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Energy

US LNG uncertainty is a reminder of lost Canadian opportunities

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7 minute read

From Resource Works 

Canada has missed opportunities to supply Europe with LNG due to political missteps and regulatory barriers, despite having the resources and potential.

For almost three years now, Europe has not been able to figure out how it will replace the cheap, plentiful supply of Russian gas it once enjoyed. Since Russia invaded Ukraine, the EU member states have made drastic moves to curtail their reliance on Russian energy, specifically Russian gas.

In an ideal world, the diversification of the EU’s energy supply would have been Canada’s golden opportunity to use its vast LNG capabilities to fill the gap.

Canada has all the right resources at its disposal to become one of the EU’s premier energy sources, with enormous natural gas reserves lying in the ground and shores upon three of the world’s four oceans. The problem is that Canada lacks both the right infrastructure and the necessary political will to get it built.

The fact that Canada is not a favored supplier of LNG to Europe is the consequence of political missteps and a lack of vision at the highest levels of government. It was reported by the Financial Times that outgoing United States President Joe Biden’s freeze on new LNG export permits and clashes with activists have created uncertainty over future supply growth.

Missteps and onerous regulatory barriers have kept Canada shackled and unable to reach its full potential, leaving us on the sidelines as other countries take the place that should have been Canada’s as an energy supplier for the democratic world.

To this day, European leaders like Greek Prime Minister Kyriakos Mitsotakis, German Chancellor Olaf Scholz, and Polish President Andrzej Duda have indicated their openness to adding Canadian LNG to their domestic supply.

However, no plans for supplying Canadian LNG to Europe have come to fruition. The absence of any commitment from the federal government to take those possibilities seriously is the result of decisions that now look like major mistakes in hindsight.

Two of these are cancelled energy projects on the Atlantic coast: the Energy East oil pipeline and the proposed expansion of an LNG terminal in New Brunswick.

Canada’s Pacific coast is now a hub of LNG development, with three planned facilities well underway, and there are hungry markets in Asia ready to receive their products. It is a shame that the Atlantic coast is being left behind during Canada’s burgeoning LNG renaissance. The economic situation in the Maritimes has long been challenging, leading to emigration to the Western provinces and stagnation back at home.

LNG projects in British Columbia have proven to be job machines and drivers of economic revitalization in formerly impoverished regions that were gutted when fishing, mining, and forestry went downhill in the 1980s.

The potential to both help Atlantic Canada level back up economically while becoming the bridge for energy exports to Europe was halted by the cancellation of the Energy East pipeline and a proposed LNG terminal in Saint John, New Brunswick.

Proposed by TransCanada (since renamed to TC Energy) to the National Energy Board in 2014, Energy East would have been a 4,600-kilometer pipeline with the capacity to transport over a million barrels of crude oil from Alberta to refineries in New Brunswick and Quebec. While it is true that Europe is more interested in LNG than crude oil, the completion of one great project encourages more and could have gotten the ball rolling on further energy infrastructure.

Had Energy East been constructed, it would have served as a symbol to investors and energy industry players that Canada was serious about west-to-east projects. Unfortunately, in 2017, TransCanada withdrew from the project due to regulatory disagreements and uncertainty.

In 2019, the federal government passed Bill C-69, AKA the “no more pipelines” law, leading to even more complex and restrictive regulations for new energy projects. When there should have been momentum on energy infrastructure building, there came only more cascading bad news.

proposed expansion of Repsol’s LNG terminal in Saint John, New Brunswick, another potential gateway for Canadian energy to get through to Europe, was abandoned due to the projected high costs and poor business case.

The idea of LNG on the East Coast making for a poor business case has been repeated by the federal government many times. However, in documents accessed by The Logic, it was revealed that Global Affairs Canada has, in fact, stated the opposite, and that there was great potential to increase rail and pipeline networks on the Atlantic.

Furthermore, Canada is capable of shipping LNG from the Western provinces to the East Coast because of our access to the vast pipeline networks of the United States.

As a result of these regrettable decisions, Canadians can only watch as lost opportunities to provide LNG to the democratic world are filled by other countries. Every downturn or disruption in the energy exports of other countries is a sore reminder of Canada’s lost opportunities.

Canada needs more vision, certainty, and drive when it comes to building the future of Canadian energy. In the words of Newfoundland and Labrador Premier Andrew Furey, “We will be all in on oil and gas for decades and decades to come…because the world needs us to be.”

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Daily Caller

Trump Calls Biden’s Drilling Ban ‘Worst Abuse Of Power I’ve Ever Seen’

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From the Daily Caller News Foundation

By David Blackmon

Kish characterized Biden’s move as “a petulant act of a Hard Left Establishment out to punish 340 million Americans who rejected their calls to bow to their Climate Religion and its vows of poverty.”

The Biden White House said early Monday that outgoing President Joe Biden has ordered huge swaths  of U.S. federal waters off-limits to future leasing and drilling for oil and natural gas. The ban includes  the entire offshore Atlantic, offshore Pacific, the Eastern Gulf of Mexico, and the Northern Bering Sea.

All told, the regions impacted by the ban encompass 625 million acres, an area bigger than the states of Texas and Alaska combined. It is also significantly larger in scope than the Louisiana Purchase, which spanned 530 million acres.

“My decision reflects what coastal communities, businesses, and beachgoers have known for a long time: that drilling off these coasts could cause irreversible damage to places we hold dear and is unnecessary to meet our nation’s energy needs,” Biden said in a statement. “It is not worth the risks.”

Ironically, the Biden ban includes the Atlantic areas where his administration has spent billions of dollars subsidizing the construction of massive industrial wind power facilities. Those developments are currently the source of rising concerns related to impacts on sea mammals, seabirds and the once-thriving commercial fishing industry. All are concerns the administration has refused to adequately address in any real way.

Dan Kish, senior fellow at the D.C.-based Institute for Energy Research think tank, pointed to the “irony of his proposed windfarms in the same waters he is closing to American oil and gas is they are not going to be built. The electricity they produce is so expensive it is deindustrializing Europe and beginning to topple governments. The only question is whether the governments or the windmills will topple first.”

Kish characterized Biden’s move as “a petulant act of a Hard Left Establishment out to punish 340 million Americans who rejected their calls to bow to their Climate Religion and its vows of poverty.” Kish added that Biden and his White House “couldn’t care less about the national security implications, as witnessed by their feckless record that has lit fires around the world while they try to extinguish our gas stoves at home.”

In an interview with Salem Radio national talk show host Hugh Hewitt Monday, incoming President Donald Trump said he would reverse Biden’s order on his first day in office.

“I see that it has just come across that Biden has banned oil and gas drilling across 625 million acres of U.S. coastal territory,” Trump began, adding: “It’s ridiculous. I’ll un-ban it immediately. I have the right to un-ban it immediately.”

Trump acknowledge that the same climate-alarm groups behind the Biden ban will challenge any attempt to rescind it in court, saying, “They’ll do everything they can to make it as difficult as possible. They talk about a transition — they always say they want to have a smooth transition from party to party. Well, they’re making it really difficult. They’re throwing everything they can in the way.”

Trump concluded by telling Hewitt that Biden’s order amounts to “the worst abuse of power I’ve ever seen.”

The White House invoked the drilling ban under Section 12 of the 1953 Outer Continental Shelf Lands Act (OCSLA). It is a section of that law that previous presidents — including Barack Obama and Trump himself — have used to authorize similar drilling bans.

A reading of that provision makes it clear that Congress intended it to be used solely for reasons of national security and during national emergencies. Unfortunately, for the prospects of a Trump reversal, the law does not include any provision for revoking such bans.

Previous presidential bans have never been challenged all the way up through the Supreme Court, though a challenge by the Trump Justice Department to Obama’s ban in 2017 resulted in the set-aside being upheld by an Obama-appointed district judge in 2019. Trump’s Department of Justice chose not to challenge the decision.

This is clearly a political power move by the Biden White House, another payoff to the Democratic Party’s big climate-alarm funders. Whether Trump and his appointees can come up with an effective strategy to challenge it remains to be seen, but if Trump’s comments to Hewitt are any indication, the incoming president is fully prepared to take on the fight.

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

Province to double Alberta’s oil production

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The Government of Alberta is working with partners to increase pipeline capacity in pursuit of its goal to double crude oil production and increase exports to the United States.

 

Alberta is a strong partner to the United States, currently delivering more than 4.3 million barrels per day to the U.S. The province is committed to increasing Alberta’s crude oil production and preserving and adding pipeline capacity, supporting North American energy security as well as enabling increased U.S. production.

The Government of Alberta is taking immediate action to accelerate its plan to increase pipeline capacity to get more product to market and more value for its product.

A critical step towards achieving this goal includes working directly with industry. This is why Alberta’s government has signed a letter of intent with Enbridge, which will form a working group with the Alberta Petroleum Marketing Commission (APMC). The working group will evaluate future egress, transport, storage, terminalling and market access opportunities across the more than 29,000 kilometres of the Enbridge network in support of moving more Alberta oil and gas to Canadians and American partners.

“The world needs more Alberta oil and gas, and we need to make sure Alberta is meeting those needs. Our objective of doubling oil production aligns with Enbridge’s plans to enhance its existing pipeline systems and we look forward to partnering with them to enhance cross-border transport solutions. This will also allow us to play a role in supporting the United States in its energy security and affordability goals.”

Danielle Smith, Premier

The working group will focus on preserving and optimizing egress, developing opportunities to expand along Enbridge’s current footprint, and developing new solutions to improve global market access and maximize the value of Alberta’s commodity. Additionally, it will work with government to cut red tape and streamline regulations and permitting approvals. It will also assess opportunities for shared investment and benefit to both Albertans and Enbridge by leveraging BRIK (Bitumen-Royalty-In-Kind) barrels.

“A strong and growing Alberta oil and gas transport and storage network will allow the Government of Alberta to maximize the economic benefits for all Albertans from our bitumen and natural gas royalties. We must also pursue regulatory reform where needed so Alberta can continue to be an attractive place for companies to invest.”

Brian Jean, Minister of Energy and Minerals

“Enbridge has 75 years of experience delivering Alberta’s energy, safely and cost-effectively to support the region’s economy, unlock export value and help meet North American demand. We’re prepared – and exceptionally well-positioned – to work with producers and governments to deliver capacity as production ramps up, providing cost-effective, scalable, executable solutions now and through the decade that support North American energy security, reliability and affordability.”

Greg Ebel, president and chief executive officer, Enbridge Inc.
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