Alberta’s energy industry is in a crisis. Our oil continues to sell at a discounted rate, limited pipeline capacity hinders oil from getting exported overseas and companies are producing more oil than what can be exported out of the province.
Companies like Cenovus Energy produce up to 300,000 barrels every day above what can be exported. That over production leads to a great price differential when compared with American oil, which can get exported to foreign markets. As of December 1, 2018, West Texas Intermediate Crude was selling for three times the price of Western Canadian Select. Our oil price discount costs the country about $80 million a day, or more than $20 billion a year. That dollar figure doesn’t show the amount of people who’ve lost their jobs as a result of this situation.
Beginning in January, the province of Alberta will reduce oil production by 325,000 barrels a day to address the price differential. The provincial government ordered oil producers to cut their production by almost 10 per cent in an attempt to stabilize prices. The Alberta government has also asked the federal government to help them purchase rail cars to move oil at a faster rate.
The federal government has not committed to helping buy rail cars and, aside from purchasing the $4.5 billion Trans Mountain Expansion Project pipeline, has really done nothing to quell the crisis. Under their government, the Northern Gateway and Energy East pipelines have been cancelled. They’ve applied a tanker ban on the west coast that prevents Alberta oil from getting exported. They’ve applied a carbon tax that increases business costs. They are currently trying to get their Bill C-69 passed before the next election. This bill, introduced by the Minister of the Environment, places even more stringent regulations on the energy industry and requires companies to apply Indigenous knowledge and consider the intersection of sex and gender when applying for regulatory permits.
If this bill becomes law, I fear that it will be yet another blow to the energy sector. Because of the cumulative actions of the provincial NDP and the federal Liberals, Canada has high taxes and a lot of red tape for businesses. Introducing more regulatory burden will shut out new investment and force businesses to lay off even more workers. The Prime Minister has publicly stated when travelling internationally that he would like to phase out the oil sands; Bill C-69 is how he’s going about it.
I’ve spoken numerous times in the House of Commons about our energy industry, urging the government to abandon Bill C-69 and help workers who’ve been affected by the crisis.