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Comments Effecting Canadian Events – Ken McGregor

Obama’s KeystoneXL Veto – Were Still Optimistic!

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arctic pipline

Proposed Arctic pipeline

Here we are in Alberta, moving into the 3rd month of 2015 and still trying to figure out how we can ship our oil by pipeline to a national market, instead of being held hostage¬†by our only buyer, the US. Can’t ship west , can’t ship east, even trouble increasing output to the US going south thanks to Obama’s veto. Its starting to be one of these topics people are tired of thinking about or just stopped thinking about. It’s probably because the oil is still flowing that people have lost interest . So what’s new that we Albertans be optimistic about?

Aside from oil prices plummeting and Obama’s veto of the Keystone, Alberta’s long-term future sill looks good to me. ¬†The completion of the new Enbridge Inc. Flanagan South and the newly twinned Seaway Crude pipeline in December 2014, allowed large quantities of heavy crude oil from Alberta to flow to the Freeport TX. on the US Gulf Coast for the first time. Elbridge’s network is the first coming from western Canada to the US beating out the Keystone.¬†It will¬†double Canadian shipments to the Gulf Coast to 400,000 barrels a day this year. There wasn’t a lot of fan fare but still a good news story for Albertans .

Another semi good news story which got a lot of attention was the Keystone Pipeline. It finally got passed through the US senate . Normally I’ve been pessimistic over the years of this ever getting passed, but today I’m¬† optimistic regardless of the veto. Just a little. Even though Obama¬†has decided not to give permission for the Keystone, he left the door open for the¬†Calgary-based TransCanada Corp. to reapply for a permit at a later date after coming up with a more environmentally acceptable route. Good News. Also the Republic party leadership intends to attach Keystone measures on to other pieces of legislation like energy, appropriations, the highway bill etc..¬†If nothing else, the ¬†future is looking very interesting for Albertans on this issue.

To put more pressure on Obama, Trans Mountain has applied for a permit for a new cross border pipeline called¬†‘Upland’ that will run in the opposite direction from North Dakota to the proposed Energy East pipeline at Moosomin, Sask. where TransCanada intends to build a 1.05 million barrel receipt and delivery terminal. Since the U.S. Bakken fracking producers¬†also can’t get an answer from Obama regarding the Keystone, they want to ship their oil through Canada by pipeline rather than by¬†less safe¬†rail through the US.¬†If the US government approves this cross border pipeline, that benefits the US, ¬†into Canada, it will prove that the veto of the Keystone is all political. The fight for cross border pipelines isn’t over yet.

Another pipeline that is looking for approval in Canada is Trans Canada’s east west pipeline that will convert an existing TransCanada 40 year-old natural gas pipeline from Saskatchewan to Ontario, connecting it with a new pipeline through Quebec and on to Saint John, New Brunswick. I think Trans Canada will be a lot more involved and vocal to tell the public the benefits than they did with the Keystone. Hopefully with a newly elected conservative government in 2015 this pipeline will have a good chance to be approved. It would be unfortunate in Justin Trudeau and the liberals got elected to govern. It would most certainly be the end of this venture¬†since the pipe must cross over¬†3 providences¬†with¬†3 Liberal governments (Ontario , Quebec and New Brunswick), and since¬†Ms. Wynne and Mr. Couillard have remained vague on their demands.¬† Also Mr. Trudeau has already been telling Quebecers’ that a pipeline through Quebec is harmful. We will¬†¬†need PM Harper’s conservative government for this one. I’ll¬†be more excited after the 2015 election when the Conservatives get re-elected..

The pipeline I find most exciting for Albertans and Canadians, is the proposed Arctic route from Fort McMurray to the northern port of Tuktoyaktuk, then to Pacific and Atlantic markets.  Since the Harper government reduced the layers of oversight, centralizing the territory’s complex land and water board system into a single review board, this route is plausible. A northern pipeline project could make 35 million barrels of diluted bitumen a year available for trans-ocean export. There might be a pilot project using small test shipments that could be started this year (2015). Very exciting for Albertans. With friendly provincial and territorial governments ready to do business, this could turn out to be the ultimate pipeline for Alberta.

There is definitely lots happening in the pipeline sector for Alberta. From the newly operating Flannigan pipeline taking Alberta oil to the US, to the proposed Arctic pipeline. Very exciting times for Alberta and Canada.

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