Regardless if you are a supporter of the oil and gas business or against it you realize the importance it plays in our daily lives and our domestic economy. The Canadian dollar has been called a petro dollar and rightfully so. And I for one fully realize the potential we as a society have to live in a world that is free of the use of fossil fuels. The problem lies that if we don’t produce it someone else will and we will continue to consume it.
Late last November the Federal government approved two new pipelines. One was the twinning of the existing Kinder Morgan Trans Mountain pipeline that has been in operation since 1953. It carries oil from Alberta to the British Columbia coast. The other was a replacement of an existing Enbridge pipeline called Line 3 which has been running from Edmonton, Alberta to Superior, Wisconsin since 1968.
One would think that common sense would suggest that there would be little in the way of regulatory or environmental issues being that these pipelines are already there and have been for 50 years or longer. But that isn’t the case and I have some reservations that these pipelines will be completed. Maybe I am too pessimistic or cynical but I fully understand that it makes good politics to announce the approval knowing that they might be tied up for many years in red tape or protestors. We have all watched for far too long how the protests for anything Canadian oil seem to attract the attention of activists from all over the globe.
If the Federal government had the will to truly get Canadian oil to export or at the very least for domestic use, they might have approved the Energy East and Northern Gateway pipelines. These two projects would certainly spur the economy of this country when we need it most and heartily assist an ailing energy industry in Western Canada. And all without a dime of tax payers dollars.
I also understand and appreciate the concerns of the environmentalists that fear a spill through pristine forests or waterways. The reverse argument is that pipelines are safer than truck or rail and certainly more energy efficient.
I realize the political football that the current Liberal government has to balance between the economy and appeasing the anti-oil crowd. The previous federal Conservative government was more energy friendly had loads of trouble getting pipelines approved. In their 10 years in power they only succeeded in getting 2 new pipelines and 2 extensions completed.
Currently 97% of Canadian oil exports are to the United States and herein lays the problem. The US appears destined to be energy self-sufficient with the Bakken shale oil in North Dakota and the recent announcement of the massive shale oil find in Texas, considered to be the largest oil reservoir ever found in the USA. We would be wise to explore other consumers and buyers and energy hungry Asia would seem logical.
Another idea would be using it domestically. Consider that Canada currently imports roughly 50% of its oil consumption with the largest suppliers being the United States, Saudi Arabia and Nigeria in that order. Mostly all of this is imported and refined by Eastern Canada. Energy East would seem like an easy fix to refine home grown.
We all know that oil is very unpopular with a worldwide shift to cleaner energy and renewable energy. Most of us welcome the thought of keeping Mother Earth in her natural state. One day we certainly will see a world with another form of energy that we probably don’t even know about yet that will replace oil completely. If that was today then we wouldn’t even be having this discussion. But given that we as Canadian’s and the world for that matter consume oil at record levels each year why would we not want to use our own resources and assist our economy at the same time.
It is Canada’s 150th birthday in 2017 and the project that “built a nation” was the completion of Canadian Pacific Railway. It seems now would be a good time for another nation builder. One that united Canadian’s from coast to coast with a common cause.
Director, Wealth Management