Latest news with #EnergyEast
Edmonton Journal
10 hours ago
- Business
- Edmonton Journal
Opinion: We need less politicking and more approvals for major energy projects
Canadians increasingly agree that our country's full economic potential and energy independence will be unleashed only if more nation-building projects are approved — and quickly. Article content This includes pipelines, which a majority of Canadians in every province — including Quebec — now support. A February SOM-La Presse poll showed support for Energy East in Quebec at 59 per cent (with 22 per cent against). MEI polling done before the trade conflict with the U.S. showed 49 per cent support in Quebec (with 28 per cent against) for building new pipelines to tidewater on either coast. Article content Article content Article content Canada is long overdue for a project approval process that is swift by default. Importantly, Bill C-5, the One Canadian Economy Act, stipulates that major projects in the national interest will be approved in less than two years. The 20 projects currently languishing in the federal environmental approvals process have, on average, taken much longer than that. Article content Article content Bill C-5 can potentially override or limit the application of the federal Impact Assessment Act, formerly Bill C-69 (the 'no more pipelines bill'), and for good reason: it was ruled unconstitutional in 2023 by the Supreme Court of Canada, which agreed with the Alberta Court of Appeal that the act took a 'wrecking ball' to exclusive provincial jurisdiction over natural resources, guaranteed under the Constitution. However, it's important to note that the IAA — which ironically was also once promoted as a 'one-stop shop' to 'speed up the approval of major projects' — has not been repealed, along with other harmful, anti-investment federal regulations, including the Clean Electricity regulations and the oil and gas emissions cap. Article content Article content Adding to the uncertainty, provinces (and Indigenous rights holders) appear to have a veto under Bill C-5. Initially, Prime Minister Mark Carney suggested that he and certain ministers have the 'authority' to unilaterally designate major project approvals and set development conditions. Energy Minister Tim Hodgson said cabinet will not discuss what projects are being fast-tracked until they are 'finalized.' Article content However, when a reporter recently asked Carney, 'If there's a pipeline project you believe is in the national interest, but Quebec or British Columbia don't want it, are you going to push it through?' Carney answered, 'No, we need to have consensus from all provinces and Indigenous peoples.' Article content Last week, Carney said it was 'highly likely' that a pipeline would make its way onto his government's to-do list of nation-building projects. However, he added that he couldn't guarantee it, given that proposals must come from the private sector.
Calgary Herald
16 hours ago
- Business
- Calgary Herald
We need less politicking and more approvals for major energy projects
Article content Canadians increasingly agree that our country's full economic potential and energy independence will be unleashed only if more nation-building projects are approved — and quickly. Article content This includes pipelines, which a majority of Canadians in every province — including Quebec — now support. A February SOM-La Presse poll showed support for Energy East in Quebec at 59 per cent (with 22 per cent against). MEI polling done before the trade conflict with the U.S. showed 49 per cent support in Quebec (with 28 per cent against) for building new pipelines to tidewater on either coast. Article content Article content Article content Canada is long overdue for a project approval process that is swift by default. Importantly, Bill C-5, the One Canadian Economy Act, stipulates that major projects in the national interest will be approved in less than two years. The 20 projects currently languishing in the federal environmental approvals process have, on average, taken much longer than that. Article content Article content Bill C-5 can potentially override or limit the application of the federal Impact Assessment Act, formerly Bill C-69 (the 'no more pipelines bill'), and for good reason: it was ruled unconstitutional in 2023 by the Supreme Court of Canada, which agreed with the Alberta Court of Appeal that the act took a 'wrecking ball' to exclusive provincial jurisdiction over natural resources, guaranteed under the Constitution. However, it's important to note that the IAA — which ironically was also once promoted as a 'one-stop shop' to 'speed up the approval of major projects' — has not been repealed, along with other harmful, anti-investment federal regulations, including the Clean Electricity regulations and the oil and gas emissions cap. Article content Adding to the uncertainty, provinces (and Indigenous rights holders) appear to have a veto under Bill C-5. Initially, Prime Minister Mark Carney suggested that he and certain ministers have the 'authority' to unilaterally designate major project approvals and set development conditions. Energy Minister Tim Hodgson said cabinet will not discuss what projects are being fast-tracked until they are 'finalized.' Article content However, when a reporter recently asked Carney, 'If there's a pipeline project you believe is in the national interest, but Quebec or British Columbia don't want it, are you going to push it through?' Carney answered, 'No, we need to have consensus from all provinces and Indigenous peoples.' Article content Last week, Carney said it was 'highly likely' that a pipeline would make its way onto his government's to-do list of nation-building projects. However, he added that he couldn't guarantee it, given that proposals must come from the private sector.
Edmonton Journal
6 days ago
- Business
- Edmonton Journal
Varcoe: Alberta wants a new oil pipeline — history warns of billion-dollar risk and reward of government financial backing
As Canadians watch a new debate unfold over what it will take to get a new oil pipeline built to the Pacific Coast, former Alberta energy minister Ted Morton has sage advice for provincial or federal politicians. Article content Don't forget about history. Article content Article content Past Alberta governments have a painful record of losing money when they get directly involved in major projects, seeking to de-risk developments and encourage the private sector to build. Article content Article content 'The track record is, I think, pretty one sided . . . not in the favour of governments and taxpayers,' he said this week. Article content 'The bottom line is governments routinely get out-negotiated, and the public, the taxpayer, gets stuck with the bill.' Article content Today, the country is contemplating building new energy infrastructure after the Carney government passed Bill C-5, which will fast-track nation-building projects. The prime minister has also said he wants Canada to become an energy superpower. Article content Article content In Alberta, part of the discussion has focused on how to best attract the private sector to develop a greenfield pipeline project to move more oil to the B.C. coast for export. Article content Will it require direct government involvement to make it happen, given the past failures of Energy East and Northern Gateway to proceed, and the high cost needed to get the Trans Mountain expansion built? Article content Will it be enough if Ottawa scraps legislation such as the tanker ban off the northern B.C. coast, the Impact Assessment Act and the oilpatch emissions cap? Article content 'There are only two ways for governments to de-risk (a pipeline). The easy way — and the wrong way — is to pony up, cover costs or reimbursement. (In) both Keystone and Trans Mountain, that's what happened,' said Morton. Article content That could happen with Bill C-5 being passed, although the concept still needs to be proven.
Calgary Herald
6 days ago
- Business
- Calgary Herald
Varcoe: Alberta wants a new oil pipeline — history warns of billion-dollar risk and reward of government financial backing
Article content As Canadians watch a new debate unfold over what it will take to get a new oil pipeline built to the Pacific Coast, former Alberta energy minister Ted Morton has sage advice for provincial or federal politicians. Article content Don't forget about history. Article content Article content Past Alberta governments have a painful record of losing money when they get directly involved in major projects, seeking to de-risk developments and encourage the private sector to build. Article content Article content 'The track record is, I think, pretty one sided . . . not in the favour of governments and taxpayers,' he said this week. Article content Article content One of those projects — the Sturgeon Refinery northeast of Edmonton — saw a $588-million net loss (a 62 per cent reduction from the previous year) recorded in the latest annual report of the Alberta Petroleum Market Commission (APMC), which was released last month. Today, the country is contemplating building new energy infrastructure after the Carney government passed Bill C-5, which will fast-track nation-building projects. The prime minister has also said he wants Canada to become an energy superpower. Article content Article content In Alberta, part of the discussion has focused on how to best attract the private sector to develop a greenfield pipeline project to move more oil to the B.C. coast for export. Article content Will it require direct government involvement to make it happen, given the past failures of Energy East and Northern Gateway to proceed, and the high cost needed to get the Trans Mountain expansion built? Article content Will it be enough if Ottawa scraps legislation such as the tanker ban off the northern B.C. coast, the Impact Assessment Act and the oilpatch emissions cap? Article content 'There are only two ways for governments to de-risk (a pipeline). The easy way — and the wrong way — is to pony up, cover costs or reimbursement. (In) both Keystone and Trans Mountain, that's what happened,' said Morton. Article content That could happen with Bill C-5 being passed, although the concept still needs to be proven.
Canada Standard
08-07-2025
- Business
- Canada Standard
Could new pipelines shield Canada from U.S. tariffs? The answer is complicated
It should come as no surprise that United States President Donald Trump's tariff threats have renewed interest in building pipelines that don't rely on access to the American market. Almost four million barrels of crude oil cross the Canada-U.S. border each day, generating revenue of more than $100 billion per year - a quarter of Alberta's GDP. A February survey by the Angus Reid Institute found that half of Canadians believe the federal government isn't doing enough to expand pipeline capacity. Meanwhile, two-thirds said they would back reviving the Energy East project - a cancelled pipeline that would have transported oil from western Canada to New Brunswick and Quebec. But would new pipelines truly insulate Canada from the threat of U.S. tariffs? And how much new pipeline capacity is necessary? Despite the apparent urgency of approving new infrastructure projects, these questions remain surprisingly unexplored. In a recent paper I co-authored with researcher Jotham Peters, which is currently under revision, we applied formal economic modelling techniques to parse through the costs and benefits of new pipelines, and in particular to understand the role of American tariffs in shaping these costs and benefits. In a worst-case scenario where the U.S. follows through on its threat of a 10 per cent tariff on Canadian oil exports, Canadian producers could lose as much as $14 billion in annual revenue - roughly a 10 per cent decrease. Simply put, Canada's existing pipeline network severely limits access to markets other than the U.S., and as a consequence oil producers bear the full brunt of American tariffs. But what if Northern Gateway and Energy East - two previously cancelled pipelines that would have brought Canadian oil to tidewater - had been built? If Northern Gateway and Energy East were operational in 2025, Canada would be more resilient, but not completely immune, to U.S. tariffs. Instead of a $14 billion loss, tariffs would reduce annual revenue by $9 billion. Ultimately, the combined capacity of Northern Gateway and Energy East, which would be 1.625 million barrels per day, pales in comparison to the four million barrels per day of existing pipeline capacity connecting Canadian producers with American refineries. Closing this gap would require an expansion of east-west pipeline capacity far beyond the cancelled pipelines of the last decade. So have the recent shifts in U.S. trade policy fundamentally altered the economic case in favour of new east-west pipelines? As with most economic analyses, the answer is complicated. On the one hand, any progress that mitigates the significant cost of U.S. tariffs are likely dollars well spent. Building new pipelines strengthens the bargaining power of Canadian producers, which carries an additional benefit of potentially increasing the return on each barrel sold to our southern neighbour. There's also a long-term capacity issue. Existing pipelines may reach their limit by 2035. In the absence of new pipelines, any new production after 2035 would either need to be transported by rail at a higher cost, or left in the ground. On the other hand, if the U.S. never follows through on tariffs on energy exports - or if future administrations do not share Trump's affinity for chaotic trade policy - Canada could end up right back where it started when these projects were cancelled. All pipelines carry some economic benefit, but such benefits were not enough in 2016 and 2017 to warrant the construction of the Northern Gateway and Energy East pipelines. The elephant in the room is whether a significant expansion in pipeline capacity could realistically be achieved at reasonable cost. Recent evidence suggests it could be a challenge. The Trans Mountain expansion project, for instance, was initially estimated to cost $5.4 billion in 2013. By the time it was completed in 2024, the final price tag had ballooned to $34 billion - a cost overrun of 380 per cent when accounting for inflation. The Coastal GasLink pipeline, which transports natural gas, faced similar issues. It was initially projected to cost $4 billion in 2012 and was completed in 2023 at a final cost of $14.5 billion, with an inflation-adjusted overrun of 180 per cent. While some of these costs were circumstantial - a major flood affected Trans Mountain, for example - increased efficiency in pipeline construction is necessary for the economic benefits of new pipelines to be realized, regardless of U.S. trade policy. While our research explores the economic impact of new pipelines in the face of U.S. tariffs, we acknowledge there are other issues that need to be considered. Chief among them is ensuring Canada meets its constitutional obligation to consult First Nations on decisions, like natural resources projects, that affect their communities and territories. Although this lies beyond our area of expertise, it will inevitably be an important element of consideration for any new pipeline developments. Read more: The complicated history of building pipelines in Canada The environmental impacts of new pipelines are another key concern. These impacts range from local exposure to oil spills to upstream greenhouse gas emissions associated with oil production. While these varying and complex impacts are also beyond the scope of our current work, future research should focus on quantifying the potential environmental impacts of new pipelines. Our research cannot say whether any new pipeline project is good, bad or in Canada's national interest. But we can help Canadians reach an informed decision about how changes in U.S. trade policy may or may not alter the economic case for new pipelines in this country. While Canada would undoubtedly be in a stronger position to respond to U.S. tariffs were Northern Gateway and Energy East operational in 2025, it would still find itself significantly exposed to Trump's tariff threats. Fully removing this exposure would require not one but seven pipelines equivalent to Northern Gateway. Whether that's a goal worth pursuing is a broader question - one we hope our research can help Canadians and policymakers reach on their own.
