Morneau delivers sound bites instead of assurances on TMX

Finance Minister Bill Morneau journeyed into the heartland of Canada’s oil industry Wednesday to sell his government’s approval of the Trans Mountain pipeline expansion. It should have been an easy pitch. He’s in downtown Calgary, talking to a room of business types, about the merits of an oil pipeline.

However, his discussion about why the federal Liberal government is moving ahead with the Trans Mountain expansion (TMX) did little to disarm skepticism about Ottawa’s resolve.

And his answers to questions about the future of Canada’s oil and gas industry — will more export pipelines ever be approved, and does Ottawa see the industry growing in the coming decades — were as tepid as warm beer.

“I didn’t hear anything about getting TMX done. I heard a bunch of fluff,” said Whitecap Resources CEO Grant Fagerheim, who attended the event.

In the coming weeks, Albertans will be watching closely to see whether the project, almost tripling the capacity of an existing pipeline that moves oil from Alberta to the Pacific coast, is built in the face of expected legal challenges and protests.

They also want to know if the federal government would like to see the oil and gas sector expand as it seeks to balance environmental and economic considerations.

All of this is unfolding against the backdrop of a federal election this fall, and concerns about federal bills C-69 and C-48.

“Where are we going, what does the energy future look like in Canada?” wondered Fagerheim.

Others in the room called Wednesday’s address more of a campaign-style speech than a blueprint for restarting an infrastructure project taxpayers bought for $4.5 billion last year.

“He was just sent in to test the water,” said oilpatch veteran Mark Salkeld, a vice-president with Cleantek Industries. “It’s no confidence builder.”

It could have been, and without much extra effort.

On Tuesday, Prime Minister Justin Trudeau gave the green light for the second time for the Trans Mountain expansion to be built. For the energy industry and the Alberta government, it’s a big deal, creating jobs and generating significant additional revenues.

Environmentalists are upset with the decision and its effect on Canada meeting its international commitment to reduce greenhouse gas emissions.

The federal finance minister correctly pointed out the project will help shrink the discount western Canadian oil has suffered from in the past year due to a lack of pipeline capacity.

Revenue from the operation and eventual sale of the Trans Mountain pipeline back to the private sector will be directed into clean energy investments.

“We need to deal with the climate challenge that we are all facing,” Morneau told the Economic Club of Canada event.

Heading into the speech, many in the energy sector wanted to hear details about plans to get construction restarted.

“It’s hard to get too elated about it when it was already approved once before,” said Seven Generations Energy CEO Marty Proctor. “This a step in the right direction, but there is so much more to accomplish before we are going to have a successful and thriving energy business.”

The project was initially approved by the Trudeau government in late 2016. A court decision overturned that approval last August, citing inadequate consultation with affected First Nations and improper consideration of marine-related issues.

In his address, the finance minister missed an opportunity to provide concrete assurances to anxious Albertans about the government’s commitment. Nor did his speech address Bill C-69 or the oil tanker moratorium off the northern B.C. coast, two bills that have the oilpatch and province riled up.

“I don’t think people felt any more comfortable leaving the speech that (Trans Mountain) would definitely get built,” said Tristan Goodman, president of the Explorers and Producers Association of Canada.

When asked by journalists, Morneau didn’t address whether there will be growth for the oil and gas industry in Canada over the next two decades.

As for the prospect of more oil pipelines being approved, he simply said if one comes forward: “We will always consider that; that is our responsibility.”

It’s not exactly a ringing endorsement.

“That is the more worrisome concern if you are in the energy patch,” said Mount Royal University political scientist Duane Bratt. “There didn’t seem to be a whole lot of support for future projects.”

Oddly, it was only when asked by journalists that Morneau uttered the kind of assurance the audience wanted to hear about Trans Mountain’s fate.

“We will persist in this, absolutely,” he said. “What is happening today is we are back at work.” So what happens next? During a conference call, Trans Mountain Corp. chief executive Ian Anderson said shippers are still on board and shovels should be in the ground as early as September.

Construction is expected to take between 30 and 34 months, and additional oil could be flowing on the line by the second or third quarter of 2022.

When asked about the biggest challenges getting the long-awaited project completed, Anderson provided a simple response. “There will be legal proceedings, there will be opposition groups voicing their concerns, there will be challenges in some Indigenous communities,” he said. “But I think we have the experience, the reputation and the approach necessary to overcome those and I want to turn my mind to the difficult task of execution.”

Now, if only the federal cabinet ministers could offer such a straightforward response.