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Alberta

Energy East May be the Nation Building Mega-Project Canada Needs Right Now

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From EnergyNow.Ca

By Jim Warren

Is it Time to Put Politics Aside for Team Canada? – Jim Warren

People on the prairies who understand the value of a flourishing oil and gas sector are hopeful the election of a Conservative government will sweep away the barriers that blocked the Northern Gateway and Energy East pipelines. Some optimistic industry analysts suggest a project similar to Northern Gateway may be doable but concede that reviving Energy East would probably be a bridge too far.

It is getting difficult to recount exactly how many times Quebec’s demands for special treatment have disrupted national unity. Quebec’s rejection of Energy East was the most recent assault on national cohesion to anger large numbers of people on the prairies. It amounted to sticking a finger in the eye of the oil-producing provinces. And while the Poilievre Conservatives are set to win the next election, their victory won’t signal a big change in attitudes about the environment in Quebec.

Politicians from Quebec argue over which of their parties can claim it hates pipelines the most. Bloc Québécois leader, Yves-François Blanchet brags about the prominent role his party played in killing Energy East. His boasting actually drew the ire of Quebec Liberals and environmental groups in 2019. They claimed the Bloc was taking credit for their work. The 338Canada website, has the anti-oil Bloc Québécois winning 45 of the 78 federal seats in Quebec in the upcoming federal election.

Provincially, the Coalition Avenir Québec (CAQ) government is marginally more reasonable to deal with. It claims to stand for Quebec’s national autonomy as opposed to outright separation. Quebec premier, François Legault, says the west would do well to behave more like politicians from his province when dealing with Ottawa. He makes a good point.

Revisiting just how eminently reasonable the original Energy East proposal actually was suggests many Quebec politicians are immune to common sense. If the Energy East proposal wasn’t acceptable to the overly zealous activists who influence environmental policy in the province, why would we expect a different response in the near future?

There are, however, coercive options that might work. Premiers from Alberta and Saskatchewan have proposed withholding a portion of Quebec’s annual equalization payment in response to its lack of cooperation on building a pipeline to tidewater on the Atlantic coast. Unfortunately that option would require a constitutional amendment, and those have proven to be extremely difficult to engineer.

Alternatively, prairie governments might encourage Enbridge to shut down its Line 9 pipeline which has the capacity to transport up to 300 barrels per day (bpd) of western oil to Montreal. That sort of move would require getting industry players on side–including Enbridge and Suncor, who owns a 137,000 bpd capacity refinery in Montreal. It is encouraging to recall that Peter Lougheed faced little in the way of industry opposition in the 1970s when he cut oil shipments to Central Canada by 10%.

Quebec’s past behavior pretty much guarantees the province would threaten separation if confronted with the loss of its equalization welfare ($14 billion for fiscal 2023-24). They might be less concerned about getting a pipeline from the west turned off—they seem to prefer tanker ships over pipelines.

Many westerners are weary of Quebec’s separation blackmail. Some of those who have run out of patience say, “next time they threaten to go, just tell them not to let the door hit them on the ass on their way out.”

The cancellation of the Energy East pipeline was viewed on the prairies as rejection of a project that would generate greater national harmony. It was seen as a nation building exercise of benefit to Quebecers, people from the Maritimes, Ontario and Western Canada. Westerners mistakenly assumed even environmentally sanctimonious Quebecers would recognize the benefits of obtaining more of their oil from pipelines rather than via marginally risky railways and ocean going tankers.

Following the 2013 Lac-Mégantic rail disaster, people from western Canada’s oil patch naively assumed approval of Energy East was a no brainer. The disaster killed 47 people and destroyed downtown Lac- Mégantic. It was caused by the derailment and explosion of a train hauling oil tanker cars. It seemed reasonable to imagine Quebecers would happily purchase safer, less expensive Canadian oil transported by pipeline.

Energy East would have been the longest pipeline in North America. It was to run from Alberta to Saint John, New Brunswick. The plan was to convert 2,900 miles of existing natural gas pipeline into an oil pipeline, build 1,900 miles of new pipeline and make a $300 million upgrade to an Irving oil terminal in New Brunswick.  It was a visionary project reminiscent of the building of the transcontinental railway and the original TransCanada pipeline.

The pipeline would be capable of transporting 1.1 million bpd. No more than 400,000 bpd would be required to replace the foreign oil being imported by tanker and rail. The remaining 600,000 barrels could be exported to new international customers for Canadian oil. The value of those new export revenues would conceivably approach $15 billion annually.

It is worth remembering the influential role Quebec Liberals played in opposing Energy East. Montreal’s Mayor Denis Coderre, was a former Liberal cabinet minister who led the Montreal Municipal Community (MMC) a coalition of 82 Montreal area municipal governments. As much as anything, the MMC’s strident opposition to Energy Easy in January of 2016 foretold TransCanada’s October 2017 cancellation of the pipeline.

Inspiration for cancelling the pipeline was provided by Quebec’s robust environmental lobby—led by activists like Steven Guilbeault. Polls conducted at the time showed the Quebec politicians who opposed Energy East had the support of 60% or more of the public. The pipeline was similarly denounced by premier Philippe Couillard and Quebec’s Liberal government at the time. While the southwest corner of B.C. has typically been thought of as the home of Canada’s Greens, in Quebec the Liberals are the party preferred by environmental activists.

Liberals in Ottawa remained officially neutral during the Energy East controversy but were unofficially cheering for the pipeline’s cancellation from the sidelines.

One of the biggest challenges to confront an effort to revive the project would be finding willing investors. TransCanada walked away financially bruised and who wants to be similarly burnt? And, the Trans Mountain example casts a dark shadow on the idea of a government-owned line.

Trying to convince Quebecers, especially young adults, about the value of new oil pipelines seems like a fool’s errand. Given that only 50% of 16-20 year-olds in Quebec have a driver’s license, it could prove difficult convincing them about the importance of petroleum to Canada’s transportation system and economic health.

No less discouraging is the fact that Quebec’s environmental movement remains dedicated to killing the petroleum and natural gas industries on behalf of combatting climate change.

Yet, oddly enough there have been surprising signals coming out of Quebec in recent years suggesting regular Quebecers don’t share the same level of anti-oil and anti-pipeline enthusiasm as their province’s politicians and environmentalists. Perhaps this is something worth looking into before giving up entirely on the idea of a pipeline to Atlantic tidewater.

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Alberta

Big win for Alberta and Canada: Statement from Premier Smith

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Premier Danielle Smith issued the following statement on the April 2, 2025 U.S. tariff announcement:

“Today was an important win for Canada and Alberta, as it appears the United States has decided to uphold the majority of the free trade agreement (CUSMA) between our two nations. It also appears this will continue to be the case until after the Canadian federal election has concluded and the newly elected Canadian government is able to renegotiate CUSMA with the U.S. administration.

“This is precisely what I have been advocating for from the U.S. administration for months.

“It means that the majority of goods sold into the United States from Canada will have no tariffs applied to them, including zero per cent tariffs on energy, minerals, agricultural products, uranium, seafood, potash and host of other Canadian goods.

“There is still work to be done, of course. Unfortunately, tariffs previously announced by the United States on Canadian automobiles, steel and aluminum have not been removed. The efforts of premiers and the federal government should therefore shift towards removing or significantly reducing these remaining tariffs as we go forward and ensuring affected workers across Canada are generously supported until the situation is resolved.

“I again call on all involved in our national advocacy efforts to focus on diplomacy and persuasion while avoiding unnecessary escalation. Clearly, this strategy has been the most effective to this point.

“As it appears the worst of this tariff dispute is behind us (though there is still work to be done), it is my sincere hope that we, as Canadians, can abandon the disastrous policies that have made Canada vulnerable to and overly dependent on the United States, fast-track national resource corridors, get out of the way of provincial resource development and turn our country into an independent economic juggernaut and energy superpower.”

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Alberta

Energy sector will fuel Alberta economy and Canada’s exports for many years to come

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From the Fraser Institute

By Jock Finlayson

By any measure, Alberta is an energy powerhouse—within Canada, but also on a global scale. In 2023, it produced 85 per cent of Canada’s oil and three-fifths of the country’s natural gas. Most of Canada’s oil reserves are in Alberta, along with a majority of natural gas reserves. Alberta is the beating heart of the Canadian energy economy. And energy, in turn, accounts for one-quarter of Canada’s international exports.

Consider some key facts about the province’s energy landscape, as noted in the Alberta Energy Regulator’s (AER) 2023 annual report. Oil and natural gas production continued to rise (on a volume basis) in 2023, on the heels of steady increases over the preceding half decade. However, the dollar value of Alberta’s oil and gas production fell in 2023, as the surging prices recorded in 2022 following Russia’s invasion of Ukraine retreated. Capital spending in the province’s energy sector reached $30 billion in 2023, making it the leading driver of private-sector investment. And completion of the Trans Mountain pipeline expansion project has opened new offshore export avenues for Canada’s oil industry and should boost Alberta’s energy production and exports going forward.

In a world striving to address climate change, Alberta’s hydrocarbon-heavy energy sector faces challenges. At some point, the world may start to consume less oil and, later, less natural gas (in absolute terms). But such “peak” consumption hasn’t arrived yet, nor does it appear imminent. While the demand for certain refined petroleum products is trending down in some advanced economies, particularly in Europe, we should take a broader global perspective when assessing energy demand and supply trends.

Looking at the worldwide picture, Goldman Sachs’ 2024 global energy forecast predicts that “oil usage will increase through 2034” thanks to strong demand in emerging markets and growing production of petrochemicals that depend on oil as the principal feedstock. Global demand for natural gas (including LNG) will also continue to increase, particularly since natural gas is the least carbon-intensive fossil fuel and more of it is being traded in the form of liquefied natural gas (LNG).

Against this backdrop, there are reasons to be optimistic about the prospects for Alberta’s energy sector, particularly if the federal government dials back some of the economically destructive energy and climate policies adopted by the last government. According to the AER’s “base case” forecast, overall energy output will expand over the next 10 years. Oilsands output is projected to grow modestly; natural gas production will also rise, in part due to greater demand for Alberta’s upstream gas from LNG operators in British Columbia.

The AER’s forecast also points to a positive trajectory for capital spending across the province’s energy sector. The agency sees annual investment rising from almost $30 billion to $40 billion by 2033. Most of this takes place in the oil and gas industry, but “emerging” energy resources and projects aimed at climate mitigation are expected to represent a bigger slice of energy-related capital spending going forward.

Like many other oil and gas producing jurisdictions, Alberta must navigate the bumpy journey to a lower-carbon future. But the world is set to remain dependent on fossil fuels for decades to come. This suggests the energy sector will continue to underpin not only the Alberta economy but also Canada’s export portfolio for the foreseeable future.

Jock Finlayson

Senior Fellow, Fraser Institute
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