Jim Carr Speech – Good And Bad News To Oil Producers On Pipelines

Aug 12, 2016

There was good news and bad news in the keynote speech in Manitoba last week by Canada natural resources minister Jim Carr.  [LINK]

The Good news:  Carr says fossil fuels are needed now so it isn’t a choice of pipelines OR wind.  Carr said “But as the Prime Minister has said many times — and this a very important point — “the choice between pipelines and wind turbines is a false one. We need both to reach our goal.” Because while it’s exciting to think about the clean energy, low-carbon economy of the future, we’re not there yet. Even in light of the Paris Agreement, even as the world continues the transition to renewable sources of energy, the demand for fossil fuels will actually increase for decades to come”.  It reminds of our view that the Future of Clean Energy is dependent on oil and natural gas.

The Bad news.  It certainly seems like the Liberals are in favor of the necessity of pipelines.  BUT what I think is going to be overlooked is the warning that there is going to be some sort of extra tax or government take.  What this means is that this ultimately means it will cost an extra $ to the producer to move his oil thru the pipeline.  These costs are passed thru to the producer ie. a lower netback.  He warns they will take their pound of flesh to fund clean energy.  He said “Our challenge — as ministers, as Canadians — is to build the infrastructure and to get our resources to global markets and use the revenues to fund Canada’s transition to cleaner forms of energy, to leverage the minerals and fossil fuel resources we have today to deliver clean energy tomorrow.”