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Energy

TMX Pipeline a Success Story – Despite All the Green Battles Against It

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7 minute read

From Energy Now

By Resource Works

“As we go into winter months, Canada will set new export records”

We remember well the green battles against the “TMX” expansion of the Trans Mountain oil pipeline from Alberta to B.C. The idea was, they said, at best unnecessary and at worst thoroughly dangerous to the world environment.

One group said the expansion “threatens to unleash a massive tar sands spill that would threaten drinking water, salmon, coastal wildlife, and communities.” It would also, others said, impede investment in clean energy and undermine Canada’s efforts to deal with climate change.

Some said the expanded line would be an imposition on First Nations. But a number of First Nations are interested in acquiring an equity stake in the pipeline (and the federal government, which owns the line, is looking to sell a 30-percent stake to them).

Despite the loud opposition, the federal government went ahead and purchased the pipeline and the expansion project in May 2018, completing the pipeline’s expansion this year at a total cost of $31 billion.

Prime Minister Trudeau’s explanation: Ottawa stepped in because owner Kinder Morgan “wanted to throw up their hands and walk away,” and his government wanted to make sure that Canadian oil could reach new markets.

Alberta’s Canadian Energy Centre supported that outlook: “We’re going to be moving into a market where buyers are going to be competing to buy Canadian oil.”

Our Margareta Dovgal wrote: “What matters to us is the benefits to Canada. For one thing, we now will be able to ship more oil by tanker to refineries on the U.S. West Coast at a better price than oil by tanker from Alaska. And . . . we’ll have more oil more readily available for overseas buyers.

“So, all in all, we can expect to see higher returns on our oil, and we can continue to see the immense benefits of high-paying jobs in Canadian energy, and the benefits of revenues to government.”

It has all been happening, in spades.

And the opening of the expanded pipeline on May 1 this year also helped bring down gasoline prices.

In Vancouver, for example, regular gasoline in April ran as high as $2.359 a litre. At the beginning of May, as key refineries returned to normal after seasonal maintenance work, it stood around $2.085. As October opened, the price was as low as $1.579.

Economist G. Kent Fellows said at an event hosted by Resource Works and the Business Council of B.C.: “Our analysis shows that insufficient pipeline capacity was costing B.C. consumers an estimated $1.5 billion per year in higher gasoline prices.

“With TMX now operational, wholesale gasoline prices in Vancouver dropped by about 28 cents per litre compared to earlier this year.”

As for those buyers competing for our oil, some thought the prime export destination would be California. But the summer just past brought exports on tankers from Vancouver to China, Japan, India, Hong Kong, South Korea, and Brunei.

As of now, California is indeed leading as a destination, with Asian buyers having eased off after their initial purchases. Experts say that was expected, with Asian refineries first taking test cargoes to see how their systems handle our oil.

Kevin Birn, chief Canadian oil markets analyst for S&P Global, told Business in Vancouver: “There is always a market for crude oil in the Pacific Basin. We always saw the need for the Trans Mountain pipeline. We saw Canadian production continuing to grow.”

Birn added: “It’s still relatively early. I’d expect volumes to continue to build, cargoes to test different markets all over the place, and over time you’ll start to see patterns.

“As we go into winter months, Canada will set new export records, because as capacity’s been optimized and new product projections and wells are brought online, the winter tends to be the peak period.

“Every year, I think, for the next couple of years, Canada will set new records.”

That would be good news for Canada’s economy — and for Alberta’s.

There are no statistics available yet on the TMX line’s impact on the economy, but in 2019 Trans Mountain estimated that construction and operation would mean $46 billion in revenue to governments over the first 20 years.

Today, as reported by Alberta’s energy minister, Brian Jean, Alberta continues to break records for crude oil production, with global demand continuing to grow.

The latest numbers from the Alberta Energy Regulator show Alberta’s oil production averaged a little over 4 million barrels per day in August — the highest on record for any August.

“The addition of 590,000 barrels per day of heavy oil pipeline capacity from Alberta to the B.C. coast earlier this year with the completion of the Trans Mountain Pipeline expansion project has been instrumental in the recent production increases.”

All this as the International Energy Agency said that while oil demand is decelerating from 2023 levels due to a slowing economy in China, demand is still set to increase by 900,000 barrels per day (bpd) this year. That would push global consumption to a record level of almost 103 million bpd.

And that forecast came as Jonathan Wilkinson, our federal minister of energy and natural resources, declared: “Oil and gas will peak this decade. In fact, oil is probably peaking this year.”

A bevy of market-watchers disagreed with him. Among them, Greg Ebel, CEO of Calgary-based Enbridge, says global oil consumption will be “well north” of 100 million barrels per day by 2050 — and could exceed 110 million barrels.

“You continue to see economic demands, and particularly in the developing world, people continue to say lighter, faster, denser, cheaper energy works for our people. . . And that’s leading to more oil usage.”

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Daily Caller

Key Trump Cabinet Nominees Face A Daunting Energy Policy Mess

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From the Daily Caller News Foundation

By David Blackmon

Just so we can frame this for everyone in the room, China will build 100 new coal plants this year. There is not a clean energy race. There is an energy race.

After a week spent watching hours of the various Senate confirmation hearings for some of President-elect Donald Trump’s cabinet nominees, one compelling thought lingers with me more than any other: Does Democrat Sen. Mazie Hirono of Hawaii have a seat on every Senate committee?

The answer to that is “no,” but it seemed that way as the Senator began her questioning of nominees ranging from Pete Hegseth (Defense) to former Florida Attorney General Pam Bondi (Justice) to former Republican North Dakota Gov. Doug Burgum (Interior) to Chris Wright (Energy) by posing some iteration of the following question: “ … since you became a legal adult, have you ever made unwanted requests for sexual favors or committed any verbal or physical harassment or assault of a sexual nature?”

Sadly, Hirono’s farcical style of questioning turned out to be less of an exception than a rule among the Democratic members of these committees as the week wore on. Democrat Sen. Tim Kaine of Virginia ended his questioning of Hegseth by literally asking if he had ever beaten his wife, an obvious smear which Hegseth denied.

It was all sad to witness, a troubling indicator of the health of both the Democratic Party and the American Republic. But what it all revealed by Friday is that the Democrats are unlikely to claim any scalps from among this week’s slate of nominees. Where energy policy is concerned, that means that the three departments/agencies that are most impactful in that realm are likely to be led by former Republican Rep. Lee Zeldin of New York at the Environmental Protection Agency (EPA), Burgum at the Department of the Interior and Wright at the Department of Energy.

Seldom if ever in this country’s history have three more capable, knowledgeable and effective individuals been in positions of leadership to help reform and recover from the waste and misallocation of taxpayer dollars that have characterized President Joe Biden’s 4-year presidency.

I have written several times here that the inevitable outcome that will result from pretty much every aspect of the Biden Green New Deal policies will be to render America dependent on China for its energy security, due to Chinese dominance of global processing and supply chains for all forms of and raw materials for renewable energy and electric vehicles. This is obviously not a sustainable situation, and it is clear that Trump and his key nominees fully understand that reality.

U.S. dependency on foreign adversaries is not limited to China. One such area involving a different country holds high stakes related to the goal of a renaissance in nuclear power often touted by Republicans and some Democrats alike.

In a revealing exchange, Wright and Republican Sen. John Barrasso of Wyoming discussed America’s recent dependence on Russia, of all countries, for imports of enriched uranium. As Wright pointed out, this is a technology first invented in the United States, but our country has virtually no existing capacity for uranium enrichment today. This is, as Wright called it, “a sad state of affairs” that has been caused in large part by wrong-headed federal environmental and permitting policies.

Unfortunately, the Biden cure for this pressing energy security matter could be even worse. As U.S. and NATO sanctions have gradually shut down Russia’s exports of enriched uranium, the U.S. nuclear industry has become reliant on imports from — you guessed it — China.

“As those [sanctions] shut down Russian uranium … we see more imports from China,” Wright testified. “We need to get beyond that … without shutting down the nuclear power plants we have running today. It is an area that requires urgent action.”

In another revealing exchange, Trump’s nominee for Treasury Secretary, Scott Bessent, disagreed with Democrat Sen. Ron Wyden of Oregon about the Senator’s claim that the United States is involved in “an arms race on clean energy” with China.

“Senator Wyden, just so we can frame this for everyone in the room, China will build 100 new coal plants this year. There is not a clean energy race. There is an energy race,” Bessent replied. Truer words were never spoken, and it is impossible to win that energy race when the United States is increasingly dependent on China for its very energy needs.

These and other Trump nominees have an enormous mess to clean up from the profligate spending and waste of the Biden years. Fortunately for the country, their work begins Monday. Not a moment too soon.

David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.

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Alberta

Before Trudeau Blames Alberta, Perhaps He Should Look in the Mirror

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From EnergyNow.ca

By William Lacey

There has been a lot of talk about how Premier Danielle Smith did not sign a statement of support with the Government of Canada regarding a unified response to any tariff action taken by incoming President of the United States, Donald Trump.

Trudeau singles out Alberta premier for not putting ‘Canada first’ in break with other provinces

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While it is easy to throw stones at Premier Smith and call her actions one of selfishness, placing the interests of Alberta ahead of Canada, I think there are a number of reasons why one could reply that she was well within her right to act as she did. Over the last decade, Trudeau has gone out of his way to vilify the oil and gas industry, through his continual bad mouthing of the industry as being antiquated, and implementing policies that ensured that capital flight from the space accelerated, infrastructure projects were cancelled and massive levels of uncertainty were overlaid on the investment landscape going forward. Despite all this, the oil and gas sector still remains one of the most important economic contributors to the economy and is the largest component of exports from Canada to the United States, and it isn’t even close.

The Observatory of Economic Complexity (OEC)

The ironic thing of all this? To get oil to the refineries in the east, you need to IMPORT it by pipeline from the United States or primarily by ship to Quebec and New Brunswick. Had the Energy East Pipeline been built, Canadian refineries could have had Canadian domiciled product to satiate them. Moreover, had Northern Gateway been built, we would have diversified our client list beyond the United States. Sure, the Trans Mountain Pipeline was built, at extraordinary cost and timelines, and some “credit” is due to the Government getting it done, but the proof is in the current landscape that we operate in.

Now, coming back to the beginning. Why do I think Trudeau should look in the mirror before throwing rocks at Premier Smith? I come back to 2015 when Trudeau said Canada is the world’s “first postnational state” and that “there is no core identity, no mainstream in Canada.” He has gone about taking away what many of us grew up with, namely a sense of Canadian identity, and tried to replace that with shame and no collective identity. What is a post nation state you may ask? Post-nationalism or non-nationalism is the process or trend by which nation states and national identities lose their importance relative to cross-nation and self-organized or supranational and global entities as well as local entities.

So, is it any wonder that people are starting to question what is Canadian any more? At a time when Canada is under significant threat, the irony that Alberta likely represents the best tool in this tools (Trudeau) economic toolbox, is wildly ironic. As they say, karma’s a bitch.

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