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Calgary Herald
2 days ago
- Business
- Calgary Herald
No private company proposing to build an oil pipeline to tidewater? 'There will be soon', Smith says
Article content Alberta Premier Danielle Smith has an answer for British Columbia's premier and other critics who have asserted there's 'no proponent' and no concrete proposal currently on the table to build an oil pipeline to tidewater in Canada: 'There will be soon.' Article content 'We're working very hard on being able to get industry players, private-sector players, to realize this time might be different and to be able to come forward,' she told delegates attending the Global Energy Show Canada in Calgary on Wednesday. 'If I'm successful in doing that, then we'll get it on the project list and we'll work through the two-year approval process and we'll see if we can get somewhere.' Article content Article content Article content Smith said the aim is to get a new one-million-barrel-per-day crude pipeline to the Port of Prince Rupert on Prime Minister Mark Carney 's potential list of projects in the 'national interest.' Article content Article content The federal government has tabled Bill C-5, the so-called Building Canada Act, which sets out a streamlined federal regulatory process for major projects. Energy industry leaders and Western politicians say Carney and Minister of Energy Tim Hodgson have sent encouraging signals. Article content But despite renewed public and political interest in constructing a new pipeline to carry crude to Canada's coasts for export to non-United States markets, no private company has emerged to express an interest in pursuing such a project. Article content Midstream companies say they've faced overwhelming headwinds in trying to advance big projects in Canada in the past decade. Two west-to-east pipeline proposals, Enbridge Inc. 's Northern Gateway and TransCanada Corp.'s Energy East pipeline, were either cancelled or abandoned, and TC Energy Corp. also abandoned its Keystone XL pipeline project after twice being rejected by the U.S. government. Article content Article content But Smith laid out the case for why she thinks 'this time might be different' and why she believes a private proponent or a consortium of companies could be tempted back to the table: Article content Since the Northern Gateway pipeline to B.C.'s northern coast was rejected by the Justin Trudeau government in 2016, two key developments have emerged that could help answer concerns raised about the risk of a new pipeline exacerbating greenhouse gas emissions from the oilsands and inadequate engagement with Indigenous peoples, Smith said. Article content The Pathways Alliance, comprised of six major oilsands producers, pitched a large-scale carbon capture, utilization and storage (CCUS) network project in 2021, which, if built, would be the largest upstream carbon abatement project in the world, capturing up to 80 million tonnes of CO2 per year by 2050.
Yahoo
01-03-2025
- Business
- Yahoo
Canada open to conversation on KXL, but not until threat of tariffs is dropped, minister says
Natural Resources Minister Jonathan Wilkinson says Canada is open to having a conversation about reviving the Keystone XL pipeline project, but not before the threat of sweeping United States tariffs on Canadian goods is dropped. He said U.S. President Donald Trump's call for the immediate revival of the cross-border pipeline project earlier this week was 'difficult to understand' while his government is simultaneously threatening a 10 per cent tariff on Canadian energy. 'Those are pretty hugely inconsistent,' he said on Thursday. 'At the end of the day, there may be a conversation about KXL, but it can't be until the Americans actually decide that they're going to down tools with respect to tariffs.' Wilkinson pointed out that the 830,000-barrel-per-day pipeline faltered due to regulatory issues in the U.S., not from anything that was raised on the Canadian side of the border. After more than a decade of efforts and billions spent on the partially built pipeline, former proponent TC Energy Corp. (then TransCanada Corp.) officially abandoned the proposal in 2021 after then president Joe Biden revoked its permits. The company has since spun off its oil pipeline business into South Bow Corp. Trump said the company behind the abandoned proposal, or another pipeline company, should come back to the U.S. and 'get it built — NOW!' in a post on social media Monday. 'We're certainly open to talking about KXL, but it would need a proponent, which it doesn't have right now, and it would need regulatory certainty in the United States,' Wilkinson said. Ottawa believes it has answered Trump's border security concerns, enacting measures that seem to have been met with approval after he delayed implementing tariffs on Canadian goods until March 4. But a decision on whether to go ahead with tariffs against Canada is still likely to go down to the wire, Wilkinson said. 'President Trump sort of thrives on misdirection and in creating uncertainty,' he said. 'At the end of the day, we will only find out if we have been successful in convincing the president on the day.' Wilkinson has been pitching U.S. officials for weeks on a partnership to develop a half-dozen energy and critical minerals projects aimed at boosting investment on both sides of the border while achieving Trump's stated aims of keeping energy prices low for Americans and enhancing national security. The most significant oil-related proposal is a project to increase capacity on Enbridge Inc.'s Mainline system carrying Canadian crude to the U.S. Midwest, Wilkinson said. As many as several hundred thousand barrels per day of additional capacity could be brought onstream as early as 2027 or 2028, Enbridge said in a statement Friday. The additional egress could come a number of ways, including debottlenecking and adding horsepower to boost flows, the company said, adding that further details will be announced next week. On a call last Friday with his American counterpart, U.S. Energy Secretary Chris Wright, Wilkinson said he also discussed investment in growing Canada's uranium production in Saskatchewan and expanding conversion facilities in Ontario. 'North America actually could have a full nuclear fuel cycle that would eliminate the dependence the United States presently has on Russia for enriched uranium,' he said. Ottawa's list of potential projects to expedite includes proposals to boost Canadian mining and exports of germanium and gallium to displace supply threatened by China's export ban to the U.S. 'It would create jobs and opportunity in Canada and it would move this conversation from a lose-lose to a win-win,' Wilkinson said. Even if tariffs don't materialize, Canada is now in a situation where it will be important to look at reducing the amount of trade it does with the U.S., Wilkinson said, such as actively seeking out customers in countries such as Japan, South Korea, Australia and Europe. For instance, Canada's trade in natural gas is poised to explode, Wilkinson said, pointing to liquefied natural gas export projects currently being built in British Columbia, including the first phases of LNG Canada, Woodfibre LNG and Cedar LNG. 'We're very close to decisions being made about LNG Canada Two,' he said. 'If all four of those projects go ahead, that volume of gas is about half of what we presently send to the United States. That's a significant step forward in terms of trade diversification.' Canada could also pursue a modest boost to crude oil flows on the Trans Mountain pipeline, but Wilkinson warned about the risk of 'overreacting' to Trump's threats when it comes to projects aimed at expanding crude oil production. Despite comments earlier this month calling for discussion of a new west-to-east oil pipeline, he questioned the need for another new pipeline project under the current circumstances. 'I'm not sure what a new pipeline would do for you,' he said. '(It) starts with there actually being a business case. And I don't think you're likely to see proponents lining up to build a pipeline unless they're sure that they can fill it.' He said a new pipeline to tidewater may not be necessary while Canadian crude continues to be in high demand south of the border thanks to the configuration of refineries in the Midwest and Gulf Coast optimized to process Canada's heavy barrels. Furthermore, he pointed to the International Energy Agency's prediction that global oil demand will peak in the next five years. In a rejoinder to recent calls for a paring back of regulatory hurdles for major projects and the repeal of federal legislation such as the Impact Assessment Act, Wilkinson defended his government's approach to major infrastructure projects like pipelines. 'At the end of the day, trying to somehow run roughshod over Indigenous concerns and environmental concerns will only lose you the ability to get social licence for any of these projects,' he said. mpotkins@ Sign in to access your portfolio
Zawya
27-02-2025
- Business
- Zawya
Canada wants new oil pipelines to avoid Trump tariffs; nobody wants to build them
CALGARY - The Canadian government would have to play a significant role in any project to build new oil pipelines in Canada to overcome regulatory, financial and political hurdles and activist opposition, industry experts said. With U.S. President Donald Trump threatening tariffs on Canadian oil exports, several Canadian politicians have called for new pipelines to coastal export terminals to reduce dependency on the U.S. market. Oil is the most valuable export of Canada, which is the world's fourth-largest oil exporter, pumping 4 million barrels per day (bpd) over the border to U.S. refiners. That is about 90% of Canadian oil exports. Canada's Liberal Energy Minister, the Conservative opposition leader and several provincial premiers have all said Canada must diversify oil exports. Some politicians have called for new pipelines to take crude to Canada's west, east and north coasts. Yet no private company has expressed recent interest in taking on such a multibillion-dollar project, which experts say could take a decade to complete. Two big east-west projects have been canceled in the last decade, and a Canadian company also lost billions when former U.S. President Joe Biden revoked permits for the Keystone XL pipeline project to the U.S. in 2021. Trump on Monday said he wanted Keystone XL built and pledged easy regulatory approvals. But on the same day, he said tariffs on U.S. imports from Canada and Mexico would proceed in March. Tariffs would make Canadian crude more expensive for U.S. refiners or cut margins for Canadian producers, hurting demand for the pipeline. Even without tariffs, building pipelines poses too many risks for Canadian companies, said Dennis McConaghy, a former executive with TransCanada Corp., now TC Energy. He worked on that company's ill-fated Keystone XL project. "If I were on the board (of a pipeline company), I would find these risks very difficult to rationalize taking on," McConaghy said in an interview. Canada's current option to bypass the U.S. is the Trans Mountain pipeline system, running from the oil-producing province of Alberta to the British Columbia west coast. Crude can then be shipped to overseas markets. An expansion of the line was completed last year, seven years after Kinder Morgan threatened to cancel it due to heavy environmental and Indigenous opposition. Ottawa bought the Trans Mountain system for C$4.5 billion (US $3.15 billion) in 2018 to finish the expansion. Construction delays and budget overruns pushed its price tag to C$34 billion over four years. "The fact that the cost overruns were so massive, that's a really strong signal to the private sector," said Kent Fellows, an energy economist at the University of Calgary's School of Public Policy. Canada's energy sector has long complained of lengthy permitting times and regulatory uncertainty slowing projects and scaring potential investors. Companies would be unwilling to consider a new pipeline proposal unless the federal government quickly amends the Impact Assessment Act, said Martha Hall Findlay, a former Liberal Member of Parliament and Suncor Energy Inc. executive, now director of the University of Calgary's School of Public Policy. The act, effective in 2019, required social and cultural assessments of pipelines as well as environmental impacts. Since then, only one project — the Cedar LNG project — has successfully completed the process, and that took 3-1/2 years. "Working collaboratively with the provinces will be key — and will take some serious political leadership," Hall Findlay said. Canadian pipeline operator Enbridge would not consider a Canadian pipeline project absent a reversal in Ottawa's policy toward energy infrastructure, CEO Greg Ebel said on a recent conference call. He said the country needs permitting reforms, elimination of the proposed cap on emissions from oil and gas production, and expansion of federal and provincial loan guarantee programs allowing Indigenous communities to become equity investors in pipeline projects. "We would need to see real legislative change at the federal and provincial government level that specifically identifies major infrastructure projects ... as being in the national interest," Ebel said. Companies also need confidence that Canada's oil sands industry could increase output to fill a new pipeline. Oil sands producers took years to ramp up to hit record production last year to fill the Trans Mountain expansion. A report last year by S&P Global Commodity Insights said Canadian oil sands output rose by 1.3 million barrels per day in the last decade, and could rise an additional half-million bpd by 2030. OIL SANDS GROWTH UNCERTAIN Canada has committed to reach net-zero greenhouse gas emissions by 2050, a goal at odds with any dramatic increase in oil output. A 2023 forecast from the Canada Energy Regulator suggested that to reach the country's net-zero target, oil sands output would likely decline by 30% by 2050. The S&P Global report predicts declines in production beginning as early as 2035. For now, threatened tariffs have tilted the scales away from climate and toward building pipelines, said Hall Findlay. "I do think in Canada, this has caused some reflection on whether, perhaps in some areas, we are too dependent on infrastructure in particular that flows only through the United States," Energy Minister Jonathan Wilkinson said this month at an event in Washington, D.C. Wilkinson has not called for any new pipelines, a representative said on Wednesday. He has noted that other people are bringing up pipelines and it will be discussed, the representative said. Alberta Premier Danielle Smith has called for federal and provincial governments to build multiple oil and gas pipelines to the "east, west and north coasts of Canada." Hall Findlay said that if federal and provincial governments were to support a pipeline through a public-private partnership or some form of financial backstop, that might attract private capital. A change in government could also boost confidence in Canada's energy sector, said Kevin Birn, chief Canadian oil market analyst for S&P Global. Opposition leader Pierre Poilievre told reporters this month that a Conservative government would "repeal anti-energy laws" and "build pipelines." Even then, there would be no long-term guarantee, Birn said. He noted that the Keystone XL project was rejected by former U.S. President Barack Obama's administration. It was revived by Trump during his first term before being revoked by Biden and now is being encouraged again by Trump. "Part of the problem is that the development of infrastructure now has to be thought of in terms of political cycles," Birn said in an interview. "If you're looking to build large infrastructure in North America, you now need to ask, 'Can I get this done in one term of office?'"
