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Sask Ch. of Commerce CEO Steve McLellan on Energy East Building pipeline capacity ‘absolutely critical’

September 18, 2018 2:00 pm
Kevin Weedmark


World-Spectator Editor Kevin Weedmark spoke with Saskatchewan Chamber of Commerce CEO Steve McLellan last week about the need for pipelines and the the town and RM of Moosomin’s efforts on Energy East.

How important is it that a pipeline gets built that’s going to help get our products to the coast?

It’s absolutely critical and well beyond getting oil to the coast.

Pipelines have become a symbol now of the ability of this country to build major projects in an effective private sector driven way.

We are trying to prove as Canadians that we can indeed still get these projects done without the vocal minority going crazy and the politicians listening to them, and that’s a challenge. That’s the reality.

The courts have started to weigh in and we are now having the common good determined by courts instead of the various levels of government.

The ability to build this pipeline is absolutely critical. It will reinforce the investment climate here.

It will tell Canadians and foreign investors that this is a place you can do business.

Even though the process to get where they are with TransMountain is convoluted by any definition, but at least it’s moving forward. It took a bit of a sidestep with the Court of Appeal decision but at the end of the day we need to get it built or else people won’t be building anything. They’ll say I just can’t take a risk that somebody’s going to think it’s a bad idea.

We’re challenged way beyond the principle of simply getting oil out. This is now much bigger. We need to get it done and get it done right and get it done soon.

When you look at the work that TransCanada put into Energy East before withdrawing that application, when you look at the work Kinder Morgan put into Trans-Mountain before the Court of Appeal reversed the approval, do you worry about the impact on companies looking at pipeline projects in the future?

There’s no question the’re doing a lot more than they used to and that’s one of the challenges in terms of the investment climate.
It’s a continuing changing requirement.

There are two elements in the Trans-Mountain piece. One is the duty to consult and accommodate.

On that, I do know the federal government did not do their due diligence on that, and shame on them.

The other piece is the environmental impact of the increased tanker traffic. Common sense says yes, they could have done that differently.

Are those two things on their own enough to have stopped the project? I’m not sure. Clearly I would have preferred a decision that said these two things need to be done, but begin the process.

Lessons learned for everybody, but I’m getting tired of courts having to decide public policy instead of our politicians who are elected to govern us.

What’s your thought on the town and RM of Moosomin trying to restart the discussion on Energy East?

I think it’s crazy that Canada buys oil from Saudi Arabia and not from Alberta and Saskatchewan. I think the way forward, for Eastern Canada to buy Western Canadian oil, is through a pipeline like Energy East.

I also know it would do great things for Saskatchewan’s economy and communities along the Manitoba border as well.
I like the concept. I liked the concept when it was first put forward.

We had done some work around the issue when we went over the Trans-Mountain decision. We looked at the judges’ decision on that pipeline, and we thought we need to look at the other options. Northern Gateway is closer, but it doesn’t provide access to Eastern Canada so as Canadians we can become more energy self-reliant.

Energy East would solve the problem of increasing the capacity to get Canadian oil to tidewater, and to meet the demand in Eastern Canada. It’s a $13 billion project, companies don’t just say, okay, we’re in for that, it’s something that would take some work to get back on the drawing board. I’m glad that SUMA and SARM have had that conversation with them, and we too will pick up that conversation with them.

Perhaps the way to get it back on the Trans-Canada priority list is to get it on the public agenda.

How do we solve the overall pipeline problem in Canada? Right now these projects are just not getting built.

Everyone needs petroleum. The Greenpeace activists who drive their Prius to a protest need petroleum, and Greenpeace ships out in the ocean that are blocking the whaling are using diesel fuel, so there’s some irony in that.

The bottom line is, Canada needs to have a very clear set of National Energy Board regulations that are monitored as people are going through them and that are followed.

Then, when clarity is there, people will invest again.

Right now, it is an absolute moving target. People would be crazy to invest significant dollars into projects that have so many variables.

Our federal government needs to be focused.

They need to set the rules very clearly.

They need to use the authority they have, and the responsibility of that authority to ensure that when a project is approved, that it happens, so jurisdictions like B.C. can’t put up artificial barriers.

We wouldn’t be in the TransMountain situation if it hadn’t been for the B.C. government. The Prime Minister should have said this has been approved by the federal government, it’s moving ahead. Get out of the way, or face the consequences. They didn’t have the gumption to do that.

Because of that, we’re in turmoil in investment intentions in Canada. People are saying we’re not sure we can build or we’re not sure we want to, because the activist minority has taken the podium and seems to be winning the day. It’s an activist minority that has taken control from the silent majority, and that’s unfortunate.

A project like Energy East is so important to Canada, maybe even if TransCanada decides not to proceed, it’s not ridiculous to think we should at least have a conversation about the federal government buying it.

If you’ve ever thought about national energy security, if Saudi Arabia and the U.S. decided they were not going to sell oil to Eastern Canadian refineries, how would the people in New Brunswick fuel their vehicles? We have the resource here, why don’t we treat this as a national security issue and say we want to make sure we have easy access to our own energy products. Now we have rail access. Why would we not say this is as important to Canadians’ well being as a highway or the military, or border security. We should say this is important to us and let’s make sure this happens.

My preference wouldn’t be that the federal government buy it. I would hope that a private company would see the merits of it and federal regulations would allow them to build it. However, short of that happening, and the precedent being set by Trans-Mountain being purchased, tells me we can’t take that off the table.

We could sleep better at night knowing we have a project that is serving Alberta and Saskatchewan oilfields, and New Brunswick and maritime users of our fuel, and making our country stronger.


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