Alberta Premier Danielle Smith speaks during a news conference in Calgary, Feb. 19.Jeff McIntosh/The Canadian Press
Tariffs imposed by U.S. President Donald Trump have resulted in a “sea change” of support among premiers and territorial leaders for pipelines, Alberta Premier Danielle Smith says, including a potential “Energy East 2.0.″
Until the United States comes “back to reality,” Ms. Smith said, Canada should focus its efforts and financial means on building multiple oil and gas pipelines to all coasts, to dramatically increase the amount of fossil fuels sold to Asia and Europe. And she believes there is a spirit of collaboration among premiers and territorial leaders to get construction under way as quickly as possible.
“It’s a really constructive table that we’ve had at the Council of the Federation. We’ve had some pretty honest conversations about it,” Ms. Smith told reporters Wednesday at a press conference announcing Alberta’s retaliatory actions against the U.S.
Some of those talks have been “a little rocky,” she said, but they include a potential addition to the existing Trans Mountain Pipeline and a new Northern Gateway proposal in British Columbia, along with several liquefied natural gas projects. Other possible oil export points include the burgeoning development of Grays Bay in the Arctic, Churchill, Man., and a new Energy East proposal to transport oil to the east coast.
“I don’t think I’ve ever seen so much across-country enthusiasm for talking about restarting some of these projects,” she said. “There’s been a sea change in attitude.”
In an interview on Wednesday, federal Energy and Natural Resources Minister Jonathan Wilkinson poured some cold water on Energy East calls, saying he has not heard serious private-sector proposals for its revival, and that the long period required to build it would not address energy-security concerns about Eastern Canada’s reliance on U.S. oil while Mr. Trump is in office.
There may also be limited need to seek new export markets for Canadian oil, he said, because he expects U.S. demand for it to remain strong despite the trade war.
And if there were a modest drop in U.S. demand, Mr. Wilkinson suggested, there is room in the Trans Mountain Pipeline – not yet at full capacity after its recently completed expansion – to incrementally increase oil flow to other Pacific markets.
“Everybody’s sort of running around saying, ‘Oh my God, we need a new pipeline, we need a new pipeline,’” Mr. Wilkinson said. “The question is, ‘Well, why do we need a new pipeline?’ And I think it’s important to have the conversation, but let’s start with facts.”
Ms. Smith is on the same page when it comes to sustained U.S. crude demand. Canada has one of the largest deposits of oil and gas on the planet, including significantly more than fast-declining oil and gas reserves in the United States.
And it is by far the largest foreign energy supplier to the U.S. Around 40 per cent of refineries in that country – especially in the Midwestern states – are designed to process the gooier crude grades from Alberta’s oil sands.
Despite Mr. Trump’s stated wish of energy dominance, the United States will need Canadian crude “more with each passing year, once they notice their declining domestic reserves and production are wholly insufficient to keep up with the energy demands of U.S. consumers and industry, let alone having anything left over to export,” Ms. Smith said.
“Canada has a secret weapon in this trade conflict with the United States – a trump card, so to speak. It is located directly under our feet, and it’s called Alberta energy.”
She said that Alberta has been approached by various proponents about potential projects to expand pipelines taking oil and natural gas to the United States or to make them more efficient. In total, those projects would add roughly two million extra barrels a day of capacity by 2030.
Proponents contemplating pipeline projects include Enbridge Inc., South Bow Corp. and numerous American companies, she said.
While the federal government has not ruled out slapping an export tax on oil and gas headed south of the border, there is “no circumstance under which” Ms. Smith would support it, she said, because it would be a violation of the 1977 pipeline treaty between Canada and the U.S.
Such a tax could generate roughly $40-billion for Ottawa’s coffers, but Ms. Smith said she hopes the federal government will abide by Alberta’s wishes.
“It is not on. It’s not been on from the beginning. You do not demonstrate that you are a reliable supplier of energy products for our most important trading partner by acting in that kind of erratic way,” she said.