As Canada, along with Mexico and the United States, negotiate a revised North American Free Trade Agreement (NAFTA), the future of our major industries – forestry and fisheries in British Columbia, potash in Saskatchewan, oil and natural gas in Alberta and B.C., among others – remain at risk.
In 2016, about 99 per cent of our energy exports – more than 3.3 million barrels per day – was shipped to the U.S.
However, in recent years, U.S. dependence on Canadian exports has waned with the rise of shale oil and natural gas production, prompting producers to sell at a discount.
The U.S. is seeking changes to NAFTA that would disrupt trade for all major Canadian industries resulting in high tariffs and trade barriers that could affect long-term investment, Canada’s prosperity, and put jobs at risk.
With NAFTA already in limbo, Canada needs to seek ways to diversify its customer base and target new, emerging Asian markets, such as China and India – both expected to drive global energy growth by 2040.
If Canada wants to remain competitive globally, it is imperative we get onboardwith Kinder Morgan’s Trans Mountain expansion pipeline (TMX).
The current Trans Mountain pipeline – in service for more than 60 years – already ships 300,000 barrels per day (bpd) to marine ports on B.C.’s West Coast.
TMX would nearly triple the pipeline’s capacity to 890,000 bpd.
In its 2017 Crude Oil Forecast, Markets and Transportation report, the Canadian Association of Petroleum Producers predicted Canadian oil supply will increase to 5.4 million bpd by 2030 from 3.9 million bpd in 2016.
Our current pipeline capacity is 4 million bpd.
The $7.4-billion pipeline already has the support of the National Energy Board, the Canadian Environmental Assessment Agency, and was federally approved by Prime Minister Justin Trudeau in 2016.
In addition to a lengthy and rigorous regulatory review, Kinder Morgan held consultations with indigenous leaders, communities along the pipeline route, and dozens of town-hall meetings, open houses and workshops.
Despite regulatory approval, TMX continues to face opposition in the form of court challenges launched by environmental non-governmental organizations (eNGOs), municipalities and the current B.C. government.
With so many uncertainties facing Canada’s major industries, it’s time the federal government move forward with TMX and follow through with its commitment to see it built.
In the past year, we’ve seen nearly $24 billion in other nation-building pipeline projects fall to the wayside as a result of increased government uncertainty and oversight, such as Enbridge’s $7.9-billion Northern Gateway pipeline and, most recently, TransCanada’s $15.7-billion Energy East Pipeline and Eastern Mainline Project.
In addition, we also lost $36 billion in investment when Petronas’ cancelled its much-anticipated Pacific Northwest LNG project near Prince Rupert.
Although the need for even more pipeline capacity remains prevalent to ensuring our energy future, TMX signals to the rest of the world that Canada is open for business – meanwhile reducing our dependency on the U.S.
Canada’s track record as a safe, reliable, and secure energy provider has already been internationally recognized.
In the Ipsos survey, Global Energy Pulse, we were ranked No. 1 by 32 countries as the energy exporter of choice, globally.
Tim McMillan is Canadian Association of Petroleum Producers president and CEO.