Saudi feud highlights Canada's lack of energy security

Here’s hoping that Saudi Arabia’s temper tantrum over our federal government’s undiplomatic tweets backfires on the morally repugnant kingdom and ends up benefiting Canada in the long run.

There is some evidence that the Saudi spat over tweets, designed to virtue signal to a domestic audience by Foreign Affairs Minister Chrystia Freeland, has served as an indelicate wake-up call to many Canadians about the need for energy security in this country.

Peter Tertzakian, executive director of the ARC Energy Research Institute, says many Canadians are just learning that despite Canada’s abundance of oil and gas, we still import 11 per cent of our oil imports from Saudi Arabia.

“I think people are starting to wake up to the notion that Canada is the fifth-largest producer of oil and gas in the world, but as a country as a whole, we’re not self-sufficient, which is on odd and ironic position to be in,” Tertzakian said from Calgary.

“A lot of suppliers today are maxxed out in their ability to send out more oil,” said Tertzakian, adding: “we are in a world where 100,000 barrels per day is significant.”

According to Statistics Canada, in June Saudi Aramco — the kingdom’s state-owned oil company and the world’s largest oil producer — shipped 136,321 barrels of oil per day to Canada’s east coast in June, which is down from a year-to-date peak of 200,811 bpd in April.

After sending out two tweets last week that demanded the kingdom release jailed rights activists,  Saudi Arabia expelled Canada’s ambassador in Riyadh, recalled its own ambassador, “put on hold all new business transactions” with Canada, suspended all scholarships to the 15,000 Saudi students studying here, blocked Canadian wheat and barley, ended flights to Canada by its state-owned airline, is divesting of Canadian investments and is even, heartlessly, recalling citizens seeking medical care in Canada. And that’s a partial list.

Even though Saudi Arabian Energy Minister Khalid al-Falih says the diplomatic feud will not affect oil exports to Canada, the spat has got Canadians thinking.

“Canada’s No. 1 supplier of foreign oil is the United States and our No. 2 supplier is Saudi Arabia and we’re having trade issues with both of them,” points out Tertzakian.

The most obvious answer to improving Canada’s energy security is a west-to-east pipeline — like TransCanada’s now-cancelled 4,500-kilometre line that would have moved 1.1 million bpd to New Brunswick for upgrading and refining, that was scuttled after Prime Minister Justin Trudeau changed the rules on the project shortly after being sworn into office in 2015.

It’s important to note that in 2017 Quebec imported 158,000 bpd mostly from the U.S. but also from Saudi Arabia and other despotic states.

First, the federal Liberal government complicated and lengthened the regulatory process from 18 months to three years. In the wake of vociferous objections by Quebec politicians, Trudeau then had the National Energy Board announce it would hold TransCanada accountable for all the greenhouse gas emissions not only caused by the building and the operating of the line, but even by the end users of the oil and gas.

Of course, Trudeau wouldn’t dare do that to any other industry in Canada. Imagine if he announced that the auto sector in Ontario and Quebec would be held to such lofty standards? His political career would be a wreck and written off immediately by his own party.

According to Michel Kelly-Gagnon, president of the Montreal Economic Institute, the Saudi Arabian controversy has “triggered the conversation among talking heads” in Quebec about the need for energy sovereignty in Canada.

“If you simply ask Quebecers — and most Canadians for that matter — ‘Do you like or want pipelines? Or do you want oil in your life?’ A clear majority will answer no. But if you put them in front of concrete, actual, real-life choices, such as the ones presented in our poll, then, they will overwhelmingly choose oil from Western Canada, as opposed to other sources, and pipelines as their preferred mode of transportation, as opposed to other modes of transportation,” said Kelly-Gagnon, who was reached in Montreal Friday.

In the May 2017 Leger poll, commissioned by MEI, 65 per cent of Quebecers prefer that the oil imported by Quebec come from Western Canada than Algeria, Saudi Arabia and other foreign sources.

Perhaps those Quebecers should have a chat with federal NDP Leader Jagmeet Singh, who thinks Canada should stop buying oil from Saudi Arabia and that we should replace that oil. Not with Alberta oil, but from other countries we already buy from, such as Azerbaijan, Algeria, Nigeria and Kazakhstan — none of which are exactly pillars in the area of human rights.

“There are other nations we can look at in terms of access to oil,” Singh ridiculously told the CBC on Friday.

Tertzakian pointed out that in 1973, when Saudi Arabia imposed its oil embargo on North America, eastern Canada had to get its western Canadian oil through a long and tortuous route.

“We had to send Alberta oil, ironically, through the Trans Mountain pipeline west to Vancouver and then south, all the way through the Panama Canal and then through a circuitous route to Montreal,” said Tertzakian.

Here’s hoping this clash with Saudi Arabia will resurrect not just more discussions about Canada’s energy sovereignty but several pipeline projects — particularly Energy East — which would eliminate the need to import oil from tyrannical states into Eastern Canada.

Source: Licia Corbella, The Calgary Herald- August 13, 2018