You can’t please everyone but one would have thought there would have been a little bit of happiness in Alberta after Justin Trudeau’s Trans Mountain Expansion approval yesterday. Instead, Alberta’s Premier, who campaigned on “Jobs, Pipelines, (and the) Economy”, admitted that the pipeline won’t provide jobs for Alberta, or help the economy until oil is flowing freely through the new pipe.
Campaign promise made, campaign promise falls flat.
In the one horse economy of Alberta, the only one Kenney ever talks about, the continued threat of America’s overproduction is a big one. OPEC has reduced output in response but Canada’s production levels have only increased.
The conversation, and investment, has been turning to shale oil over the past decade. In 2012, it was predicted that by 2020 the U.S. would replace Saudi Arabia as the world’s largest oil producer. The U.S. is on track to do just that by the end of the year, for the third time; they were the world’s largest oil producer in 1973-74 and 1990.
Both Royal Dutch Shell, which sold its interest in Canadian Natural Resources and Conoco Phillips which sold theirs to Cenovus in 2017, have shale oil drilling projects in Alberta’s Duvernay formation. It is the second largest investment in shale for Conoco Phillips, behind its Permian Basin investment in Texas.
Duvernay is expected to have around 3.4 billion barrels of oil and Montney only 1.1 billion. The oil sands still have around 165 billion remaining bitumen reserves.
Back in 2018, it was predicted that Alberta had seen the last of oil sands mega-projects. Once completed, the mega-projects can produce for a much longer period of time than smaller projects. Many of the companies that were active in the oil sands are now invested or investing in the Duvernay and Montney formations.
Alberta still has a capacity problem, especially with growing production from the oil sands and opportunities for new development in shale oil. In an email the UCP said they won’t celebrate until pipelines are being built in every direction including “Energy East, Northern Gateway, Keystone XL and Eagle Spirit (Just to start…)”.
TransCanada is chomping at the bit to get their own shovels in the ground on Keystone and Kenney is promoting Energy East again. Trump issued another Presidential Permit for Keystone XL a few months ago to replace the one he signed in 2017. We also have Trans Mountain’s approval but Horgan added to his statement yesterday that his government was “open” to continuing to fight it.
However, since the 2019 Alberta Election campaign, we know Alaska is interested in providing a port for the export of Alberta oil. At this point, it makes sense to pursue all avenues to get oil to market, not just the ones that have been cancelled or held up. We need new ideas, not old ones.
This post contains fact, links to sources provided.
Twitter: @Mitchell_AB for all the commentary, @thisweekinAB for posts