OTTAWA – Natural Resources Minister Jim Carr acknowledges there’s considerable urgency to building new Canadian pipeline capacity to tidewater, even as new roadblocks continue to appear.
A B.C. Supreme Court ruling this week and discouraging signals from B.C.’s provincial government have further undermined the prospects of two proposed oil pipelines to the Pacific coast, just as Carr is taking part in briefings on his new portfolio in Justin Trudeau’s Liberal government.
Carr’s mandate includes expanding market access for oil and gas — a highly polarizing public policy debate — and his challenge comes amid a global oil glut that is cratering international prices and killing investment in Alberta’s oilpatch.
The natural resources minister is also charged with re-tooling the National Energy Board and environmental assessments in an effort to restore broad public confidence in the way major resource projects are approved.
“Believe me, nobody is lollygagging,” Carr told The Canadian Press in an interview this week from Winnipeg.
“We understand the importance of the moment … and I also understand the opportunity. So we’re working intensely and collaboratively across the government and we’re determined to get it right in a timely way.”
His comments Friday came as federal Finance Minister Bill Morneau took part in pre-budget consultations in Calgary, where he promised “smart investments in infrastructure” while seeking local input.
The Liberals are signalling they’d like to speed up the timetable for major government infrastructure spending, given the ongoing economic downturn. At the same time, they’re grappling with continued delays in approving pipelines — multibillion-dollar long-term infrastructure projects funded by the private sector, including the proposed Energy East line from Alberta to New Brunswick that TransCanada says it’s ready to start building this year.
With the benchmark price of oil slipping below $30 a barrel, dragging down the Canadian dollar with it, the new national government is staring into the barrel of a budget deficit that threatens to balloon into the tens of billions of dollars.
And reports this week suggest Liberal ambitions for a new free trade deal with China may hinge in part on Chinese demands for a new export oil pipeline to tidewater.
International Trade Minister Chrystia Freeland noted during a panel discussion in Toronto on Friday that “one of the top instructions in my mandate letter is to deepen our economic relationship with emerging markets and then with a specific call-out to China and India” — both energy-hungry countries.
Even with current Canadian oil production of two million barrels a day (down from more than four million barrels a day in 2014), diversifying market access away from the U.S. remains a key industry priority, said Terry Abel of the Canadian Association of Petroleum Producers.
“What’s equally important is having access to a range of markets to ensure you get the highest value for what you’re producing,” said Abel.
Events are all conspiring to ratchet up pressure on the Trudeau Liberals for a Nixon-to-China move on a major pipeline-to-tidewater approval, a goal that eluded the Alberta-based, oil-and-gas-boosting Conservative government of Stephen Harper during almost a decade in office.
Conservative energy critic Candice Bergen said the Liberals have already caused “huge uncertainty” in the oil and gas industry by banning tanker traffic on B.C.’s northern coast and failing to clarify how evolving environmental assessment rules will impact projects.
The industry needs someone in government as a cheerleader, said Bergen, “but unfortunately they’re sending the opposite signal.”
The Liberals have promised a new era of environmental responsibility and broad public consultation, which Carr insists remain integral to the government’s plan.
“It’s important that we move as quickly as we can while being responsible — by ensuring that we’ve consulted with people who are part of the movement going forward to ensure that Canada is able to move its resources to market sustainably,” said the minister.
All that collaboration and consultation, Carr added, must be “mindful of the importance of Canada’s competitiveness position and that moving our resources to market in a sustainable way is also part of our mandate.”
Reminded of the cautionary saying about living in times of turmoil, Carr agreed there’s a lot on the boil.
“So you’re right, these are interesting times and they’re important times,” said the former CEO of the of Business Council of Manitoba.
“But I also choose to see them as a time of opportunity.”
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