After several months, Prime Minister Daniel Smith promised to find a company ready to develop a new oil export pipeline, the Alberta government itself takes a decisive step.
As a result, Smith is the third prime minister of Alberta in a row in order to occupy taxpayers' money, trying to help the industry export more oil from the province.
This step already gets both praise and care from the oil patch, which wants a new pipeline, but is careful about state intervention.
There are also many problems with the fact that such a proposal about how the existing federal policy, the process of regulation, and whether a sufficient number of oil producers are ready to accept long -term obligations to use a new pipeline.
On Wednesday Smith The province of the province said It will offer its own project using an advisory group, which includes the pipeline companies South Bow, Enbridge and Trans Mountain.
Until now, Smith takes $ 14 million to create and submit an offer to the Federal Department of Large Projects in the spring, which will include determining the possible path to the western coast and expenses.
At this stage, the Government of the province states that it does not plan to build or operate the new pipeline itself.
“This is bold, this is aggressive, and this is what you need to do to make this country move forward in terms of economic level,” said Robert Cooper from the institutional sales and trade team in the Calgar-investment company Acumen Capital Partners.
According to Cooper, pipeline companies do not want to risk their investment dollars in order to continue the new project from a harmful federal policy over the past decade, such as the restriction on oil emissions and a ban on the traffic of a tanker for parts of the British Colombia coast.
“I am sure that there are supporters who will do this, but the federal government actually made it impossible,” he said.
Smith should be praised for the fact that he was the champion of the industry, says Rafi Tahmazian, managing a retired portfolio at Canoe Financial. Nevertheless, he has reservations about the direct participation of the government in this sector, similar to the purchase of the Federal Government of the Extension of Trans Mountain in 2018 Provide the pipeline will be built.
“If the province must be involved, that would be a shame. It would be too bad, ”said Tahmazyan, adding that the government has construction or construction pipelines“ No Business ”.
The pipes are filled
Currently, there is a place to move more oil on export pipelines after the end of the expansion of the trans -mauttin last year, but these pipes will reach the full capacity by 2030, according to several forecasts, since oil production continues to grow in Albert.
“We are all trying to find out how, damn it, we control the ability when the trans-landin is filled,” said CBC News Brian Schmidt, Executive Director of Tamarack Valley Energy, medium-sized oil manufacturer.
Prime Minister Mark Carny said that he wanted to see the new oil export pipeline, but still this year, nobody Of the main pipeline companies, such a project was announced. The main office of the projects is designed to help simplify the regulation process.
Companies do not dare to engage in a new export pipeline, given the cost, complexity and story unsuccessful and problematic projects over the past few decades.
The development and construction of an export pipeline will probably require tens of billions of dollars and, possibly, a decade of time for classes.
Smith's proposal about the pipeline will encounter the same obstacles as “it is difficult to really promote the pipeline,” said Deborah Yedlyn, president of the Calgary Chamber of Commerce.
“Private capital will not take risks until the government brings such projects,” she said.
Alberta's past investments
In 2018, the then Prime Minister Rachel Notli announced plans to buy thousands of iron wagons for moving oil province to the market, ultimately throwing contracts with railways for transporting railway cars that he rented.
Two years later, the then spokesman Jason Kenny abolished contracts by 1.3 billion dollars, but said that the amount was reduced by $ 500 million.
Kenny had other plans.
In the same year, the Alberta government invested about 1.5 billion dollars as capital in the notorious Keystone XL pipeline, as well as another billions in the guarantee of a loan to force the pipeline to move. The pipeline was designed for oil export from Hardisty, Alta., Nebraski.
This investment He was wasted When the Biden administration in the United States canceled permission for the project on the first day in the office.
The final cost of Albertans for Keystone XL will be about 1.3 billion dollars, although the province is still trying to compensate for money.
Prime Minister Alberta Daniel Smith makes an announcement of energy infrastructure.
With obstacles in front
Until now, Smith will invest only part of this amount. Nevertheless, the Alberta government can increase its initial investment by $ 14 million, given the complexity of the development of the pipeline.
“It is not enough to apply for the approval of regulatory authorities. This is not enough to conduct a detailed study, ”said Stephen Paget, associate professor at the Khaskinsky University School of Kalgary and a former pipe analyst from the Calgary investment bank Fourstenergy Capital.
“In order to get to the ground, even assuming that you have not bought any equipment, you look at hundreds of millions,” Paget said.
“This is a good strategy on her part,” said Dennis McConagi, the former head of Transcanada Corp, now known as TC Energy.
He says that the announcement shows that Smith seeks to ensure the development and a new pipeline has been built. Nevertheless, it is unclear is whether large oil producers will support Smith’s proposal by signing long -term contracts to use this proposed pipeline.
“Can she collect them enough to give reality, I would say, this tactic and trust,” he said.
There will be other problems, including opposite communities and political leaders.
According to the Prime Minister of the British Colombia David Ebi, the federal government must devote itself to other proposed projects, which are actually ready unfortunately.
“Prime Minister Smith continues to promote a project that is fully funded by the taxpayer, does not have a supporter of the private sector, is not a real project and is incredibly alarming for the British Colombians,” he said on Wednesday.
