Saturday January 16, 2016

Alberta NDP, federal Tories demand pipelines to help 'crippled' energy industry

The Alberta NDP and federal Conservatives are presenting a united front on the need to build pipelines to help the battered oil industry.

The Alberta NDP and federal Conservatives are presenting a united front on the need to build pipelines to help the battered oil industry. (Canadian Press)

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The Alberta NDP and the federal Conservatives might seem like strange bedfellows, but on the issue of the economy they are presenting a united front: build pipelines now to save the "crippled" oil industry.

The province's economy is facing a crisis as the price of oil flirts with levels below $30 a barrel, potentially rendering large swathes of the oilsands economically unviable. But one thing that could bring the industry — and the government coffers it helps to pad — back from the brink is additional pipeline capacity, both parties said in interviews with CBC News.

"We know, and the whole country knows, that the significant drop in the global price of oil is posing challenges not only for this province, which are pretty, pretty big, I must say, but they're also for the country, unless we get behind something like market access," Alberta Finance Minister Joe Ceci said in an interview with Chris Hall on CBC Radio's The House.

Ceci said that the status quo — with virtually all pipeline projects stuck in limbo — is unacceptable and it will leave the Canadian economy stuck in neutral for many years to come.

Liberals say they're not 'lollygagging'

The Alberta finance minister is now calling on the federal Liberal government to take immediate action to help get something built.

"I need them to voice and recognize that pipeline access is critical for not only Alberta but for the whole country. And if they can do anything with their significant majority, their significant weight [in Ottawa], their connection to premiers across the country, to underscore that, then we'll be better off as a country," Ceci said.

Natural Resources Minister Jim Carr said Friday that his government understands the urgency of getting new pipelines approved, but said the regulatory process at the National Energy Board first has to be modernized.

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Natural Resources Minister Jim Carr says the Liberal government is moving with 'urgency' to get new pipeline projects built, but that major reform is needed at the National Energy Board before Canadians can trust the regulatory process. (John Woods/Canadian Press)

"I know people want us to make announcements three weeks ago. We're certain that if we can take this little bit of time to consult and to assess precisely where we want to be down the road, we'll do a better job. We feel the urgency, nobody is lollygagging, but we want to get this right," Carr said in an interview with Rosemary Barton on CBC News Network's Power & Politics

Carr also confirmed that existing pipeline projects will not have to "start from square 1" with the NEB, but will face a "transition process."

Oil downturn 'unlike any other'

Interim Conservative Leader Rona Ambrose said she's deeply concerned about the state of the Alberta economy, and the handling of the energy file by both the federal and provincial governments.

"I think we're in a very different situation today in Alberta. I've seen ups and downs in the oilpatch before. This is very different," she said.

Ambrose added that she finds it "unusual" that the Alberta NDP has now become a vocal proponent of pipeline development, after some of the party's remarks in the past.

"The Notley government themselves, and to a certain extent the Trudeau government, did come into power with a very anti-fossil fuel message," Ambrose said in a separate interview with Hall.

The Edmonton area MP also said billions of dollars in investment money has already left the province since the political regime changes, in part because of the prospect of additional regulations and a new carbon tax.

"Justin Trudeau supported certain pipelines on certain days under certain circumstances, and that's not a very strong message to an industry that right now is crippled," she said.

The former Harper government, of which Ambrose was a senior cabinet minister, made building energy infrastructure a top priority but ultimately failed to get any new pipelines started.

"My hope is that politics will not prevent some of the good scientific and evidence-based work that's being done by groups like the National Energy Board ... and that we do eventually see these projects move forward," she said.

Alberta facing deeper budget deficit

Ceci also told The House that budgetary considerations he made only a few months ago, in October 2015, likely need a complete revision given the dramatic decline in oil prices. That budget forecast oil to be $61 a barrel in 2016, roughly twice of where the price finished trading on Friday.

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Alberta Finance Minister Joe Ceci says he'll have to re-evaluate budget projections after a massive decline in the price of oil since he delivered his last budget in October 2015. (cbc)

In his last budget, Ceci forecast that a decline of just $1 in the price of oil would lead to a $170-million shortfall. Based on those numbers, Alberta would add more than $5.4 billion to the record $6.1 billion deficit already anticipated for the 2015-16 budget year.

"You know there's no doubt that there are new budget pressures that I'm experiencing, that we're experiencing in this province, because of the drop in global price of oil," Ceci conceded. "We're going to take a really good look at that as we go forward, but our plan is still to balance in 2019-2020."