Even at his most blatantly brazen and brutally bombastic Donald Trump would never dare to suggest such a lopsided deal.
Nope, not even The Donald would seriously propose selling a customer something for $50 while at the same time buying that exact thing for only $20 from that same, sorry fellow.
But then the current president of the United States didn’t have to. No, Canada managed to come up with this humdinger of a deal all on its lonesome. In fact many people across certain parts of this country think such an arrangement is fine and dandy – trading barrels of oil back and forth with our grateful, if slightly incredulous American neighbours on exactly those ludicrous terms.
The massive spread between what Canadian heavy oil fetches when exported to the U.S. compared to the benchmark West Texas Intermediate price has become such a ridiculous economic monstrosity even our asleep-at-the-switch provincial government has woken up: after figuring out the huge loss of revenue to those barren treasury coffers.
Yep, Premier Rachel Notley has plans on becoming a modern-day Van Horne by purchasing rail cars to get more oil moving southward. Oh, and we also plan to shutter more crude in the ground in a weird bid to show the watching world that yes indeed, we mean business. Every day there’s some fresh scheme hatched in this mad scramble to do something – anything – to stop the hemorrhaging of cash.
But this light hasn’t dawned way off in Justinland, that happy place in Ottawa where the energy industry is something never mentioned in polite conversation, despite it being the biggest driver of national GDP.
You see we are currently importing about 670,000 barrels of oil every day in this country, more than half from our grateful southern neighbour. And no, we certainly aren’t paying them just 40 cents on the WTI dollar for that cosy arrangement.
That’s because there’s pipeline capacity over on the eastern part of North America. In fact a big, fat pipeline brings more than 100,000 barrels every day into Quebec from south of the border.
Whoa, hold on a minute, buddy. How can that be? After all didn’t La Belle Province kick up a stink about the Energy East pipeline project? Remember, that’s the one that would have carried Alberta crude but somehow jeopardized virtually every town in Quebec. The nasty pipeline outrage was such the company proposing building the darn thing, TransCanada, decided to deep-six the entire project.
It does seem mighty odd, to be sure. But, hey, that’s Canada for you.
Meanwhile, back here in Alberta, we seem cursed by some malevolent compass maker.
It wasn’t just that eastward-bound pipeline which was kiboshed. No, it was Prime Minister Trudeau himself who put the stake through the heart of the Northern Gateway project, while the westward Trans Mountain expansion fiasco is once again stuck in legal limbo. Meanwhile the fourth and final insult arrived courtesy of a Montana judge who put the brakes on the southern route, TransCanada’s XL pipeline.
The upshot to all this hostility and subsequent roadblocks is that energy companies are furiously fighting over what little spare capacity’s left and therefore – it being a buyer’s market – getting less than $20 a barrel for crude, of which we ship more than three million barrels every day.
The amount of revenue lost is astronomical and even if things somehow reversed tomorrow, this situation would continue to drag. Pipelines are not light switches to be turned on at will. You have to actually construct the darn things over thousands of kilometres. No, this nightmare isn’t one from which we’ll awaken any time soon.
Chris Nelson is a long-time journalist. His columns on Alberta politics run monthly in the St. Albert Gazette.
