Paul Tsounis, the director, energy economics for Alberta Energy, today kicked off the first of a series of webinars for the CPCA, discussing the state of the oil sands.
And although Canada’s energy sector has taken repeated body blows from low prices, restrictive federal legislation, COVID-19, and despite the serious downturn in drilling activity, there is still reason to smile for Alberta’s energy sector.
“It is really hard to see a light at the end of the tunnel,” said Tsounis. “But there are little bits of signs of hope.”
He cited the importance of LNG on the west coast, and the Trans Mountain pipeline being built.
“And when we do get that developed, Alberta can play a very competitive role in supplying to Asian markets. It is a $40 billion project (Trans Mountain pipeline), the largest infrastructure project in Canada. It is going to help get a lot of the natural gas off of the shelf.”
The webinar, Breaking Through a Cloud of Uncertainty in Alberta’s Energy Industry, provided an overview of the current state of Alberta’s economy and where it is headed.
When asked how potentially increased emission regulations and taxes currently being considered by Ottawa might affect the oil sands, Tsounis – although optimistic – warned that any heavy-handed actions by the governing Liberals would do more harm than good for the Canadian economy.
“We’re in constant communication with Ottawa in regards to what they mean by this, to get more clarity, and to make sure we put a plan in place to keep Canada’s energy industry moving forward,” said Tsounis.
“Can we sustain it? I think through the technological and cost innovations, I think they (the industry) could withstand a chunk of it; but again, we need more clarity as to what the government means.”
But there is a ceiling of how much the industry can pay, adds Tsounis, when you consider the existing legislation from 2019 that was placed on restricting tankers along the northern B.C. coast and added pipeline infrastructure red tape.
“If the cost is too high, then it won’t be good for industry at all. But we have seen the larger players make really good moves in getting their cost down, and it is something we (Alberta) as a government are helping to do.
“We’re already battling the government with Bills C-48 and C-69, and it has hampered our ability to get crude to market. We want to make sure these policies won’t hinder our industry any more than it has hindered our industry.”
While the industry remains wary of any new restrictions, regulations and taxes that may come from Ottawa, Tsounis sees other reasons for optimism going into 2021coming from world markets.
“Another bright light at the end of the tunnel, world energy demand is expected to climb, and we cannot lose sight of the long-term. Energy demand is going to increase.”
Alberta can play a pivotal role in being a part of providing crude and natural gas, points out Tsounis, and do so while reducing emissions.
“Alberta has got a very strong pipeline gathering system. It is a complex, integrated system and it is going through billions of dollars of retrofitting right now,” he says. “It is going to help reconfigure the system and move a lot of the LNG out to the west coast.
“Another key feature for Alberta is condensate,” continues Tsounis. “We can’t get enough of it, and Alberta is rich with it. We are going to need condensate to help move bitumen to market. The price is at a premium to WTI, and is very much in demand.”