Tag Archives: Saint John

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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Forging a confederation of common cause

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Typically, when Canada’s premiers gather to discuss the state of the federation, they produce enough hot air to float several trial balloons, all drifting in different directions at once. But last week’s gathering in Niagara-On-The-Lake suggested that provincial leaders might be warming to the idea of pinpointing one or two destinations at which to touch down together.

New Brunswick’s David Alward can take much of the credit for forging at least the semblance of common cause among his colleagues this year. He has been a vocal and effective critic (whether or not you agree with him) of federal changes to both the Employment Insurance system and labour market agreements. He has emphasized the shared impact of these moves across the country.

He has also reached out to other premiers in a consistent and collegial way – not seen since the Frank McKenna era – on the subject of energy, which is rapidly becoming the most important file on the interprovincial agenda. Even in the notoriously self-absorbed central Canadian press, his name tends to come before all others in stories about a dearly imagined west-east oil pipeline.

“They’ve all been very open to that discussion – I don’t have any concerns at all,” he told the Globe and Mail last week. “We’re bullish on the project because it’s a nation-building project, it’s going to have a positive impact on Canadians from coast to coast to coast. . .We feel very good about the work that is taking place and I have full confidence in the next steps.”

Reflecting on Quebec Premier Pauline Marois’ refusal to discuss the pipeline in the wake of the Lac Magentic tragedy, Mr. Alward was circumspect: “In discussions with the Quebec government thus far in our working groups, in terms of the pipeline, have been excellent, and we look forward to continuing to work with them,” the New Brunswick Telegraph-Journal quoted him in Friday’s edition. “A catastrophe in their province, the derailment. . .I don’t believe Premier Marois is commenting out of respect for that. . .And I respect that.”

In fact, Mr. Alward was one of the first Canadian leaders to recognize the project’s symbolic significance to the country, as whole. He likened it to a new “national dream”, as big and bold for this century as the transcontinental railway was to the 19th. The argument resonated immediately with Alberta Premier Alison Redford, whose overriding priority is to get her province’s crude to refineries (any refinery) as soon and as cost-effectively as possible.

It’s clear, from her quote in the Telegraph-Journal last week, she hasn’t changed her mind. “We believe it is terribly important that this be considered exactly what it is,” she said. “(This) is a commercial transaction that must be approved by the approval processes in each province that has to take into account the integrity of the project, as well as the environmental impact of the project.”

Moreover, she said, “I’ve heard nothing (at the premiers’ meeting) that in any way suggested to me that there was any possibility that there were any new developments that would change this – that each jurisdiction that is touched by this project will do the work that it needs to do to make sure it does receive the approvals.”

Translation: Stay tuned, but matters are proceeding apace.

The pipeline company, itself, seems to agree. Last week, the Globe and Mail broke news that TransCanada Corp. was nearly chafing at the bit to execute its Energy East strategy sooner, not later.

“(The company) says it has garnered significant support for its quest to ship Western crude to refineries in the East, as premiers seek consensus on a politically charged cross-country pipeline,” the newspaper reported on Thursday. “The Calgary-based company (said) it has received major backing from producers who want to ship crude on its Energy East pipeline, and will make an announcement in the coming weeks. ‘We are very optimistic about the project,’ Alex Pourbaix, TransCanada’s president for energy pipelines, said in an interview.”

For New Brunswick and the rest of Canada, this is one trial balloon that may be getting ready to come down to earth.

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