A big part of the business of Halifax Harbour involves incoming crude oil.
This strange support, given that it is the National Energy Board that actually approves such things, could be considered political tampering in an established regulatory framework if another minister did it (or the mayor of Toronto, say), but I guess it is OK for the Oil minister to give the political signal that the government wants to ship Alberta Oil to the Maritimes.
I'm not saying I'm against it either, but since no application has actually been made to the regulator it does seem like jumping the gun a bit. So I am giving the proposal my "Amber Light."
Here's what I think should and should not happen if the 1mn bbls per day of Alberta tar sands bitumen makes it to the east via pipeline.
Most crude is imported from the world spot market.
1. The Province of Quebec will have to OK such a pipeline through its sovereign territory, and that is not a foregone conclusion by any means.Their biggest refinery, Ultramar in St-Romauld, (Lévis) gets its crude from Algeria as far as I can tell - and that is a far from a stable domestic source as we have seen recently. They will want some cheap Canadian crude too - lets say 200,000 bbls per day. They aren't the only Quebec refiners, so Petro-Canada will want some, say another 100,000 bbls per day or more.
2. A certain amount must be doled out to keep the Imperial Oil refinery in Dartmouth a viable entity, and even expand, say 100,000 bbls per day. The pipeline will never be extended from Saint John to Halifax, so Irving will have to guarantee sea or rail delivery of the 100,000 bbls per day as a cost of doing business.
Refined product is distributed to all of Atlantic Canada, and into Quebec from Halifax.
They are already getting Bakken crude from North Dakota by rail, so they are already competitive in the US retail market, where most of their output goes now. However they are still selling into the Canadian market as if their crude comes from overseas. Therefore the price of this deal to Irving must be that they sell refined product in Canada at the same price as Alberta pays for gasoline at their pumps (taxes excluded of course.)
4. Drastically bringing down the price of gasoline in Atlantic Canada would of course probably mean that all Newfoundland offshore oil production would have to cease because it would no longer be competitive in Canada. However it could be exported more widely without any messy pipeline debates in B.C, and it is a lot nicer oil than Alberta tar/ shale/ bitumen/ or what ever critics want to term it.Newfoundland oil is "clean" oil by comparison. Of course the lower price of fuel in Atlantic Canada can only spur our economy - or does that really matter?
Newfoundland shuttle tankers would still shuttle oil to terminals where it would be sold abroad for world prices, however it would be too expensive to use in Canada.
5. What must not be allowed to happen is for Alberta bitumen to sell at international prices as as soon as it hits tidewater. Irving must guarantee to use every drop of its 600,000 bbls and not to sell any crude - only to sell refined product. Canada must become absolutely 100% weaned off foreign crude oil before a single drop of Alberta bitumen leaves our shores. Ultramar, Imperial and the others must also agree to this deal and not sell their their share overseas either.
Why can't Canada become self-sufficient in oil and gas?
6. TransCanada Pipeline of course will also be part of this deal, and they will want to rake off transmission costs to actually pay for the pipeline. I propose a policy shift here however. Instead of the "meter" being at the user end (like electricity or water) I propose that the meter be at the "producer" end and that the Alberta producers pay a rate to ship their product off their property. They can still sell the oil per bbl, but they must also pay the shipping cost, so that all users along the length of the pipeline pay the plant gate price for the crude.
Regrettably I have no ability to bully the National Energy Board, so my Amber Light remains a caution, and I expect most "drivers", like the Oil Minister, will blast right through it instead of slowing to a halt and stopping to think this through.
This tanker was called British Destiny. What will be Canada's Destiny?