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A pipe yard servicing government-owned oil pipeline operator Trans Mountain in Kamloops, British Columbia, Canada.
Will Trans Mountain Pipeline expansion pay off?
“It’s been quite a journey,” he says of the many weekends, nights, and early mornings he spent visiting Indigenous communities to secure their consent. By the time he retired in April 2022, more than 60 communities were on board. Barring disaster, the $23 billion project will be completed this year, and Canada will have access to tidewater for an additional half a million barrels of crude a day.
Ottawa stepped in to buy the project when Kinder Morgan pulled out in 2018, and the construction costs have increased sixfold, leading some to call it a “catastrophic boondoggle.”
Justin Trudeau’s government believed the project would add tens of billions of dollars in national revenues by allowing more Canadian oil to reach Asian markets and command a world price. Western Canadian Select crude has typically traded at a discount of up to $16 per barrel, compared to North American benchmark prices, because it all goes to the United States.
The expansion of TMX will end that stranglehold, and most analysts expect the discount to fall to closer to $10 a barrel. The upshot could be more expensive diesel in the US Midwest.
Will Ottawa get its investment back? Pipelines generally trade at around 10-12 times cash flow, which in this case could see Ottawa raise more than $20 billion. But the government, or its successor, may decide to take a lower price to ensure a material Indigenous ownership stake.
“It was not a terrible decision at all, and it was one that only the government could have seen through,” Anderson says, noting the political, regulatory, and legal risks.
Canada produced a record 4.19 million barrels of oil a day in December. The prospect of higher prices, thanks to the Trans Mountain expansion, is likely to see new records set in the future.
The Nord Stream gas pipeline whodunit.
Who blew up Nord Stream?
The controversial Nord Stream gas pipelines connecting Russia to Germany and Europe made headlines last September when several sections mysteriously exploded deep underwater, causing the surface of the Baltic Sea to bubble.
Multiple investigations determined the explosions were an act of sabotage, but they failed to identify a culprit. Most experts in the West pointed the finger at Russia, suspecting it was an attempt to worsen the winter prospects of an already energy-starved Europe to weaken its resolve to support Ukraine.
But I never fully bought into that theory.
Why would Russia blow up its own multi-billion-dollar infrastructure and destroy its biggest source of leverage over Germany, Europe, and the West? While the pipelines were already offline, the Russians were counting on the Europeans eventually getting weary of going without their cheap gas. The ability to turn the tap back on was Moscow's best bet to undercut Western support for Ukraine.
Most importantly, it's been nearly five months without a shred of evidence linking Russia to the sabotage. If there were anything at all that pointed to the Kremlin, US intelligence would have found it and we would already know about it. The fact that we don't tells me the Russians probably didn't do it.
Enter veteran investigative reporter Seymour Hersh, who last week published an explosive piece on his Substack blog alleging the United States blew up the pipeline in a joint covert operation with Norway behind Germany's back and deliberately hidden from Congressional oversight.
The US and Norway categorically denied any involvement, calling Hersh's article "utterly false" and "nonsense." Still, the story was a propaganda gift to Vladimir Putin and his cronies, giving ammunition to US critics in Russia, China, and parts of the developing world.
If true, not only would it give Russia justification to escalate its asymmetric attacks against the West (which they were going to do regardless) — but also it would drive a wedge in the NATO coalition and have massive political (and even legal) ramifications for the Biden administration.
Does Hersh's theory hold up?
The man is a journalistic legend, having earned a Pulitzer Prize for his reporting of the My Lai massacre and cover-up. But much of his work since then has been shoddy and — worst of all — rife with motivated reasoning. His (understandable) bias against the US intelligence community and national security establishment colored his widely discredited claims that the Osama bin Laden killing was a cover-up and that the Syrian government didn't use chemical weapons.
The fact that this latest story aligns so neatly with Hersh's ideological prism should invite skepticism. And indeed, a look under the hood of Hersh's report reveals a whole lot of holes — and no smoking gun.
First, the explanation he lays out for hiding the operation from Congress isn't internally consistent. Hersh initially claims the operation was devised without special operations personnel to avoid having to notify Congress. But any covert action pursued under Title 50 authority — the section of US code governing covert and direct action undertaken by the intelligence community — would have had to be briefed to Congress regardless of what assets were used.
Hersh then suggests that the operation was actually "downgraded" to avoid Congressional notification. But that's not a thing: If it was a covert action, the government was legally required to notify Congress, end of story.
Second, Hersh's interpretation of President Joe Biden's and Under Secretary of State for Political Affairs Victoria Nuland's pre-invasion remarks as unambiguous threats of military sabotage is self-serving and disingenuous. If, as Hersh claims, the administration went through so much trouble to hide the operation from Congress, why would it foreshadow it publicly not once but twice?
The most logical reading is that they were instead referencing diplomatic engagements with Germany to halt pipeline operations, which were already underway.
Third, the publicly verifiable facts don't align with Hersh's timeline. He specifies that US Navy divers supported by a Norwegian Alta-class minesweeper planted the explosive charges during BALTOPS — the NATO military exercises conducted annually in the Baltic Sea — in June 2022. But publicly available data shows that none of Norway's five Alta-class ships were in the region during that exercise.
Hersh further claims that a Norwegian P-8 Poseidon — a maritime control aircraft — dropped a sonar buoy on the day of the blast to trigger the explosives. But according to flight tracking, none of the five P-8s that Norway operates were in the area that day.
That neither of these assets shows up on tracking data is critical because Hersh's core claim is that Norwegian assets were used precisely so these maneuvers wouldn't need to be covert.
More broadly, the very contention that the US would sabotage infrastructure partially owned by a key ally (Germany) in concert with another shared ally (Norway) without alerting Berlin beggars belief given what we know about Washington's strategic interests.
At the time, the Biden administration was pursuing closer ties with Germany on a range of issues, including tech regulation, China decoupling, and reversing the pullback in transatlantic cooperation initiated by the Trump administration. Blowing up Nord Stream would have jeopardized all those initiatives and invited Russian retaliation for a questionable benefit: definitively ending Germany's already-dwindling dependence on Russia to strengthen NATO unity.
Targeting Germany in cahoots with Norway also would've risked fracturing the NATO coalition Biden had explicitly focused on bolstering from day one — a risky move for a generally risk-averse administration.
To be clear, none of this means the US didn't do it. After all, Washington had been critical of these pipelines for years. And very few countries on Earth could pull off such a challenging operation, with the United States topping the list. Hersh could plausibly be wrong about the how while being right about the who, but his article doesn't prove anything.
If not Russia or the US, then who?
Who else had the motive, the means, and the opportunity to pull off such a risky, complex, and fingerprint-free operation?
My money is on Ukraine. Ukrainians had the most to gain from blowing up this multi-billion dollar, Russian-owned cudgel. They were also the most risk-tolerant. Russia poses an existential threat to them, so they are willing to do almost anything to prevail. They knew they couldn't win without a strong and united NATO behind them, and they knew the alliance would be vulnerable as long as Russia could leverage its gas against Germany.
Five months ago, I would've been skeptical that the Ukrainians had the technical and operational capabilities to do something like this. But I also didn't think they'd be able to blow up the Kerch Bridge connecting Crimea to Russia, itself quite a sophisticated operation. Nor did I imagine they could assassinate Darya Dugina just outside of Moscow. So it's clear the Ukrainians are eminently willing and able to plan and execute high-risk reasonably complex operations.
Is it possible Ukraine had help from one or several NATO members? Poland, for instance, has been the most strident Russia hawk in the coalition, aware that it's next on Putin's wishlist should Ukraine fall. It's not inconceivable that the highly competent Polish special forces could have pulled off such an attack. Of course, as far as means go, the Americans would have had the most operational capability to help Kyiv with this. That's what made Hersh's theory compelling at face value.
Absent any proof, though, it's speculation all the way down. And make no mistake: There's no proof of anything — not yet at least.
Beware of anyone who claims otherwise.
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