Support for Prime Minister Carney's pipeline: Premier of Saskatchewan

Key Concepts

• Memorandum of Understanding (MOU): An agreement signed by Alberta and Ottawa aimed at facilitating the construction and financing of one or more private sector pipelines in Canada.
• Global Energy Superpower: An aspiration for Canada, articulated by the Prime Minister, to become a leading nation in global energy production and supply.
• G7 Nation: The Group of Seven, an intergovernmental political forum of leading industrialized nations.
• Oil and Gas Emissions Cap: A previously planned federal regulation by Ottawa, now removed, that would have limited emissions from the oil and gas sector.
• Greenwashing Provisions: Regulations or policies designed to prevent misleading claims about environmental benefits, some of which have been removed by Ottawa.
• Private Investment: Funding provided by non-governmental entities, crucial for financing large-scale infrastructure projects like pipelines.
• Taxpayer-Funded Pipeline: A pipeline project financed by public funds, such as the Trans Mountain Pipeline (T-MX).
• Lower Basis / Higher Oil Price: An economic benefit for oil producers where a lower "basis" (the difference between local and benchmark oil prices) results in a higher net price received for their oil.
• Egress Capacity: The ability or infrastructure to transport a product, such as oil, out of a specific region or market.
• Port Capacity: The maximum volume of goods that can be handled by a port within a given period.
• Project Proponent: A private company or entity that proposes, develops, and takes responsibility for a project.
• First Nations Agreement/Support: The consent and active participation of Indigenous communities, often a critical requirement for the approval and successful execution of major resource projects in Canada.
• Rightsize Regulations: The process of adjusting or modifying regulations to make them more appropriate, efficient, and conducive to project development without compromising essential standards.
• Partnerships (with Indigenous Communities): Collaborative arrangements between industry and Indigenous communities, often involving economic opportunities, employment, and shared benefits.

Overview of the New Energy Agreement and Saskatchewan's Role

The discussion centers on a new Memorandum of Understanding (MOU) signed between Alberta and Ottawa, with the primary goal of facilitating the construction and financing of one or more private sector-constructed and financed pipelines in Canada. Saskatchewan Premier Scott Moe expressed strong support for this agreement, viewing it as a crucial step towards fostering collaboration between provincial and federal governments, a dynamic largely absent over the past decade, particularly concerning prairie provinces.

Premier Moe highlighted that the agreement signifies a positive "change in tone" in intergovernmental discussions, enabling provinces to work closely with the federal government to support industrial development. This collaboration aims to help Canada achieve the Prime Minister's aspiration of becoming a global energy superpower and to build one of the strongest economies among G7 nations. A key objective is to diversify Canada's energy production away from reliance on the United States, benefiting all Canadians. Premier Moe credited Prime Minister Trudeau and Premier Smith for their hard work in reaching this initial agreement.

Characterizing the Discussions and Future Steps

Premier Moe described the discussions leading to the MOU as involving "a lot of give and take," emphasizing that reaching an agreement was not straightforward. He reiterated that this MOU is merely the "first step in a long list of discussions," some of which will be sensitive. However, he views it as a significant opportunity to expand Canada's economy, determine its destiny in global trade and the global economy, and enhance its energy and food security supply chains. He concluded that it is a "good day not just for Western Canada or even Alberta, but a good day for all Canadians."

Attracting Private Investment and Regulatory Changes

A core aspect of the new agreement is the call for private investment to build and finance pipelines, which will cost "billions of dollars." Premier Moe sees Ottawa's changes, specifically the removal of the planned oil and gas emissions cap and some greenwashing provisions, as a "tremendous step in the right direction" to attract this investment. He noted that the previous regulatory environment was not conducive to private investment, leading to the construction of a taxpayer-funded pipeline like the Trans Mountain Pipeline (T-MX).

While acknowledging these changes are a "giant step forward," Premier Moe suggested that further discussions might be needed to "tweak" the investment environment. He also envisioned a "shared investment" model, involving energy companies, pipeline companies, and communities along the route, to ensure broader economic opportunities.

Benefits for Saskatchewan and All Canadians

Premier Moe detailed the direct and indirect benefits for Saskatchewan:

• Direct Access: Saskatchewan's oil producers in the northwestern part of the province could indirectly access new pipeline capacity.
• Lower Basis/Higher Oil Price: All of Canada, including Saskatchewan, will benefit from a "lower basis," meaning a higher net oil price for producers.
• Increased Egress Capacity: More capacity to transport oil into the U.S., where much of Saskatchewan's oil currently goes.
• Improved Port Efficiency: Enhanced efficiency and capacity at West Coast port operations. Saskatchewan ships 70% of its products (including non-oil products) out the West Coast to Asian and European markets. Moving oil by pipeline instead of train will free up rail capacity, further increasing overall export capacity.

Beyond Saskatchewan, Premier Moe stated that all Canadians would benefit from stronger federal and provincial budgets due to increased revenue lines and greater access to global markets for various products, not just oil.

Addressing Opposition and Indigenous Engagement

Premier Moe addressed the skepticism from BC Premier David Eby, who stated that the pipeline proposal currently lacks a project proponent, a defined route, necessary permits, and crucially, the support of coastal First Nations. Premier Eby highlighted that the Prime Minister himself recently emphasized the importance of First Nations agreement and support for major projects.

Premier Moe countered that it was largely federal regulations, not a lack of Indigenous support, that scrapped previous projects like the Northern Gateway Pipeline and the Energy East pipeline. He noted that the federal government's commitment in the MOU includes "rightsizing some of those regulations" to make private sector-funded projects feasible.

He expressed confidence that the private sector would become interested in these projects, a route would be found, and engagement with communities, particularly Indigenous communities, would follow. He emphasized that the goal is not just "approvals per se, but partnerships" that offer real economic opportunities. He cited the example of the mining industry in northern Saskatchewan, where partnerships between the mining sector and local Indigenous communities provide "very real opportunities in very good careers." Premier Moe asserted that creating an environment for such partnerships, with tangible benefits for people living in project areas, is an "ethical way for industries to do business" and a requirement for responsible projects in Canada.

Conclusion

The new energy agreement between Alberta and Ottawa, strongly supported by Saskatchewan Premier Scott Moe, marks a pivotal "first step" towards a more collaborative federal-provincial relationship aimed at expanding Canada's energy infrastructure through private investment. While acknowledging the significant challenges, including securing private sector commitment, defining routes, and addressing opposition from provinces like BC, the agreement is seen as a crucial move to attract investment through regulatory adjustments (like removing the emissions cap). The emphasis is on creating economic benefits for all Canadians, strengthening national and provincial budgets, and fostering ethical partnerships with Indigenous communities, which are deemed essential for the success and social license of future projects. The long-term vision is for Canada to solidify its role as a global energy leader and enhance its economic prosperity and security.