The problem with socialism, said Maggie Thatcher, was that, eventually, you run out of other people’s money. Of course this means it works quite well in the short run as Sweden learned already, for as long as there is oil and gas as Norway is finding, or only so long as there are transfers, as Greece is discovering now. It’s harder to do what is needed to create a better society in the long run, but we have completely taken leave of our senses when we can’t even figure out what works in the short run.
On Energy East, Quebec missed the chance to have a new port and important source of taxes and fees. Instead, it elected to be an oil highway for Alberta and New Brunswick. It hinders its own oil development at the same time. With some of the world’s best engineers it’s not a big stretch to assume Quebec could figure out how to build a port and protect the environment at the same time.
Quebec also turned down local natural gas production in 2010, back when it could have become an exporter to the US. Instead, Pennsylvania created over 100,000 jobs and now exports natural gas to Quebec. The BAPE says that’s ok because natural gas doesn’t deliver economic benefits. They better keep this secret away from Pennsylvania in case they will stop production for Quebec markets.
Quebec is looking for money to create a highway for gas and jobs from the United States. Of course, the economics of this pipeline is the real question when there is natural gas right under Quebecer’s feet.
In British Columbia, they block a pipeline because they want taxes and fees. However, they are working hard to build LNG plants and pipelines to transport British Columbian shale gas to Asia.
In Alberta, the new socialist premier talks not of stopping oil and gas. She recognizes that hydrocarbons are an engine of the economy. Instead, she talks of how to increase taxes and keep more value added in Alberta through upgrading and refining.
Democrats in the United States have figured out that the longer they can block the Keystone pipeline, the longer they can keep buying Canadian oil on the cheap. Canada has only one customer, and $50 million per day goes to the likes of Illinois refineries because we sell our oil below the world price and. Why would Democrats want to stop that?
Others have figured out it is in their short term interests to block oil and gas from outside, while they develop their local oil and gas. Quebec does the opposite, to its long term and short term disadvantage.
But, my friends, don’t ever believe there is no hope. Actually, I would argue for quite the opposite. I’m an optimist, and so we all should. Quebec, many times in his history has been the forebearer of energy and natural resource exploration and production in Canada. Just think of early fisheries, logging and, more recently, the great expansion of hydro power. This province never shied away from groundbreaking innovation to assure its economic development. Why should it be different for oil and gas? I don’t think it is, and I don’t think it will.
Oil in the Gaspe and Anticosti Island has huge potential. Possibly enough to be bigger than the giant Utica discovery that could easily solve Quebec’s natural gas supply problems. It’s time to recover our senses, and do the right thing by becoming an oil and gas producer. And you know what? I’m on the side of those who think it will happen in a very short time.