Calgary – On Feb. 4, the government of Saskatchewan announced it was putting together a four-member cabinet committee to look at pipeline proposals, including the possibility of investing public funds into such proposals. The Saskatchewan Party government is looking to do so as a way to remove some of the political risk that has stymied or delayed almost every major export pipeline project in the last 10 years.
That has the people interested at Canadian Prosperity Pipelines Corporation (CPPC), a startup that wants to build an export pipeline from Alberta to New Brunswick. Doug MacLellan, president and CEO, told Pipeline Newson Feb. 11 that they’ve already sent information packages to each of the four ministers on the committee. The Pipeline Projects Assessment Committee (PPAC) will be comprised of Minister of Finance Donna Harpauer, Minister of Trade and Export Development Jeremy Harrison, Minister of Energy and Resources Bronwyn Eyre and Minister of Environment Dustin Duncan.
MacLellan said, “We liked it.”
“I understand, from their perspective, they’re early on. They’re looking at a myriad of possibilities. They haven’t fixed their ideas on exactly what they would do. They’re looking to talk to people, so I’m hoping to come to Regina to talk to them.
“I think, right now, in this world, any favourable support for pipeline projects, for us, is positive and welcome. We welcomed the court win last week, but all the negative stuff with protests and blockades makes people outside of Canada wonder,” he said.
“I like the idea of the committee. I guess the question is how is it going to impact the feds? How is it going to impact the provinces?”
He noted Alberta Premier Jason Kenney has backed the Alberta Indigenous Opportunity Company to bankroll loans between $20 million and $250 million.”
MacLellan said, “There’s been some discussion of Churchill. I kind of wonder if people have really looked at Churchill. He noted there’s been some discussion by Kenney and Saskatchewan Premier Scott Moe, as well as some investors, about the northern Manitoba port on Hudson Bay. So CPPC has looked at some of the studies already done.
“You know, you might get three to six months of usable time. The facilities there, you’d have to upgrade, which will cost you more. But you still likely won’t get more than 50,000 barrels per day for that short period of time. So, are you going to pay that off for any investor?
“It’s a short-term, in time, solution, but it’s not going to solve your problem of getting to tidewater. So if you can’t get to the West Coast, you’re going to have to go to Tuktoyaktuk, Port Valdez or New Brunswick,” MacMillan said.
Tuktoyaktuk is a small hamlet on the Beaufort Sea (part of the Artic Ocean). It is in the very northwest corner of the Northwest Territories, north of Inuvik. Port Valdez, Alaska, is the export terminal for the Alaska Pipeline system, 180 kilometres east of Anchorage. It already has massive tankage and supertanker loading facilities. Tuktoyaktuk, which did see exploratory natural gas drilling roughly 40 to 50 years ago, has essentially nothing but an airstrip and limited wharves. While Valdez is ice-free, Tuktoyaktuk is ice-bound most of the year.
He pointed out that Bill C-48, which bans tankers off the northern British Columbia coast, is the impediment to any pipeline there. One would have to go to Alaska to get around that.
He added that the Keystone XL Pipeline is still not built, so the option of going to the United States “is ridiculous.”
“I’m not sure it removes the differential if you go that way. You’ve got to get to other markets,” MacLellan said.
That leaves the New Brunswick route, which CPPC is touting. It would be close in concept to the defunct Energy East project from TC Energy (formerly TransCanada), but as MacLellan frequently notes, Energy East is dead.
Is there a Quebec option?
There are currently efforts to build a large natural gas pipeline to Saguenay, Quebec, for a liquefied natural gas (LNG) project called Energie Saguenay. Asked if they’ve considered using that same port for a pipeline terminus instead of New Brunswick, MacLellan said, “The law would allow you to do that. I’m not sure that, right now, the Quebec premier would. He’s come out vocally in favour of LNG and gas.
“Saguenay is not without its issues. I’ve looked at that project, and talked to people associated with it.. They’ve got a lot of landowner issues, but they’re going to get it built.”
Asked if CPPC could do a parallel pipeline when the natural gas line is built, he said, “It’s possible. I haven’t looked in detail at that.”
They are still working on their Quebec strategy, noting that relationship has to be built, “one brick at a time.”
“We’ve got to be less fiery and more willing to build a relationship with Quebec,” he said, referencing a recent positive visit by Kenney to Quebec.
He’s also concerned about Quebec Indigenous bands who have signed an anti-oil pipeline proclamation.
MacLellan said, “We’re doing preliminary engineering to get to the point where we get investors in for seed capital to get us into a regulatory submission. At the same time, we have been consciously building relationships with Indigenous leaders to give us advice and help us make decisions so that, when we’re faced with big issues, we’ve got them onside, right at the beginning, and they’re guiding us as to the best way to do it.”
“We want highly successful Indigenous leaders. We want guys who have done it. We’ve reached out to Indigenous leaders who have had successful businesses, who are respected on their reserves and tribes, that have been chief, or are still chiefs, who have managed projects and are aware of the issues.”
He said their goal is to build a chain of Indigenous contacts from Alberta to New Brunswick to help with decisions on routing, on reaching out, and how to build the project. “I don’t think we’re going to get anything built, across Canada, without a strong Indigenous aspect involved from the beginning.”
MacLellan went on, “It’s not ‘rent-a-feather.’ We’re not renting somebody. We’re saying you’re involved, you’ve got an equal say. You’re a partner, backed by a robust and first of its kind indigenous Empowerment and Beneficiation Model developed by CPPC. Here’s what we’re planning to do, what do you think of this? Have you got some ideas of how to change that and what to do, what to do differently? What are your thoughts on where we’re going?”
He said they would be partners in the same way major oil companies partner on big projects in joint ventures.
“We are still considering whether we want to put, in our pipeline, some sort of option for a lateral to Churchill. It seems to be something that gets political attention. I’m not sure if it’s practical or economical. I don’t want to do anything that’s not going to payout. But I’ve asked the guys to address that, to look at it seriously, to say if there’s a way for us to do this that will give us an uplift politically but will not lose us money.”
He noted that it would be essential to have two icebreaking tankers transiting from Churchill to ice-free water, where they could transfer their cargoes to other tankers. While Russia does do this, it means the tankers would essentially be an extension of the pipeline. “They would cost you quite a lot of money, like a billion each. If you could push it, you might be able to push it to 100,000 barrels per day.”
Why they haven’t done the numbers for a Churchill an the terminus port, he noted, “We know if we do 1.1 million barrels a day, and we build our project and it costs approximately $25 billion, it’s financially feasible, and we’ve got some flexibility in there for extra costs. But if we waste money building something on a side lateral, such as Churchill, we just don’t see how you could make money.”
“We’re going to give it a thorough evaluation, to make sure we’re not missing something,” he said. “I think we owe it to ourselves and we owe it to everyone whose talking about it.”
New Brunswick makes more sense for Canadian energy security, he noted.
(On Feb. 13, Global News reported that Manitoba Premier Brian Pallister would support a pipeline to Churchill. If such a pipeline was built within the province, it would be an intraprovincial pipeline which would not be regulated by the Canada Energy Regulator, but by the Province of Manitoba.)
While MacLellan said they are making connections with various governments and other enterprises, he noted, “I think it’s still too early to get seed money. Everyone’s still nervous. These blockades aren’t helping me. People like the project, but they know our project is pretty risky.”
The delays in the Trans Mountain Expansion project have driven its costs to $12.7 billion, a 70 per cent increase from its last cost estimate. MacLellan said the delays, rerouting, hearings, legal issues and extensive consultations have added up. But it doesn’t keep him up at night.
MacLellan said some of TMX’s issues are things they should have addressed from the beginning. “We’re going to take more time to ensure our consulting, our consenting, our planning, is done really well. And we recognize where our obstacles are. Our focus, I think, is to build a strong relationship with Quebec. Then CPPC will have state-of-the-art answers to environmentalists as we meet all regulations and request of the legislation. Our focus with the federal government will be to abide by all regulations and regulatory request and submit a project for approval that is complete to all requested guidelines and that stands on its own while meeting and/or exceeding all standards. By the time this is built, we’ll have gone through a couple elections.”
He said they are working within Bill C-69, and plan to be “net-zero” carbon emissions by 2050.