Alberta Premier Danielle Smith made it clear Thursday that the province’s ethical oil supply will continue to “run economies,” regardless of her federal counterpart’s antics.
“I believe the world needs a secure supply of Canadian energy,” Smith told reporters. “The question that I posed was where else would America get its [energy] products from? Iran? Venezuela?”
U.S. refiners Delek US Holdings, and Phillips 66 told Reuters they expect higher Canadian volumes and reduced prices along the West Coast upon completion of the Trans Mountain pipeline expansion (TMX) this spring.
Once completed, the 300,000 barrel-per-day pipeline expansion would nearly triple the flow of barrels to 890,000 barrels and open access for Canadian crude to international markets.
“TMX has multiple knock-on effects in our organization,” contends Will Monteleone, president of Par Pacific Holdings, which processes Canadian crude oil at its Washington state refinery. The company also buys competing crude oil from Latin America for a refinery in Hawaii.
Premier Smith says Alberta should be “aspirational” about the oil and gas sector, adding the province will explore doubling its production, an idea she discussed with Tucker Carlson. pic.twitter.com/mjyY0LTrLB
— Rebel News Canada (@RebelNews_CA) January 25, 2024
“I mean, we’re right here; we’re friends, we’re allies, [and] we have an integrated system to fill that supply,” added Smith.
“We are here to assist them in [the] North American energy security strategy,” she said. “That will not only provide security but also affordability.”
TMX is expected to start operating in the second quarter of 2024, according to Jason Balasch, a senior director at Trans Mountain. The pipeline expansion is expected to bolster Canada’s pipeline capacity in early April and will ramp up to full capacity by the end of the year.
Smith said unlike the federal government, the Americans understand they can increase oil production and reduce emissions simultaneously. “They have massively increased their production of both oil and natural gas over the last 10 years despite having stated policies … to reduce emissions,” she said.
“That’s what we want to do. We want to increase production and reduce emissions so that we … address the dual problem of emissions and energy poverty.”
Danielle Smith (@ABDanielleSmith) on the Trudeau government’s attempts to limit Alberta’s oil and gas production:
“If you are trying to limit our production, it’s a violation of the Constitution, and so we are going to make sure that we defend that vigorously.” pic.twitter.com/XaztRfBWVy
— Rebel News Canada (@RebelNews_CA) December 22, 2022
However, regulatory delays and hefty budget overruns have beset the project for years.
The government-owned TMX suffered its third construction delay last fall after encountering difficult drilling conditions in a mountainous area between Hope and Chilliwack, B.C. The Crown corporation worried of a “catastrophic” two-year delay and billions more in losses as late as December.
Last September, Stk’emlúpsemc te Secwépemc First Nation disputed a proposed change to the pipeline route through an area known as Pípsell — a “cultural keystone place.” It proposed a 10-month construction delay to next December at an estimated cost of $2 billion in lost revenue.
Again, work on the pipeline halted in November for safety-related non-compliances in a wetland area near Abbotsford.
According to a Fraser Institute survey of senior oil and gas executives last year, 82 respondents said uncertainty in Canada concerning environmental regulations, disputed land claims, and the cost of regulatory compliance are significant impediments to future investment.
Out of the 15 energy jurisdictions in the survey, Wyoming ranked 1st in attractiveness for investment, followed by Texas (2nd) and Oklahoma (3rd). Alberta ranked 12th, and B.C. ranked 14th.
Alberta will fight back against the Trudeau government’s oil and gas emissions caps, says Premier Danielle Smith.
“This is not cooperative federalism,” she says. “It’s unacceptable and it’s unprofessional.”https://t.co/pmQJNq9XF2 pic.twitter.com/ZxWF0x6ohz
— Rebel News Canada (@RebelNews_CA) December 7, 2023
“Everybody keeps talking in very gloomy terms about the future of this industry,” contends Smith. “So, I say let’s be aspirational.”
“We’re going to see more announcements on natural gas and LNG exports with Coastal gas link having been completed and LNG Canada set to be up and running in 2025,” she added. “They also announced the next stage of that project with an additional line to the coast.”
“For the foreseeable future, we’re going to need a secure supply of oil and natural gas. And if it’s the case that the world reduces its reliance, we need to be the best barrel on the market, so that … our trading partners [continue to] have access to our energy.”
According to Reuters, Canadian oil producers are expected to ramp up output in the next couple of years and fill the expanded capacity, courtesy of TMX.
“The federal government does not intend to be the long-term owner of the project, and we will launch a divestment process in due course,” Finance Minister Chrystia Freeland told reporters in 2022.
Ottawa purchased the pipeline for $4.5 billion in 2018, but costs have spiralled out of control to $12.6 billion, then to $21.4 billion and most recently to $30.9 billion. The federal government plans to sell the pipeline once the expansion is completed.
