Mines ministers focused on Canada’s energy security

Canada’s energy security was a key item on the agenda at a meeting of energy and mines ministers last week in Banff.

Alberta’s Energy Minister Dr. Neil Webber predicted that if oil and gas prices don’t stabilize, “within a few years, the whole of Canada could face security of supply problems.” Pointing out Canada was the largest per capita consumer of energy in the world, he predicted we could become “major net importers in the early 1990s.”

Without giving any specifics, he admitted that Alberta had been discussing a stabilization program with the federal government. But he cautioned that “no matter what the federal government does,” it won’t prevent the restructuring which is presently under way in the industry. Energy Minister Vincent Kerrio said his government wants to set aside the acrimony that has characterized such ministerial meetings in the past, and he implied that consumers in his province might be in for even lower natural gas prices sometime in the future. He said they were trying to get Ottawa to “straighten out TransCanada PipeLines” which distributes gas from Alberta to Ontario and the second largest gas market, Quebec. Ontario has been signing direct purchase agreements with western gas producers and he argued TCPL would also “have to become more competitive.” Producers have been grumbling about TCPL’s monopoly on gas distribution and the company is facing what some industry followers believe could be a 25% loss in revenues from domestic sales in Eastern Canada. e

Quebec Energy Minister John Ciaccia said his government was concerned about a “shortage of western oil by 1990,” adding that he wanted to explore ways of securing supplies of “light medium crude through the Sarnia-Montreal pipeline” into the next decade. He said they were looking at the problem in a Canadian context “with no partisan politics” involved. He added that Quebec was the largest “increasing gas market” and gas was becoming competitive with hydro electric power which the province has in abundance.

Alberta’s petroleum and natural gas industry stands to lose the most given the present situation in the energy sector. The province is predicting a deficit of $2.5 billion, mainly due to lower oil prices, and 50-70,000 jobs may be lost in Alberta alone if oil prices don’t stabilize, he said. For 1986 alone, over $5 billion of energy investment will be cancelled or deferred and he emphasized that energy investment has traditionally contributed one fifth to one quarter of all private sector investment in Canada.

In the national context, Mr. Webber estimated that $3 billion in foreign exchange earnings could be lost, noting that net energy exports where major contributors to Canada’s positive balance in 1985. The loss of these energy revenues will put downward pressure on the Canadian dollar, he claimed.

“It is in our collective interest to ensure that competitively priced supplies of energy are secured through appropriate federal, provincial and territorial government actions,” he said.