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Chamber of Commerce makes pitch for new pipelines

TransCanada Corp.s Keystone XL pipeline.

Nathan VanderKlippe/The Globe and Mail

Canada's largest business organization has launched a public campaign to persuade Canadians of the importance of building new oil and gas pipelines to connect the country to global markets, saying the lack of such infrastructure is costing billions of dollars each year.

The Canadian Chamber of Commerce is releasing a report Tuesday that supports arguments made by the oil industry and federal government that a growing oil and gas industry benefits the entire country.

In producing the report, the Ottawa-based chamber received financial support from the biggest companies in the oil industry, including TransCanada Corp. and Enbridge Inc., the two companies that are proposing to build major new oil pipelines across the country.

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The report notes that huge discounts, or price differentials compared with U.S. and international oil, for Canadian crude over the past winter meant lost revenue of up to $50-million a day, and says that without access to new markets, future price discounting will cost both the industry and governments in Canada billions of dollars annually.

The chamber's effort buttresses a major advertising campaign by the federal government, which proclaims that Canada is pursuing "responsible resource development," and a heightened effort by the industry itself, including a series of eye-catching television ads from Cenovus Energy Inc.

Chamber of Commerce president Perrin Beatty said the organization is encouraging its members across the country to support the oil and gas industry as he embarks on a speaking tour to promote the report.

B.C. Premier Christy Clark, who has opposed Enbridge's proposed Northern Gateway pipeline across her province, will be the featured speaker at the chamber's annual meeting in Kelowna later this month.

In an interview, Mr. Beatty said it is important for Canadians to understand what is at stake as the industry prepares for a massive building program that would see new oil and gas pipelines heading both west and east to diversify the industry's customer base away from the U.S. Midwest and seek international prices for the resources.

"We are at a critical juncture," said Mr. Beatty, who served as a cabinet minister in Brian Mulroney's Progressive Conservative government.

"The dynamics of the global energy market for Canadian energy are changing dramatically. We can either be very successful in global markets if we're able to reach tidewater and get global prices for our energy, or we will be landlocked within North America selling to one customer whose need for Canadian energy may be on the decline because they are rapidly developing their own reserves."

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Environmentalists argue it is foolhardy for Canada to depend for its prosperity on an oil industry that will be producing some of the most expensive crude in the world, and will be a major source of growth in greenhouse gas (GHG) emissions at a time when the world is trying to cut its carbon diet.

But Mr. Beatty said the world will be relying on fossil fuels for at least several decades, and that the oil sands represents only a small slice of the global production of GHGs.

However, it appears unlikely Canada will meet its international commitment to reduce GHGs by 17 per cent from 2005 levels by 2020 if the oil sands grow as projected.

Mr. Beatty said his organization, which has 450 local chambers and boards of trade, is well suited to carry the message nationally.

"It is very easy to pit region against region in Canada," he said. "It is important to us as a national organization to point out that Alberta's success is Canada's success. It's not a win-lose proposition – it's something that all Canadians benefit from."

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About the Author
Global Energy Reporter

Shawn McCarthy is an Ottawa-based, national business correspondent for The Globe and Mail, covering a global energy beat. He writes on various aspects of the international energy industry, from oil and gas production and refining, to the development of new technologies, to the business implications of climate-change regulations. More

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