Energy East pipeline needed for Canada to compete in oil markets, says Calgary Mayor Naheed Nenshi
Cross Country Checkup | CBC | Posted: February 8, 2016 11:50 PM | Last Updated: February 8, 2016
The proposal to build the Energy East pipeline has inspired many leaders across Canada to share their opinion on the project. Calgary Mayor Naheed Nenshi is a strong proponent of this project. He spoke with Checkup guest host Duncan McCue about his perspective.
On the role of mayors in the Energy East decision process
The mayor of Montreal and the other mayors in the area certainly have the right to push for the best possible deal they can get—and certainly that's something that we're seeing now—but let's remember that mayors don't get to decide; premiers don't get to decide. We live in a federation and for mayors or premiers, including me, to lay down conditions—it's not particularly helpful.
This is the federal government's responsibility and if the federal government is happy with the changes that it has announced to the regulatory process of the National Energy Board (NEB)—that it is rigorous and science-based, and it will make the right decision—then we ought to step back and let the NEB do it's work—anything else is a distraction.
On the need for the Energy East pipeline
The gasoline we fill our cars with in Central and Eastern Canada comes from abroad. It's either transported by railcar from the Bakkens, by pipeline from Maine to Montreal—and from Maine it could have come from anywhere—or by tanker up the St Lawrence Seaway from places like Venezuela, Saudi Arabia and Algeria. I think most Central and Eastern Canadians don't understand that they're not getting any benefit from Canadian oil.
People are used to the price of oil being quoted as the West Texas Intermediate (the price for a grade of 'light' crude oil which is used as a benchmark for global oil prices), which is what we refer to when we say "the price of oil is hovering around $30". I was surprised that an audience I was speaking to in Ottawa didn't realize that that is not how much Canada gets for its oil. We actually pay the Western Canadian Select price (the price for a grade of 'heavy' crude oil) which can be less than half of the West Texas Intermediate. So instead of getting $30 a barrel, we're getting $13 a barrel and that is precisely because we don't have access to any market.
We don't have access to any market, except the United States, which is our only customer. Now the USA is our biggest competitor because of the fracking for shale oil and because of the discoveries in the Bakkens. They now produce more than they need and we've only got one customer who is now our competitor.
Listen to the interview above to hear Mayor Nenshi address environmental concerns, the help Prime Minister Trudeau has pledged to Alberta, and the prospect of using the royalties made from oil to invest in the province's future.
Mayor Nenshi's comments have been edited and condensed. This online segment was produced by Ayesha Barmania.