Cogito Ergo Non Serviam

Alberta Energy Minister Ken Hughes on the XL Pipeline

The Kensington Review has interviewed by email Ken Hughes, the newly appointed Energy Minister in the Canadian Province of Alberta. This journal is grateful to the minister for his time, and to the staff in the provincial government who assisted in this effort, especially Bob McManus and Bart Johnson.

Kensington: Just how important is the Keystone XL pipeline to the development and exploitation of the oil sands in Alberta?

Minister Hughes: Oil sands supplies are sought after in the gulf coast region as secure and reliable replacements for unpredictable imports from declining production sources in Venezuela and Mexico. Currently, Alberta?s oil can only be shipped as far as Cushing, Oklahoma where the price per barrel is based on West Texas Intermediate (WTI) price. Access to refineries along the Gulf Coast through pipelines like the Keystone XL will allow Alberta producers to fetch the Brent Sea Crude price which lately has been sold at $10-$30 higher than the WTI price. This is estimated to have cost the Alberta government more than $3 billion in foregone royalties and taxes, and the federal government $1 billion in foregone taxes.

As well, in March 2012, CIBC World Markets estimated Canadian producers are giving up $18 billion a year, or $50 million a day by not accessing the international market. With KXL, Canada will have export capacity of over 4 million bpd compared to present exports of 2 million barrels per day.

Projects like Keystone will boost the economies of Alberta and Canada; create and support jobs across the country; and generate higher royalties and taxes that help pay for health, education and the other programs and services we rely on.

Kensington: How closely do you work with TransCanada on the pipeline?

Minister Hughes: While Alberta does not support specific companies or facility projects, it does encourage viable projects that advance our goal of diversifying markets and increasing access to markets in the Pacific Rim. The Government of Alberta is supporting the Keystone XL Pipeline Project as it is one of the more efficient ways to extend an existing system to gain gulf coast access. During the State Department's pipeline process former Alberta Premier Ed Stelmach, Alberta Deputy Minister of Executive Council, Peter Watson and Alberta Environment?s Deputy Minister, Ernie Hui provided project support submissions with respect to the quality of Alberta?s heavy oil and the environmental record of oil sands producers. It's also important to note that in November 2011, newly elected Alberta Premier Alison Redford travelled to Washington to meet with State Department representatives to discuss the merits of the pipeline.

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© Copyright 2012 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Ubuntu Linux.



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