Vivian Krause’s data is fine, but her conclusions are wrong and her work encourages industry to think of itself as a victim of American eco-activist money

Vancouver blogger Vivian Krause is well known in the oil and gas industry for her work tracing the financial ties between American charities and Canadian environmental groups. But there are problems with her work that the industry, and its boosters, need to acknowledge.

Let me start by stipulating that I accept Krause’s painstaking research into tax records and financial statements that show American charities donating$300 million since 2000 to Canadian eco-activists. Critics have pointed out that much of that funding was used for environmental projects like a planning process for the Great Bear Rainforest, which was conducted in conjunction with the Canadian government.

But for the sake of this column, I’ll accept Krause’s argument that some – perhaps even most – of the money goes to fund groups fighting against the Alberta oil sands and the building of pipelines to tidewater, like Kinder Morgan’s Trans Mountain Expansion.

There are still two serious problems with Krause’s analysis.

One, her data doesn’t support her conclusions, not by a long shot.

For instance, her latest piece in Alberta Oil Magazine entitled “The Great Green Election Machine,” purports to explain how tainted greenbacks financed Canadian eco-activists who helped steal last fall’s federal election for Justin Trudeau and the Liberals.

The article is a 2,200 word blizzard of detail built on flimsy logic.

American dollars flow into two main US charities, Tides Foundation and New Venture Fund, which then fund Canadian environmental groups like Dogwood Initiative, The Tar Sands Campaign, Leadnow, OpenMedia, SumOfUs, and Westcoast Environmental Law.

Some of these groups supported Justin Trudeau’s Liberals by organizing volunteers, phone calling voters, and other campaign activities. You know, like unions do for the NDP and business groups do for the Conservatives.

“The Liberals won their majority government by 14 seats. In B.C. alone, they picked up 15, thanks in part to Leadnow and the Dogwood Initiative,” Krause writes.

That’s like arguing that if I worked on my local Liberal candidate’s campaign, then Trudeau is now Prime Minister thanks in part to Markham Hislop.

Krause is a researcher, not a journalist, so she never interviews expert sources to back up her claims. In this case, her argument might be convincing if someone on the Liberal campaign was quoted saying that Leadnow and the Dogwood Initiative played crucial roles in the party’s BC victories, but she doesn’t.

“It’s certainly bordering on conspiracy theory. The idea that all of these groups are interlinked and they’re that well coordinated, it doesn’t work that way, not on the environmental side of things,” said political scientist Keith Brownsey of Mount Royal University in an interview for this column.

“They are generally very disorganized and very discrete. It’s almost impossible – not impossible, but very improbable what the author’s [Krause] trying to argue here.”

Brownsey points out that a few million dollars isn’t going to “sway a national election.”

“I don’t think so. We have no evidence to support that. It just doesn’t work that way in our political system,” he said.

Another favourite argument of Krause is that American-financed opposition to Canadian pipeline projects is a form of “economic protectionism” by the United States energy industry.

“The US now jostles with Saudia Arabia and Russia for top spot as the world’s number one oil producer. Last year, the U.S. began exporting oil to China, Japan, France, Italy and elsewhere but there is no campaign against exporting U.S. oil,” Krause wrote in an Oct. 3 Financial Post article entitled, “The cash pipeline opposing Canadian oil pipelines.”

“The Tar Sands Campaign is keeping Canadian oil landlocked within North America, stopping it from reaching overseas buyers and allowing the US to dominate the market. Anti-pipeline activism claims to be about the carbon emissions and the climate but what it amounts to is economic protectionism.”

Not so, says University of Houston energy economist Ed Hirs, who is also a veteran oilman and the managing director of Hillhouse Resources, an oil and gas company in the Niobrara play.

“Her conclusion that [anti-pipeline activism] is economic protectionism for the benefit of the US is wrong,” Hirs said in an interview.

“The Canadian crudes compete head-to-head with Venezuela and some of the other heavy crude resources from around the world like Saudi Arabia and Mexico. If there are interests unhappy with Canadian crude coming down to the United States, you have to look at the head-to-head competitors and that would include Saudi Arabia.”

Hirs also points out that global markets are awash with cheap crude oil and that situation is likely to continue for a long time. Therefore, Krause’s argument that the US wants cheap Canadian oil while it exports American crude for the higher Brent price, is way off the mark.

“The US is a net importer of crude. The [Financial Post] article you referred me to which points to the US exporting crude, that’s just really totally insignificant in the scheme of the larger market. It’s totally a non-event,” said Hirs.

If American charity financing of Canadian anti-oil sands/pipeline groups doesn’t sway federal elections and doesn’t protect US refineries supply of cheap Canadian crude oil, then we are left to conclude that domestic eco-activists’ motives are pretty much what they claim: opposition to the production and transport of carbon-intensive crude oil which they believe contributes significantly to global warming.

Sometimes the simplest explanation is the best one.

And that brings me to my second point of contention with Krause: her work perpetuates a sense of victimhood in the C-suites of the oil and gas industry. Readers may find it difficult to believe that an industry which exported product worth $129 billion in 2014 – whose members include some of the biggest players in the national economy, players who could easily outspend American charities by a factor of a hundred – can feel like victims of the environmental movement, but they do.

Many times I’ve discussed this issue with senior executives in Calgary and on social media and they invariably point to Krause’s many articles to justify feeling that they are treated unfairly.

When Krause argues that “[g]iven the significant impact of anti-pipeline activism, it’s time for an update about who funds it, who is involved, and why this U.S.-funded campaign against Alberta oil is unacceptable,” those executives nod right along in unison.

Why is industry victimhood dangerous? Because most of the Alberta-based industry refuses to acknowledge that the political culture around energy changed dramatically during the past decade.

Poll after poll shows Canadians outside Alberta and Saskatchewan are worried about climate change, want policies that promote clean energy technologies, and think the era of oil and gas is slowly coming to an end.

Some energy executives have accepted the new political reality (e.g. the four who stood on the stage with NDP Premier Rachel Notley during last November’s climate policy announcement), but most have not. Nor have their own advocacy groups, such as the Canadian Association of Petroleum Producers and the Canadian Energy Pipelines Association. BC-based eco-activists have been busy for almost a decade campaigning and mobilizing grassroots support against pipeline projects, while energy executives wring their hands in dismay and reference Krause to make themselves feel better.

It’s time for the Canadian oil and gas industry to re-earn its political legitimacy, to move forward with different political strategies and an updated energy narrative that appeals to Canadian voters, especially youth, who are much more “green” than older generations.

And the place to start is to stop paying attention to Vivian Krause.