FCCQ Shows its Support For Pipeline Development
There are times when eastern and western Canada mix together about as well as oil and water. But in business, when the topic is solely oil – both ends of the country seem to be largely on the same page, at least when it comes to the province’s respective Chambers of Commerce and broader business community. There’s no denying the industry plays a major role in the economic well being of both Quebec and Ontario as the crude oil is sent from the west to large refineries in the east.
However, the separatist minority Quebec government of Pauine Marois’ Parti Quebecois has taken a hard stand on fossil fuel development and there’s widespread concern that it will continue to drive resources-related business out of La Belle Province. The president and CEO of Fédération des chambres de commerce du Québec Francoise Bertrand recognizes the mangled disconnect and is doing everything in her power to emphasize to the rest of Canada that she and her members are pro pipeline and eager to do business with the rest of the country. The FCCQ carries tremendous clout in the business community, having been founded in 1909. It currently represents more than 150 chambers of commerce and 1,200 corporate members, in all, nearly 60,000 companies and 150,000 business people.
Bertrand made her latest push to attract investors to her province while also espousing support for a pro-pipeline stance during a keynote address at the Toronto Region Board of Trade. It comes at a tense time when Marois’ government is seeking to impose a five-year ban on the controversial practice of fracking while also looking for more substantial royalties on mining companies. To say the timing of these proposed royalties is bad for resources companies doing business in Quebec would be a huge understatement, given how a number of mining companies and refineries are scratching and clawing just to stay afloat, the former of whom are almost entirely dependent on raising capital on the stock markets, which has become nearly impossible given the extreme volatility during the past couple of years.
In Quebec, it’s the refinery aspect that primarily comes in to play and Bertrand wants to see the industry preserved, thus ensuring several thousand people remain employed in good-paying jobs. Five Quebec refineries have closed down since the mid 1980s. Three years ago Shell turned out the lights on its Montreal refinery, which had been producing more than 160,000-barrels per day. Any hopes of having it get back on track were dashed once it was announced the company was dismantling the facility altogether and moving valuable parts to other refineries.
Bertrand says her chamber is supporting both Enbridge and TransCanada in an effort to bolster Quebec’s refineries industry. Enbridge’s 300,000 barrel per day Line 9B reversal and TransCanada’s 850,000 barrel per day eastern pipelines are being proposed to take Western Canadian oil to refineries in the East.
East Coast refineries pay higher Brent crude prices so it’s hoped that access to cheaper western crude from the eastern pipelines may help control costs.
The government may also be able to rein its $16-billion deficit if oil imports are reduced.
While the province needs to source alternative energy sources, oil consumption will continue to remain an important part of the mix, as just over half of Quebec’s energy demand is still met by hydrocarbons.
Enbridge is planning a number of open house meetings in both Ontario and Quebec to try and ease the fears of those who believe pipelines are not safe and how spills will negatively impact the environment. The company has spent about $900 million in safety improvements in response to an oil spill in Michigan.
Regarding the Enbridge Line 9B reversal, Bertrand makes it very clear that the FCCQ is 100 per cent on board with its support.
“We need to be able to carry Canadian crude oil to markets,” she declares. “This project represents the restoration of the pipeline’s original purpose which was to transport oil to the rest of Canada.”
At the request of clients, the flow was reversed in 1991 at a time when overseas oil was considered inexpensive. Enbridge now wants to re-establish the original direction of flow to the pipeline.
“The FCCQ has supported this project from the outset and we will continue to espouse its benefits,” Bertrand reaffirms. “We’ve always been very active in our efforts to promote exploration and the development of natural resources.”
To underscore the extraordinary potential that our natural resources represent today, the sector as a whole – either directly or indirectly – accounts for almost 20 per cent of Canada’s gross domestic product and 1.6 million jobs in Canada.
“We believe that all resourcing – mining, forestry, gas and oil, development is a way of promoting economic prosperity now and for coming generations,” Bertrand says.
If the proposed Enbridge project goes ahead as planned, Bertrand tells us it will preserve thousands of jobs at refineries in Montreal.
“Let me remind you that over the last 30 years five refineries in Montreal closed down because they were not competitive,” Bertrand laments. “On the other hand, future work would make the remaining two refineries more competitive.”
Texaco Canada closed its refinery in 1982. A year later Petro Canada and Imperial Oil refineries were shuttered followed three years later by Gulf Canada – and most recently Shell in 2010.
As Canada’s second-largest province by population, Quebec is also a very large consumer of energy and resources, much like Ontario. The need to be able to develop energy solutions within our own country’s boundaries is essential. Bertrand also says the FCCQ is definitely on the side of innovation as well but there also must be a realistic determination and evaluation on what is available in the here and now.
“Although we are very much in favour of developing new green technologies the fact is that businesses and individuals will continue to use energy from hydrocarbons for many years to come,” she notes. “To be sure, efforts have to be made to reduce our gas emissions but we also have to be realistic that other methods will not replace the current methods in the short term. There is a transition well under way but it’s going to take a very long time.”
Bertrand went on to say that continuing to develop the oil and gas industry in various regions of Canada will mean less dependence on Canada having to import foreign oil from the likes of some African countries and parts of the Middle East.
A study conducted by Leger Marketing just over a year ago revealed that the majority of Quebeckers (78%) believe the government should make better use of our natural resources to make it a more substantial cornerstone of economic planning, leading to increased prosperity now and in the future.
It’s estimated that the market share of oil-based fuels will decrease but real consumption will continue to grow for at least the next four years. Oil based fuels still account for more than 92 per cent of transportation based vehicles.
“The province (Quebec) needs to develop strategies to achieve a synergy with the rest of Canada,” Bertrand states.
Additionally, Bertrand notes that there’s the 4,400-kilometre TransCanada pipeline could potentially transfer between 500,000 and 850,000 barrels of oil per day from Alberta and Saskatchewan to refineries in eastern Canada.
“Every necessary means must be taken to ensure the refining industry remains competitive,” Bertrand implores. “Canadian oil must be refined in Canadian facilities.”
While at the 38th annual conference of the Association des économistes Québécois, Natural Resources Minister Joe Oliver reiterated the federal government’s commitment in assisting Quebec.
“Our natural resources are one of the cornerstones of the economic development of Quebec and Canada,” Oliver says. “They have been a key driver of the Canadian and Quebec economies since the earliest days of our country.”
The minister went on to emphasize the potential new markets created by the development of fast-growing countries and the importance of opening up new markets for Canadian oil and natural gas.
“The high demand for our resources, particularly in fast-growing countries like China and India, opens up export opportunities for Canadian companies,” Oliver continues. “This will result in the creation of new jobs and long-term economic growth and prosperity for Canadians across the country, including here in Quebec. We support the responsible development of our natural resources while protecting the environment.”
By Angus Gillespie