Lloydminster – Alberta United Conservative Party Leader Jason Kenney attracted a sold out crowd of approximately 500 people to the opening ceremonies banquet of the Lloydminster Heavy Oil Show, and he didn’t disappoint.
Kenney and federal Conservative Natural Resources critic Shannon Stubbs, MP for Lakeland, which includes the Alberta portion of Lloydminster, spoke to the media just prior to going on stage on Sept. 11.
At the time of the interview, Saskatchewan Premier Scott Moe had been saying there was a $200 million direct impact to the coffers of Saskatchewan due to the Western Canadian Select (WCS) to West Texas Intermediate (WTI) price differential. (Moe has since revised that number to $300 million per year). Asked about the impact for Alberta, Kenney said, “It’s probably at least ten times that. The energy sector in Alberta is about 10 times the size of that in Saskatchewan, in terms of revenue. So we’re talking tens of billions of dollars value that we’re losing, primarily to the United States, as we sell them oil at, on average, $35 a barrel, and they’re now selling their oil at $70 a barrel. So we’re taking something like a 50 per cent hair cut right now. According to the Toronto Dominion Bank, I think their estimate is we’re losing $50 billion a year in value to the Canadian economy.”
With regards to the now-defunct Energy East pipeline project, and the idea of reviving it, Kenney said, “My attitude is we should pursue everything. But we need to clear out the regulatory barriers. That means getting Trudeau to stop Bill C-69, stop Bill C-48. Get Energy East back on the table. Folks down east want that to happen. There are proponents looking for potential oil and gas access to Hudson Bay, first through the renewal of the rail route to Churchill, and then an pipeline. There are proposals to get a pipeline built to Juneau, Alaska. Another to Port Angeles in the United States. There are Aboriginal advocates of the Eagle Spirit Pipeline, which is basically an Aboriginal-owned Northern Gateway.
“How about the feds start consulting with the pro-development First Nations?
“We need not give up on Trans Mountain. We’re calling on the feds to declare the Trans Mountain as being for the common advantage, using a special constitutional power, Section 92.10c of the constitution. I’m calling on the federal government to impose sanctions on BC for standing in the way of that. They should appeal the Federal Court of Appeal decision to the Supreme Court of Canada immediately.
“There are other possible developments, like technologies for the solidification of bitumen to allow it to move as a solid by rail, which would remove a lot of the opposition. There’s a lot of different strategies that should be all pursued.”
Kenney said he and Premier Moe are of like mind on all of these questions, and, if elected, Alberta would join Saskatchewan and Ontario in their constitutional challenge of the federal carbon tax.
“Alberta needs to catch up with Saskatchewan on deregulation. It is faster and easier to get permits to do exploration or production in Saskatchewan, whether it’s light, natural gas, heavy oil or bitumen, than it is in Alberta. I’ve given Scott fair warning that we’re going to catch up with him in terms of a lighter regulatory touch in Alberta.”
Regarding carbon taxes, he said it would be an imposition of a de facto provincial tax by a federal government, which is unconstitutional.
In terms of provincial revenues, if it was possible to bring investor confidence back, capital spending and employment, it would generate “a heck of a lot more revenue than the carbon tax does,” Kenney said. The Alberta NDP increased corporate and personal income tax rates, but revenue has declined for three straight years because of an overall decline in the economy, fueled partly by higher tax rates, he added. Eliminating the carbon tax would be part of the UCP’s strategy for economic growth.
“The best way to do that is to get pipelines to reduce the differential, get more value for our oil and gas, including higher royalties,” Kenney said.
Asked if he would reverse the current Alberta government’s plans to shut down all coal-fired power plants, he said, “Bill No. 1 of a future Conservative government in Alberta would be the Carbon Tax repeal Act, which would repeal the entire 2015 Carbon Leadership Plan Act, which includes the accelerated shutdown of the modern coal-fired plants. We will invite the power producers to continue operating those modern plants if they choose to do so. But we won’t compel them to. Some of them have made market decisions to convert from coal to natural gas production, which, in the long run, I think is a good thing. But in the medium term, coal is a reliable and inexpensive form of power.
“What the NDP in Alberta is doing is trying to replicate the failure in Ontario of massive subsidies for unreliable and hugely expensive forms of intermittent power, wind and solar, with the need for backup of the baseload through hydrocarbons like natural gas. That doesn’t make any sense, to force consumers to pay twice for their power. We will stop the NDP shutdown of the coal plants.”
Stubbs said, “The crisis around the Trans Mountain Expansion is the direct result of the failures of Prime Minister Trudeau and the Liberals to exert federal jurisdiction and the rule of law to ensure the Trans Mountain Expansion, which they approved nearly two years ago, can actually go ahead. It is shocking they were unprepared for the court ruling, in either scenario, because they claimed for two years this is a priority for them.
“It’s doubly unconsciousable that they, as of yet, have no concrete plan for the expansion to go forward, she said, two weeks after the ruling. Nine days later, the federal government instructed the National Energy Board it had 22 weeks to review what was set out in the ruling.
She has been working in a Parliamentary committee to look into what has been going on, but has been stymied by the federal Liberals. “So I’ve heard overwhelming frustration and anger from people right across my constituency. Of course, they’re rightfully angry. Countless examples of men and women who either were employed either right now, to begin land clearing, or were counting on those jobs over the next one to four years – totally out of work, completely uncertain. I was talking to a woman from Vegreville not too long ago. Her husband just lost his job immediately. He’s been told he may or may not be able to go to Ontario to work on a pipeline sometime in October or November,” Stubbs said.
Asked why it takes so long to study pipelines, whose fundamental technology hasn’t changed in decades, Kenney framed it this way, “The original TransCanada pipeline, that went from Hardisty to Sarnia, that created a political crisis in Ottawa, was approved and built in 18 months.
“This is why the Harper government actually brought in legislation to limit the NEB process on a pipeline application to two years, which is the longest in the world. But that was opposed by the Liberal Party and the NDP as being too fast. So this is ridiculous. We are sending a message that Canada cannot function as a modern country, which is why we estimate some $90 billion in capital has been pulled out of Canada, or investments have been cancelled, in the past two years alone, because of the uncertainty created by this. This is becoming existential for our economy. It’s not just about oil and gas. It’s about the rule of law. It’s about whether we can build anything. These are extraordinary times and require extraordinary measures,” Kenney said.
Stubbs added, “I would say this question around energy development in Canada is the most pressing domestic economic question I think facing public policy makers at both levels of government right now. I’ve made it my mission over the past three years to talk about the importance of the energy sector to the entire country. It’s the number one private sector in the Canadian economy. It’s Canada’s second-biggest export. It makes an out-sized contribution to a variety of different sectors in all provinces. The issues, I think, around timeliness, and competitiveness and certainty and predictability for approval process so this crucial, multi-billion dollar, long-term infrastructure can actually get built in Canada. That’s our priority focus for us.”
Stubbs said that federal Conservative Leader Andrew Scheer would, immediately after being elected, invite TransCanada back to the table on Energy East and establish the conditions to make it possible.