Sohi orders NEB to study whether Canada's pipelines are being used to capacity
Natural Resources Minister Amarjeet Sohi has ordered the National Energy Board to evaluate whether Canada’s pipelines are being used to their full capacity.
“I have instructed the National Energy Board today to do the evaluation of the existing capacity of the pipelines,” Sohi told host Omar Sachedina on Friday’s episode of CTV’s Power Play.
He said the review will look into whether Canada is “properly utilizing, optimizing the existing capacity and if not, what steps we can take.”
The minister added that the NEB will report back to him “as soon as possible.”
Canada has been facing a crisis in the energy sector as oil prices plunged to record lows in recent weeks, falling to US$14 a barrel earlier this month. Many are pointing to Canada’s struggle to get product to market as a key factor in the price problem.
Sohi felt the energy sector frustrations first hand on Friday when he met with the Edmonton Chamber of Commerce.
The Albertan politician was greeted by protesters unhappy with the rate at which pipelines have been approved and constructed.
Similar protests also welcomed Finance Minister Bill Morneau and Prime Minister Justin Trudeau in separate visits to the province within the last 10 days.
The price of Canadian oil is far lower than oil from other producers. Alberta Premier Rachel Notley has been outspoken on the differential, calling the current cost of Canadian oil “ridiculous” on Wednesday’s episode of CTV’s Power Play.
The Premier proposed a solution of her own to tackle the problem. Her provincial government plans to purchase rail cars in order to get Albertan oil to market.
The current backlog, she said, is costing the economy roughly $80 million a day.
“We need to fix that, and that’s why we’re calling on the federal government to help us, even in the medium term, with this problem,” Notley said.
The federal government has not agreed to help with the planned rail purchase, but Notley said she remains “hopeful that they will reconsider.”
In the meantime, the government’s new NEB study could help boost the movement of Canadian oil -- that is, if the board finds the pipelines aren’t being used to their full capacity.
Sohi has not provided a firm deadline for the results of the NEB study.