Saskatchewan

Prairie officials continue push for pipelines amid low crude oil prices

Saskatchewan people continue to push for pipelines as low oil prices persist.

Western Canadian Select trading for about $13 US per barrel by end of day Tuesday.

A large differential between Western Canadian Select and West Texas Intermediate Crude continues. (CBC)

Some prairie​ politicians and industry experts continue to push for pipelines as low oil prices persist. 

Western Canadian Select, a heavy crude oil from the prairies, was trading for about $13 US per barrel on Tuesday. The price caught the public's eye after dipping below $14 US a barrel.

Its US counterpart, West Texas Intermediate Crude is hovering around $54 US per barrel. 

"It's because we don't have pipeline capacity to take our product to tide water," said Saskatchewan's Minister of Export and Trade Development Jeremy Harrison on Tuesday.

"It's costing the economy literally millions of dollars a day, the fact that we are not getting world prices for our resource."

Harrison said the industry needs federal approval for the construction of pipelines.

The backlog means more oil will have to be transported by rail, he said, which could disrupt transportation of products like agriculture goods or potash.

While the price of West Texas Intermediate remains significantly higher than Western Canadian Select, it has also plunged in price since October. 

Industry slow in Estevan

Estevan has slowed down noticeably, according to mayor Roy Ludwig.

Life in the town hasn't felt the same since its big resource boom went bust and people have "been in limbo ever since." 

"Not a whole lot is moving," he said. 

"It's unfortunate, and we put a lot of this to the fact we can't seem to get pi​pelines built in this country."

He, too, is calling for pipelines and said the state of the industry has been difficult for everyone in the community. 

"In Estevan, we always put a positive light on things and we remain as optimistic as we can and we hope that you know things will start turning for the better, but it's tough."

Ludwig said a good crop and had the local coal power plant have helped support the community. He also said people are used to the cyclical nature of the oil industry.

However, he feels the future of the resource-based town is uncertain.

"There's clouds on the horizon there, too, with the fact that the federal government would like to end coal by 2030."

He's remaining positive.

"When things are down — whether that be oil or now with climate change with the coal issues that we're being faced with — it definitely puts a damper on things but we're trying to put our best face on it and move forward."

Industry in 'crisis'

The industry is in "crisis," said Tim McMillan, who is president and CEO of the Canadian Association of Petroleum Producers.

McMillan said prices are strong in the global market and people are making capital investments outside of Canada. 

"Saskatchewan has been a jurisdiction that has worked to attract investment. That has been one of their mandates and has been quite successful at it," McMillan said. 

"But when we get federal policies and federal legislation that is limiting Canada's ability to get its products to market, that affects all provinces." 

McMillian said it seems foolish to import so much crude from places like Saudi Arabia "when we have an overabundance of overproduction here in Western Canada."

About the Author

Kendall Latimer

Journalist

Kendall Latimer began her journalism career in print as a newspaper reporter in Saskatoon and then as a feature writer in Bangkok. She joined CBC Saskatchewan in 2016. Latimer shares stories on web, radio and television. Contact her: kendall.latimer@cbc.ca

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