MNI INTERVIEW: Alberta Says BC Pipeline Must Be Fast-Tracked

Alberta Premier Danielle Smith will push for an oil pipeline to the Pacific coast and a carbon storage project as part of Prime Minister Mark Carney's new effort to fast-track approval of infrastructure projects, despite the reluctance of neighboring provinces, the premier told MNI. 

"Building a carbon capture, utilization and storage pipeline at the same time as we're building a new bitumen pipeline. That's probably the perfect mix of being able to achieve both of those objectives at once, and those will be the two that we'll be putting forward,” she said in an interview from Calgary. "Our customers want a product that's going to have fewer emissions."

Building a line to Prince Rupert in British Columbia, where there is opposition to the pipeline, would mean shipments reach Asia in eight to 10 days, Smith said. 

"There's no other single project that would have greater economic benefit," she said. "If it's a million barrels of bitumen a day, multiply that out over 365 days in today's prices, that's about CAD20 billion a year.” 

The pipeline and the Pathways carbon capture project, a group of six oilsands firms seeking emissions neutrality by 2050, will combine economic and environmental objectives, Smith said. Pathways Alliance is backed by producers including Canadian Natural Resources, Suncor, Cenovus, Imperial Oil, ConocoPhillips Canada, and MEG Energy.  

EASTWARD EXPANSION

While the focus is on the Pacific, Smith said Manitoba's port of Churchill is a better alternative to the shelved Energy East line to the Atlantic. "Then we'd be able to use ice breakers to not only get the product up and over to Europe but that allows us to feed both sides of the planet," Smith said, adding it already has support from Premier Wab Kinew. 

Going further east through Quebec to the Atlantic is tougher, Smith said, even though federal leaders say central Canada is vulnerable because much of their oil runs partly through the United States at a time when Donald Trump wants energy dominance.

Quebec has long resisted transporting Alberta oil, citing environmental dangers, though it often imports energy from other nations. Premier Francois Legault recently said support for big projects appears to be rising.

"Quebec has to begin with developing its own" energy, Smith said. "Quebec has substantial natural gas reserves, a very prominent formation that would not only be able to help feed Quebec supply and wean Quebec off their dependence on U.S. gas, but also be able to export to Europe."

PROCEEDING WITH CAUTION

Smith's plans come days after Prime Minister Mark Carney launched a bill quickening approvals to two years for projects deemed of national interest. Carney also says he can't force provinces to accept pipelines. (MNI: Carney Has Support to Break Longtime Big Project Barriers) 

Quebec and British Columbia could win support by pointing to good jobs and offering stakes to indigenous peoples, she said. "There's only so many projects you can commence at once. If you're too hasty trying to ram a pipeline through an area where there's too much resistance, it's just going to face a lot of obstacles.”

Canada's past regulations made it impossible to build major sites and Carney's ambition of turning the nation into an energy superpower will only convince investors if he addresses his predecessor Justin Trudeau's west-coast tanker ban and an emissions cap, Smith said. 

QUELLING SEPARATIST INSTICT 

"No one will get private sector investment unless some of the bad policies are repealed," she said. "There's no point in expanding production if there isn't going to be the ability to get it to market." 

With Carney also weighing when to sell the TMX pipeline Trudeau bought out after regulatory delays, Smith said there's no need to hurry as the pipeline is paying back taxpayers' investment. "Maybe they want to hold on to that for a little while longer to get the amount of the sale price," Smith said. The cost of expanding TMX increased to CAD34 billion from the CAD7.4 billion estimated in 2017. As with other projects, she said when Canada sells it should offer indigenous people who often own land around big projects an equity stake. 

Smith recently said the province could hold a referendum to separate from Canada if the government doesn't get projects moving, a stance Former Deputy Prime Minister Anne McLellan told MNI scares investors. (See: (MNI:Alberta Pipeline Dream Hurt by Separation Talk)

The premier said federal delays shelved CAD500 billion of projects and getting back to work is the best way to national unity. "It will reduce the separatist motivation, and it will also allow us to attract investor confidence.”