and other restrictions enforced on our properties. Those rights taken and the restrictions enforced were the result of government NEB expropriation legislation. It was an expensive lesson on the state of property rights in Canada. At the preliminary hearing (certificate hearing), the judge ruled that

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Dave Core has lifelong experience with pipelines on his land, which has inspired his work fighting for property rights and spreading CAEPLA’s message to landowners across Canada.

we had no rights or remedy to go to court for our claims outside the NEB Act. In 2006, two of the three judges at our appeal hearing agreed with the first and awarded court costs to the defendants. In other words, the government created legislation that could take all or some of your property rights away and give them to a private company. It could even transfer the company’s risks and liabilities to landowners while at the same time restricting our use of the Canadian courts. This only intensified my resolve to not back down and instead find a way to win recognition for the property rights of pipeline landowners. I followed the pipelines across the country and back, bringing CAEPLA’s message direct to landowners’ doors. After many years of dealing with

bureaucrats both regulatory and corporate, I came to understand that denial of pipeline landowners’ property rights was only the tip of the proverbial iceberg in Canada. I began to see that a healthy respect for property rights was the missing link – the real key to securing personal liberty, economic prosperity, and environmental protection for all Canadians. As Nobel Prize winning economist Fredrick Hayek once said, “The power a multi-millionaire might have over me and over my property, whether he is my neighbour or my employer, is much less than what’s held by the smallest government bureaucrat or agent, who wields the coercive power of the state, and upon whose discretion it depends whether and how I am able to live, work, or make decisions.” 

CAEPLA WORKSHOP SERIES

The CAEPLA Workshop Series Designed as a service to landowners. OPPORTUNITIES FOR CONTINUED LEARNING COVER TOPICS SUCH AS: HOW TO CROSS THE LINE - SAFELY

Take the guesswork out of moving your equipment over pipeline rights of way. INTEGRITY DIGS

PIPELINE CONSTRUCTION 101

Everything landowners need to know about the life of a pipeline. REMEDIATION 101

What they are, what’s involved and what landowners should know. BIOSECURITY

Everything landowners need to know about protecting and restoring soil after pipeline construction. PROTECTING PROPERTY RIGHTS

How developing and enforcing a biosecurity protocol protects your land.

Know your rights—and how to stand up for them.

“THE TOPICS AND THE OPPORTUNITY TO INTERACT ARE VERY MUCH APPRECIATED. IT IS ALWAYS INTERESTING TO LEARN ABOUT THE INDUSTRY.”

“VERY INFORMATIVE AND INTERESTING. CONTINUE WITH THE WORKSHOPS TO BUILD A CLOSER RELATIONSHIP WITH COMPANIES.”

Stay tuned for our next series. Check our website often for new dates, topics and locations.

For more information contact: admin@caepla.org or 306-522-5000

DON’T MISS THIS OPPORTUNITY TO LEARN MORE Brought to you by Enbridge and CAEPLA, Canada’s leading advocate for landowner safety and environmental stewardship. CAEPL A .ORG

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Only a few provinces benefit from pipelines move billions of dollars into Canadaâ&#x20AC;&#x2122;s economy nationwide.

Pipelines drive prosperity across Canada through employment and billions for vital government programs like education and health care. To see how, visit: SHAREDFUTURE.CA/ECONOMY

Pipeline Observer SUMMER 2020

Articles inside

The Art and Science of Reclamation

How I Discovered Property Rights

Alberta Taxpayers are the Owners of Another Pipeline

A Pioneer Passes

Gun Rights are Property Rights

Pipeline Construction Monitor Update

Tackling Waste Gas from a Free Market Perspective

Just Say No

Another Quiet Revolution?

Recon$iliation Nation

Are Holdouts Really a Problem?

A Federal Windfall for Orphan Wells

Fight for Property Rights

The Nimble Market Response to Oil Storage Fears