Even though a new report from the Canada Energy Regulator questions the need for the Trans Mountain pipeline expansion project and the construction of Keystone XL, the Trudeau government on Wednesday reaffirmed its support for oil export projects tar sands.
In his report “Canada’s energy future in 2020”, released Tuesday, the Canada Energy Regulator (formerly known as the National Energy Board) finds that the expected implementation of more ambitious climate policies in Canada and elsewhere in the world will influence demand for the Canadian oil and natural gas.
The federal body responsible for evaluating major energy transmission projects in the country thus refers to an “Evolution scenario”, which anticipates “intensification of measures to combat climate change”. This scenario is all the more plausible given that several States have already indicated their intention to meet the ambitious climate objectives of the Paris Agreement and that the Trudeau government last week introduced a bill to achieve ‘carbon neutrality’ by 2050.
However, based on such an assumption, the Canada Energy Regulator (REC) anticipates “a reduction in demand for fossil fuels” at the International scale. In its “Evolution scenario”, the federal agency estimates that Canada’s peak oil production would be reached in 2039, at 5.8 million barrels per day. Gas production should level off in 2040. Subsequently, “the production of crude oil and natural gas slowly weakens during the last decade of the projection period”, ie the decade 2040-2050.
Trans Mountain lapsed?
This means that the needs for transporting oil to export markets are expected to decline over the next decades. As can be seen in a graph published in the REC report, the growth in the oil industry’s export needs expected over the next few years would be met by the sole replacement of the pipeline « Ligne 3 » d’Enbridge, which has received the necessary approvals in Canada and the United States. The replacement of this 1,660 kilometer pipeline will export 760,000 barrels of Alberta crude every day.
However, the demand for crude transportation would be too low to justify the completion of the Trans Mountain pipeline expansion project, acquired in 2018 by the federal government for $ 4.5 billion to Texas oil company Kinder Morgan. Construction work $ 12.6 billion, funded by the Trudeau government, have already started.
According to what is written in the CR report, the new pipeline Trans Mountain should be completed in 2022. It could then transport 890,000 barrels per day, against 300,000 currently with the pipeline built in the 1950s and which will remain in operation. The Trudeau government has always maintained that once complete, the pipeline system would be sold to a private operator. However, no buyer is known for the moment.
The projections included in the REC report also show that the construction of the pipeline Keystone XL would also be unnecessary, especially since the project is still not fully approved in the United States. President-designate Joe Biden also pledged during the election campaign to put an end to this project, which this year received $ 1.5 billion in funding from the Alberta government.
“Essential role” of oil companies
In light of the findings of the Canada Energy Regulator, does the Trudeau government consider that the completion of the Trans Mountain expansion project and the construction of Keystone XL are necessary?
“Canada’s Energy Futures Report 2020 Shows Our Government’s Plan Is Making A Difference: Canada’s Greenhouse Gas Emissions In 2030 Are Expected To Be Lower – By 227 Million Tonnes – Than Previously Projected the adoption of the national climate plan in 2016 ”, first argued Ian Cameron, press secretary to the Minister of Natural Resources, Seamus O’Regan.
“Canada will exceed its Paris targets and achieve net zero emissions by 2050; we cannot achieve this without the oil and gas industry, which will play a vital role in the development and functioning of our economy, ”he added, in a written response.
Earlier this year, in announcing that he was exempting exploratory oil drilling in the marine environment from an environmental assessment, Minister Seamus O’Regan had already said that the growth of the industry could be compatible with the fight against the climate crisis. . “This industry demonstrates an ingenuity and a spirit of innovation that make it an important part of our future based on clean growth. This is why the federal government is so determined to maintain the competitiveness of this sector on a global scale ”, he declared, about the offshore petroleum industry.
“In the most likely scenario, we won’t need these pipelines. So we should at least postpone or suspend construction, ”said Tom Gunton, professor of resource and environmental planning at Simon Fraser University in British Columbia, in an interview with The Canadian Press. He pointed out that at the moment we could spend more than $ 22 billion to build pipelines that are not needed.