With cross-border discussions continuing on a potential trade deal between Canada and the U.S., President Donald Trump shared late Tuesday an AI-generated photo of a pipe labelled “Keystone,” which many are interpreting as a reference to the oil project killed by the former Joe Biden administration. Richard Masson, former CEO of the Alberta Petroleum Marketing Commission, shares his perspective on what this could mean with Alberta Primetime host Michael Higgins. This interview has been edited for length and clarity. Michael Higgins: What sense is to be made of a potential Keystone XL revival? Richard Masson: If this is the kind of thing we’re giving up in the negotiations, I’m feeling pretty good because it doesn’t cost us anything, it doesn’t change anything, and if it makes (Trump) feel good, great. But reality is South Bow – which is the company that was the pipeline division of TC Energy, who did Keystone XL – they have been working for months to try and figure out if shippers –which are oil producers or refiners – would sign up for some part of the Keystone XL system to go to the U.S. What they managed to put together was a proposal called Prairie Connector. It moves oil from Hardisty, Alta., to the Canadian border, and then it connects with a separate pipeline company’s assets called Bridger Pipeline. They’re going to twin some of their existing system to get down to Guernsey, Wyoming. So that proposal – it’s not Keystone XL, but it uses some of the rights away and some of the old pipe. It was put to shippers.… Shippers said ‘Yes, we would sign up for 465,000 barrels a day,’ which was good enough for them to say we’re going to move this forward on a commercial basis. And so, all of that’s been underway for months. And in the scheme of new pipelines, it is one of the more likely ones to happen because it’s relatively short to connect to existing pipeline systems, it already has commercial support, there’s private sector proponents, much of the right of way has already been reviewed and looked at, and so it has a lot going for it. And what President Trump said in the last couple days really has no bearing on it. MH: Do we chalk this up to a degree of confusion on Donald Trump’s part around developments here? RM: Is he confused or what’s his angle here? Diesel prices, in particular in the U.S., are under pressure like they are globally because Ukraine is bombing Russian refineries, and the Middle East remains shut. And so refineries are not able to keep up with global demand for gasoline, diesel, and jet fuel, and prices are going up because of that. Even though the oil price hasn’t gone up that much because of these wars, the refined product prices are continuing to go up because refining capacity is being bombed in Russia. So he wants to be seen to be doing something to offset that. Well, let’s talk about a pipeline that he’s been in favour of a couple times. A pipeline takes years to build. It won’t be around before he’s out of his presidency, probably. But you know he gets traction out of these kind of things, and it really doesn’t change much. MH: How much demand is there for the Alberta oil that this pipeline will deliver? Is there someone to buy it? RM: Absolutely. The Gulf Coast refineries are the big complex refineries in the Houston area, and they are where the world oil price gets set because they can import on tankers, or they can take oil from Alberta or Texas by pipeline. They want our oil because they’re designed for heavier products like diluted bitumen. They used to get a lot of oil from Mexico from a field called Maya that has been declining for years and years, and so Alberta is a replacement for that. If you look at the pipelines that are proposed right now, it’s 300,000 barrels a day going to the west coast, expanding the Trans Mountain pipeline. Those, I think, will happen. They’re relatively inexpensive and can happen over the next two or three years. Enbridge is building 150,000 barrels a day, but they decided to defer building an extra 250,000 barrels a day on their main line, probably because the shippers said we would rather see this Prairie Connector move forward first, and so that’s what’s in play right now over what likely is to be built before 2030. A million barrels a day west coast pipeline probably won’t happen ‘til the mid-2030s. MH: What kind of effort is it going to take to generate all the oil that’s going to be needed to fill all of these pipelines? How is this going to land with producers, who will be the ones called on to fill them? RM: The good news is this is a totally commercial proposal.There is no government money involved in this one at all. It stands on its own economic merits, and so as long as the politicians don’t mess it up by pulling presidential permits or things like that, this thing can move forward on its own. The average production growth from the oil sands is around 100,000 barrels a day per year. When we were growing really quickly, we could grow quicker – sometimes 200,000 barrels a day per year. Lately it’s been a little slower, but we can fill up the three pipelines I just talked about probably by 2031 or 2032. That’s good news. So we can expand oil sands projects, find diluent hopefully to meet the need to make diluted bitumen, so I think this is all setting up for very favourable conditions for Alberta. MH: Outside of the pipeline talk, what are you looking for now in the trade deal talks where the energy sector is concerned? RM: One of the things I take away from this is Trump has talked a lot about tariffs for months and months. He’s never tried to tariff oil coming from Canada or natural gas coming from Canada. It demonstrates how dependent they are on us. Now we depend on them, too, as our key customer, but we’re tied together. I get very frustrated with a lot of the things the U.S. is doing, but I recognise that for decades coming, we will be tied to the U.S. as our key customer. I hope that one of the things to take away from Trump’s tweet is a recognition that they want our energy, they benefit from it, we benefit from it, and we should work together to make sure North America is a more secure energy market. Certainly, in a world where there are active wars taking out refining capacity and oil production capacity, it benefits us all if we have secure supplies here in North America.
