More Alberta oil may start flowing east, MPs told

One of Canada's top federal bureaucrats in charge of energy policy says Canadians in Eastern Canada may see more Alberta oil coming their way in the near future as oil prices rise.
As oil prices rise, more Alberta oil is likely to flow to Eastern Canada, which currently imports much of its oil, MPs on the Commons natural resources committee were told Tuesday. (Larry MacDougal/Canadian Press)

Canadians in Eastern Canada may see more Alberta oil coming their way in the near future.

That's according to Mark Corey, one of Canada's top federal bureaucrats in charge of energy policy.

Corey, assistant deputy minister for the energy sector with Natural Resources Canada, was testifying Tuesday at a House of Commons committee looking into oil and gas pipelines and refineries in Canada.

He told MPs that as oil production in Alberta increases, companies will start to find it in their economic interest to send it to refineries in Eastern Canada.

"As oil production ramps up in Western Canada you will likely see the market respond and in fact we are already seeing the markets respond."

He was responding to a question from NDP MP Claude Gravelle who wanted to know why Prime Minister Stephen Harper recently said in an interview with the CBC's Peter Mansbridge, that "at a certain level … it does seem odd" that a good chunk of Canada doesn't have access to domestic oil.

"Can you comment on that issue of insecurity for our country?" Gravelle asked.

Corey said the oil supply is driven by market forces and it's simply cheaper to import energy from the Middle East and Africa to Atlantic Canada rather than move it long distances across the country by pipeline.

Right now Canada exports two-thirds of the oil it produces every day, but also imports half of the oil it needs on a daily basis.

Provinces from Manitoba west produce and use their own oil and Ontario uses a mix of Western Canada and imported oil, but further east, in Quebec and Atlantic Canada, it's all imported.

Corey told the committee the proposal by energy company Enbridge to reverse one of its oil pipelines to bring Alberta crude east to Ontario is an example how the market is starting to change.

"Enbridge for example has applied to reverse Line 9 as far as Nanticoke which is just west of Toronto … so the idea is they would bring more western crude into the Ontario market. There's been speculation in the media they may reverse it all the way to Montreal, but again that is a decision for the company to make."

National energy strategy

But it's not all about market forces when it comes to energy security, according to the head of the Canadian Petroleum Products Institute.

CPPI President Peter Boag, whose group represents refineries, says the country needs an energy strategy. Boag is the latest in a growing list of people, including Alberta Premier Alison Redford, who are calling for a national plan on how to manage Canada's vast energy supplies.

"A common understanding and a common vision and speaking in a common language going forward with respect to energy would be something that is very valuable," he told the committee.

That might easier said than done given the politics wrapped in Canada's past energy plans. Saskatchewan MP David Anderson bristled at the suggestion of anything that sounds like the National Energy Program that was introduced by Pierre Trudeau in 1980 to try to ensure energy security.

"The last time that government got involved excessively in the energy sector it almost destroyed the entire industry and our country," said Anderson.


  • This story has been edited from an earlier version to correctly state that David Anderson is a Saskatchewan MP.
    Jan 31, 2012 4:17 PM ET