Brian Zinchuk is editor and owner of Pipeline Online
Saskatchewan Premier Scott Moe, left, Alberta Premier Jason Kenney, with hand outstretched, and Lloydminster Mayor Gerald Aalbers greeting vendors during the Lloydminster Heavy Oil Show on Sept. 14. Photo by Brian Zinchuk
LLOYDMINSTER – On March 24, one month after the Russian invasion of Ukraine, federal Minister of Natural Resources Jonathan Wilkinson pledged to Europe that Canada would increase oil production by 300,000 barrels to help with their energy needs. Six months later, it turns out neither the premier of Saskatchewan, Scott Moe, or premier of Alberta, Jason Kenney, have seen or heard any action from the federal government on this front.
A March 24 story on CTV quoted federal Minister of Natural Resources Jonathan Wilkson, who said, “This is a crisis.”
“These folks in Europe are looking at the prospects potentially of not having fuel for the trucks that provide groceries for people to survive on or potentially not having adequate supplies of gas to heat their homes,” Wilkinson said.
On Sept. 13, Pipeline Online asked Moe about this at the Lloydminster Heavy Oil Show, which you can read here. Moe said Saskatchewan has not heard from the federal government. However, Rhona Delfrari, with Cenovus, said on Sept. 14, said that the federal government had been in contact with oil producers initially.
On Sept. 14, Moe shared a stage with Kenney. After Kenney’s speech, Pipeline Online asked, “Has the federal government talked to the Alberta government at all? Have they talked about putting a pipeline in the ground, crude-by-rail?”
Kenney’s response mirrored Moe’s the day before. He said, “No. And we have no idea where they came up with it. We think we could do much more. There actually is unused pipeline capacity right now, a couple of hundred thousand. That will sort itself out with market courses.
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“Secondly, through pipeline optimization and line reversals, we think the industry, over the next couple of years, could add another 400,000. TMX (Trans Mountain Expansion pipeline), by Q1 of 2023, should add another 650,000 barrels of export.
“But no, of course they haven’t talked to us about how to take it up from there. I mean, look, we’ve got 180 billion barrels of proven and probable reserves in the oil sands alone, 200 billion barrels altogether and the western Canadian basin. Ottawa, when Biden vetoed Keystone XL, in which we had invested, Ottawa a folded like a cheap house of cards. So there’s they’re putting no muscle behind the Americans desperate need for more reliable energy.”
Alberta paid for the building of the Alberta portion of the Keystone XL pipeline, including pipe in the ground and compressor stations, right up to close to the Saskatchewan border. That is also very close to where the now-defunct Energy East project would have started using one of TC Energy’s mainline pipes, a 42 inch pipeline, heading east. Asked if that wasn’t a coincidence, if Alberta was laying the groundwork, should Energy East every go ahead, Kenney said, “Well, there’s pipe in the ground, and it’s an asset that could be used in the future. We are in a joint venture with TC energy. And we have auctioned off a lot of the material that had been purchased.
“It’s not all gone. But I mean, there are still assets there, the engineering work has been done. So much of the necessary regulatory planning have been done.
Referring to the now-defunct Keystone XL project, Kenney still holds out hope. He said, “Here’s my point. And this is my message to Washington. If we could get a certainty from the United States about approval to build another major pipeline along that route, I think we could get it done. My message to Washington is: the capital markets are unlikely to back this given all of the political uncertainty. So if the US is really serious about this, instead of positioning a carrier group in the Persian Gulf to protect OPEC supply, how about investing a fraction of that in a state investment? In restarting a KXL. Make it a state owned enterprise. I don’t like doing that. But if it’s necessary, so be it. We could potentially go in on a joint venture. Capitalise it. Go to the market. Let midterm midstream companies bid on it and build it. And I think that could get done in 18 months.”
And could have that been done with Energy East? Kenney said, “The answer is yes, that’s exactly what the federal government did with TMX.”
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