InterviewEnergy exports to US harm Canada

06 February 2008 18:31  [Source: ICIS news]

By Stefan Baumgarten


TORONTO (ICIS news)--Canada’s chemicals and plastics industry will face many more plant closures and job losses unless the country puts a stop to the unrestricted export of oil and gas from Alberta to the US, a top Canadian union leader said on Wednesday.


Canada’s federal government needs to develop a strategy on oil and gas and its uses in a strategic way for Canada, or this business [chemicals] will be slipping away and we will be importing product that could have been made here,” said union leader Bob Huget.


Huget is vice-president of the Communications, Energy and Paperworkers Union of Canada (CEP), which represents chemical workers, including 180 of the 270 workers losing their jobs as a result of the Lanxess' acrylonitrile butadiene rubber (NBR) closure announced for the second quarter at Ontario’s petrochemicals hub in Sarnia.


The reasons for the many chemical plant closures - including major shutdown’s by Dow Chemical at Sarnia and Basell at Sarnia and Montreal - lay in the unrestricted exports of Canadian energy from western Canada, particularly Alberta, to the US, Huget said.


In eastern Canada, energy costs were soaring and feedstock supplies running short, he said, adding that the downstream industries in Ontario and Quebec were paying the price for the high petro-dollar.


“There is no attention being paid to the fact that we need energy in this country as well, at made-in-Canada energy prices,” said Huget.


Canada’s National Energy Board (NEB), a regulatory body, was only looking at the energy industry’s interest when approving energy exports to the US, but not at the interests of all Canadians, he said.


"While I have no problem with the western provinces benefiting from the high price of crude oil, no attention is being paid to the negative effects this has on our industries.”


Chemical firms were not only shutting down plants but also ceasing many research and development (R&D) activities in Canada, with negative long-term implications for the chemical industry here, he said.


“Nobody is thinking about tomorrow when it comes to this country.”


Huget conceded that under Canada’s constitution, energy resources belonged to the provinces, and under NAFTA Canada could not just suddenly reduce energy exports to the US from one day to another.


However, with plans for ever more exports and pipelines from western Canada's growing oil, gas and oil sands sectors to the US, the situation in manufacturing in Ontario and Quebec would inevitably worsen if nothing was being done, he said.


"Nobody has stopped to ask: 'Shouldn't we have an obligation to protect Canadian downstream manufacturing and jobs, which rely on the energy, in our energy export schemes?,'" Huget said.


"I don't get the sense that [provincial and federal governments] are paying attention to this, they are just sleep-walking their way into a very serious problem for Canada."

By: Stefan Baumgarten
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