‘This is a crisis,’ PM tells Alberta
LOW OIL PRICE A ‘MASSIVE CHALLENGE,’ TRUDEAU SAYS AS PROTESTERS GATHER IN CALGARY
Prime Minister Justin Trudeau says Alberta is in a crisis as the province’s oil is being sold at a discount of about $45 a barrel, but he and some oil company bosses agree there are no easy fixes Ottawa can offer.
“There is no question that folks in Alberta, folks here in Calgary, are living through extremely difficult times. This is very much a crisis,” Trudeau said Thursday following an affordable housing announcement.
“When you have a price differential that’s up around $42, $50 even, that’s a massive challenge to local industry, to the livelihood of a lot of Albertans. I hear that very, very clearly.”
Premier Rachel Notley has said the price gap between Canadian and U.S. crude is costing the Canadian economy $80 million a day.
Hundreds of pro-oil protesters shut down part of the street outside the hotel where Trudeau addressed the Calgary Chamber of Commerce.
Inside, chamber CEO Sandip Lalli grilled Trudeau on what Ottawa intends to do, including possibly investing in moving crude on trains as a stopgap measure as new market-opening pipelines remain in limbo.
“Currently, the federal government doesn’t have a plan to address the $80 million that’s coming out?” Lalli asked Trudeau in a questionand-answer session.
“You think there’s a super-simple easy answer and there’s not. There’s a multi-faceted complex issue and as much as there is a tendency out there in the world to give really simple answers to really complex questions, unfortunately the world doesn’t work like that,” Trudeau replied.
“We need to make sure that we’re moving forward in the right way and that is where actually listening to the experts is sort of the best way to make policy.”
Trudeau said the federal government is doing what it can to get the Trans Mountain pipeline expansion built, which would triple its capacity to carry oil to tankers on the West Coast.
The federal government bought Trans Mountain and its expansion project for $4.5 billion last summer only to have the Federal Court of Appeal strike down its approval, citing inadequate Indigenous consultation and failure to consider impacts on marine environment.
Trudeau said the sector should benefit from his government’s announcement Wednesday that companies will be able to immediately write off capital investments.
However, the federal fiscal update included no Albertaspecific measures — prompting a harsh reaction from the province.
“The crisis happening in this province affects the whole country but they are speaking a different language,” Alberta Finance Minister Joe Ceci said Wednesday. “We must get our product to tidewater and nothing today addresses that.”
Canadian Natural Resources Ltd. executive vice-chairman Steve Laut, who participated in a roundtable with the prime minister Thursday, said the accelerated capital cost allowance “doesn’t matter with differentials where they are because nobody’s going to spend any money.”
Laut said Trudeau seemed to appreciate how dire the situation is and was receptive to ideas. But he said he’s skeptical a federal investment in crude-by-rail, as the Alberta government has urged, would deliver swift relief.
“I don’t know what more the federal governments can do that companies ourselves can’t do,” Laut said. “Getting (rail) cars is tough to do. It takes time to build these things.”
Notley said last month the federal government needs to step up to support a rail expansion.
I DON’T KNOW WHAT MORE THE FEDERAL GOVERNMENTS CAN DO THAT COMPANIES OURSELVES CAN’T DO.
“We need more cars. We need to order more locomotives in order to get more cars onto rail. That’s the bottom line,” she told reporters in October. She agreed pipelines are the long-term solution to Alberta’s oil-price crisis. “In the meantime however, we need to take a close look at the tools available to us to close the differential where it’s feasible.”
But federal officials, speaking to Bloomberg News, said Ottawa is unlikely to heed the plea because it would take at least a year to get the new trains in place,
On Thursday, Notley said the province is willing to go it alone to buy trains to add between 120,000 and 140,000 barrels per day of oil export capacity if the federal government isn’t willing to help.
That capacity would be in addition to current record levels of crude-by-rail shipments, she added.
Notley also announced her government would add oil and gas drilling to a list of trade-exposed industries exempt from the province’s carbon tax, a move expected to provide $750,000 to $1.5 million per year in relief for the drilling industry.