As oilsands punished, tanker loads of cheap Saudi oil sail into Canadian ports daily

As federal and provincial politicians pat themselves on the back for his or her climate change ‘leadership,’ and pipeline opponents gloat about stalling construction of recent Canadian pipelines, tanker-loads of foreign oil are delivered regularly to Eastern Canadian refineries, including increasing volumes from Saudi Arabia.

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That’s right. Saudia Arabia, the oil-rich kingdom that’s waging a brutal price war to shore up its market share and devastating Canada’s oil and gas sector in the process, dumped an average of 84,017 barrels each day of their cheap oil in New Brunswick’s Irving Oil Ltd. refinery in 2015, according to data compiled by the National Energy Board (NEB). That’s up from 63,046 b/d typically in 2012.

Overall, refiners in Quebec, Ontario, Newfoundland and New Brunswick imported about 650,000 barrels each day from foreign producers in 2015. Along with Saudi Arabia, the oil came from the United States, Algeria, Angola, Nigeria, because there is insufficient pipeline capacity to import it from Western Canada, which produces much more oil than it needs.

The reversal of Enbridge Inc.’s Line 9, that is finally ready to go after much opposition and moves up to 240,000 b/d of Western Canadian oil to Montreal, means oil imports will drop this season – but not likely from Saudi Arabia.

Wouldn’t it be nice if refineries in our own country took this oil instead of foreign oil?

The Irving refinery, Canada’s largest, says on its website it has a long-term supplier partnership with the Saudis. The organization is a big supporter of TransCanada Corp.’s proposed Energy East pipeline from Alberta to New Brunswick, but until it’s done, it features a 350,000 b/d refinery to help keep running a business.

“We source crude oil throughout the world for our refinery in Saint
John, N.B.,” said a spokesman for Irving. “Our crude imports come from oil producing regions for example Saudi Arabia, Norway, the united states, and Canada – including Newfoundland and Labrador, Alberta and Saskatchewan. Canadian crude is processed at our refinery, from a few of the same producers who would be shipping product via the Energy East pipeline.”

The Saudi imports alone are equal to the daily manufacture of a mid-sized producer such as Calgary-based Penn West Exploration Ltd., certainly one of scores of Canadian firms that are can not remain solvent after slashing jobs and budgets to outlive the Saudi-instigated oil price collapse.

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Where may be the political outrage over oil imports from rogue nations with inferior environmental records and deplorable behaviours toward women, dissidents and minorities? Where are the beefed up regulatory reviews of Saudi Arabia’s climate change impacts, or their dumping practices? Why is Canada so consumed with scrubbing its oil clean while oil from foreign sources flows in to the gasoline tanks of Eastern Canadians free of scrutiny?

“If we choose to import oil from Saudi Arabia – shouldn’t we estimate the entire GHG (greenhouse gas emission) impact of Saudi Arabian oil, which must range from the military footprint of safeguarding that oil in the midst of a perpetual battleground?” asks Terry Etam in a column for that BOE Report, a business online trade publication. “Could someone please show the calculation based on how much GHG is emitted with a fighter jet launching air strikes to irritate neighbours, including the chaotic aftermath? Do you know the CO2 emissions of torched oil wells which will take months to place out? Just how much GHG is emitted by tanks blowing things up?”

Meanwhile, refineries in Quebec – where mayors led by Montreal’s Denis Coderre are fighting Energy East – are relying heavily on imports from the Usa, a great deal coming on oil trains, even as The president killed the Keystone XL pipeline to frustrate imports of “dirty” Canadian oil.

“If the recent past is any indication, like 2015, we will potentially be losing over 500,000 b/d of product from Western Canada due to shut-ins given the prices,” said Tim Pickering, president of Calgary-based commodities trading firm Auspice Capital Advisors. “This will likely be exacerbated to at least 600,000 b/d by capital expenditure cut-backs. Wouldn’t it be nice if refineries within our own country took this oil instead of foreign oil? It might potentially firm up the entire United states supply/demand picture.”

Yet the main preoccupation of political leaders like Liberal Pm Justin Trudeau would be to tighten the screws of  regulatory reviews of Canadian pipeline projects, by looking at their global warming impacts and expanding consultations, and sometimes it means keeping Canada’s already highly regulated oil in the earth and buying foreign oil to satisfy demand.

“We are likely to say no, we don’t like our oil, we will buy oil instead from all of these countries and we are likely to fund these types of international behaviors – and that’s OK because we feel better within our conscience,” said Gaetan Caron, a former National Energy Board chairman who’s now a professional fellow in the School of Public Policy in the University of Calgary and questions the priority.

It’s arrived at this because of pressure of groups like the Sierra Club, which in a recent statement took credit for rallying Quebec mayors against Energy East. “When the Montreal Urban Community – announced its opposition to TransCanada Corporation’s controversial Energy East pipeline yesterday, nearly two dozen hard-working volunteers with Sierra Club Canada’s Quebec Chapter took a victory lap,” the group said.

Or because it’s an expedient way to build political capital in order to show Canada is making progress on its new climate commitments to the international community or because reducing greenhouse gas emissions fairly is a lot harder than picking on pipelines. Less hypocrisy and much more respect for that needs of ordinary Canadians would be nice once in a while.

ccattaneo@nationalpost.com

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