Industry exec urges new oil pipelines for Canada

Days before the Canadian government is expected to decide on some key projects, a proponent speaks out in favour of expanding exports beyond just the US. Above, the Kinder Morgan Trans Mountain Expansion Project’s oil storage tank farm is seen in Burnaby, British Columbia. (Canadian Press/REX/Shutterstock)

TORONTO (ICIS)–Canada needs to approve proposed new oil pipeline projects to lessen its dependence on the US and get a higher price for its oil by accessing global markets, an industry executive said on Tuesday.

The comments by Martha Hall Findlay, CEO of Canada West Foundation, came as the federal government under Prime Minister Justin Trudeau is poised to issue decisions on proposed big oil pipeline projects this week.

Hall Findlay said that planned pipelines to “tidewater” would help Canada’s oil reach markets other than just the US, thus opening up the opportunity for higher prices.

“In Canada, we are [currently] stuck with pretty much one customer, the US, so our pricing is different. We suffer a price discount; we get less per barrel” than with access to world markets, Hall Findlay said in a webcast media briefing.

As such, proposed projects going to the sea were “particularly important” for Canada, she said.

However, that does not mean that pipeline projects to the US are less important as it is cheaper for producers to supply that nearby market, she said.

As for the prospects of particular projects, Hall Findlay said that she did not expect Enbridge’s Northern Gateway pipeline to get approval, given that Trudeau campaigned against that project in elections he won last year.

The 1,177-kilometre project would ship more than 500,000 bbl/day of oil from Alberta province to the Kitimat port in northern British Columbia, from where it would be exported.

The project has conditional approval from Canada’s National Energy Board (NEB). However, in a recent ruling against Northern Gateway a court determined that Canadian indigenous people had not been sufficiently consulted.

Hall Findlay was more hopeful about Kinder Morgan’s Trans Mountain project from Alberta to a port near Vancouver, British Columbia. That project would involve tripling capacity of an 1,150-kilometre existing pipeline to just below 900,000 bbl/day.

In addition to Northern Gateway and Trans Mountain, the government is also due to decide on a project by Enbridge to replace its 1,660-kilometre Line 3 oil pipeline from Alberta to Superior, Wisconsin, in the US.

Line 3 currently operates at about half of its capacity, for safety reasons. The replacement would allow it to run at full capacity of 760,000 bbl/day.

Unlike TransCanada’s cross-border Keystone XL project from Alberta to the US, which was rejected by outgoing US President Barack Obama a year ago, the Line 3 project would not require US government approval.

As for Keystone XL, President-elect Donald Trump said during the US election campaign that he would back the project, opening up the possibility that he may reverse Obama’s decision.

But Hall Findlay was sceptical, saying that “campaign rhetoric is not necessarily the same as reality”.

She said that rather than hoping for a revival of Keystone XL, “we should all take a little bit of what Trump is saying with a grain of salt. We should just pause a little bit and focus on what we are doing here in Canada.”

Canada West Foundation is a Calgary, Alberta-based public policy think tank. Hall Findlay is a Canadian businesswoman and former federal member of Parliament for Trudeau’s Liberal party. In 2013, she lost against Trudeau in a race for the Liberals’ leadership.

SMALL PHOTO: Not everyone favours the pipeline projects. Protester Jessica Lambert Mascotte sits chained to a pipeline junction of the Trans Northern pipeline project in Oka Provincial Park, Quebec. (Canadian Press/REX/Shutterstock)

INSET IMAGE: Pipelines with two pumpjacks in the background in Alberta, Canada. (Design Pics Inc/REX/Shutterstock)