A loophole in Bill C69 identified by a consortium of Calgary-based companies allows for a new pipeline to be approved to eastern Canada.
EDMONTON, Alberta – This morning, despite the federal government’s proposed changes and regulations around pipeline, a pipeline was fully approved to move oil from Alberta and Saskatchewan to eastern Canadian refineries.
The approved pipeline, dubbed the Cascadia Twin XXL, has been approved through an expedited, coordinated process between a consortium of oil producers in Alberta, Saskatchewan, and Manitoba.
In a statement released Thursday afternoon, the consortium announced that Cascadia will break ground early next week, as there is no further work needed to be shovel-ready, as the construction plan is to secure equipment and materials previously purchased and stored for other pipeline and infrastructure projects.
The approval comes as the federal government and Quebec spar over the pipeline issue, but the Cascadia Twin XXL might just force the Quebec Premier’s hand once it nears completion.
“The oil is going to leave western canada, that’s for damn sure, but what happens to it east of Ontario depends on whether François Legault has any sense,“ said the head of the consortium behind the project. “A recent poll shows that the majority of Quebectarians are in favour of a pipeline, but it’s just Legault who doesn’t get it, but he soon will have to.”
The Cascadia Twin XXL, plans to run through the western provinces, and into northern Ontario. The double 24″ pipe then runs to a 600 foot riser system. Beyond that riser system the Cascadia really earns its namesake however, as the flow of oil into, or onto, Quebec, largely depends on how Quebec handles their decision making.
Initial planning for the Cascadia XXL Twin simply ends at the Ontario Quebec border. The oil will either flow out of the Twin lines at that point, or be captured by a pipeline approved to move product through Quebec – that’s entirely up to Premier Legault.
“We think this is a valid solution to the Western oil glut, and the resulting differential pricing. We would like to reverse the production cuts and in fact
grow production, while giving this oil to eastern Canada. If Quebec chooses to accept our gift, they can profit. If they choose to refuse an infrastructure program on their side, they can deal with a spill at a later date. Although we expect it to grow at 800 to 1000 cubic meters of sour heavy oil per day” – Alejandro Hjanda, Kindegg Morgana Planning
Along with this pipeline approval, there is an economic challenge coming to the federal government regarding equalization payments. This issue was raised at the First Ministers meeting last week, but now faces an alternate solution.
According to a tiny amendment made to the Canadian Equalization Payment Act by former Prime Minister Harper just before he left office, the oil flowing through, and out of the Cascadia Twin XXL pipeline is also a legal form or equalization value. This means that cash payments to Quebec will stop the minute the oil starts to flow, and Quebec will have to find value in the black gold flowing to its borders. Be it refining, transport, burning, or selling, Quebec will now receive bulk crude oil as equalization value, not tax money as dictated by the Federal government.