HANNAFORD: Ottawa’s energy rules are crippling the West

It’s unbelievable. Canada now runs on two energy economies — one in the West, burdened by costly “net-zero” regulations, and another in the East, fuelled by billions of dollars’ worth of imported foreign oil untouched by such rules.Why? To talk about how one country can accommodate two energy economies — one based on expensive oil out west, the other on cheap oil in the east — host Nigel Hannaford is joined on The Hannaford Show by Dr. Ron Wallace, who dissects the economic imbalance at the heart of Ottawa’s climate policy.Wallace is a former National Energy Board member and consultant with decades of experience in the oil sands. He remarks that between 1988 and 2020, Eastern Canadian refineries imported more than $364 billion in foreign oil — much of it from the United States — without being subject to Ottawa’s “decarbonisation” mandates of the last ten years..“Decarbonised oil” is defined as product for which an amount of carbon dioxide has been sequestered equivalent to that used in its manufacture — hence “net zero.”“None of that oil from back east is decarbonised,” Wallace said. “There is no costly equivalent carbon capture and sequestration in its countries of origin, or in Canada. Yet Western Canadian producers are being told they must capture, compress and bury their emissions underground at enormous cost.”Those costs, Wallace warned, could cripple Alberta’s oil sands industry. Referring to the Pathways Alliance — the consortium that plans to build massive carbon-capture and storage (CCS) infrastructure as a condition of expanding oil production — Wallace said the economics simply don’t work without material subsidies.“The minimum estimate so far for this Pathways project is $16 to $24 billion,” Wallace said. “Then you have to operate that facility with estimated costs ranging from CDN$60 to CDN$100/tonne which some analysts calculate could amount to costs as much as $1.12 billion per year.”.“At those costs, Alberta producers could not possibly remain competitive,” he added. “Who could afford to produce oil at US$57 a barrel when you’re adding $100 to $200 a tonne in costs? No one else in the world is doing this.”The situation has serious implications for Premier Danielle Smith’s proposed “Grand Bargain” — her plan to trade Alberta’s co-operation on federal emissions targets for Ottawa’s approval of new pipelines and energy exports.Wallace said bluntly the deal may be “built on sand.”“The premier is trying to find a workable compromise,” he said. “I congratulate her for that. But if the federal government is presenting this as an alternative for Alberta, the Alberta government needs to look at it very, very carefully.”Given the staggering cost of “decarbonised oil,” Wallace said the entire idea could prove economically unviable and politically illusory.The Hannaford show airs at 7 o'clock tonight.