Tuesday , 14 July 2020

The current attitude towards pipelines is costing us dearly.

Kitchen Table Talk: December 27th, 2017

Many people may not think about it or discuss it, yet they intuitively understand that wealth doesn’t simply appear. If it did, the whole world would be rich. It’s not. Even when a nation has abundant resources—oil, gas, minerals—wealth is never assured. Nigeria ranks 11th in global petroleum reserves, yet comes in 139th in per capita GDP.

Venezuela has the most abundant oil reserves on the planet—more than the Saudis—yet Venezuela is poorer than Kazakhstan, Libya, and even the Maldives. The policies of Hugo Chavez and Nicolás Maduro have brought Venezuela to its knees. Stores are empty. Hospitals lack basic medical supplies. People go hungry. Even elected politicians haven’t been paid in over a year.

Mining.com reported that only a fifth of the world’s total oil reserves are accessible to private investment, and that 56% of that total is in Canada. We have the world’s third-largest oil reserves but we’re certainly not the third-wealthiest country. We’re not even in the top 15, and many predict our economic position will falter due to anti-development policies being advanced by Ottawa and provincial and junior governments.

Global oil demand will exceed 103 million barrels/day by 2040, up from 92 million in 2015. Canadian oil is a resource to the world, yet due to government policies opposing or impeding pipeline construction, our oil is pretty much landlocked. Western Canadian oil doesn’t even freely reach eastern Canada. Quebec and the Maritimes buy Saudi oil (and elsewhere) while western Canada sells petroleum at a discount to the U.S., which exports energy at higher world prices to the markets Canada can’t access.

Canada already has over 750,000 km of pipeline and a massive share of the world’s readily accessible oil supply, yet our own politicians resist the development of new, dependable infrastructure that ships petroleum one way and sends money back the other.

The Trump administration wants “American energy dominance” so it’s elevating fossil fuel production. The U.S. Senate this month opened the door to allow drilling in the Arctic National Wildlife Refuge.

In Canada, the absence of pipelines has led to the extended use of rail. Why activists and politicians think rail cars loaded with petroleum are preferable to highly regulated and reliable underground pipelines is a mystery. In a news story titled, “Crude oil spills are bigger from trains than pipelines,” Global News even reported that “train spills in transit are larger than those from pipelines.”

Years ago, very little petroleum moved by rail. According to Canada’s National Energy Board, from January 2012 to September 2017, Canadian exports by rail went from 290,000 monthly barrels to more than 4 million. Obviously, there’s a pipeline shortage.

Former federal Finance Minister Joe Oliver says the Canadian attitude toward pipelines is costing us dearly. He notes that the Prime Minister “sang kumbaya while he rejected Northern Gateway, encouraged intrusive and costly regulatory procedures that killed Pacific NorthWest LNG and Energy East, and has provided zero leadership in advocating for the embattled Trans Mountain pipeline.”

Saskatchewan’s Brad Wall points out that the only winners from blocked Canadian pipelines are other oil-producing countries. He says that the Saudis and others are going to supply the world’s growing demand and get paid for it, all the while holding little obligation for better environmental provisions or higher human rights standards—things which Canada maintains and considers important.

Each week, a small group of Official Opposition MLAs get together to talk through a specific policy issue. As part of the process,
a short commentary is compiled and then edited. Editorial committee members include DREW BARNES, Cypress Medicine Hat; SCOTT CYR Bonnyville Cold Lake; GRANT HUNTER, Cardston-Taber-Warner; WES TAYLOR, Battle River Wainwright; MARK SMITH, Devon-Drayton Valley; RICK STRANKMAN, Drumheller-Stettler; and RON ORR, Lacombe-Ponoka.

About Scott Cyr