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If Ottawa is serious about eliminating the $34.4-billion federal budget deficit, it's time for the feds to step up to the plate and help "grow the economic pie" by backing oilsands exports to Asia.
In particular, says Alberta Finance & Enterprise Minister Lloyd Snelgrove, Ottawa needs to throw its weight behind Enbridge's proposed Northern Gateway bitumen pipeline to the West Coast or risk losing out on billions of dollars of future investment and tax revenue.
"Simply stated, this is of national economic significance," says Snelgrove, noting that the federal and provincial treasuries are already losing billions of dollars of revenues annually due to the discount on North American oil prices.
That discount -roughly $19 US a barrel compared to the current world price -won't be cut until there are pipelines to carry Alberta's growing bitumen output to the U.S. Gulf Coast and the B.C. coast, he warns.
"We have extended every olive branch we can to the federal government, and if they really want to develop this resource in partnership, we're all for it," says Snelgrove, who met with Chinese business execs and government officials in Beijing last month.
"It is literally billions and billions of dollars (being lost) in the short term, and it's tens of billions of dollars on an ongoing basis if we can't move the bitumen out of here."
With a Tory majority in Ottawa, Snelgrove says the province expected the feds to clearly express support for Enbridge's embattled pipeline project, which is opposed by B.C. environmentalists and First Nations. But so far, that hasn't happened.
"Unfortunately the buzz (from the Harper government) is kind of just a hum right now. We sure don't feel that Ottawa is coming here saying, 'Let's get to work on this, let's move,' " says Snelgrove.
"(Canada's) economy is still in a very fragile place, and we see the Americans doing contortions around what they've got to do (to cut the massive U.S. budget deficit). The one thing we've got in Canada that's going to make a difference is the oilsands," he says.
"So I think they (the Harper government) are going to have to go back to basics and decide whether we're going to become a responsible world energy producer or not."
"And if we are, then let's sit down (and lay out a clear plan)."
Snelgrove's comments, made during an hour-long interview with The Journal, echo those of Suncor CEO Rick George, Alberta Energy Minister Ron Liepert and Western Canada's premiers, who met earlier this week in Yellowknife.
In a joint statement, the premiers backed Alberta Premier Ed Stelmach's call for speedy development of roads, ports, pipelines and policies that will boost energy exports to Asia. In particular, the premiers called for "timely approval" of Enbridge's proposed 520,000-barrel-per-day pipeline to Kitimat, on the B.C. coast. The National Energy Board is slated to begin hearings on the project in January.
B.C. Premier Christy Clark, who is expected to face a provincial election this fall, was a conspicuous holdout, however. Clark says she won't take a position on the Enbridge project until an environmental review is completed, a process that could take years.
"The debate isn't really about (increased West Coast) tanker traffic; the debate is about the pipeline," Clark says. "I think most people who have an issue with the tanker traffic ... would admit that it's really about the pipeline and issues that they have with oilsands products."
Clark's foot-dragging, fence-sitting posture prompted an angry response from Snelgrove.
"If the federal government, the B.C. government and the First Nations can't get together and put a framework around where the responsibility starts and stops, then let's go around B.C., and run another pipeline down to the States," he says.
"If they don't want in they should just say so, but you can't take 10 years to say no. Look at what happened with the (long-proposed) Mackenzie Valley Pipeline, it just went on and on," says Snelgrove.
"So we can put a loop around British Columbia. If (Northern Gateway) isn't going to happen, I don't believe Albertans are going to come back cap in hand and say, 'Well gee, that's too bad.' "
Since the shale gas fields in northeastern B.C. are also "stranded" assets unless they're tied into global LNG (liquefied natural gas) markets -where gas prices are well above those in North America -Clark should "have a look at the big picture," says Snelgrove.
"You can't continually bring your natural gas through our collection system and down through Alberta and say, 'That's OK for us, but it's not OK for you to transport your oil out there (to the B.C. coast),' " he says.
"So in looking for a solution, we have to look at all our options. And if it's not an option to go through B.C. we have a couple of other options, going north or south. A lot of our oil is north and Valdez, Alaska, has a great big terminal.
http://www.edmontonjournal.com/business ... story.html
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