Dispatch #4 - How to fight zombie pipeline arguments

No, Trump’s tariffs don’t mean we should revive long-dead pipelines – Here’s why

With the recent threat of 25% tariffs from the U.S., there’s been a huge resurgence in pro-pipeline rhetoric from Canadian politicians, business leaders, and the general public. There’s a lot of misinformation going around about what these tariffs mean for our economy and how pipelines fit into that equation. Our Natural Resources Minister Jonathan Wilkinson said we should “weigh building a new west-east oil pipeline” as a result of the “vulnerabilities” that President Donald Trump’s tariffs would expose in our energy sector. Alberta’s Premier, Danielle Smith, has been calling on Ottawa to “immediately” revive the long-dead Energy East pipeline. Op-eds are rolling in arguing that now is the time to unleash the “power” of our natural resources.

It’s not surprising that those with a vested interest in expanding fossil fuels at the expense of everything else would capitalize on this tenuous political moment, but it is deeply frustrating. If you encounter this rhetoric during the coming days and months, it’s important to be prepared with the facts. We wanted to pull together some of the main arguments we’ve seen that Canada should unearth long-dead pipeline projects to protect our economy and why they ultimately don’t hold any water.

The idea being touted is that we need to build new pipelines to remain competitive in the face of new tariffs and to protect our economy.

Even if we forget about the looming climate crisis, the reality is that this argument does not stand even just in purely economic terms. We also need to diversify our economy right now, not double down on fossil fuel infrastructure. New pipeline projects are simply not economically viable anymore. Global fossil fuel supply is projected to outpace demand within the next ten years as more countries hit peak oil use. According to the Rocky Mountain Institute, 58% of nations have already reached peak demand for fossil fuels. Demand decreases like this are irreversible as major energy-importers, like China and other countries in Asia, move permanently away from fossil fuels towards renewables in a bid for both energy security and affordability. In 2023, global spending on solar power surpassed investment in oil production for the first time ever.

As long as our economy is reliant on coal, oil, and natural gas, it will also continue to be deeply vulnerable to fluctuations in global commodity prices. Renewable energy prices do not fluctuate in this way, making them far less volatile and a much better bet for long-term stability. Fossil fuels do not equal stability. It’s quite the opposite – they actually worsen our cost of living crisis significantly. By some estimates, O&G price increases contributed a third or more to economy-wide inflation since 2022.

New pipeline projects would take years to build and cost billions of dollars that very likely will not be recouped later as demand declines, saddling the public with the bill. This is what happened with the TMX pipeline, which has now reached a cost of over $35 billion that will be borne almost entirely by Canadian taxpayers. It makes utterly no sense. Even the companies that originally sponsored these projects, like Enbridge and TC energy, have shown no interest in reviving them – because they know it’s a bad investment. Even Enbridge is increasing their investments in wind and solar. They see what’s coming, even as they try to get all the profit out of fossil fuels they can in the meantime.

New investments in oil and gas will most likely lead to us being saddled with billions in stranded assets – infrastructure that becomes uneconomical to operate before its expected lifespan, meaning it is unlikely to recoup its initial investment. As a high-cost producer with emissions-intensive fuels, Canadian producers will be hit by two major economic tailwinds: a loss of markets, and low and volatile prices. Recent analysis demonstrates that Canada has the potential to lose $100 billion in stranded assets by as early as 2036 due to the accelerating pace of the energy transition.

There are also other solutions to the economic threats posed by the Trump administration that aren’t unprofitable pipeline projects. For example, a proposal to increase trade and labour mobility within Canada by reducing tariffs and other intranational barriers to trade would increase our GDP by about 4 percent, which would largely offset any negative effects of a trade war with the U.S. New pipelines are not the answer.

Additionally, there’s a unique opportunity right now as President Trump slashes renewable projects in the U.S. for Canada to become more competitive in this arena. Although our renewable energy supply chain is heavily dependent on the U.S. right now, this aggressive turn from President Trump provides the perfect moment to pivot, diversify our supply chain, and lean into the economy of the future.

The bottom line is that continuing to invest in fossil fuels makes no sense – socially, politically, economically. The only people who want this are those that stand to make a quick buck and head straight for the exit the moment the bill is due. Fossil fuels are the economy of the past. The longer we cling to them, the steeper the fall will be.

Other countries see the writing on the wall, while we seem to be caught in the blinders of short-term profits for investors over the long-term safety and stability of our economy and society. We have a choice to make, and we must make sure that the path we choose is rooted in a future orientation, not based on the inflammatory rhetoric and anxieties that the current administration in the U.S. is attempting to stoke. We can – and must – choose better this time.

For more information, check out our mythbusting page on our website for lengthier responses to all of the biggest energy-related myths we’re contending with right now.

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We’ve got some exciting events and updates! Check out the highlights:

1. This month, we kicked off our Coffee Chat Program for students and recent grads in our National Network. We matched 16 aspiring sustainability professionals with experts in our network in impact investing, sustainability consulting, and social entrepreneurship. We're excited to spark these mentorship connections to promote Clean Careers!

2. We have our Degrooted in Impact conference on March 15th hosted by Degroote Impact at McMaster university. It’s an impact investing focused workshop to equip students with tools to engage in impact

   investing case studies run by Sierra Haziza, former Impact Conference attendee and winner of Propel Impact funded internship. Student deliverables will be presented at the conference before a panel of judges for the chance to win an interview with Propel Impact!

Some events coming up in the climate space you might want to check out:

1. UofT - Vulnerable Communities and Climate Justice: A Roundtable - March 6, 7-9 pm, Innis Town Hall

2. UofT (Trinity College): Race, Labor, and the Political Fractures of Climate Actions - March 7, 3-5 pm, Trinity College

3. Killer Water documentary screening - March 12, 6:30 pm, Innis College

How about a glimpse into our potential future? This time last year, we published an article talking about Shell’s “divestment” from their fossil fuel operations in Nigeria, or in other words, what happens when oil companies realize their infrastructure isn’t profitable anymore (it isn’t pretty).