Copyright of the Daily Oil Bulletin 2018
Saskatchewan Premier Scott Moe Supports Cutting Off Oil To B.C.
Regina — By mid-March, it was apparent both in Edmonton and Regina, governments and their respective premiers have become increasingly frustrated with attempts by the British Columbia NDP government to delay the construction of the Kinder Morgan Canada Limited Trans Mountain pipeline expansion.
Saskatchewan Premier Scott Moe made numerous social media posts and statements, getting increasingly tougher on B.C. In his first interview with Pipeline News since he became premier, Moe laid out his case by phone on March 23.
Pipeline News: In recent days you’ve been making some strong statements on the pipeline politics in the country. What is your broad thrust here?
Premier Scott Moe: The broad thrust is how important this pipeline is, not just to the province of Saskatchewan, or even Alberta, but how important it is to the nation. Canada is an exporting nation. More specific to Saskatchewan, our exports are precisely our source point of wealth here in the province of Saskatchewan, and they’re the job creator in Saskatchewan as well.
We need any and all avenues to get those exports to market. That includes rail, but it also includes pipelines. We have to ensure that this pipeline that has been approved by the federal government begins construction as soon as possible to ensure we’re able to move that product through that safe and efficient transport method, and open up some of the capacity on rails for some of the other products we want to export.
P.N.: The Kinder Morgan Trans Mountain expansion is seeing daily protests, and deliberate attempts by the B.C. NDP government to draw this out as much as possible. Is this an attempt at death by delay?
Moe: This is an attempt, by the province of B.C., and a few individuals, to essentially stop this pipeline that’s been approved by the federal government, through meaningless and unnecessary delays. We’ve seen this with Energy East and it’s all familiar to us right now.
I would put forward it’s the B.C. government and a few individuals attempting to play politics with a project that has gone through a very rigorous assessment process. The National Energy Board looked at it, looked at this project for 29 months, and it deemed that it is of the national interest. Fifteen thousand construction jobs, and 37,000 jobs, both direct and indirect, will apply.
Further to that, if anyone is wondering if the project was not looked at closely and meticulously, That’s just not the case. It was given a full inspection, from an environmental perspective. We know this because it was given 157 conditions, that needed to be met by this pipeline. The industry, from what I understand, is prepared to meet those and move forward with construction.
It has gone through the process, the process by the federal government, and now we should be starting construction. The government of British Columbia, local governments and some individuals should accept that, and we should move forward with the safe and efficient construction of this pipeline.
P.N.: Should Alberta cut off oil and refined products to the Lower Mainland via the existing Trans Mountain pipeline?
Moe: Yes. And as we’ve proposed, we’ll support the premier of Alberta and the leader of opposition, in their efforts to stop their exports of these products until the construction of this approved pipeline begins.
I’d even go a step further. The premier of Saskatchewan supports them. I’d invite the leader of the opposition in the province of Saskatchewan to join with the four of us, in support of the important construction of this pipeline.
P.N.: You’ve said something to the effect that Saskatchewan won’t backfill any shortages in B.C. if Alberta cuts off supply. What did you mean by that, and how would you go about doing it?
Moe: What I mean is we support Alberta in their initiative, that the premier and opposition leader put forward, in halting exports of energy products, if this project doesn’t move forward. I’ve said it won’t be Saskatchewan that fills up the empty fuel tanks in British Columbia.
How would we do that? We’d look at passing legislation that would require export permits for oil shipments out of the province.
P.N.: So you actually have a legislative plan for this, then?
Moe: If need be. That’s how serious we are, and I think Alberta would be just as serious, I would hope.
P.N.: The Alliance Pipeline, which handles much of northeast British Columbia’s natural gas exports, runs right through Saskatchewan, from Kerrobert to Alameda. Have you given consideration to some sort of retaliatory measures on B.C. natural gas exports which run through this province?
Moe: First of all, I hope none of this comes to fruition. As we said, this pipeline has been approved by the federal government. What we really want is for it to begin construction, because of the interest in our province, in Saskatchewan, and in Alberta, but also because of the national interest this pipeline can bring to our one nation of Canada. So I hope none of this comes to fruition. But with respect to restricting flow of B.C. natural gas through our province, whether that be through the Alliance Pipeline or others, that’s a conversation that we’re not scared to have. We’re not afraid to have that conversation.
I think people don’t realize that, it flows both ways, sometimes. We understand that. We have their gas flowing by our front door.
P.N.: The argument Alberta, and now Saskatchewan, are making is that provinces should not be able to obstruct interprovincial pipelines; that they are a federal consideration. Would imposing an embargo on B.C., or taking other measures, be a case of “what’s good for the goose is good for the gander? If they can’t play by the rules, then we’ll show them what that looks like?”
Moe: I reiterate that I don’t think anyone hopes it comes to this. But the fact of the matter is, pipelines, rail lines, ports, are under the national responsibility for a reason. It’s so that all of us, as Canadians, wherever we live, are able to get our goods to market and grow our economy, grow our jobs and grow our opportunities. That is why these rail lines, these pipelines, these ports, are under the federal purview.
We call on the federal government to step forward. We call on the prime minister to do what is necessary, to engage with the province of British Columbia, to ensure this pipeline is not only built, but construction can start in short order.
We will not hesitate, as a province, to take any retaliatory measures, against the province of British Columbia. They are, in their actions, threatening jobs here in the province of Saskatchewan, and already impacting wealth, here, in the province of Saskatchewan. This is enhancing the oil differential that we have in the province of Saskatchewan.
These are jobs that employ real people. People that support real families in Saskatchewan, and their livelihoods depend on construction projects just such as this.
It’s time for the prime minister, the federal government, to understand this. It’s time for the government in B.C. to understand this. And it’s time for us to ensure this pipeline starts construction so we can have these Canadian jobs, not Saskatchewan jobs, but Canadian jobs, but ensuring this starts sooner than later.
I would put forward that the steel that is going into this pipeline is produced at EVRAZ steel, just north of Regina, and it’s that plant, there, that’s producing steel with an 80 per cent reduced emissions level (compared to) the industry average. We shouldn’t forget what we’re already doing in the way of sustainability, in this industry or any other industry. It’s these people that are waiting to go to work at the commencement of this pipeline construction.
P.N.: Let’s talk about Quebec. What happened there, and how does that contrast with what happened to the now defunct Energy East Pipeline proposal? Are there two, or more, standards in this country?
Moe: Here we have a case where we’re trying to get [to] the West Coast. Recently, we had a case where the pipeline, Energy East, was pulled by delays. That’s exactly what we’re seeing with this other pipeline.
With respect to embargos or other similar action by us, Quebec’s economy is a little different than us. They have manufactured goods as opposed to gas or anything of that nature. They get those goods to market by rail as well as over the highway.
The upstream/downstream emissions that were applied to the Energy East project, one could argue you could do the same upstream/downstream emissions to every time you pave a road in Quebec or fix a rail line in Quebec. Their goods are going over those very same transportation avenues, if you will. That is never the case.
One could argue that every time there is an aircraft sold from Bombardier, that the upstream and downstream emissions of that piece of manufactured goods, in that case, an airplane, should be counted in the production of that airplane. This is troubling, when things are being produced, and carried across, essentially from Western Canada, Alberta and Saskatchewan, and the challenges that we’re facing with the upstream/downstream emissions test, when you compare that to some of the products being produced in places like Quebec, such as cars, such as planes, and they’re not facing that same criteria, if you will.
This is a challenging environment, as we move forward.
P.N.: We aren’t seeing it so much in certain parts of Saskatchewan, but crude-by-rail is on the rise again. And it seems that farmers are having a heck of a time getting their product to market. What’s the connection to this, and pipelines? How does a farmer in Norquay become impacted by a lack of pipelines, and what does it do to that farmer’s bottom line?
Moe: This is a good question, because this is an indirect consequence, but a direct consequence to the people of the province, and to another important industry that we have; a number of industries.
We need that rail. We need the train for our grain, our potash, and even our refined energy products, as well. We do have some gasoline products that do travel by rail, as well, across Western Canada, all of which are behind in their deliver schedule as we speak.
So we need to build these new pipelines, not just for the energy capacity, not just for the benefits we have for the oil differential. We need these pipelines to ensure that we can continue to have the capacity on our rail lines as those products, and the volume of those products continues to rise as well.
If not, we increase those transportation costs for not only our western Canadian oil producers that are on rail, when they should be in a pipeline, but we affect negatively the transportation of these other commodities as well, such as grain, such as potash, such as some refined energy products.
This is an indirect consequence that ends up being a directly negative financial impact on the people of the province of Saskatchewan, far beyond even the energy industry. It’s very troubling, and what you’ve done with this last question is hit on the core of why we are so strong with respect to our advocacy for this safe, efficient, environmentally sustainable pipeline.
P.N.: Is there anything you would like to add?
Moe: I would just add this, on the oil differential, we’re losing, in our province, to the royalty to the province, to the people of the province of Saskatchewan, about $150 million each and every year. We’re losing about $1.8 billion to the value to our Saskatchewan oil producers. That’s directly to the GDP (gross domestic product) of the province, just by the oil differential the lack of this pipeline is adding to.
It’s an awful number.