Trump has known as for revival of deserted Keystone XL pipeline undertaking, ‘get it constructed — NOW!’
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Pure Assets Minister Jonathan Wilkinson says Canada is open to having a dialog about reviving the Keystone XL pipeline undertaking, however not earlier than the specter of sweeping United States tariffs on Canadian items is dropped.
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He stated U.S. President Donald Trump’s name for the quick revival of the cross-border pipeline undertaking earlier this week was “obscure” whereas his authorities is concurrently threatening a ten per cent tariff on Canadian power.
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“These are fairly massively inconsistent,” he stated on Thursday. “On the finish of the day, there could also be a dialog about KXL, however it might’t be till the Individuals really determine that they’re going to down instruments with respect to tariffs.”
Wilkinson identified that the 830,000-barrel-per-day pipeline faltered attributable to regulatory points within the U.S., not from something that was raised on the Canadian facet of the border.
After greater than a decade of efforts and billions spent on the partially constructed pipeline, former proponent TC Vitality Corp. (then TransCanada Corp.) formally deserted the proposal in 2021 after then president Joe Biden revoked its permits. The corporate has since spun off its oil pipeline enterprise into South Bow Corp.
Trump stated the corporate behind the deserted proposal, or one other pipeline firm, ought to come again to the U.S. and “get it constructed — NOW!” in a put up on social media Monday.
“We’re actually open to speaking about KXL, however it might want a proponent, which it doesn’t have proper now, and it might want regulatory certainty in the US,” Wilkinson stated.
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Ottawa believes it has answered Trump’s border safety issues, enacting measures that appear to have been met with approval after he delayed implementing tariffs on Canadian items till March 4.
However a call on whether or not to go forward with tariffs in opposition to Canada remains to be more likely to go right down to the wire, Wilkinson stated.
“President Trump kind of thrives on misdirection and in creating uncertainty,” he stated. “On the finish of the day, we’ll solely discover out if now we have been profitable in convincing the president on the day.”
Wilkinson has been pitching U.S. officers for weeks on a partnership to develop a half-dozen power and significant minerals initiatives geared toward boosting funding on each side of the border whereas reaching Trump’s acknowledged goals of preserving power costs low for Individuals and enhancing nationwide safety.
Essentially the most vital oil-related proposal is Enbridge Inc.’s beforehand introduced plan to extend capability on its Mainline system carrying Canadian crude to the U.S. Midwest, Wilkinson stated.
And in an announcement Friday, Enbridge stated as many as a number of hundred thousand barrels per day of further capability could possibly be introduced onstream as early as 2027 or 2028. The extra egress may come numerous methods, together with debottlenecking and including horsepower to spice up flows, the corporate stated, including that additional particulars might be introduced subsequent week.
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On a name final Friday together with his American counterpart, U.S. Vitality Secretary Chris Wright, Wilkinson stated he additionally mentioned funding in rising Canada’s uranium manufacturing in Saskatchewan and increasing conversion services in Ontario.
“North America really may have a full nuclear gasoline cycle that will eradicate the dependence the US presently has on Russia for enriched uranium,” he stated.
Ottawa’s record of potential initiatives to expedite consists of proposals to spice up Canadian mining and exports of germanium and gallium to displace provide threatened by China’s export ban to the U.S.
“It could create jobs and alternative in Canada and it might transfer this dialog from a lose-lose to a win-win,” Wilkinson stated.
Even when tariffs don’t materialize, Canada is now in a state of affairs the place will probably be essential to have a look at decreasing the quantity of commerce it does with the U.S., Wilkinson stated, comparable to actively searching for out prospects in international locations comparable to Japan, South Korea, Australia and Europe.
As an illustration, Canada’s commerce in pure gasoline is poised to blow up, Wilkinson stated, pointing to liquefied pure gasoline export initiatives at the moment being inbuilt British Columbia, together with the primary phases of LNG Canada, Woodfibre LNG and Cedar LNG.
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“We’re very near selections being made about LNG Canada Two,” he stated. “If all 4 of these initiatives go forward, that quantity of gasoline is about half of what we presently ship to the US. That’s a major step ahead by way of commerce diversification.”
Canada may additionally pursue a modest enhance to crude oil flows on the Trans Mountain pipeline, however Wilkinson warned concerning the danger of “overreacting” to Trump’s threats in terms of initiatives geared toward increasing crude oil manufacturing.
Regardless of feedback earlier this month calling for dialogue of a brand new west-to-east oil pipeline, he questioned the necessity for an additional new pipeline undertaking underneath the present circumstances.
“I’m unsure what a brand new pipeline would do for you,” he stated. “(It) begins with there really being a enterprise case. And I don’t suppose you’re more likely to see proponents lining as much as construct a pipeline except they’re certain that they’ll fill it.”
He stated a brand new pipeline to tidewater will not be mandatory whereas Canadian crude continues to be in excessive demand south of the border due to the configuration of refineries within the Midwest and Gulf Coast optimized to course of Canada’s heavy barrels. Moreover, he pointed to the Worldwide Vitality Company’s prediction that international oil demand will peak within the subsequent 5 years.
In a rejoinder to current requires a paring again of regulatory hurdles for main initiatives and the repeal of federal laws such because the Influence Evaluation Act, Wilkinson defended his authorities’s strategy to main infrastructure initiatives like pipelines.
“On the finish of the day, making an attempt to by some means run roughshod over Indigenous issues and environmental issues will solely lose you the power to get social licence for any of those initiatives,” he stated.
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