Brian Zinchuk is editor and owner of Pipeline Online
Saskatchewan Minister of Energy and Resources Bronwyn Eyre/Handout
REGINA – Of all the major pipeline project that have been proposed over the last decade, most have failed. Some, like Energy East, would have a direct impact on this province, but others, less so. But Enbridge Line 3 replacement was one of the most significant for this province, especially because it is now, finally, in operation after an eight-year effort.
Asked how significant the Line 3 replacement is to Saskatchewan, Energy and Resources Minister Bronwyn Eyre said on Oct. 1, “Absolutely, it’s a big deal for Saskatchewan. And it’s the first major Canadian pipeline project to be completed since 2015. So it’s a big day for the energy sector and producers in Saskatchewan.”
Night shift at the Cromer Terminal, where one of the final tie-ins took place. This was on the Canadian portion of the pipe, which went into service two years ago. Photo courtesy Enbridge
Line 3 replacement is part of Enbridge’s “Mainline,” a series of parallel pipelines that run from Edmonton, past Kerrobert, Rosetown, Outlook, through Regina and Kipling, past Fairlight before crossing into Manitoba, and then onto Superior, Wisconsin. The Mainline was originally built to Superior, the very western tip of Lake Superior, to allow tankers to be loaded for transport on the Great Lakes, and Superior is now a key pipeline hub. From there, other pipelines distribute Canadian oil through the American Midwest and to Central Canada.
She noted it links up to refineries. “It’s the great backbone, and really the only major pipeline left for Saskatchewan oil producers. The Mainline transports 70 per cent of our oil. Three of Saskatchewan’s oil producing regions are totally reliant on the Mainline for pipeline egress. So it is the major export pipeline, with terminals, here in Saskatchewan.”
Pipeline wars and Energy East
Asked if this is the end of the pipeline wars of the past decade, and if we should push for Energy East, she replied, “We can push, but it’s not something that can happen independently, of course. I don’t think we’ll get very far in light of the fact that the government that won last Monday, albeit without the majority that it wanted, cancelled it the first time round.
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“So, to play the long game, do we try to position ourselves in such a way that in the future, Energy East can be brought back into the conversation? Absolutely. But, of course, the company that runs it will have a say in that, and could run it, and would run it. And that’s the big problem. We saw that with TransMountain. The private company responsible walked away. So it becomes very challenging when these pipeline projects keep getting canceled, to continue to live in hop that private companies will continue to finance them, pursue them.
“Does Energy East make sense? Yes. But unfortunately a number of other jurisdictions have a say in that, and the federal government, and the private company that would run it,” Eyre said.
She noted the Impact Assessment Act, previously referred to as Bill C-69, is another cross-jurisdictional issue.
Quebec killed an LNG export project, and Europe is in energy crisis
Much like the failed Energy East project, the Government of Quebec, this last July killed the Energie Saguenay liquified natural gas project, which would have tied into the TC Energy mainline and allowed Western Canadian natural gas to be exported onto LNG carriers for export in the Atlantic basin. That project would have eventually allowed Canadian gas to supply Europe, which today is experiencing an energy crisis, with supply shortages and prices soaring.
“Obviously we’re missing out,” Eyre said. “What’s happening in Europe, that’s a very complex situation but it certainly is demonstrating to people in the UK and elsewhere throughout Europe, the importance of fossil fuels. I mean, I read the other day that Germany is ramping up coal, because, of course, they got out of nuclear, and it was oddly windless, quote, unquote.
“So their wind turbines, only generated about 10 per cent of necessary power in Germany, so that’s a problem, if you’ve also got out of nuclear. And obviously we know there’s been the issue of the gas line from Russia and so on that Germany certainly needs and wants it, but it takes a while to get all that rolling.
“You know, because of gas prices, they are now in a situation where as we see a number of companies are being bankrupted, and there are supply chain issues, and all kinds of issues that are going to potentially have pretty serious impacts on the UK and elsewhere, going into winter.
“Does this scream out to them that they should use LNG and import LNG from such a stable jurisdiction as Canada? Absolutely. Will they? That’s another question. Or will they, you know, get it elsewhere? So, I mean, certainly we can continue to tell the story, from Saskatchewan’s perspective, about the sustainability of our resource sector in our energy sector, but it’s up to other jurisdictions and the federal government to continue to continue to tell our story, you know, geopolitically around the world. When we’re seeing what we’re seeing right now in, in the UK, and elsewhere, I think it may be something of a wake up call to them, depending on where things go, about the real reality right now.”
She noted that Warren Buffett had expressed concern with the federal regulatory structure with Energie Saguenay.
“It all creates a lot of uncertainty, and so one can say, ‘Yes, let’s bring back Energy East,’ but there are so there are so many headwinds that that come into play there. And Bill C 69 is a big part of that,” Eyre said.
No end to ironies
“There is no end to ironies here, I mean, in terms of, you know, you talk about the European situation. Let’s not forget, you know, President Biden and his request of OPEC to increase production because it just doesn’t suit right now politically to have consumers experiencing high gas prices.”
She pointed out UK Prime Minister Boris Johnson’s hydrogen strategy, announced this summer, has similar issues.
“I think you know we look at when you when you consider that in light of Biden’s knee jerk reaction on the gas prices thing. Perhaps there’s a considerable political consideration that will come into play. If consumers feel absolutely overwhelmed, not only with shortages, but also incredibly high prices. So where this is all going to you know is impossible to say but there are some developments that certainly have been highlighting the importance of price on could for consumers. And perhaps, you know, a longer-term impact to some of these shorter term he jerk reactions around pulling out of everything without really thinking about what you’re doing to replace what you’re doing. And as I say the wind thing in Germany is an example of that I thought that was relatively ironic,” Eyre said.
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