Canada must come together and build more pipelines to lift economy out of COVID-19 hole - Action News
Home WebMail Tuesday, November 26, 2024, 06:02 AM | Calgary | -17.5°C | Regions Advertise Login | Our platform is in maintenance mode. Some URLs may not be available. |
ManitobaOpinion

Canada must come together and build more pipelines to lift economy out of COVID-19 hole

A longtime oil, gas and mining industry insider explains why he believes the Trans Mountain and Coastal Gas pipelines must be built and not "held hostage by a minority of special interest groups."

Longtime oil and gas exec says Alberta's heavy crude can help drive the recovery

A stack of pipes is pictured.
Pipes intended for construction of the Keystone XL pipeline are shown in Gascoyne, N.D. on Wednesday April 22, 2015. (Alexander Panetta/The Canadian Press)

Canada has the world's third-greatestproven petroleum reserves, behind only Venezuela and Saudi Arabia.

Canada is currently both the fourth-largest producer and the fourth-largest exporter of petroleum in the world.

Ninety six per cent of Canada's 168.5 billion barrels of oil is heavy oil.

Some experts believeCanada has heavy oil reserves in the trillions of barrels.

Canada, due to its political stability, has the world's most secure source of heavy crude known as Western Canada Select.

What Canada currently requires are pipelines, which, in my opinion, will enable it to deliver its oil to market in the safest, most cost-effective manner.

Prior to pandemic

Prior to the onset of the COVID-19 pandemic, worldoil production was slightly greater than the demand of 100 million barrels per day.

However, all of that changed with the onset of COVID-19, coupled with the flooding of the market by Saudi Arabia due to their conflict with Russia.We have now seen a dramatic dropin demand and it is unclear when demand will return to normal.

On April 20, 2020, the world experienced something that had never happened before.On that date the price of a barrel of West Texas Intermediate crude went from $17.73 to -$37.63 per barrel.

Futures Traders were caught off-guardand unable to trade out of their options for the May contract.

There were no buyers!

If you wanted to unload your contract, you had to pay someone to take your oil and as physical storage was scarce, in my opinion, the market had nowhere to go but down.

Efforts to get this valuable resource to market have been stymied ...- Donald Benson

The carnage has impacted trading prices of our Canadian benchmark Western Canada Select.

However, fear not.

I believe that demand will rebound and Canada's time will only continue to glow brighter as the century moves forward.

The world is evolving away from the internal combustion engine.It is light crude, notably Saudi Arabian Light and West Texas Intermediate, which will become out of favour, as the world shifts away from jet and internal combustion engines.

Light oil is the principal source of oil refined into gasoline and jet fuel.The market for light oil will continue to diminish as the increase of air and land vehicle traffic turns to electric.

But heavy oil, such as Western Canada Select, has a much wider market.

While it can be upgraded to allow for refinement into gasoline, due to the molecular makeup of heavy oil, with its greater numbers of long chain carbon molecules, it is the feedstock used for the manufacture of thousands of consumer products.

The following is a partial list of products that are derived from petroleum:

Ballpoint pens, ink, floor wax, upholstery, sweaters, boats, insecticides, bicycle tires, sports car bodies, nail polish, fishing lures, dresses, tires, golf bags, perfumes, dishwasher parts, tool boxes, shoe polish, shampoo, wheels, paint rollers, shower curtains, guitar strings, luggage, aspirin and safety glasses.

Because heavy oil is so utterly predictable and stable, and responds precisely the same way every time, companies are not looking to replace it as a feedstock.

What Canada needs now and what will be required into the future are pipelines.

Pipelines provide the ability for Canada to get its oil to market in a safe and sustainable manner.Canada is a unique country that has the capability of exporting its oil and gas to the north, south, east and west.

But efforts to get this valuable resource to market have been stymied in my opinion by political and environmental forces intent on keeping our country from being allowed to market its resources.

Quebeckers should embrace pipeline

Today, people have allowed the catastrophic 2013 train crash, which killed 47 people in the town of Lac-Mgantic, Que., to escape from their memory.

That terrible event would not have happened if we were shipping our oil to markets through the safe, dependable means of a pipeline.

Our eastern brothers and sisters in Quebec should be embracing the Energy East line of TransCanada Corp., now known as TC Energy Corp.

However, their application was withdrawn due to the impractical, unreasonable decision of Quebec's leaders, who object to new pipelines in their province.

Instead the Quebec and New Brunswick refineriesimport their oil from Saudi Arabia, Venezuela and elsewhere.

In the West we are struggling to get pipelines built to tidewater.

What Canada must consider is a Manitoba pipeline ..."- Donald Benson

The constant government interference, objections and (in my opinion) disobedience of others has to stop, if we Canadians are going to have the prosperity that our oil industry can provide.

The Trans Mountain and Coastal Gas pipelines must be built.

For far too long we have been held hostage by a minority of special interest groups, many of them from the U.S.A., which will go to whatever limits to destroy our country's prosperity.

In this June 12, 2019, file photo, demonstrators walk to Andrew W. Bogue Federal Courthouse as they protest against the Keystone XL pipeline in Rapid City, S.D. (Adam Fondren/Rapid City Journal via Associated Press)

To the south, the never-ending interference from one group after another has again caused the Keystone XL Pipeline to be delayed.

On April 15, 2020, Montana Chief District Judge Brian Morrisruled more work needed to be done on permits required for two river crossings.

Now, news out of Washington that if elected in November, Democratic hopeful Joe Biden vows that he will cancel Keystone XL pipeline.

This $8-billion project has been needlessly held up for more than a decade.

Revenge for TC Energy will come, once the pipeline is completed and recourse from the provisions of the now-replaced NAFTA free trade agreement will be relied upon for the damages that TC Energy has endured.

Northern pipeline

What Canada must consider is a Manitoba pipeline to the northern Port of Churchill and a Northwest Passage route from Alberta, north to the Beaufort Sea.

Pipelines in the northern hemisphere are not new, neither is the task insurmountable.Russia has been transporting oil and gas through above-ground pipelines in the Arctic Circle for decades.

The Alaska pipeline, which is constructed above ground, was completed in 1977. Engineers faced a wide range of difficulties stemming mainly from extreme cold and difficult terrain. Special construction techniques had to be developed due to the difficulties caused by permafrost.

Today, the COVID-19 financial crisis is now unfolding and to what extent we can only imagine.

It will cause Canada to endure a deficit like never before.

How will we overcome that debt, which must be repaid?

It will take decades and Alberta oil once againwill be one of the economic engines driving the recovery, and all of the have-not provinces, Quebec included, will be eagerly looking for Alberta's continuation of transfer payments.

Canadians need to disregard the unfounded ranting from the likes of Elizabeth May, with allher negativitytoward the oil industry.

Canadians need to come together and bend a little where necessary to see the common good achieved, through the construction of pipelines north, south, east and west.

Be a proud Canadian!


This column is part ofCBC's Opinion section.For more information about this section, please read thiseditor's blogand ourFAQ.