Alberta, and by extension Canada, is learning a lesson Quebec learned the hard way 20 years ago.
U.S. opposition to the Keystone XL oil pipeline has been galvanized by less than favourable attention on Canada's recent environmental record and the manner in which Alberta's tar sands are exploited. The same is somewhat true in British Columbia and Quebec, where there is opposition to new pipeline routes from Alberta to the Pacific and the Atlantic, respectively.
If Albertan oil cannot be exported, then it will be stranded and its price heavily discounted. This will not just affect oil producers, but also Alberta's finances and the Canadian economy as a whole.
It threatens to be Alberta's Great Whale.
A Pocket History of Great Whale
It's 1986. Quebec's newly-elected premier, Robert Bourassa, announces his intention to build the Great Whale hydro-electric project in Quebec's north. The project will add 3,090 MW to the more than 10,000 MW already completed at the La Grande complex.
Electricity generated at Great Whale is to be exported to New York and New England. In 1988, the New York Power Authority (NYPA) conditionally signs a 21-year $17 billion power purchase contract with Hydro-Quebec, Quebec's state-owned power utility.
This contract is essential to make Great Whale feasible, and it's great news for the Quebec economy.
But by 1992 the contract with NYPA is in tatters. Two years later, Great Whale is permanently beached.
Quebec's Failure to Consult
One major mistake made by the Quebec government was that it undertook the Great Whale project with little inclination to consult, and even less to involve, the First Nations most affected by the projects, Quebec's Cree and Inuit. This led to push back from First Nations, especially the Cree, resulting in lengthy and acrimonious lawsuits and public debates that galvanized opposition to the project.
The Quebec government and Hydro-Quebec were caught flat-footed and unprepared.
The Cree and Inuit advantageously used the courts and media. First Nations accused Quebec of not only destroying a fragile environment, but also of committing "cultural genocide" by flooding large swaths of their ancestral lands.
The high point of the First Nations campaign was the very telegenic arrival on Earth Day 1990 at New York City of a Cree/Inuit boat paddling down the Hudson. Advance notice ensured maximum media coverage. This in turn rallied U.S. NGOs and other pressure groups behind the cause.
In 1991, NYPA asked Hydro-Quebec for a one-year extension before confirming the previously signed power contract.
A year later, NYPA decided not to proceed. While economic factors were the main cause of the cancelation, the environmental and other social issues raised by the project made the decision easier to make and defend.
Great Whale was finally shelved by premier Jacques Parizeau in 1994 after a face-saving hiatus.
Quebec learned a valuable lesson from this episode: what happens at home resonates in export markets.
As a result, Quebec has been mindful in the last 20 years to repair and improve relations with its First Nations in general, and the Cree in particular. Several comprehensive agreements have been concluded, relations normalized and a repeat of the Great Whale debacle made less likely.
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