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O’Reagan: ‘I don’t know if Canada needs more pipelines’

“I don’t know – I think the market will decide that and I think investors will decide that,” said O’Reagan.

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The National Resources Minister and his civil servants don’t know if Canada needs more pipelines, but experts say the answer is obvious.

Reporters asked Seamus O’Reagan if Canada needed more pipelines during a stop in Alberta June 3 to announce hydrogen fueling stations for heavy trucks.

“I don’t know – I think the market will decide that and I think investors will decide that,” said O’Reagan.

It wasn’t the first time the question had been asked, according to documents the Canadian Press obtained by request.

After Keystone XL was cancelled in January, O’Reagan’s deputy minister held meetings with the Alberta government, Keystone XL owner TC energy, and other stakeholders.

A briefing note suggested the deputy minister ask: “Do you believe Canada still requires additional export capacity beyond [TransMountain] and Line 3? What do you see as the likely routes to putting it in place?”

Richard Masson, an executive fellow of the University of Calgary’s School of Public Policy, said the industry knows what the government might not.

“It’s better to have excess pipeline capacity so that if a refiner is trying to give you a lousy price, you’ve got an option to send it to a different refinery. And so that’s why producers are very keen to have more pipeline capacity than we have,” said Masson.

“A lot of folks who have never been in the oil business don’t understand that. So deputy ministers and ministers federally may never have had those kinds of experiences. But if you’re in the oil patch, you absolutely know you need options. You need spare capacity because that’s how you’re going to get the value for your resources,” he said in an interview.

Dan McTeague, president of Canadians For Affordable Energy, said the briefing memo shows a lack of esteem for the major economic contribution of pipelines and the energy sector.

“I don’t think the bureaucrat said this haphazardly or capriciously. I think unfortunately, it underscores substantial, significant and dangerous secrets by Canadians as to how important those pipelines are to the standard of living and the valued foundational benefits that we often take for granted,” McTeague said in an interview with the Western Standard.

“The deeper question is, if we’re going to allow to roll over and play dead every time a pipeline is destroyed, either by our government or by another government… then what is it that we want to do? Do we really want to end the oil and gas sector industry in Canada, representing directly 11% of the country’s GDP? If the question is, can we do without that industry? If we can do without pipelines, then how do you substitute an 11% drop in your economic activity? I don’t see it happening.”

Mike Simpson, Executive Director of Operations for the Canadian Energy Centre, agrees the case for more pipelines is strong.

“Canada does need additional pipelines. What the [Keystone XL] decision taught us is we shouldn’t have to rely on our ‘friends’ to grow our economy. While [TransMountain] and Line 3 are extremely important, those lines will provide egress of our current production, not necessarily allow for immediate growth of production. If Canada wants to see decades of economic strength and a strong and secure energy system we must build our own pipelines to our own coasts,” Simpson said in a written response to queries by the Western Standard.

“While there is the belief the market will decide if more pipelines are necessary, the market has been distorted by governments through over-regulation and interference – C-69 and [the] west coast tanker ban come to mind.

“In Alberta, there are many approved oil and gas projects ready to begin if there is an ability to move that product out. Those projects would bring great economic fortune to Canada. However, until we have our own secure pipeline network to our own coasts, we will be missing out on a tremendous opportunity.”

Harding is a Western Standard corresponded based in Saskatchewan

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3 Comments

3 Comments

  1. Steven

    June 28, 2021 at 9:51 am

    Minister O’Reagan forgets there are no Canadian oil pipelines from Western Canada to Ontario or Quebec. Line 5 runs down in to the USA then back into Ontario.

    I’d say to Albertans, why are we supporting Central Canada when they don’t like us, don’t want us as part of the country anyways? Let the oil/gas industry in Alberta know that Eastern Canada can go it alone on energy. Albertans will keep selling to the USA & shipping West. Oil/Gas to Eastern Canada suspended until the Liberal Idiots come to their senses; if ever ??

  2. Linda McAuley

    June 16, 2021 at 5:50 pm

    I guess I would say as long as we have Saudi oil coming to Canada, we don’t need to use our own product. / sarc

  3. Left Coast

    June 16, 2021 at 9:30 am

    Scamus O’Reagan doesn’t Know . . . just like the rest of Justin’s merry band of Diversity & Gender morons.

    Windmills & Solar Panels will not be a substitute for Oil, Gas & Coal EVER !

    There is nothing today that can replace so-called fossil fuels . . . period !

    Meanwhile . . . long Trains of Oil Tank Cars are coming down the Fraser Canyon every day . . . only a matter of time till we find a few in the Fraser River. When that happens it will be entirely on the Federal Govt, BC & the Enviro-fascists.

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Energy

BAROOTES: There’s nothing ‘just’ about Justin’s ‘Just Transition’ 

Erika Barootes says Albertans need a voice in the Senate to fight the phasing-out of the energy sector.

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Erika Barootes is a Senate nominee candidate for the Conservative Party of Canada

A key reason I put my name forward to represent Alberta in the Senate is to speak up for the many Albertans whose lives and livelihoods are being fundamentally ignored by Ottawa.

The Liberal government’s so-called “Just Transition” scheme is only the most recent example. In its crosshairs are the 522,000 Canadians working in the oil and gas industry and the families that depend on them.

You easily could have missed it: right before the Liberals pulled the plug and called their opportunistic election in August, they launched consultations for “just transition” legislation. That consultation has already closed, with no further opportunities for feedback to be welcomed by the government.

No matter how it’s branded, the “transition” here involves putting resource workers out of work, with their livelihoods deemed a write-off.

The “Just Transition” plan, a scheme to mothball a key economic driver in our country, started long before the creation of Trudeau’s buzz term with the stopping of resource projects. Whether it was the prime minister’s killing Northern Gateway by cabinet order or the regulatory strangulation of the Frontier oil sands project, amongst others, the government knows the jobs it doesn’t want Canadians supporting their families with. 

The glaring omission in the idealistic “just transition” are the lives of those it impacts immediately. Much like the consumer carbon tax forced on provinces by Ottawa, the considerations for ordinary people weren’t taken into account: the carbon tax didn’t stop people from driving to work, or their kids to extra-curricular activities, or paying to heat their homes — it just made it more expensive. 

Leadership – especially amongst Alberta companies – in reducing GHG emissions per barrel, or ongoing innovation in the oil and gas industry, global demand for resources, and the uncomfortable question of “then who are we going to import our resources from?” don’t seem to resonate at all with Ottawa.

While the legislation hasn’t been introduced, nor has the report from the “consultations” even been finished, I’m not optimistic about where the NDP-backed Liberal minority government in Ottawa will land on this.

This is exactly why the Senate, the upper house, needs legitimate representation from our country’s regions. That was supposed to be the point of the Senate, a counterbalance and gut-check on the House of Commons. 

Another handpicked-by-Ottawa appointee to speak for Albertans only exacerbates the problem. 

I know what you’re thinking: you think this government is going to appoint the person Albertans choose? What’s the point? 

Hundreds of thousands of ballots were cast in Alberta’s Senate nominee elections in 1998 and 2004 during the previous period of federal Liberal governance. In 1998, there wasn’t even the hope of a merged federal Conservative Party on the horizon.

This election, and Alberta’s proud history of leadership on Senate reform, gives Albertans an opportunity to make their voices heard. 

The Liberals and NDP who mock and boycott these elections love the appointment process and an effective rubber stamp on whatever comes out of the House of Commons. No checks, no balances. 

With next-to-no consultation on consequential legislation like the upcoming “just transition” scheme coming out of Ottawa, it’s clear why we need real representation in the Senate to put checks and balances on the House of Commons. 

People’s livelihoods are too important to be lost in the process.

Erika Barootes is a Senate nominee candidate for the Conservative Party of Canada

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Energy

WITTEVRONGEL: The oil and gas industry is helping rein in Alberta’s deficit. Can it also help lower GHGs?

“If we want to have a chance of hitting this ambitious target, we need to shift the narrative from blaming the oil and gas industry to embracing it as an integral part of the solution.”

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Alberta’s expected deficit will be less than half what was projected in February, largely thanks to the rebound of the oil and gas industry. Expanded oilsands production, improved oil prices, and increased oil and gas investment have resulted in higher than anticipated resource revenues. In fact, the province’s revised royalty estimates are now triple the original sums.

While the oil and gas industry steps in and once again saves Alberta, the forecasted resource revenue is being called too high to be sustainable. In addition, the serendipitous rebound occurs as we emerge from Canada’s “infernal summer,” with many calling for decisive action on climate change.

Given the federal government’s pledge to achieve net-zero emissions by 2050, we must consider how and where the oil and gas industry fits into that. While some are more than happy to see the entire sector go up in flames, others have a more nuanced vision of the future. With its technology, resources, and infrastructure, the industry is actually uniquely situated to not only play its part in a low-emission future, but to lead.

Capturing carbon

While the Canadian oil and gas sector contributes only about 0.3% of overall global GHG emissions, and work is well underway to develop more renewable energy sources for consumption, there are other high-emitting industries like steel and cement that lack viable options for reducing emissions. Therefore, without some form of carbon capture, utilization, and storage (CCUS), net-zero seems unrealistic. 

CCUS involves capturing carbon dioxide and, if not used on site, often transporting it (by pipeline) to be used elsewhere or injected into geological formations for permanent storage so it does not re-enter the atmosphere. The oil and gas industry, with its expertise, pipelines, and other infrastructure, is best positioned to lead in this area. In fact, the same formations we extract oil and gas out of can store CO2, deep in the ground.

In recent years, some of the world’s largest and most advanced carbon capture projects have been developed in Alberta. With a promised federal investment tax credit for CCUS slotted to take effect in 2022, this is an opportune time to expand and grow CCUS potential.

In addition, the much-vilified Alberta oilsands are in close proximity to Canada’s Western Canadian Sedimentary Basin, offering a world-class opportunity for permanent carbon storage. 

CCUS fits into the broader circular economy model for mitigating emissions. The four Rs of the circular carbon economy—reduce, reuse, recycle, and remove—were endorsed at the G20 Energy Ministers meeting in 2020 as being “a holistic, integrated, inclusive, and pragmatic approach to managing emissions.” As such, CCUS has a part to play in a resilient, sustainable system.

Reducing net GHG emissions to zero by 2050 is going to be a challenge. If we want to have a chance of hitting this ambitious target, we need to shift the narrative from blaming the oil and gas industry to embracing it as an integral part of the solution. 

Guest Column by Krystle Wittevrongel, Public Policy Analyst at the Montreal Economic Institute www.iedm.org

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Energy

Deal sees Alberta becoming half owner of the Sturgeon Refinery

North West Refining will be paid $425 million to forego future tolling revenue and for its 50% equity stake. Canadian Natural Resources Ltd., which owns the other 50% of the refinery, will also be paid $400 million.

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The Alberta government now owns 50% of the troubled Sturgeon Refinery.

Energy Minister Sonya Savage said yesterday the move should free up $2 billion for provincial coffers.

“We are taking action to get a better deal for taxpayers and reducing long-term costs. This agreement provides more economic certainty which will benefit Albertans today and into the future. We look forward to our renewed arrangement with the refinery’s operator, the North West Redwater Partnership, in the years to come,” Savage said in a release.

Under the deal, the government is transferred a 50% ownership interest in the refinery previously held by North West Refining.

The government made the switch after reviewing contracts the Sturgeon Refinery signed with former premier Ed Stelmach’s government in 2011.

The Alberta director of the Canadian Taxpayers Federation, Kevin Lacey, wasn’t happy with the deal.

“The government is just trying to dig themselves out of bad contracts they signed in the past. We expect our government to run schools, hospitals and keep our taxes low, they should not be involved in the energy business,” Lacey told the Western Standard.

“Alberta needs our government to support our energy sector, yes, but it should not be directly involved in the industry. Let the politicians run the government and business people run businesses.”

With the deal, North West Refining will be paid $425 million to forego future tolling revenue and for its 50% equity stake. Canadian Natural Resources Ltd., which owns the other 50% of the refinery, will also be paid $400 million.

“This process will not cost taxpayers any additional funds than the government would otherwise be obligated to pay as a toll payer,” said a government release.

“Through the agreement, the government is able to capture the value of processing bitumen as both a toll payer and facility owner.

“This plan improves the government’s net present value for the refinery by approximately $2 billion over the life of the project. Net present value is the difference between the present value of cash inflows and the present value of cash outflows over a period of time.”

The government said the agreement also frees up $1 billion in cash flow over the next five years because additional cash flow is a result of the restructuring.

The agreement includes a 10-year extension of the processing agreement to 2058.

“With this optimization, the government has an equal vote in the control of the refinery to which it is the majority toll payer. Canadian Natural will provide operational leadership to North West Redwater Partnership,” said the government.

The Sturgeon Refinery is designed to process approximately 79,000 barrels per day of diluted bitumen from Alberta’s oil sands into higher-value products like low-carbon, low-sulphur diesel, vacuum gas oil, diluent and natural gas liquids.

It was set to originally cost $5.4 billion but was completed last year at a cost of close to $11 billion.

Dave Naylor is the News Editor of the Western Standard
dnaylor@westernstandardonline.com
Twitter.com/nobby7694

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