The National Post is Canada’s second largest national paper.
TORONTO – The party that takes over the reins of the federal government after Oct. 19 must make pushing ahead pipelines projects as a top priority, the head of the Canadian oil industry association says, adding the lack of progress is hurting the Canadian economy’s competitiveness.
“After the election [pipelines] will continue to be one of the biggest impediments to the Canadian economy — and affect our ability to access markets,” said Tim McMillan, president of the Canadian Association of Petroleum Producers.
“These are fundamental, big pieces and if we can get those in line, we can be far more competitive — we have to be. If we are not, we are out of the game,” McMillan said during an National Post editorial board meeting in Toronto.
Lack of pipelines has seen Canadian producers fetch crude prices that are on average of US$13 per barrel lower than U.S. crude this year, further eroding already razor-thin margins in a depressed oil price environment.
While the global oil market is going through a protracted depression, the Canadian oil industry is wrestling with additional headaches including the political uncertainty in Alberta after the election of the NDP government, and the upcoming federal vote that could see any of the three major political parties — all of which have different views on the energy sector — get elected.
In June, CAPP revised its oil production forecast downward by 1.1 million barrels per day by 2030 to 5.3 million bpd, as the severity of the oil crisis hit its 90-plus member companies, including Suncor Energy Inc. and Canadian Natural Resources Ltd.
“If we see things fundamentally change mid-year, we likely would [revise our forecast],” McMillan said. “I think the economics have gotten worse since June, but we will have to make a judgment call whether it is a meaningful change.”
Oil lost its coveted position as Canada’s No. 1 export this year to the automotive industry, underlining the sector’s depressed state. The industry has seen 35,000 jobs lost in the current downturn, while investment is down 38 per cent this year to around $45 billion, from the lofty heights of $74 billion last year.
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