Tag Archives: pipeline

New Brunswick’s pipeline to opportunity

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Now, for something completely different in New Brunswick: unvarnished good news. What began, for many, as a pipe dream becomes, for all, a bonafide pipe line into Saint John. And, unquestionably, not a moment too soon.

For much of the past 15 years, the urgent conversation in this decidedly unpromising corner of Canada has had everything to do with loss. How much public debt can we bear before our international creditors come knocking at the door? How many young people must we send west for jobs before, as public policy pundit Donald Savoie once famously wrote, New Brunswick becomes an old folks home?

Trans Canada Corp.’s announcement last week that it will move forward with a multi-billion-dollar pipeline from Alberta east to refineries in Quebec and Saint John – tentatively scheduled for completion by 2018 – changes the channel. (Quebec insists it wants to study the proposal, but the odds are in favour of its support).

In a report issued last Tuesday, Scotiabank energy analyst Patricia Mohr framed the opportunity clearly: “The line would allow access to less expensive and more secure domestic crude oil, allowing displacement of imports into the Suncor Energy and Ultramar (Valero) refineries in Montréal and in Lévis (near Québec City) as well as the large Irving Oil refinery in Saint John. These refineries have in the past been mostly supplied by expensive light oil imports.”

Moreover, “Greater access to stable supplies of domestic oil would improve the financial viability of current refineries and could eventually encourage development of a larger domestic refining industry in Québec and Atlantic Canada. History shows that pipeline developments – linking crude oil supplies to markets – often precede refinery expansion.

And, thirdly, “The line could provide vitally needed new export outlets for Western Canadian oil – to Europe and, most interestingly, to India – accompanied by expanded port and marine service-sector activity near Québec City and Saint John.”

All of which led her to conclude: “The economics of the ‘Energy East Pipeline Project’ are compelling. . .Refiners in India have shown considerable interest in importing Alberta blended bitumen. Estimated tanker charges from Québec City and Saint John to the west coast of India average a mere US$4.20 per barrel in a Suezmax vessel. A marine terminal at Saint John would be ice-free year round and could accommodate VLCCs of 350,000 DWT, cutting tanker costs to India to only US$3 per barrel. . .developing low-cost transportation infrastructure to access overseas export markets is critical.”

Against this backdrop, of course, languishes Keystone. As the Globe and Mail astutely observed in its coverage last week, “Politically, the project has attracted far less opposition so far than either Keystone XL, which has become a prime target for American climate-change activists and a political bone of contention between U.S. President Barack Obama and congressional Republicans, or the Gateway project, which has been opposed in its current form by Premier Christy Clark.” Meanwhile, it added, “Canaport (has) applied to transform its offshore facility to a gas storage and export terminal, giving it a new lease on life.”

For New Brunswick, the economic stimulus will be enormous: immediately translatable into thousands of skilled, highly paid jobs. Longer term, the energy sector, itself, will undergo a profound transformation as clusters of small and medium-sized enterprises emerge to support the refining anchor in the Port City.

But the broader significance of the pipeline has as much to do with national, as it does with regional, identity.

Premier David Alward was not wrong last year when he likened the project – when it was still just a concept – to a country-building exercise. For too long, the solitudes of West and East have driven the dialogue about what it means to be a Canadian. The have-less and have-more provinces have bickered over their respective slices of the energy pie.

The pipeline is, in effect, a handshake, across thousands of kilometers of geography, that unites once-competing interests. It says we’re in this together.

It also says to Alberta: You know all those Maritime sons and daughters we’ve been sending your way in recent years. . .Well, we’re gong to need you to send some of them back.

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Hail to the chief “Keystone Kop”

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Some call it oil. Others call it tar. Still, U.S. President Barack Obama appears disinclined  to call the whole thing off over a simple matter of nomenclature.

In a speech at Georgetown University on Wednesday, the second-term Commander in Chief, mired in legislative gridlock, makes one thing more or less clear: Alberta bitumen must pass his administration’s litmus test for environmental benignity before it gets piped to refineries in Texas.

On whether the sandy crude should, in the alternative, be railed to said locations (and, therefore, cause more carbon pollution than a pipeline ever could), he doesn’t venture an opinion. Such is the kookiness of Keystone politics these days.

Clearly, Mr. Obama – who is as lame a duck as a president can get – has nothing to lose, and he knows it. The “audacity of hope” minstrel is back in full-throated glory, appealing to every possible constituency under the setting sun of his mandate.

“The 12 warmest years in recorded history have all come in the last 15 years,” he roars to the delight of environmentalists. “Last year, temperatures in some areas of the ocean reached record highs, and ice in the Arctic shrank to its smallest size on record – faster than most models had predicted it would. These are facts.”

Here are some others: “2012 was the warmest year in our history. Midwest farms were parched by the worst drought since the Dust Bowl, and then drenched by the wettest spring on record. Western wildfires scorched an area larger than the state of Maryland. Just last week, a heat wave in Alaska shot temperatures into the 90s.”

In fact, he says, “The question is not whether we need to act. The overwhelming judgment of science – of chemistry and physics and millions of measurements – has put all that to rest. Ninety-seven percent of scientists, including, by the way, some who originally disputed the data, have now put that to rest. They’ve acknowledged the planet is warming and human activity is contributing to it. . .As a President, as a father, and as an American, I’m here to say we need to act.”

That is the zig; now for the zag.

“One thing I want to make sure everybody understands. . .This does not mean that we’re going to suddenly stop producing fossil fuels,” he declares to the relief of the oil lobby. “Our economy wouldn’t run very well if it did. And transitioning to a clean energy economy takes time. . .I know there’s been a lot of controversy surrounding the proposal to build a pipeline, the Keystone pipeline, that would carry oil from Canadian tar sands down to refineries in the Gulf. . .I do want to be clear: Allowing the Keystone pipeline to be built requires a finding that doing so would be in our nation’s interest. And our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution.”

Ah yes, something for everyone. Most of all, perhaps for Canada’s Natural Resources Minister Joe Oliver, who’s still hung up on the whole “tar sands” versus “oil sands” business. “There is no tar in the oil sands,” he told a news conference in Ottawa, following Mr. Obama’s speech. “Not everyone understands that.”

But on the broad stokes of the president’s address, Mr. Oliver was sanguine. “We agree with President Obama’s State Department Report in 2013 which found that, ‘approval or denial of the proposed Project is unlikely to have a substantial impact on the rate of development in the oil sands, or on the amount of heavy crude oil refined in the Gulf Coast area’.”

All of which reasons strategically for an eastern pipeline into Saint John. After all, the more Alberta oil that can be diverted away from the American marketplace, the more persuasive the argument for Keystone becomes in Washington.

Some say “to-may-toe”. Others say “to-mah-toe”. Still, it seems clear, they’re calling the whole thing on, and everybody wins.

Except, perhaps, the planet, which stubbornly refuses to appreciate the nuances of politics.

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