We already own a pipeline.
Why not a railway?
Call it the Great Western Canada Select Railroad. And we’ll use it to ship Alberta bitumen to the West Coast for export to Asia.
That’s not exactly what Premier Rachel Notley suggested in a speech to oil drilling companies Thursday, but kinda.
Notley’s frustration with the federal government has grown to such a level that she is seriously thinking about buying hundreds of rail cars to ship Alberta’s landlocked bitumen to tidewater.
“Ottawa needs to join Alberta to help ease the economic pain that Alberta played no part in causing, but is affecting the well-being of the entire province and country,” she told the Canadian Association of Oilwell Drilling Contractors.
Hundreds of tanker cars needed
“And let me say – if Ottawa won’t come to the table, then we’ll get it done ourselves. Our oil, the oil you drill, the oil that is the natural inheritance of each and every Albertan will get to market one way or another for the best price possible. And if it takes buying trains to do it, then that’s what we’re going to do.”
Notley didn’t say how many rail cars she’d buy but she wants to ship 140,000 barrels and day. She’d need hundreds of tanker cars.
Interestingly, Notley delivered her speech in Calgary just hours before Prime Minister Justin Trudeau arrived in the city to speak to the chamber of commerce.
The two didn’t meet. Not that that would have made any difference.
They’ve met numerous times before and their offices are, by all reports, in continuous communication. Another face-to-face meeting would likely have been nothing more than a venting session by Notley.
Or maybe Trudeau was afraid of meeting with her.
Maybe, because Notley managed to browbeat him into buying the beleaguered Trans Mountain pipeline earlier this year, she could have badgered him into buying a railway to ship Alberta oilsands bitumen to the West Coast.
Notley, Trudeau ‘nothing new to say’
Most likely they didn’t meet because they had nothing new to say to each other.
Trudeau had signalled clearly to Notley on Wednesday via the federal government’s fiscal update that he had nothing new to announce to help Alberta get more of its rapidly depreciating oil to market.
The province’s landlocked oil is selling for a massive discount. The world price is hovering around $55 US per barrel. The price Alberta gets is called the Western Canada Select price — and that’s worth about $12 per barrel. The gap is called the price differential.
It’s just one bit of bad news after another for Alberta’s NDP government.
As if inheriting an economy heading into a recession in 2015 wasn’t bad enough, the NDP has watched the world price of oil stabilize while the price our landlocked energy industry receives has dwindled to a record low.
The promised expansion of the Trans Mountain pipeline is still stalled, helping depress the “Alberta price” of oil even further.
And there is pretty much nothing the Alberta government can do except vent its frustration with Ottawa— and make a flurry of announcements such as adding $1-billion worth of incentives into a program to help kickstart petrochemical upgrading.
But that’s just another Band-Aid while Alberta’s oil industry is hemorrhaging.
Same with Notley’s announcement she is appointing three special envoys to work with the energy industry to tackle the price differential.
Two of the names are non-controversial: Robert Skinner from the University of Calgary’s School of Public Policy and Alberta’s deputy energy minister Coleen Volk.
Then there’s Brian Topp.
He’s a long-time NDP operative, federal and provincial, as well as Notley’s former chief of staff.
The opposition was quick to attack Topp’s appointment, pointing to comments he had made in 2011 where he ridiculed suggestions that Alberta had “ethical oil.”
I’m not sure that makes him anti-oil (I’ve made similar augments in the past that Alberta needed to tackle environmental issues with the oilsands, not simply hide behind the “ethical” oil fig leaf).
As chief of staff, Topp had proven himself something of a friend to the energy industry. He helped soften the NDP’s election promise to overhaul energy royalties into a relatively minor tinkering with the system.
But if Topp’s critics want to dredge up past quotes to paint him as an enemy to the oil industry, they shouldn’t complain when Kenney’s critics dredge up his old quotes to paint him as an enemy of the gay and lesbian community.
Both Topp and Kenney should be judged on what they say and do now.
Just as Albertans should judge Trudeau on what he does now to help the province get more of its landlocked oil to market.
All aboard the Great Western Canada Select?