Alberta Premier Rachel Notley says that cutting provincial oil production will help to temporarily address the province’s economic crisis, but she also needs Prime Minister Justin Trudeau’s government to “step up.”
Notley made the comments Monday after announcing the province will cut output of oil for the first time since 1980, by about 325,000 barrels per day. The goal is to push up the price of Alberta crude, which is trading at such a low price that it’s costing the province $80 million daily.
In an interview with CTV News Chief Anchor and Senior Editor Lisa LaFlamme, Notley said that she believes the cuts are necessary because there are currently 35 million barrels of oil sitting in storage, and there is not enough pipeline capacity to transport it to markets where it can fetch a profitable price.
“We cannot continue to hold ourselves hostage this way ... having this product coming out of Canada receiving one fifth the price that it does in the rest of the world,” Notley said. “That makes no economic sense.”
The NDP premier said that successive federal governments are to blame for the lack of pipeline capacity, and that whichever federal government happens to be in power needs to respond to this “national crisis.”
“What we need to do is spend less time blaming, and more time fixing and just focusing on getting the job done because at the end of the day this is fundamentally important to our economy,” Notley said.
While the Conservatives have consistently supported pipeline construction, the Liberals refused to say during the 2015 election whether they would champion the building of several proposed pipelines.
In November 2016, they approved the Trans Mountain pipeline expansion and Enbridge’s Line 3, but simultaneously quashed the approval of the Northern Gateway pipeline and passed legislation banning crude oil tankers from traversing B.C.’s northern coast.
In May, the Liberals spent $4.5 billion to buy the Trans Mountain pipeline in order to ensure it gets built, but they were told in August by a federal court that it could not go ahead due to a flawed environmental review and improper consultation with Indigenous peoples.
Notley said she has asked the federal government to help the province pay for 7,000 railcars that it’s buying in the hopes of shipping 120,000 barrels of oil per day starting next year.
Natural Resources Minister Amarjeet Sohi told CTV’s Power Play Monday that he agrees the lack of pipeline capacity is a problem. But he blamed the previous Conservative government.
“We have a broken system in place that we inherited from the previous government which we are trying to fix,” Sohi said. “We’ve made some changes to it and we got one pipeline through because of those changes, the Enbridge Line 3 project which is under construction now and will come into operation next year. It will provide 350,000 barrels per day capacity to deal with this situation.”
“We need to do more and we’re moving forward on fixing this system and moving forward on (the) Trans Mountain pipeline expansion in the right way,” Sohi added.
Members of the oil industry, meanwhile, were split Monday on whether production cuts are a good idea.
Alex Pourbaix, president of Cenovus Energy, called the cuts a “thoughtful and measured,” response to a market “temporarily broken by pipeline policy failures.”
Pourbaix said production cuts “should only be used for a short period of time, and only in extreme cases.”
Other producers were less amenable to the idea. Imperial Oil CEO Rich Kruger warned of “unintended consequences” to competitiveness.
Husky Energy issued a statement saying there could be “serious negative investment, economic and trade consequences.”
Notley also wants the federal government to overturn the tanker ban and to rethink pending legislation, known as Bill C-69, that would change the pipeline approval process.
“They need to fix Bill C-69, because in its current form, there is too much uncertainty and we're never going to be able to get these kinds of projects moving,” Notley said.
Bill C-69 would, among other things, replace the National Energy Board with a new Canadian Energy Regulator and require new impact assessments to consider a plethora of new factors including “Indigenous knowledge” and the extent to which the project “contributes to sustainability.”
It would also require an assessment of the “intersection of sex and gender with other identity factors.” At the recent G20 summit in Argentina, Trudeau said “there are gender impacts when you bring construction workers into a rural area -- there are social impacts because they are mostly male construction workers. How are you adjusting and adapting to those?”
Former Liberal MP Martha Hall Findlay wrote in an op-ed this week the bill “would create enormous uncertainty, more red tape and increased court challenges.”
Conservative Leader Andrew Scheer, meanwhile, has said Bill C-69 will “ensure no new pipelines will ever be built.”
“I believe what we’re seeing is a systematic strangulation of the energy sector by this Liberal government,” he said.
