While Canada dithers, the world shops elsewhere for energy

Gary Lamphier - Edmonton Journal
May 30, 2016

Eventually, Justin Trudeau’s Liberal government will have to stop talking out of both sides of its mouth and make some tough decisions on whether to support new oil pipelines or liquefied natural gasprojects.

Although the Selfie King’s extended political honeymoon is starting to ebb — witness the blowback over his tough guy act in Parliament two weeks ago — we’re no closer to a final decision on key energy infrastructure projects than we were when Trudeau was elected in October.

This isn’t a fresh observation, of course. Globe and Mail columnist Jeffrey Simpson, among others, has chronicled the Trudeau regime’s chronic aversion to decision-making, and its affection for seemingly endless consultation and protracted regulatory reviews.

In the meantime, with Canadian energy policy adrift, anti-capitalist, anti-fossil fuel crusaders such as Naomi Klein are only too happy to fill the vacuum, flying around the country and delivering instructions to the hoi polloi on how we need to change our evil ways to save sacred Gaia.

Klein was at it again Sunday, oh so helpfully linking the Fort McMurray wildfires and climate change while addressing a University of Calgary conference. “If we are serious about keeping warming below 1.5 C (the target set at the December climate confab in Paris), it does kind of mean the end of the fossil fuel era,” she declared.

Well, here’s the thing. You know, kind of.

While Klein never fails to draw a crowd in Canada, where she gets the celebrity treatment on college campuses and her radical views get heavy promo on the state-funded CBC (her filmmaker hubby Avi Lewis’s ex-employer), the rest of the planet seems to care not a whit.

Most energy exporting nations are simply carrying on as usual, building new pipelines and LNG projects at a furious pace. The result? While Canada’s energy resources remain largely landlocked, the U.S. and other exporters — from Saudi Arabia to Iran, Qatar, Kuwait and Russia — are only too happy to fill the void.

The U.S., for decades the world’s biggest consumer of oil and natural gas, is now busy ramping up exports of both. The U.S. government ended its 40-year ban on crude oil exports in December and in February Cheniere Energy’s Sabine Pass export terminal in Louisiana became the first in the continental U.S. to start exporting LNG.

One of the key export markets for U.S. crude oil is (you guessed it) Canada, where imports of U.S. crude soared nine-fold between 2008 and 2015, and U.S. production grew faster than in any country on Earth.

While two major Canadian oil pipeline projects to the West Coast — Enbridge’s proposed Northern Gateway pipeline to Kitimat, B.C., and Kinder Morgan’s planned TransMountain pipeline expansion to Burnaby, B.C. — have been conditionally approved by Canada’s federal energy regulator, they remain stillborn. 

Their ultimate fate rests with Trudeau and his foot-dragging cabinet.

Meanwhile, the U.S. is building new pipelines as fast as it can. In 2014, the U.S. added more than 8,000 kilometres of oil pipelines, a 9.1-per-cent jump over the previous year, according to the U.S.-based Association of Oil Pipelines. And during the 2010-14 period, the U.S. added more than 19,000 km to its oil pipeline network.

Put differently, the Association of Oil Pipelines notes, that’s roughly 12 times the length of Keystone XL pipeline the Obama government rejected after years of delay. 

With TransCanada’s proposed Energy East oil pipeline still just a gleam in the eye of its proponent, Eastern Canada’s refineries will remain a key target of U.S. producers and other foreign suppliers — including Saudi Arabia — for the foreseeable future. 

Klein’s influence on Saudi oil policy, as you might guess, seems rather limited. Perhaps that’s why she hasn’t been lecturing in Riyadh of late. Or Moscow, Tehran, or any number of other foreign oil capitals.

On the LNG side, Sabine Pass is merely the first of several U.S. export terminals that will come into service over the next few years. Several others are already under construction.

The list includes: Dominion Energy’s Cove Point LNG terminal in Maryland, which is slated to come online by the end of 2017; Cheniere Energy’s Corpus Christi LNG terminal in Texas, which is due to commence exports in 2018; Sempra Energy’s Cameron LNG terminal in Louisiana, also due to come online in 2018; and Freeport LNG’s Texas export terminal, scheduled to begin service in 2019.

Yet another LNG terminal, Southern Union’s Lake Charles facility in Louisiana, has already been approved by U.S. regulators, and several more, mainly on the Gulf Coast, are either proposed or have applications currently pending.

On the other side of the Pacific, Russia increased exports of crude oil to China, now the world’s biggest oil importer, by more than two-thirds between 2013 and 2015.

State-owned Rosneft, Russia’s key supplier to China, ships about half its oil via the East Siberia-Pacific Oceanoil pipeline. The remainder is exported by sea or through energy swaps with another major supplier, Kazakhstan, which also has major pipeline infrastructure in place with China.

In Africa, Uganda is planning a 1,400-kilometre, $4-billion-US pipeline to connect recent oil discoveries in its western region with the Tanzanian port of Tanga. The project is expected to come online in 2018, international media reports suggests.