Varcoe: Regardless of KXL and carbon tax setbacks, Kenney is assured about olive oil’s future

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The premier of Alberta was shocked by Joe Biden’s change final yr to oppose the Keystone XL pipeline, however says the destiny of the mission is “not but over.”

Jason Kenney is upset that Canada’s highest courtroom has backed the federal carbon tax and says he’s now contemplating Alberta’s choices, together with a cap-and-trade plan with different provinces.

And the UCP chief believes pipeline big Enbridge has a “tight document” in its dispute with Michigan over Line 5, noting that there’s robust federal assist for it – in contrast to ” abject cession ”of Ottawa on Keystone XL.

In lower than an hour on Friday, the premier of Alberta mowed down a thorny discipline of power points whereas addressing the nation’s oil and fuel drillers.

On the root of all of it, Kenney tried to convey a degree of confidence that did not exist a yr in the past when the business, together with the province, was in freefall.

“Simply take into consideration how far we have come previously yr. It felt like I used to be wanting into the abyss, ”Kenney stated on the Canadian Affiliation of Oilwell Drilling Contractors’ annual on-line assembly.

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“We plan for essentially the most excessive situations, actually. And thank God, we recovered sooner.

The Supreme Court of Canada in Ottawa.
The Supreme Courtroom of Canada in Ottawa. Picture by Adrian Wyld / The Canadian Press / Characteristic

CARBON TAX REGULATIONS

The most important information for the Kenney authorities this week got here from a landmark Supreme Courtroom of Canada ruling that federal carbon pricing laws is constitutional.

The courtroom rejected a suggestion from Alberta, Saskatchewan and Ontario to reverse the nationwide carbon pricing plan.

The province should now resolve whether or not to maintain the federal assist program or contemplate different choices.

Options embody reintroducing an Alberta-made consumption tax, increasing the province’s present carbon tax on giant industrial emitters, or becoming a member of a cap-and-trade program, just like that of Quebec.

“We will probably be discussing with different provinces to see if there’s a wider curiosity on this, so we aren’t captive of the California market like Quebec is now,” he stated.

KEYSTONE XL

The Prime Minister additionally defended his authorities’s ill-fated resolution final spring to speculate $ 1.5 billion in TC Power’s Keystone XL mission, in addition to to offer as much as $ 6 billion in mortgage ensures.

In January, simply hours after turning into president, Biden canceled the required permits for the cross-border pipeline, halting building.

When Alberta introduced its funding final March, Biden was the one main Democratic presidential candidate to not have signed a pledge to cease the mission for climatic causes.

US President Joe Biden signs a series of executive orders in the Oval Office, including an order to withdraw the building permit for the Keystone XL pipeline, on January 20, 2021.
US President Joe Biden indicators a sequence of government orders within the Oval Workplace, together with an order to withdraw the constructing allow for the Keystone XL pipeline, on January 20, 2021. Picture by Chip Somodevilla /Getty Photographs

A number of weeks after the province’s announcement, the previous vice chairman stated he would block the road if he received the US election in November.

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“We had been frankly shocked when he abruptly moved to the left after successful the primaries,” Kenney informed the viewers.

“We might be able to make some use of those property. It is not over but. We are attempting to determine the way forward for this with TC Power. And if we resolve to desert the mission, we will definitely search damages. “

The province has set its monetary publicity to the mission at practically $ 1.3 billion.

LINE 3 and LINE 5

Kenney stated he anticipated the Trudeau authorities to combat extra with america over Keystone XL as soon as it’s vetoed and famous that the federal authorities has proven rather more resistance. on an present pipeline: line 5.

Michigan Governor Gretchen Whitmer is searching for to dam Enbridge’s pipeline to central Canada, citing environmental and security considerations.

Line 5 transports 540,000 barrels per day of oil and pure fuel liquids from Alberta to central Canada, the pipeline passing beneath the Straits of Mackinac, delivery the product by means of Michigan to southern Canada. Ontario.

The pipeline is critically vital for supplying refineries in Quebec and Ontario, in addition to supplying gasoline to Michigan and different states within the area.

In this file photo from June 8, 2017, fresh nuts, bolts and fittings are ready to be added to the eastern section of the pipeline near St. Ignace, Mich. As Enbridge prepares to test the east sides and west of Line 5. Pipeline under the Straits of Mackinac at Mackinaw City, Michigan.
On this file photograph from June 8, 2017, recent nuts, bolts and fittings are able to be added to the jap part of the pipeline close to St. Ignace, Mich. As Enbridge prepares to check the east sides and west of Line 5. Pipeline beneath the Straits of Mackinac at Mackinaw Metropolis, Michigan. Picture by Dale G Younger / Detroit Information through AP, File

Whitmer notified final yr that by Could, the state would revoke a greater than six-decade-old easement that permits Line 5 to cross beneath the Straits of Mackinac.

A authorized confrontation is looming. Enbridge stated the road met US security requirements and Michigan didn’t have the authority to close it down.

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“We consider Enbridge has an hermetic document in courtroom,” Kenney stated.

Extra typically, the Prime Minister is optimistic about enhancing entry to pipelines from Western Canada. Enbridge’s Line 3 substitute pipeline, which connects Alberta to Superior, Wisconsin, is predicted to be accomplished later this yr, whereas building of the Trans Mountain enlargement continues.

When requested about Ottawa’s response to Line 5 – the Trudeau authorities makes it a precedence to maintain the pipeline working – Kenney in contrast it to federal efforts round Keystone XL, which he described as a “heinous give up.”

“The explanation they take a special method to Line 5 is as a result of it hits central Canada,” he added.

“So what can I say? Traditional Ottawa politics.

New power

The Prime Minister additionally mentioned the way forward for the power transition, ESG concerns and new alternatives for the event of carbon seize and storage applied sciences.

Alberta additionally has the potential to increase its rising power sources, resembling geothermal and hydrogen growth, that are a part of the province’s general pure fuel technique.

“We’re in superior talks with a serious investor who’s contemplating a $ 3 billion funding on this space,” Kenney stated, with out giving additional particulars.

All of those feedback try to color an image of the surge in enthusiasm within the business, particularly as commodity costs agency up.

CAODC President Mark Scholz stated he hasn’t felt so optimistic concerning the business’s prospects for a very long time, noting that the Canadian power business is at a crossroads.

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The affiliation, created 72 years in the past, is even contemplating altering its title.

“We’re doing this to higher place the group and its members, because the business navigates by means of fast transformation,” stated Scholz.

Mark Scholz, President of the Canadian Association of Oilwell Drilling Contractors, Monday February 13, 2017.
Mark Scholz, President of the Canadian Affiliation of Oilwell Drilling Contractors, Monday February 13, 2017. Picture by Ian Kucerak / Postmedia

Because the sector evolves, it nonetheless faces a myriad of challenges, resembling public stress to decarbonize and the persevering with problem in attracting capital.

Firms are rising from an extended and attempting interval, beginning with the collapse in oil costs in 2014-2015 and now with the influence of the pandemic.

But confidence is rising, which was sorely missing a yr in the past.

“There are a whole lot of causes to be optimistic. Pipelines seem like progressing and manufacturing has rebounded, ”stated Kevin Birn, chief Canadian oil markets analyst for consulting agency IHS Markit.

“However nothing is assured.”

Chris Varcoe is a columnist for the Calgary Herald.

cvarcoe@postmedia.com

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