Energy minister solidifies federal acceptance of west-to-east oil pipeline
[Almost there]
' OTTAWA – The federal government is firming up its support of two projects that would see oil from Alberta piped to Atlantic Canada. Natural Resources Minister Joe Oliver says he gave a tentative nod to one proposal in a meeting with industry giant Irving Oil. “I met with Arthur Irving (Irving Oil’s CEO) and expressed the support of the government of Canada, in principle, for this initiative,” Oliver said in an interview with The Canadian Press. TransCanada Corp. (TSX:TRP) wants to convert an existing, underused natural gas line to bring oil from Western Canada to Quebec and New Brunswick. It would be up to the National Energy Board to approve such projects, and TransCanada has not yet formally submitted the proposal for scrutiny.
Irving Oil owns a refinery in Saint John with a current capacity of about 300,000 barrels per day. If the conversion goes ahead, the pipeline could move upwards of one million barrels per day and benefit the Irving refinery. Oliver said industry participants have built a solid business case for the proposal, and he supports it, so long as it passes the necessary regulatory hurdles.
[...] Alberta Premier Alison Redford and New Brunswick’s David Alward have also been talking for months about the feasibility of shipping oil to Saint John. The benefits are many, advocates say. Converting and expanding the pipelines would create thousands of jobs and provide governments a significant revenue boost. Consumers could eventually see lower gasoline and other fuel prices, because Western crude is much cheaper than the Brent crude refineries are using now. It could also reverse the recent trend of refineries closing their doors, said former Liberal MP Dan McTeague, who runs a website dedicated to the tracking of pump prices.
“If we do nothing, we will continue to have higher prices,” McTeague argues. “And that will not solve . . . the conundrum of Eastern Canadian refineries closing down while Western oil has no market in which to sell.”
Just over two years ago, a major refinery in Montreal was shuttered, which cut refining capacity in Eastern Canada by upwards of 10 per cent. There hasn’t been a new refinery built in Canada since the mid 1980s. Eastern refineries currently rely on crude imported from overseas, which is more expensive than oil that comes from Western Canada. It’s just one of the reasons why gasoline prices are much higher in the East than they are the West. A lack of adequate pipeline capacity has also meant Alberta crude hasn’t been able to find its way to the most lucrative markets. Oliver said he sees great potential to tap into those markets with a west-to-east flow of crude.
“The west coast of India is closer to the east coast of Canada than the west coast of Canada is to India on the other side,” he noted. “I think Canadians take pride in the resources they have. And if we develop them responsibly, this is a national building exercise.”
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Jim |
