Just when you think the Parti Québécois has finally put the lid on the outbursts and non-scripted remarks that characterized the party’s first days in power, here comes Daniel Breton.
On Wednesday, Mr. Breton, Quebec’s Environment Minister, said the province could block Enbridge Inc.’s project to transport oil from Alberta to Quebec on environmental grounds. Never would Mr. Breton accept the reversal of the flow of the pipeline between Sarnia and Montreal if it were imposed by Ottawa against Quebec’s will. “What I see is Alberta wanting to transport its oil on our territory without our consent. Are we masters of our own territory or not?” he said, even if is unclear whether the province has authority over the project, which the National Energy Board will review.
After a call from Pauline Marois’ office, Mr. Breton tamed his words. Even his colleague Martine Ouellet, the Natural Resources Minister who has made incendiary remarks of her own, tempered the discourse of this former activist, who is so green he glows in the dark. “There are economic advantages with respect to costs and it also represents an alternate source of supply,” she noted.
There are also political advantages in saving jobs.
Montreal-East, a PQ stronghold, has lost five of its six oil refineries – and the dismantling of Shell’s refinery, where 800 people worked, is still painfully vivid. There are only two refineries left in the province: Suncor’s in Montreal and Ultramar’s in St-Romuald, near Quebec City. And even Ultramar’s modern facility, which employs some 535 workers, is threatened if it can’t substitute the expensive crude it imports from Europe or Africa with cheaper Alberta oil. “We have done everything in our power to stay competitive, so if we can’t access this oil, mid to long term, we will be vulnerable to a closure,” says Michel Martin, Ultramar’s public affairs director.
These competing interests perfectly exemplify the battle that is raging in many locales in Canada and in the United States. On the one side, a confined energy industry that needs to reach its clients, be they in North America or in China. The transportation glut is such that, should there be no additional outlets, Canada’s western oil production will be constrained as of 2014 or 2015, believes the Canadian Association of Petroleum Producers. This is a dire prospect for Alberta and for Canada, which are already feeling the pinch of lower prices.
On the other side stands a well-organized green movement that is fiercely opposed to new pipelines, especially if they carry heavy crude from Alberta’s oil sands. Caught in a middle is a divided population, which remembers the Kalamazoo spill, when 20,000 barrels of oil were dumped close to this Michigan River before Enbridge could close its valves, making the 2010 accident the worst on-shore spill in U.S. history.
Enbridge’s new president, Al Monaco, may be changing the ways of his company, investing in research, replacing old pipes and tying executive bonuses to safety and security. But the damage is to a great extent done. And the opposition to building new pipelines is magnified with the transportation of the heavy crude oil from the demonized oil sands. Where will the oil go? Looking South, looking at the Far East, the horizon appears clouded.
The hope that the re-election of U.S. President Barack Obama would lead to a quick approval of TransCanada Corp.’s Keystone XL pipeline is fading as the greens are resuscitating their opposition campaign, using Hurricane Sandy and climate change as fresh ammunition. The U.S., where Canada ships virtually all of its oil exports, will no longer be the destination of choice. The shale oil boom will increase U.S. domestic production to 11.1 million barrels a day by 2020, just as Americans decrease their consumption markedly, according to the last forecast of the International Energy Agency, dramatically reducing imports.
The Northern Gateway pipeline, which was intended to send Alberta’s oil to the West Coast, where it could be shipped to Asia, looks doomed, so fierce is the opposition from British Columbia and aboriginal groups.
Like the water that finds its way to the sea, however, oil is trickling its way to clients in unconventional ways: by reversing the flow of pipelines, by converting gas pipelines into oil pipelines, and by shipping crude via train. Shipping oil by railroad is more expensive than pushing it through a pipe. Yet the quantity of oil sent by train, while still marginal, has multiplied tenfold in the past year and is expected to double this year again.
Unfortunately, using trains to send oil is far more risky for spills than by sending it underground. But the irony is lost on those like Mr. Breton who are fighting the pipelines as a way of attacking Alberta’s oil sands.