Feds see future for Eastern pipeline9/11/2012
CHARLOTTETOWN – Federal Natural Resources Minister Joe Oliver is calling for the diversification of Canada’s oil markets to include an oil pipeline east to New Brunswick.
Oliver said during annual meetings with Canada’s energy and mining ministers Monday that United States oil production is on the rise. He also warned that U.S. dependence on imported oil is “waning.”
In a keynote address to national industry experts and politicians, the federal minister then called for the expansion of Canada’s oil market to include the east.
“With our traditional market stagnating or shrinking and an inability to get top dollar for our product, market diversification is not just an opportunity, it is a necessity,” Oliver said in Charlottetown. “Within our own borders, energy security is a continuing preoccupation.
“While proposals for pipelines running west and south have attracted a great deal of attention, the industry is also exploring moving western Canadian crude to Quebec and New Brunswick for refining and export.”
Oliver later elaborated on his perspective while speaking with media, stating he sees a multi-pronged importance to Alberta oil heading east.
“We are encouraging the transport of energy south, west and east if there is an economic case to do that,” Oliver said. “Frankly, we could use the pipeline capacity in all directions.
“We see a benefit for that to happen, because it will feed potentially the refineries in Quebec and New Brunswick that have excess capacity. It will provide employment in those areas and it will also demonstrate to Canadians in Atlantic Canada and Quebec what the advantages are of having robust resources in Alberta because they will directly benefit from it.”
He added: “Moving oil east makes economic sense in principle.”
Oliver said the federal government can play an indirect role in aiding private industry in moving ahead with an eastern pipeline through modernizing environmental regulation to “make the process of regulatory approval more efficient and more robust.”
He said part of the Charlottetown meetings will focus on eliminating regulatory duplication.
Oliver said that he has met with government officials in Atlantic Canada and members of the private sector on the potential expansion of a pipeline project as far east as Saint John.
“We would be pleased to see that happen,” Oliver said. “If it was to happen it would be a positive thing for this region, no doubt.”
Irving Oil, Limited president Mike Ashar is attending the energy and mining ministers meetings, which run until Tuesday, but declined to speak on potential plans to bring oil east to the Saint John refinery.
Irving Oil is now refining limited amounts of crude oil from North Dakota to find out whether the practice makes sense in the long run, according to a Calgary-based oil analyst Edward Kallio of Ziff Energy Group. Reports suggest Irving Oil’s Saint John refinery is receiving one train load a week from the oil-rich Bakken Field of North Dakota.
In June, the Telegraph-Journal reported that Irving Oil was close to a deal with an American fuel broker that would see rail cars regularly shipping high-quality crude from North Dakota oil fields to the Saint John refinery.
Oliver said the development of the country’s natural resources provides the opportunity to generate coast-to-coast economic benefit.
“Our natural resource wealth is quite simply a defining feature of Canada, part of our national DNA and a legacy of all Canadians,” he said. “As crucial as this legacy has been, we are at the brink of an opportunity unparalleled in our nation’s history.
“An opportunity to secure and grow our place as a global leader, creating jobs and wealth for all Canadians.”