Saudis table opportunity for Atlantic Canada
A strategic reason that makes sense to bring energy self-sufficiency to Canada
One can’t escape the national news covering the breakdown in political relations between Canada and Saudi Arabia. Canada has its views on human rights and Saudi Arabia has its views but both sides are on different planets culturally.
Canada is trying to keep its cool while the Saudis continue to blow off steam in the international media hoping other nations will be hesitant in the future to publicly criticize their human rights record.
It appears for now the Saudis will continue to supply oil to Canada’s East Coast since it is in their best interest to keep foreign currency flowing into their economy which woefully lacks diversity for long-term survival.
When it comes to proven oil reserves, Canada ranks third in the world behind Venezuela and Saudi Arabia. Over 60 per cent of the world’s oil still resides in the Middle East which has been a consistently volatile region. Saudi Arabia’s recent temper tantrum with Canada clearly demonstrates how easily you can fall out of favour.
Oil mostly comes from unstable regions of the world. Lead global producer Venezuela is going through a political meltdown that has recently reduced its oil production by over 50 per cent leaving countries like Saudi Arabia to fill the gap. Iran is facing global trade sanctions, Iraq is still struggling with ISIS, and Russia is increasingly being hit by global sanctions for its maverick behaviour making it also an uncertain supplier.
But let’s look at our precarious relationship with Saudi Arabia and what if Canada plays some hard ball by stopping oil imports. Over the last decade Canada imported $21 billion of Saudi oil into the East Coast. That is Canadian hard-earned cash unnecessarily going offshore to benefit another country’s economy. It is also more than the $15.7-billion price tag for the Energy East pipeline project which was scrapped by the Liberals back in October 2017.
Most Saudi oil imported to Canada goes to the Irving Refinery in Saint John, N.B. While oil quality from Saudi Arabia is different from Alberta crude, the Irving family had made a commitment to upgrade their refinery to process Alberta heavy oil if the Energy East pipeline was built.
Statia Terminals in Port Hawkesbury, which operates an oil storage tank farm and superport dock, could be big benefactors in Nova Scotia as an export location for western crude.
Our entire country could and should be completely energy self-sufficient if there was political will at the federal government level. In my view Energy East should be completed for strategic reasons let alone the benefits and jobs the project would bring to Atlantic Canada.
But blocking the Energy East project is the province of Quebec. It is unfair when Quebec asks Atlantic Canada to support its position on supply management during NAFTA negotiations to protect dairy and poultry farmers yet denies a chance for economic stability and energy self-sufficiency for our region. Maritimers are forced to pay higher prices for dairy and chicken than if we could access them through free trade with the state of Maine absent a 270 per cent Canadian government duty.
Quebec wants to protect 5,300 family dairy farms and its captured domestic market of 3.3-billion litres of milk.
I am not against a robust dairy industry in Quebec but clearly our federal government has decided to support Quebec farmers and not support the Energy East pipeline and the needed economic revival it would bring to Atlantic Canada.
Slowly western economies will make a transition to green energy including solar, hydro, wind and batteries. But we are many decades away from the total elimination of the gas-fired auto engine or battery-powered commercial airlines.
In the meantime, other oil producing countries continue to sell oil to Canada when we should be energy self-sufficient. Without pipelines to tidewater Canada can’t get its resources to market.
Canada will ultimately have stranded resource assets, lost jobs and miss the economic growth and improved standard of living for our citizens that oil export dollars could bring to our country.
Better health care, better seniors care, pharmacare and lower taxes are all at risk.
If Energy East has any chance of materializing, strong pressure and lobbying must come from all levels of government. This includes provincial and municipal governments to encourage our 32 Liberal Atlantic Canada MPs to speak in unison with their MP colleagues in Alberta and Saskatchewan to get the feds to act and support the project. This needs to be a bipartisan initiative of both the Conservative and Liberal parties to takes politics and Quebec interests out of the debate.
You can’t let the mayor of Saint John be the sole voice advocating for the Energy East pipeline project. Every Atlantic Canada mayor should be raising their voice in support of the project.
If the Kinder Morgan pipeline to the B.C. coast can be built in the national interest so can the Energy East pipeline to New Brunswick. It simply takes political will which appears to be in scarce supply in Atlantic Canada and Ottawa.