Cenovus Energy Inc. chief executive Brian Ferguson says his company needs every major pipeline project on the drawing board, along with rail, to allow it to transport its growing oil sands production.
Speaking at the TD Securities Calgary Energy Conference on Tuesday, he said he remains firmly committed to the $7.9-billion Northern Gateway project approved by the federal government last month. The proposed pipeline, which would move 525,000 barrels of Alberta oil sands bitumen and other crudes each day through northern B.C., to the Pacific and then through coastal waters in supertankers, still faces stiff opposition in British Columbia from First Nations and other communities.
Mr. Ferguson’s comments stand in contrast to recent predictions from some analysts who have said that at least one or two of the proposed pipelines – beset by regulatory delays and facing environmental critics – will not be needed to ship increasing oil production in the next 10 years, and will not be built.
But Mr. Ferguson said increasing oil production means producers need more ways to transport their oil.
“We need all of the market access – east, south and to the West Coast,” Mr. Ferguson said in a speech where he shared the stage with TransCanada Corp. chief executive Russ Girling.
“I’m one of the producers that is actually supporting all of those four pipeline projects, and we’re also planning on expanding rail,” he later told reporters.
Mr. Ferguson was referring to four proposed projects: Northern Gateway, TransCanada’s Keystone XL project through the U.S. to the Gulf Coast, Energy East – the 4,600-kilometre pipeline will carry 1.1-million barrels of crude oil per day from Alberta and Saskatchewan to refineries in Eastern Canada – and Kinder Morgan’s planned expansion of its Trans Mountain pipeline.
On Northern Gateway, Mr. Ferguson said potential shippers such as Cenovus are still behind the project. It’s an important project “not just for our industry but obviously for the country. We’re most definitely behind it.”
The need for additional transport capacity, by pipeline or rail, is not likely to diminish. Oil sands production is expected to roughly double in the next 10 years, hitting 4.5 million barrels of oil a day by 2025 compared with 1.8 million barrels a day in 2012. Mr. Girling said transport by rail, especially for trans-continential distances, is more expensive and difficult. However, he believes the amount oil being shipped on tracks will go up if constraints on pipeline capacity remain.
“If the world price of oil is $100 a barrel, we'll figure out how to get it to market,” Mr. Girling said.
Mr. Ferguson also took aim at NDP Leader Thomas Mulcair and Liberal Leader Justin Trudeau, saying he doesn’t understand the federal opposition leaders vocal resistance to the Northern Gateway pipeline, even after the project has been approved by the National Energy Board, with 209 conditions.
“To me it just doesn’t feel right as a Canadian that people who aspire to be the prime minister of the country would say that they would just abandon and make a mockery of our regulatory system,” Mr. Ferguson told reporters.
“I don’t think that’s the right approach for them to be taking.”Report Typo/Error