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Comments Effecting Canadian Events – Ken McGregor

A Small Win For Alberta

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Enbridge-Pipeline-Map 88Finally, a small win for Alberta in the battle to deliver our oil sands to the US. The Flanagan pipeline is about to be commissioned. This 600,000 barrel per day , 600 mile pipeline should be up and running in the 4th quarter of 2014. With an ultimate capacity of 880,000 bpd, this would double the¬†¬†capacity of the Alberta clipper pipeline and bring it close to what the Keystone would carry. The Flanagan will run from ¬†Pontiac¬†Illinois to Cushing Oklahoma¬†connecting Elbridge’s main Canadian export pipeline to Cushing, Oklahoma, the same destination¬†that the Keystone was going,¬†where the oil is expected to flow into the expanded Seaway pipeline to the Gulf.¬†The big deal about the¬†Flanagan South is that it is ¬†not¬† a¬†border-crossing line,¬† so¬†doesn’t require the State Department or Obama’s approval like the Keystone pipeline to get to Cushing.

In a stealthy move, the Obama administration approved this plan of transferring Canadian oil sands to the Gulf by allowing Enbridge to switch crude from one pipeline to another before it crosses over the US border. The plans is to  link to an adjacent pipeline called Line 3, which already crosses the border then transfer it back to the main line a few miles into the U.S.. This plan is only a temporary measure until the State Department approves  the expansion of the Albert Clipper capacity to 880,000 barrels a day. That proposal is now under a State Department review.

As I mentioned this is only a small win for Alberta, but a win.¬†The thing is it¬†does signal that the Obama administration is not anti Alberta¬†and bowing to all the environmental lobby’s demands. The arrival of¬†Alberta’s heavy oil to the US is expected to further cut into imports from supplies like Mexico and Venezuela which¬†I strongly suspect¬†have been backing the environmentalist to shut down the Alberta oil Sands, and I would think they will continue to try to shut out Alberta from the world markets like China. Hopefully Canadians will come to realize the fight to shut down the oil sands is less about the environment and more about our competitors trying to line their own pockets at our expense. Environmentalist only seem to care about the Alberta Oil sands and very little about other world oil sands like Venezuela which are twice the size of Alberta. There must be a message for Canadians in their bias¬†behavior.

I don’t blame our competitors from trying to keep¬†the Oil Sands¬†out of the international oil market. It’s just business. It’s a shrinking marketGraph_EconomicDiversity2013 in the US and we all have to expand our markets to include other regions . The Alberta government also needs to diversify Alberta‚Äôs economy from depending on oil and gas if we want to maintain our living standard. Much of our other industries like Construction, Real-estate, healthcare all depend on energy revenue. manufacturing only makes up 6% of our GDP. We need¬†to export more goods.¬†¬†We can’t just rely on the US to buy all our oil product since it’s producing more of its own.¬†¬†BP OIL’s new study¬† predicts the US will be energy self-sufficient by 2035.¬†This doesn’t¬†give us¬†much time .

Though the Flanagan is encouraging it’s not going to save Alberta. Our new PC premier Jim Dinning¬†has to come up with a long-range plan to get our oil to International markets and to invest in other long-term¬†business.

I would help if Albertans stopped spending so much time thinking on how to spend money we may not have in the future, and spend more of their time thinking and learning how Alberta can make money long-term to support our needs, and back the political party that has the answers and the will.

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Written by Ken McGregor

September 8, 2014 at 12:30 pm

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