If the debate around pipelines was restricted to scientific arguments, Alberta Energy Minister Ken Hughes believes the case for building them would be much easier to advance. But pipelines are about politics as much as science, which makes predicting their future more difficult.
Mr. Hughes hasn’t a clue, for instance, what will become of designs to build pipelines to the West Coast. Similarly, he won’t even venture a guess at what U.S. President Barack Obama will decide about the proposed Keystone XL project. If it were a rational decision-making process, he says, he’d be able to offer a projection on its fate .
“Unfortunately,” he said in an interview with The Globe and Mail, “it’s moved well beyond that and has become an iconic political discussion that seems at risk of completely escaping gravity.”
That Alberta’s Energy Minister doesn’t have a handle on the fate of pipelines in Canada and elsewhere exposes just how profoundly politics has forced the destiny of this key sector into guessing-game territory.
While there has been a recent thaw in relations between Premier Christy Clark and Premier Alison Redford, the probability of any pipeline being built across B.C. remains largely speculative.
There is stout opposition to pipelines generally in B.C. Ms. Clark has said that a pipeline will only get built if it has the “social licence” from British Columbians to proceed – a condition that becomes more elusive when Alberta is striking commissions to look into the causes behind a rash of oil leaks in the province over the last couple of years.
But the minister believes there is a bigger picture to consider.
“Alberta has 10 times the length of pipelines that B.C. does,” said Mr. Hughes. “Alberta has been regulating this industry for 75 years. I think if people in B.C. felt Alberta was indifferent to the concerns about pipelines in our own province – and many people believe that – that would be one thing. But it’s simply not true. We actually care a lot.”
He said there has been a dramatic improvement in the performance of pipelines in Alberta since 1990, when there were 5.1 incidents per thousand kilometres of pipe. In 2012, he said, that record was 1.5 incidents per thousand kilometres.
Nonetheless, Alberta’s energy horizon is uncertain. With the U.S. becoming increasingly energy self-sufficient and Keystone in doubt, the province needs to find tide water from which to launch oil-laden tankers to lucrative new markets in Asia.
Even though the West Coast option is in limbo, Mr. Hughes remains confident that avenues will be found, whether it’s through the proposed Energy East pipeline to Saint John, or by rail to Alaska.
“The fact is we have multiple points of access to tide water,” Mr. Hughes said. “The Saint John option is really important to us because it’s actually closer to the west coast of India than B.C. is. So that’s big.”
The minister said officials from his department have also been in discussions with the government of the Northwest Territories, which will acquire ownership over its natural resources next April.
“So they will start to look and behave just like the southern provinces with an interest in developing their resources and getting their product to market by looking north, west or south as well,” he said. “They’re very keen in working with us. So that’s positive.”
Mr. Hughes also dismissed suggestions that Asian investors are starting to sour on Alberta as a reliable energy bet because of the roadblocks in the way of getting its oil out. Ms. Redford returned this week from a trip to China, where she spent time trying to allay fears that the prospects of shipping oil to Asia are dimming.
“Asian investors are playing a very long-term game,” Mr. Hughes said. “I’m confident that investors who are here recognize that we will get this product to market. It may not all be to their market, but my understanding is that isn’t important to all Asian investors.
“It’s more important to be part of a global marketplace. So access to the Asian market is important, but access to any markets is equally important. And I’m confident we’ll have access to markets. Even with the constraints we face today, we’re getting our product to market.”
How long that continues, however, remains to be seen.