Ottawa – Expanding Canada’s energy infrastructure to bring western oil to Eastern Canada will create jobs and save money, leading members of Canada’s energy sector told a Senate committee.

Tim McMillan, President and CEO of the Canadian Association of Petroleum Producers (CAPP), and Alex Ferguson, Vice President of CAPP, spoke before the Standing Senate Committee on Energy, the Environment and Natural Resources in separate appearances on February 23 and March 8.

Quebec and Eastern Canada refineries rely heavily on imported oil and they pay a premium to do so, McMillan said. Canada lacks the infrastructure to bring cheaper Western Canadian oil east.

“If we could connect Canadians with Canadian products, all of us are better off,” McMillan said.

Infrastructure expansion would comply with Canada’s stringent regulatory standards, which are among the most robust in the world, McMillan said. It would create jobs and generate hundreds of millions or even billions of dollars in revenue.

The alternative is continuing to rely on oil from the other large exporting nations: Saudi Arabia, Russia, the United Arab Emirates, Iraq, Nigeria, Kuwait, Angola, Kazakhstan and Venezuela. “I would pick Canada every time,” McMillan said.

McMillan also addressed climate change. The industry continues to improve its performance by using new technology and investing in research. Since 1990, the amount of greenhouse gases per barrel out of the oil sands dropped by nearly 30 per cent. McMillan highlighted the fact that the Canadian Oil Sands Innovation Alliance has shared 814 patents valued at about $1.3 billion. Today, there are about 150 projects currently under way to increase the industry’s environmental performance.

For his part, Ferguson pointed out that the current status of the industry does not only impact oil and gas producing provinces. He reminded Senators that many companies across the country supply goods and services to the oil sands, including some 1,100 companies in Ontario. Companies in Prince Edward Island are also feeling the effects of the commodity prices. The current downturn has had a negative effect on these companies’ workforce.

Quick Facts

• Canada is the fifth largest producer of oil and gas in the world. The country’s oil reserves are the third largest in the world, smaller only than those of Saudi Arabia and Venezuela.
• Refineries in Quebec and Atlantic Canada import about 80 per cent of the oil they use. The remaining supply mostly originates from offshore Newfoundland.
• Canada’s oil and natural gas industry accounts for more than 450,000 direct and indirect Canadian jobs.

Quotes

“Our committee thought it would be valuable to invite CAPP to appear before us considering the current status of the oil and gas sector in Canada. Like most Canadians, we are concerned about the low price of oil and the ripple effect it has had across the country, particularly in Alberta, where tens of thousands of jobs have been lost, said Senator Neufeld, Chair of the committee. I also welcomed Mr. McMillan’s positive comments regarding the importance of liquefied natural gas export facilities for the industry. I agree with him that Canada should be providing natural gas to countries in growing markets where it could offset the use of coal and, ultimately, reduce global greenhouse gas emissions.”

-Senator Richard Neufeld, Chair of the committee.

"The energy industry is at the center of the debate over Alberta's economy, its contribution to Canada's economy and the need to meet increasing public concern with GHG emissions in a time of very reduced oil prices. CAPP's representatives captured this well in their testimony and demonstrated and that they are engaged in efforts to meet this challenge."

-Senator Grant Mitchell, Deputy Chair of the committee.

Associated Links

• Link to the committee homepage: click here.
• Link to the Canadian Association of Petroleum Producers: www.capp.ca

For more information, please contact:

Lynn Gordon
Committee Clerk
Senate Committee on Energy,
the Environment and Natural Resources
613-991-3620
lynn.gordon@sen.parl.gc.ca

Marcy Galipeau
Committees Liaison Officer, Communications
Senate of Canada
613-944-4082
marcy.galipeau@sen.parl.gc.ca