“It’s going to be a beautiful pipeline, and the United States is going to pay for it!”
–Heather Exner-Pirot
Remember when former prime minister Stephen Harper predicted that Canada was on its way to being an energy superpower? It’s starting to happen.
The long-awaited completion of the Trans Mountain oil pipeline expansion and LNG Canada’s liquefied natural gas export system are just the beginning. That was the takeaway message from an Energy Futures town hall, hosted by the Macdonald-Laurier Institute and Resource Works in Victoria on Feb. 25.
Heather Exner-Pirot, the institute’s director of energy, natural resources and environment, highlighted the rapid changes to the world’s energy security picture in a keynote speech.
The United States soared past Saudi Arabia in the last decade to become the biggest exporter of oil in world history on the strength of huge shale oil production, and that resource is starting to peak and decline.
The Bakken shale, extending over the Saskatchewan border with North Dakota and Montana, has peaked.
In Texas, where hydraulic fracturing and horizontal drilling were developed to drive U.S. production, the Eagle Ford shale has peaked and the biggest American resource of all, the Permian Basin in New Mexico and Texas, is also showing signs of levelling off, Exner-Pirot said.
Hence U.S. President Donald Trump’s sudden interest in reviving the cancelled Keystone XL pipeline to bring more Alberta crude to the midwest and “Gulf of America” refineries that are geared for heavy oil.
“That’s why we’re being annexed as the 51st state,” she said, shifting to a deft parody of Trump’s now-familiar rhetoric. “It’s going to be a beautiful pipeline, and the United States is going to pay for it!”
The U.S. has “gorged [itself] on cheap oil and gas for the last 10 years,” noted Exner-Pirot, and their dependence on Canada to keep up with demand has only increased.
Two days after her speech, Trump made Western Canada even more vital by cancelling former president Joe Biden’s oil purchase deal with Venezuela, home of the only oil sands deposit larger than Alberta’s. A member of OPEC, Venezuela teeters close to failed-state status as it loses a licence allowing joint ventures between its decrepit state-run oil company and Chevron.
Renewed interest in ‘northern leg’ of Trans Mountain pipeline
The Trans Mountain pipeline expansion has enabled more shipments to Asia, but fully half of this new output is being shipped south to California, Exner-Pirot said. The Trans Mountain system can still increase capacity with more pumping stations, and interest has now revived in an extension called the “northern leg.”
Before selling the pipeline system to federal taxpayers, Kinder Morgan Canada built extra capacity on the Alberta side of the expansion to allow a branch from Valemount out to the north coast of B.C., on a similar route to the cancelled Northern Gateway line.
Rising fuel demand exceeds BC electricity generation
Whether B.C. is ready to take advantage of the emerging opportunities in the energy market is another matter.
There are glaring problems with the NDP government’s “CleanBC” plan to decarbonize the province’s energy use, former B.C. Liberal environment minister Barry Penner told participants of the well-attended event.
The CleanBC climate change plan refers to B.C.’s “abundant” hydro power to drive the province to phase out natural gas heat and gasoline and diesel vehicles.
B.C. currently has the most aggressive electric car mandate in the western world, requiring 90 per cent of new vehicles to be zero-emission by 2030. That’s the 2030 model year, so for car dealers that’s only four years from now.
Even if that sales target could be achieved, where would the power come from?
B.C. has been a net importer of electricity for the last six years running. Site C Dam went online last fall and is expected to be fully operational by this fall, but growth in demand is keeping pace. Never mind the estimated $1.4 billion needed to build public charging stations in Metro Vancouver alone.
“You might be forgiven for thinking electricity is our dominant energy source in the province.”
Barry Penner
Penner quoted a footnote buried in a June 2024 government document showing that BC Hydro has applications for 7,000 megawatts of new power waiting for approval. That’s about half of the utility’s current output.
Net electricity imports have added up to about two Site C dams’ worth in recent years.
CleanBC legislation must be changed, says Penner
Another CleanBC deadline is to require net-zero buildings by 2030. That means phasing out natural gas for heating, as Vancouver and Nanaimo have done.
“We hear a lot of talk about electricity being the solution to our energy challenges and the magic bullet to address climate change,” Penner said. “You might be forgiven for thinking that’s our dominant energy source in the province.”
In fact, electricity accounts for less than one fifth of B.C.’s total energy use. The vast majority is still natural gas and refined petroleum products to heat homes, hospitals and schools and run the buses, trucks and cars.
Electricity accounts for less than one fifth of B.C.’s total energy use.
Converting all of that to electricity is simply impossible, Penner said, adding the CleanBC legislation needs to be changed, and soon.
As for Ontario Premier Doug Ford’s threat to cut off electricity sales to the U.S. in response to Trump’s tariff threat, Penner said Ford many not realize that B.C.’s electricity deficit would leave us in the dark for part of the year.
Asia’s growing demand is Canada’s future
Exner-Pirot described the evolution of human development as defined by energy use. In world history, new energy sources have only added to old ones, with wood and dung still a heating and cooking source for much of the developing world.
While population and energy use have begun to peak in Western Europe, Japan and other developed countries, Asia is the future of growth and demand, Exner-Pirot said. About 1.5 billion more people are projected to join the middle class in Asia in the next six years, making the region the main source of energy demand.
B.C.’s location on the northern Pacific Rim a vital asset. The first LNG tanker from the Gulf Coast recently made the journey through the Panama Canal and across the Pacific to Asia, twice as far as the journey would be from Kitimat. The Atlantic option is also long, including transit of the Red Sea, where ships have been target of attacks in the volatile Middle East.
The threat of war and terrorism looms over everything now, Exner-Pirot said, pointing out there is only one democratic country in the world with substantial untapped oil reserves. And we’re living in it.