EDITORIAL: A national pipeline: Alward and eastward2/4/2013
NEW BRUNSWICK Premier David Alward isn’t the first Maritimer to go west to seek out economic opportunity.
But his departure for Edmonton Sunday, for talks with Alberta Premier Alison Redford and oilpatch players, has a novel twist. He literally wants to bring the oil stimulus home through a pipeline to the East Coast, a missing piece of infrastructure that has left Canada without a national market for its anchor commodity.
Mr. Alward and Ms. Redford have good reasons to make this more than a pipe dream.
A glut of oil and a scarcity of pipeline capacity in the U.S. Midwest, America’s growing sufficiency in oil, and the uncertainty of pipelines to the Gulf and B.C. coasts being approved have all reduced the price Alberta can get for its oil. As Premier Redford told Albertans a few days ago, the deep discount imposed on Alberta producers by a lack of access to world markets is costing the province $6 billion a year in revenue and playing havoc with budgeting.
The huge Irving refinery and deepwater port in Saint John would provide a market and an export terminal for western crude. The boost to New Brunswick’s anemic economy would help Mr. Alward with his own revenue problems.
The key is getting producers, refiners and pipeline operators to make commitments necessary to finance the link. TransCanada and Enbridge are considering re-purposing existing gas and oil lines to bring western oil to Quebec refineries. A new pipeline or greater use of rail would have to complete the link to the Atlantic.
The two premiers say the business case looks feasible, but there may be a business case for governments investing, too, if that becomes the make-or-break factor. Former Bank of Canada Governor David Dodge has argued this is a good long-term investment in a more balanced and stable national economy and worthy of a federal loan guarantee. Alberta’s one-year revenue losses from lack of market access are greater than the $5-billion price put on one of the go-east proposals, so it’s easy to see real returns on its financial participation.
Good on Mr. Alward and Ms. Redford, then, for leading an effort to combine geology and geography in a smarter, more productive way.
(The Chronicle Herald)