Currie’s Corner 638, July 5, 2018
We have just passed the fifth anniversary of one of Canada’s darkest tragedies of recent years, the death of 57 people in the beautiful Quebec community of Lac Migantic. It was basically the result of criminal negligence by a nickel and dime subsidiary of an American-owned railway that declared bankruptcy almost immediately after that deadly night.
The oil industry seized upon Lac Migantic as a reason to more aggressively promote pipelines as a preferred alternative to shipping by rail. In Ottawa, the Trudeau Liberals have definitely bought the message. This year they’re spending four and a half billion dollars of our money to take over the expansion of Kinder Morgan’s Trans-Mountain pipeline.
Are we seeing less oil shipped by rail since Lac Migantic ? Not really it appears. The National Energy Board says rail exports of crude from Canada were up 13% in April over the previous month. Almost 195,000 barrels per day crosses the Canada-U.S. border by rail. The trains are carrying a lot of heavy Canadian oil that is destined for refineries on the Gulf coast. Those refineries are buying more of our crude, because they’re getting less from Venezuela.
That South American country is one of the world’s largest producers, and over the years their price has been highly competitive. Some day the hope is that Canadian crude will move south through the Keystone X-L pipeline, rather than by rail, but don’t hold your breath.
Relatively few Canadians realize that we still import hundreds of thousands of barrels of oil from Venezuela every day. They are a country that has never resembled anything like a modern democracy. We should be worried about how reliable they might be as a source of supply going forward, especially if there were to be political upheaval.
It’s a complicated energy landscape that has developed over the decades. Would it not make more sense to satisfy our domestic Canadian needs with Canadian oil ? Are you still awake ?
Perhaps we’ll postpone this week’s quiz on the subject.
I’m Roger Currie