Brian Zinchuk: Canada’s promise to provide Europe with an additional 300,000 barrels of oil per day wasn’t worth a bucket of warm spit

On Feb. 24, Russia invaded Ukraine.

On Feb. 25, I had a conversation with Tim McMillan, outgoing CEO of the Canadian Association of Petroleum Producers about Canada’s response.

I asked, “If things get worse, do you think that the Canadian government should move to approve those projects that were cancelled and expedite their construction?”

McMillan replied, somewhat prophetically, “No, I don’t think we should wait for things to get worse. I think if we cannot see as plain as day today that Russia’s aggression is enabled because of the energy crisis in Europe, we’re naïve.

“And the policy decisions that has made them so vulnerable, shutting down nuclear, not developing their own natural gas, shutting down their coal, countries like Canada that made political policy decisions to not build LNG in a meaningful way. That, today, has proven to embolden Russia, and to leave Europe vulnerable, and to leave us vulnerable.

“So we don’t need to wait for any more signs. The federal government should be making this a national imperative. It’s going to require national leadership, because there’s been so much policy challenge that has driven out all private sector initiatives; Energy East, Saguenay, Goldboro. All of these LNG facilities were trying, from a company perspective, to move forward. So, after all of them have been cancelled, it’s only going to be successful if the federal government thinks it’s a national imperative, and pulls on these projects to enable them.”

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In our conversation, I implored CAPP to talk to its members about doing everything they could to ramp up oil production. We could use crude-by-rail to get it to the East Coast, the federal government could tell TC Energy to build Energy East, and we should get it built as soon as humanely possible.

The Canadian promise

Step forward a month. 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.

Now, nearly six months after that, has the federal government done anything – anything at all – to move on that promise to Europe?

No. Not a damned thing.

I know that because I asked Premier Scott Moe about it after his speech at the Lloydminster Heavy Oil Show. His speech focused on the need to displace Russian oil with Canadian oil.

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I asked him if Saskatchewan had heard anything from the feds on their promise of increasing oil production by 300,000, or any ability to get it to them – pipeline, crude-by-rail, export infrastructure. We are, after all, the second largest oil producing province in the country, and anything coming from Alberta to the East Coast would have to pass through us. So you’d think we’d have heard something. Anything.

The answer? “No,” Moe said.

“And listen, it’s possible for Canadian production to increase by not only 300,000 barrels, but to increase substantially more than that, if the government puts action behind words just like that, and puts policy in place. Policy that will provide certainty for many of the folks that are in this room, here at the Lloydminster (Heavy) Oil Show, to invest in long term production increases.

“And just to have some stable policy in place, and then some stable policy in place on how we’re actually going to get that product out of Canada to a saltwater port, and ultimately to, the global market that is that is out there.

“So, yes, we can do that. But then what the federal government has failed to do is to put the policy behind the words that they spoke about three, four months ago,” Moe said.

I had to look it up, as mentioned above, it was actually closer to six months ago .

This is what I told McMillan, back on Feb. 25:

“However this goes, we need to seriously look at Canadian oil production dramatically – ramping up dramatically shipping to Europe as quick as we can. And the whole concept of it takes 10 years to build a pipeline needs get thrown out the window. The original TransMountain Pipeline was built in 16 months. The original plans for record Energy East are sitting there, in a file box, at TransCanada. TransCanada has a pile of pipeline infrastructure sitting there, like pumping infrastructure and everything for for Keystone XL. It’s just just parked, and could be used to get energies going.

“These are things that I would suggest that, the next time you guys have a meeting, you might want to talk about. The whole idea of we are Canada, we can’t accomplish anything, we can’t do anything – we have to reset that clock 80 years and think that we may have to move on these things and move fast.”

Why would I tell the head of the leading oil producer association in Canada that? Because its much better we send oil tankers and LNG carriers to Europe than my 18 year old kid, in a uniform, carrying a rifle. Or his kid’s. Or anyone else’ kids.

Not worth a bucket of warm spit

So we now know that Wilkinson’s, and by extension, Canada’s promise to Europe wasn’t worth a bucket of warm spit. If we had actually mobilized six months ago, done a real response, we could have gotten crude by rail in place to the East Coast. We already have the infrastructure built on this end. Yesterday I drove past two idle loading facilities, at Kindersley and Kerrobert. We could have built ad-hoc loading facilities at Saint John, New Brunswick. And we could have mobilized the construction of the Energy East pipeline, using all the leftover material that TC Energy was stuck with following the collapse of the Keystone XL project.

Instead, we have done nothing, NOTHING, while the other side of the world literally burns.

At least a bucket of warm spit could have been used to put out a fire in Ukraine.

 

Brian Zinchuk is editor and owner of PipelineOnline.ca. He can be reached at brian.zinchuk@pipelineonline.ca. You can follow Pipeline Online at PipelineOnline.ca, on LinkedIn., Facebook and Twitter.

 

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