Canada should be noted for its resourcefulness

By Letter to the Editor on December 10, 2018.

Alberta, and indeed Canada, are suffering because of the oil crisis, as 6.8 per cent of our economy depends on the oil and gas energy sector.

With the large discount on our oil (about 70-80 per cent of value), it has been estimated that we are losing about $80 million a day in lost revenues. One contributing factor is that due to a lack of pipelines, we are restricted in the ability to transport the product out of the province. It has been proposed by the political parties to minimize this problem either by reducing the amount of oil produced so that there is less to transport, or to buy more rail tankers to carry the oil to markets.

As addressed on CBC-TV on Dec. 2, the real problem may be due neither to the production or transportation of oil, but to the stranglehold by upgraders and refineries. Canada does have these, but their capacities are either woefully inadequate or facilities have been shut down after billions of dollars of investment by the large oil companies (see an excellent article by Brent Jang, “The Refining Moment,”Globe and Mail, 2017, https://www.theglobeandmail.com/news/alberta/oil-patch-faces-a-refining-moment/article25965077/).

Still, does it make sense to ship crude oil down to Houston to be upgraded and refined only to have the finished product shipped back to us? Why can’t we have the jobs, technologies and product in this province and country rather than south of the border? Instead of giving away three out of four barrels free to the U.S. (when one takes into account the discount), wouldn’t the cheap oil be a tremendous bargain for in-house refineries?

The main arguments against such a plan for developing our own capabilities are that refineries are multi-billion-dollar investments and that the small Canadian market makes this uneconomical. I do not agree with either. It is like saying we cannot have micro-breweries in this country because one needs to build something like Molson Coors Brewery with $12 billion in assets and 17,000 employees.

We can think big by thinking small, doing not what others have done but what we need to do. When I was on international conferences and meetings, the other countries would call this “The Canadian Approach.” At the World Economic Forum at Davos, Switzerland in 2016, our prime minister said that Canada should be noted not for its “resources” but for its “resourcefulness.”

The answer to our problems may well be not in separating but in combining the two.

John Cherwonogrodzky

Medicine Hat

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