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Carey Johannesson's avatar

It was good of Minister Wilkinson to do the interview. I found however many of his messages were at odds with my recollection and view of the Liberal government’s performance over the Trudeau years. For example, looking at pipelines, under the previous Conservative government there were a number of pipeline projects that were approved including the Enbridge Alberta Clipper project. Under the Liberal, Energy East was cancelled on Oct 5, 2017 because at the 11th hour the Liberal government changed the assessment requirements to include significant new ones including downstream greenhouse gas emissions assessments. It was clear, based on political calculations, that the Liberals would have had a fight with Quebec if they were to have allowed that line to be built to supply Quebec and the Maritimes with oil and refined products. So they changed the goal posts to remove any certainty of approval. I’m sure the proponents decided to not put more money into a losing proposition. TransMountain’s approval was overturned by the Federal Court on August 30, 2018 because the Federal government had failed to consult adequately with aboriginal groups and to include potential offshore environmental effects on killer whales. It was no surprise that the federal government ended up announcing the purchase of Trans mountain on August 31, 2018. What a coincidence. My guess is the Liberals figured having squashed Energy East, they would have had major political issues in western Canada if they failed again with pipelines. And then there’s the famous “no business case for east coast LNG” statement made by Mr. Trudeau.

I find it incredible that Liberal Ministers are trying to say now they were supportive of energy development when they clearly have been otherwise.

I forgot Northern Gateway - similar issues and federal response to Energy East in addition to banning tankers off the west coast.

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Russil Wvong's avatar

My understanding is that the economics of Energy East were always marginal - it's a long way from Alberta to the East Coast. According to Andrew Leach, Energy East died because Trump 1.0 put Keystone XL back on the table, and TC decided to bet on KXL instead (by moving its shipper commitments). I know Dennis McConaghy (formerly at TC) blames Trudeau, but he concedes Leach's point: "Others have emphasized, more legitimately, that if those other pipeline projects [TMX and KXL] are actually constructed and before Energy East is even permitted, then Energy East might not have been required based on reasonable projections of future supply and pipeline capacity." https://www.ualberta.ca/en/folio/2017/10/commentary--how-donald-trump-killed-the-energy-east-pipeline.html

With US oil production increasing, it made sense to try to expand pipeline capacity to the BC coast for export to Asia, despite the obstacles (fear of an oil spill, the delicate political situation with First Nations in BC, and concern over climate change). But Harper really screwed up Northern Gateway. It was so radioactive that the government sent out the 2014 approval by press release. When Jason Kenney was asked about it a few days later, he said, "No particular project is a national priority." Despite this attempt to maintain a safe distance, nearly every Conservative MP representing a riding touching the Pacific coast was defeated in 2015. In 2016, the courts quashed the approval.

Trudeau burned a ton of political capital in BC to make the Trans Mountain expansion happen. (It's operating now, basically in the nick of time considering what's going on with Trump.) This was the Trudeau-Notley compromise: carbon pricing, including on industrial emissions, in exchange for more pipeline capacity to tidewater.

The Trudeau government didn't just approve TMX by press release. When the BC NDP tried to obstruct it, giving Kinder Morgan cold feet (and enraging the Alberta NDP), Trudeau used the biggest hammer available by buying it (announced May 2018), making it a federal project that couldn't be blocked by BC. After the courts quashed the appeal due to inadequate consultation with First Nations (in August 2018), Trudeau redid the consultations, approved it again, and this time the approval stood up in court.

I thought Jonathan Wilkinson did an excellent job of explaining the need for TMX *within* the Liberal Party. He emphasized the importance of maintaining national unity, as well as the fact that the project was following an existing pipeline route to a busy port where oil had been shipped since 1953.

From Alberta's point of view, the BC NDP trying to block TMX is definitely a justified grievance. But the federal government - Trudeau's government - did make it happen. As Trudeau said in 2017: "No country in the world would find 173 billion barrels of oil in the ground and just leave them there."

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Carey Johannesson's avatar

Good comments Russil. A few reflections on your comments. Since Energy East had firm shipper commitments and Trans Canada was spending the money to pursue the project, I would tend to give more credence to their assessment that the project economics were viable, rather than the opinion of a non-involved third party. The basis for Energy East was always to provide Canadian oil to Ontario, Quebec and the Maritimes much of which using existing pipe, adding new pump stations and valves as required, and avoiding going through the US, as the current supply pipeline (Enbridge line 9) does. This would have also removed the requirement for the Irving refinery in St. John to rely on oil from less desirable sources including Saudi Arabia. It was disappointing that the Liberal government was unable or unwilling to have the strength of courage to support the project, and somewhat ungracious of Quebec to deny the Maritimes access to Canadian oil (since Quebec already had their own supply).

Respecting Trans Mountain, despite the political rhetoric from BC politicians, the BC administration acted professionally and expeditiously to provide TMPL with the necessary provincial authorizations they required. It seemed to me the federal government at a political level were always ambivalent and made fundamental missteps in both scoping and aboriginal engagement. TMPL actually was given accolades for their aboriginal engagement program - the lack of performance was only on the part of the federal government. And although the offshore environmental effects were assessed as part of the federal TERMPOL process, that was never argued by the federal government in the scoping case.

One point Wilkinson did raise that I found interesting was the concept of a new pipeline to Churchill. There are lots of complexities with that concept such as having to get approval for and construct a new pipeline from either the TCPL or Enbridge systems to the port through some pretty difficult terrain. Aboriginal engagement would be a key part of that effort, along with provincial and federal support for the plan. Then of course, unless the federal government was interested in having a pipeline decision, there would need to be a commercial package including investors and shippers to support the project economics. As we have seen, none of that is easy.

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Russil Wvong's avatar

Thanks! I just looked up a Reddit comment I wrote six years ago, basically making the argument for TMX. A lot of it was based on what I'd heard Jonathan Wilkinson say. I think he's done a good job as natural resources minister. (It may help that he's from Saskatchewan.) https://old.reddit.com/r/canada/comments/aep2uy/what_are_some_of_your_thoughts_on_the/edrl893/

I still remember Thomas Mulcair saying in one of the 2015 leadership debates that Energy East was "win-win-win."

It's true that Andrew Leach is a third party; I rely pretty heavily on his judgement.

In the case of TMX, as someone living in Vancouver I've got a pretty close-up view. The BC NDP made a concerted attempt to block TMX. January 2018: "The province announced on Jan. 30 that it would limit the amount of diluted bitumen that can be transported by pipeline or rail until it could do further research on spill cleanup. That same day, Environment Minister George Heyman ate dinner with a 'Kinder Morgan Strategy Group' at a two-day retreat on Bowen Island, which was attended by opponents of the $7.4-billion Trans Mountain project." Of course this resulted in a huge fight with the Alberta NDP. https://vancouversun.com/news/local-news/environment-minister-blasted-over-dinner-with-anti-pipeline-activists-on-eve-of-trade-war

April 2018: BC submits reference case to the courts on whether it can block diluted bitumen. "B.C. government asking courts to rule on new permitting system to restrict bitumen flow." https://globalnews.ca/news/4169798/bc-reference-case-trans-mountain/

Again, the federal government used the biggest hammer available by buying the pipeline and making it an unblockable federal project. BC was trying to block it; the federal government made it happen. I don't see any of the federal ambivalence that you're describing. Harper sent out the Northern Gateway approval by press release; this is what Trudeau's announcement of the TMX approval looked like. The photo tells the story. https://www.cbc.ca/news/politics/federal-cabinet-trudeau-pipeline-decisions-1.3872828

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Andre L Pelletier's avatar

The oil was never intended to be used at the Irving refinery. They don't have the equipment to use more than a fraction of heavy oil in their operations and had no intentions of making the investments then: https://financialpost.com/commodities/energy/irving-oils-president-says-it-would-keep-saudi-imports-even-if-energy-east-goes-ahead

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Carey Johannesson's avatar

Andre I think you missed the nuance in the article. The article doesn’t say Irving wouldn’t use western oil. It said it wouldn’t stop buying Saudi’s oil. Most liquid pipelines today are batch pipelines meaning they can ship a variety of crudes and refined products through batches so supplying a lighter crude to match Irving’s requirements is quite feasible. Energy East would have provided an opportunity for Canada to restrict oil imports from countries like Saudi Arabia that have environmental and human rights practices that would never be allowed in Canada so there is a political and moral rationale for restricting such imports.

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Andre L Pelletier's avatar

Not sure what you think I missed. Western Canada mostly produces WCS. Sure, pipelines can blend crudes, but we produce very little light sweet crude. Hence why even now, most of Irving's oil comes from the US (shale), Nigeria, and Saudi Arabia, in that order of importance (https://www.cer-rec.gc.ca/en/data-analysis/energy-markets/market-snapshots/2024/market-snapshot-crude-oil-imports-rose-slightly-2023-first-time-since-2019.html).

This is also the reason why the US imports most of our heavy oil. Their Gulf refineries are tooled for it. Something that happened during the oil shock of the 70s and they pivoted to consuming Venezuelan heavy oil (to bypass OPEC). This is also why they still import so much while also exporting a lot of light crude. Shale oils are much lighter and they have to blend it with (now) WCS.

Why do you think Irving's specifically said "we would still keep importing oil"? It's an open market and they have technical requirements to match to. If Canadian crude became cheap enough or imported crude became expensive enough, they would likely spend the significant capital to make the investment into cookers and crackers, but that would certainly increase the cost to end-users.

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John Tak's avatar

Thanks Russil for your thoughtful and thorough response to the interview. I agree. The $40 billion LNG Canada plant and associated Coastal GasLink pipeline is the largest private sector O&G investment in Canadian history. Plus, under the Liberals Alberta oil production is at an historic high.

All this while the Liberals were trying to balance O&G economic growth with action on climate change. I recall PM Harper allocating taxpayer dollars to the CRA to hire additional auditors to harass Canadian environmental groups.

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Russil Wvong's avatar

Thanks, John. According to St. Laurent, maintaining national unity is the first principle of Canadian foreign policy. I always think of global warming as an example: climate policy has very different impacts in Alberta compared to provinces with a lot of hydroelectricity, like BC and Quebec.

At least between BC and Alberta, equalization payments aren't an issue. (Albertans often feel like a neglected breadwinner: they contribute a lot to the Canadian economy, and in return they're harshly criticized for destroying the environment.)

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Ken Schultz's avatar

"... they're harshly criticized for destroying the environment."

Even though we have world class environmental standards on our resource industry, something that the green proponents fail to acknowledge.

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John Tak's avatar

Hi Ken - Kudos to the oil and gas sectors in Alberta, BC, Saskatchewan, and Newfoundland for adopting world class environmental standards.

But let’s also give kudos for the drivers of that adoption and innovation, hard working and underpaid environmental groups like: Pembina Institute; West Coast Environmental Law; Dogwood BC; Environmental Defence Canada; Greenpeace; Sierra Club of Canada; and others. Plus credit to federal and provincial government leadership and subsidies.

It’s fair to say that without that environmental group leadership/ pressure and without the government regulatory system and subsidies, the current environmental standards would not have been achieved.

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Ken Schultz's avatar

John, I agree that those folks do have their place. Having said that, I absolutely think that it is important to recognize that the folks in the corporate sector live here as well and they also want what is best for the country.

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Al's avatar

Lots of ’reflecting’ and ‘conversations’. You’d swear the Liberals were champions of resource development.

A great example of gaslighting.

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Edward Smith's avatar

I had a chuckle on this point!

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ian stewart's avatar

Pivot? Hypocrisy is not too strong a word to describe the Liberals (every last one)180 to valuing Canadian resources and believing there is a "business case" for them. The only thing they value and that is their political hides. Anyone who thinks Carney can save Canada needs to read his economic plan and follow his ideology (net zero). I guess his focus on the brass ring is stronger than that what he was taught at Oxford.

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John Dowell's avatar

Amen. No one should believe that the Liberals have suddenly found Jesus.

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Gary Ley's avatar

Boy, the reincarnation of Jonathan Wilkinson as CD Howe is very hard to swallow. For the last ten years Wilkinson has sneeringly obstructed development of Canada's resource sector. And we're now supposed to believe he will be our economic saviour? Puh-leeze.

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Douglas Sell's avatar

Enjoyed the interview Paul.... but.... a bit of revisionist history going on by Mr Wilkinson.

Kinder Morgan walked away from the project because they saw the writing on the wall. BC and Ottawa were both opposed to the plan, the Liberals had already cancelled energy East and the Northern Gateway, so as a few others have already noted the hypocrisy of Wilkinson in "Championing" the trans mountain project is pretty rich.

Marc Carney, I believe is the same kind of climate zealot as Stephen Guilbeault, and if the Canadian public were to re-elect a Liberal government, this country would be in a whole lot of hurt, as the goose that lays the golden egg would be further decimated.

In other words Paul, I don't believe Mr Wilkinson, or Mr Carney or any other Liberal who would champion any fossil fuel development. The track record of the Liberal party for the last 9 years is a very clear indication of what they see for the future of Canada.

My hope is that the media (yourself included) will push back every time that the Liberals "champion" the trans mountain pipeline.

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dan mcco's avatar

You let him off the hook for his revisionist history. Is there any chance that the LPC got TMX built using our tax dollars because 50% of our oil exports are to China much from Chinese oil sands companies CNOOC, PetroChina and Sinopec? When Japan (among others) offered to INVEST in LNG facilities we told them to pound salt.

https://www.biv.com/news/resources-agriculture/china-accounted-for-50-of-oil-exports-via-vancouver-in-2024-china-institute-10190694

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CF's avatar

Wilkinson speaks like a Laurentian elite. He is yesterday's man and deep into the Trudeau/Liberal cabal. He is speaking of nothing brave or contentious. How many times did he say that he does not support Energy East? He is an activist, rather under the talk but you can niggle it out in this discussion. Would not trust him at all.

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Val Knight's avatar

Paul,

Sounds to me like the Liberal Government has a lot of "reflecting" to do.

Not sure that's what Canadians are looking for.

Val

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S.McRobbie's avatar

Thanks for the interview, Paul. He sounded, for better or worse, how I remember most governing politicians sounding twenty or thirty years ago. Actual use of nouns and verbs about specific things. That being said there was the usual sucking and blowing at the same time.

Over the current Trudeau years (calling it the Trudeau regime is way more fun) I don't recall natural resources being front and centre at all unless cast in terms involving indigenous peoples.

Mr. Wilkinson seemed unable to say that the goal is to increase the number of BTUs shipped world-wide, as this runs contrary to all the PMO messaging calibrated to the progressive flank. I don't think Mr. Guilbeault will sit next to Mr. Wilkinson in the Parliament Hill canteen with such heresys.

I suspect the PMO knows Canada can only pay for entitlements if it can make money. Don't tell the urban base. (Picture governing MPs having sweaty, arousing dreams of Norwegian style sovereign wealth funds. Thank you North Sea oil!)

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Don Pasquini's avatar

Minister Wilkinson seems to be living in an alternate universe. The actions he describes in this interview are completely different from his actions while in government. It seems odd that he would request an interview with you Paul (uncharacteristic of a politician). Perhaps he feels you have a large audience and your podcast is a venue he can use to rehabilitate his and his party's reputation. I hope Canadians aren't fooled! Carney, Freeland, Trudeau (and his cabinet ministers) are all cut from the same cloth. The last thing they want to do is develop natural resources, especially Alberta's. Ironically, Trump seems to have united Canadians more in a couple of months than a decade of Liberal government under Trudeau. I can't believe after a decade the liberals are still talking about Stephen Harper.

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Louise Teasdale's avatar

Liberals can turn on a dime when it is in their favour, unfortunately they are out of favours at this point. 9 years of No Oil and Gas and all of a sudden they had a revelation.

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Bruce's avatar

Paul.

That was a wonderful interview. I am significantly more informed on Canada’s energy activities. Hopefully, we remain sovereign and make the correct decisions going forward.

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Peter A's avatar

It’s outrageous how the Liberals take credit for the Transmountain pipeline expansion after failing so badly to create the conditions that would have allowed Kinder Morgan Canada to complete it. The federal government has all the authority it needs to declare national interest and get cross provincial pipelines built. Minister Wilkinson’s reluctance to talk about a pipeline in the spirit of Energy East for an evident fear of Quebec’s “social licence” veto does not bode well for Canada’s future energy security under a Liberal government. The US is changing the rules of our relationship with them. Our political leaders are being far too tactical in their response.

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Kathleen Fillmore's avatar

Kind of late and out of touch!

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Mike's avatar

Thanks Paul, it was a good listen. I am currently reading Maher's book on Trudeau (I read yours earlier), and had just gone thru the chapter where it did talk a lot about the situation, especially in 2015, around pipelines and trying to balance the provincial requests and demands from Alberta, BC, Quebec. To be fair, it has often been said in Alberta that Wilkinson was the minister that the UCP government could deal with, to some extent.

I would also say that I appreciate your interview method. I particularly like that you let the guest finish the conversation, and you don't finish the podcast with editorial or analysis, you let their words stand, for better or worse. Not to say I haven't driven off the road with some of what I have heard, but it is still a refreshing approach.

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Alan's avatar

Great podcast Paul, thanks! Perhaps Minister Wilkinson should be reminded that the public now has access to a powerful (and frightening…) new tool called AI.

I spent 20 minutes on different platforms inquiring about the Minister’s “pivots”. It was quite an experience to see detailed analysis generated of his historical statements on record,contradicting his statements on the pod. Great material for the upcoming election, no doubt.

The greatest shock for me, however, was hearing him reference Churchill, Manitoba as a potential energy hub - shipping oil AROUND Quebec… Mon Dieu!!!

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