It seems the people of B.C. are just as concerned about jobs as everybody else. The May 14th provincial election established their priority quite clearly.
In a stunning reversal of expectations – i.e., the polls had the NDP out front by 20 points at the beginning of the campaign – the Liberal Party won a strong majority, 50 seats versus 33 for their main opponent, the NDP, and one for the Green Party.
If the NDP’s Adrian Dix had been elected Premier, the future would have included higher taxes for top income earners and corporations. The province would have pulled out of its agreement with Ottawa to let the federal government make decisions on large resource sector projects.
Both Enbridge’s Northern Gateway pipeline proposal and Kinder Morgan’s TransMountain pipeline expansion – as first legs in a journey to transport oil from Alberta to Asia – would have been sent to the morgue.
No coroner’s post mortem would have been needed to determine cause of death. Mr. Dix, in an effort to woo votes away from the Greens, voiced opposition to TransMountain before the company had even made an official application before the National Energy Board (NEB).
Christy Clark will continue as both Liberal Party leader and Premier of the province, even though she lost her own riding. At first blush, her comeback from the wilderness seems like a story for the ages.
But it’s not the only time this has happened lately. The pollsters have been way off the mark in two adjacent provinces. Alison Redford’s Conservatives took Alberta in a cakewalk after the supposedly “smart money” favored the Wildrose Party. Somebody should spend more time re-jigging their survey algorithms.
The Liberals themselves are claiming their win was a victory for the business community, resource development and jobs.
This may be overstating the case. It’s not as if the doors to unrestricted free enterprise have been thrown wide open. In a three-way coalition that includes the incumbents, many aboriginal groups and environmentalists, opposition to at least a new northern oil pipeline will remain strong.
Prime Minister Stephen Harper and his Minister of Natural Resources, Joe Oliver, will have to call on considerable finesse if Enbridge is ever to see oil flowing through its cherished dream.
Nevertheless, the prospect of oil and/or natural gas being pumped to eagerly awaiting customers around the eastern Pacific Rim has now improved by a good-sized leap.
B.C., with a 13.2% share of Canada’s overall population, contributes only 7.4% of the nation’s total export sales. That’s a shame, given the storehouse of resource sector wealth possessed by the province.
To address this shortcoming, Ms. Clark’s Liberals ran on a platform that endorsed boosting the liquefied natural gas (LNG) sector in the north of the province. Major energy firms that have expressed an interest in the area can feel more confident that they’re not wasting their time.
They can line up major financing and commission working drawings for pipelines and export terminals. Investment dollars will flow from communities northeast of Prince George all the way to Kitimat on the Coast.
The future for LNG seems nearly assured in any event. There have been recent media reports that some Great Lakes freighters are testing lower-cost and cleaner LNG propulsion systems. The expectation is that greenhouse gas emissions (GGEs) will be reduced versus all-diesel engines.
In the same vein, two major railway lines – CN in Canada and BNSF (Warren Buffet’s Burlington Northern and Santa Fe) in the U.S. – are experimenting with locomotive prototypes that run mainly on LNG. Other train companies are said to be interested in the possibilities, including CP, Union Pacific and Norfolk Southern.
Canada has abundant oil and gas. The U.S. is greatly increasing its reserves as well, thanks to new “fracking” technology that releases reserves trapped in shale rock.
Even if more oil is never allowed to flow through pipelines to the West Coast, there are other options.
The government of the Northwest Territories has indicated it would be interested in “hosting” an oil pipeline to serve customers in Asia.
On the other side of the country, the Mayor of Saint John, New Brunswick, – Mel Norton – is actively pursuing an oil pipeline expansion to his city’s deep water port.
TransCanada is considering reversing the flow along its current east-west natural gas mainline to run in the opposite direction from Alberta to Quebec City. It will then be renamed the Energy East Pipeline.
Across from Quebec is a major refinery owned by Valero Energy Corporation of San Antonio, Texas. Capable of processing 230,000 barrels per day (bpds), it is currently import-oriented, receiving its oil from offshore and the United States.
But some of the largest vessels can’t navigate the St. Lawrence River in the depths of winter.
The world’s largest oil tankers can access Saint John’s harbor year-round.
Saint John is already home to the country’s largest oil refinery. Irving Oil can process 300,000 barrels per day. It’s Canada’s closest port of call for potential customers in the eastern and southern U.S, Europe, South America and India.
Mr. Norton further argues that residents of the Maritimes are attuned to making their livings from the sea, whatever the catch or cargo might be. April’s unemployment rate in the province was a high 10.9%. Canada-wide, it was 7.2% and in B.C., 6.4%.
This doesn’t exhaust all the alternatives. As well as testing out LNG as a fuel source, the railroads are carrying more oil in almost all directions. With tracks already in place, additions to RR capacity aren’t limited to the same degree as pipelines by the need to maneuver through the approvals gauntlet.
Similarly, oil is being transported to processors by barge along the continent’s major river systems.
In the event that Washington rejects the Keystone XL expansion, the U.S. will still be taking a great deal of Canadian crude for the foreseeable future.
The transformation of the energy sector in the U.S. and Canada is already having a dramatic impact on world energy markets. The transition does present some problems.
For example, a downward price effect from greater supplies might slow investment. Energy companies need prices to stay relatively elevated if new sources are to be developed profitably.
There’s also the bigger picture. What does all of this will mean for Middle Eastern oil providers.
If the U.S. can wean itself from Arab oil, then it will no longer need to play as active a role defending its interests in the region. That would be good for world peace, right?
Some commentators have concluded exactly the opposite. If the U.S. becomes less dependent on Mid-East oil and therefore less engaged in the region, other nations, such as China and India – once they become more important customers – will expand their geopolitical roles.
According to this reasoning, the region may become even more unstable, if that’s possible.
I’m inclined to be more optimistic. I think greater North American energy self-reliance will prove to have numerous positive implications.