Alberta Oil - - CONTENTS - NICK WIL­SON nwil­[email protected]­ber­taoil­magazine.com

Canada’s in­abil­ity to af­fect world oil prices means we must lower our en­ergy trans­porta­tion costs


Trans Moun­tain pipe­line, Al­berta Premier Rachel Not­ley has fi­nally got­ten be­hind the project, and Prime Min­is­ter Justin Trudeau is re­lax­ing on the B.C. oil tanker mora­to­rium. Ex­cel­lent.

Not­ley “tilted”—to use a Henry Kissinger term for real poli­tik— on the North­ern Gate­way pipe­line, came out swing­ing against the anti-oil sands ac­tivists in her own party, and pushed Trudeau to pro­mote pipe­lines on his re­cent visit to Al­berta—all in just one month. More mu­sic to in­dus­try ears.

As “The 200” list grimly showed last month, when oil is down rev­enue is down; and when rev­enue is down re­al­ity ham­mers on the door of those in power. An op­po­si­tion, such as the Leap man­i­festo-fed bri­gade, can yelp and whine all it likes, but gov­ern­ments have to gov­ern, which is hard to do when the well’s run­ning dry. Not­ley and her en­ergy min­is­ter Marg McCuaig-Boyd proudly sport Canada Ac­tion’s “I Love Oil Sands” t-shirts—in or­ange, of course. They know which end of a pipe­line their so­cial spend­ing’s but­tered on. They are prag­ma­tists, and prag­ma­tists can de­liver in a way that ranters can­not.

In the short term, car­bon pric­ing is a dou­ble-edged sword. For pro­duc­ers who weren’t in­vest­ing in cut­ting emis­sions, the dou­ble whammy of in­creased car­bon and cor­po­rate taxes comes at the wrong turn of the eco­nomic cy­cle. Drillers won’t wel­come it ei­ther. But for ser­vice firms that sell cost-sav­ing and car­bon-cut­ting tech­nol­ogy, it’s a boon. In the long term, com­bined with roy­alty in­cen­tives that re­ward low­er­ing pro­duc­tion costs, it greens up Al­berta’s oil brand, boosts so­cial li­cense to get pipe­lines to tide­wa­ter, makes Canada’s crude glob­ally com­pet­i­tive and its pro­duc­ers more in­no­va­tive, and al­lows ser­vice firms to pen­e­trate over­seas mar­kets.

Now back to those pipe­lines. Let’s hope that Trudeau takes ac­tion quickly. It looks as if he’s tilt­ing too, but on the mora­to­rium on oil tankers on B.C.’s north­ern coast. Re­ports af­ter his moun­tain re­treat meet­ing with Not­ley sug­gest his elec­tion stance, like hers, is now more flex­i­ble. And the Fort McMur­ray wild­fire was a grim but timely re­minder of where the feds get their money from. Trudeau is, af­ter all, pro-pipe­line, but with a softer strat­egy than his pre­de­ces­sor. He also dropped in to Saskatchewan to visit Premier Brad Wall, who’s been prod­ding him about pipe­lines but with a sharper stick.

Trudeau says the best way to build pipe­lines is through co-op­er­a­tion with com­mu­ni­ties and First Na­tions along their paths. He’s a con­sen­sus builder. But build­ing sup­port takes time and it’s not pos­si­ble to be all things to all peo­ple. Trudeau has enough po­lit­i­cal cap­i­tal from his en­vi­ron­men­tal poli­cies to get at least one pipe­line built. There’s noth­ing Canada can do about world oil prices, which are de­ter­mined by the power plays of Riyadh and Tehran. But we can lower our own trans­porta­tion costs and gain ac­cess to global mar­kets.

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