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Why Canada's oilpatch can't solve the energy crisis – CBC News

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After meeting with his global counterparts in Paris this week, Canada’s natural resources minister pledged to pump out more oil and gas to alleviate the energy crisis in Europe.

Oil and natural gas are in short supply in parts of the world after many countries sanctioned Russia following its invasion of Ukraine.

The Canadian industry wants to increase production, but there are questions about how much extra oil and natural gas can be pulled from the ground and what impact it could have on the world, especially considering oil production in Western Canada is already near record levels.

Jonathan Wilkinson announced Thursday that Canada’s industry is expected to increase oil production by 200,000 barrels per day, and the equivalent of 100,000 barrels of natural gas per day, by the end of the year. 

Currently, Canada produces about 4.7 million barrels per day of oil, and exports about four million barrels per day.

World’s energy woes

Commodity prices have spiked in the last month as Russia’s exports, from oil to coal, have fallen. It’s why gasoline prices hit record levels in Canada this month.

Europe is the biggest customer for Russia’s oil and natural gas. That dependance is why European countries are having a difficult time following in the footsteps of Canada and the U.S., which both banned imports of Russian oil and gas.

WATCH | Searching for solutions as countries ban Russian oil:

Searching for solutions as countries ban Russian oil

7 days ago

Duration 8:10

With more countries banning Russian oil and looking to make deals on Saudi Arabia’s oil supply, it raises ethical issues considering the country’s human rights record. Plus, the opportunity this presents for countries to look at more environmentally friendly solutions. Ginella Massa talks to Deborah Yedlin, chair of the Calgary Chamber of Commerce, and Tzeporah Berman, program director for the environmental organization Stand.Earth. 8:10

“We have our European allies who are facing the prospect of not being able to heat their homes or fill up their trucks to actually service their grocery stores and their restaurants. It would be incredibly irresponsible for Canada to say ‘we don’t care,'” Wilkinson told reporters on Thursday.

Canada’s role

Last year, Russia was exporting about 4.6 million barrels per day of crude oil, according to energy consultancy group Wood Mackenzie. Those exports have fallen because of the widespread economic and energy-focused sanctions against the country.

If Canada can boost its own oil output by 200,000 barrels per day, that in itself won’t have much of an impact on offsetting those Russian barrels. If anything, it could help the United States, which is looking to replace about 500,000 barrels of petroleum that it was importing from Russia.

Natural Resources Minister Jonathan Wilkinson, pictured here at the UN climate conference in November, wants Canada to produce more oil and gas in 2022. (Kyle Bakx/CBC)

“Canada on its own is not going to solve the issue,” said Wilkinson. “But Canada coming forward in conjunction with Brazil, in conjunction with the United States, and I’m sure there will be others, will help us to remove some of the tightness in the market.”

While many Canadian companies say they want to help by increasing production, there are also some critics who say the federal government hasn’t been supportive enough of the oilpatch, in terms of pipeline regulations and a proposed cap on emissions, among other policies.

“It’s a temporary respite to the negative approach the federal government has taken toward energy development,” said Robert Cooper, with the institutional sales and trading team at Calgary-based investment firm Acumen Capital Partners.

“I don’t think that anyone in downtown Calgary believes that there’s been a sudden change from the federal government as it pertains to resource development in this country,” he said.

Turning up the taps easier said than done

For Canadian oil companies to produce more oil is much easier said than done, considering production levels were already high this winter. Alberta’s oil production hit a record high in October and was also a record for the first 10 months of any year, which shows that industry hasn’t been holding back on turning on the taps.

“My initial reaction is a bit of confusion, to be honest,” said Rory Johnston, founder of the Commodity Context newsletter, about the federal announcement about increasing oil exports.

There is spare pipeline and rail capacity to boost exports, he said, the question is about the extra crude.

“It’s difficult to see right now where a substantial or material increase in Canadian oil production could actually fill those increased pipelines, at this moment,” he said.

Oil output can fluctuate

It’s also worth considering that Canada’s oil output can fluctuate from month-to-month because of cold weather, facility maintenance, and other impacts. 

Last year, exports reached four million barrels per day of oil, but were as low as 3.6 million during some months. Those swings don’t have an impact on global oil markets, which shows how even if Canada is able to increase total capacity by 200,000 barrels per day, it’s a relatively insignificant amount.

The potential boost in crude also might not happen with regularity, considering the nature of the industry. 

Building new oilsands facilities or expansions often take several years to develop and require billions of dollars of investment.

The Fort Hills oilsands mine began production in 2018. The facility hasn’t operated at full capacity in recent years. (Kyle Bakx/CBC)

Oil major Cenovus has said any production increase this year will be marginal, while Suncor is expecting an increase of nearly 100,000 barrels per day from the Fort Hills oilsands facility, north of Fort McMurray.

The mine was operating at about 50 per cent capacity, but the company told CBC News the 194,000 barrel per day facility should be operating at about 90 per cent later this year.

There are opportunities to increase production to address the affordability issues in North America and the energy security problem around the world, but it’s not a certainty, said Tristan Goodman, president of the Explorers and Producers Association of Canada.

“You will need investors to have confidence that they should increase production. And if you’re not going to have investor confidence, you will not see increased production,” he said.

Tristan Goodman, with the Explorers and Producers Association of Canada, takes part in a panel focusing on Canadian energy at CERAWeek by S&P Global in Houston earlier this month. (Kyle Bakx/CBC)

In recent years, investors have pushed oilpatch companies to give more cash to shareholders instead of increasing oil and gas production.

“In the long-term, or in the mid-term, there does need to be a conversation with Canadians over infrastructure related to natural gas and oil,” he said.

Where will it go?

Even though Europe is the target destination for any increases in Canadian oil and natural gas, that’s not a straightforward journey from Western Canada. The overwhelming majority of Canada’s export pipelines head south into the U.S.

If more Canadian oil is shipped to Europe, it would likely first have to travel all the way down to the Gulf Coast to be loaded onto a tanker, before setting sail across the Atlantic.

It’s a similar situation with natural gas as Canada does not have way to export to Europe without first traveling south across the border.

Still, even if all goes as planned with Canada’s promise of more energy to the world, it’s much too small on its own to move the needle when it comes to commodity prices or global supplies.

WATCH | Government looking to shore up short-term supply of crude oil and natural gas:

Minister says government looking to shore up short-term supply of crude oil and natural gas as U.S. bans Russian imports

17 days ago

Duration 5:54

Natural Resources Minister Jonathan Wilkinson joins Power & Politics to discuss the U.S. ban on Russian imports of oil and gas. 5:54

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Bad traffic, changed plans: Toronto braces for uncertainty of its Taylor Swift Era

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TORONTO – Will Taylor Swift bring chaos or do we all need to calm down?

It’s a question many Torontonians are asking this week as the city braces for the arrival of Swifties, the massive fan base of one of the world’s biggest pop stars.

Hundreds of thousands are expected to descend on the downtown core for the singer’s six concerts which kick off Thursday at the Rogers Centre and run until Nov. 23.

And while their arrival will be a boon to tourism dollars — the city estimates more than $282 million in economic impact — some worry it could worsen Toronto’s gridlock by clogging streets that already come to a standstill during rush hour.

Swift’s shows are set to collide with sports events at the nearby Scotiabank Arena, including a Raptors game on Friday and a Leafs game on Saturday.

Some residents and local businesses have already adjusted their plans to avoid the area and its planned road closures.

Aahil Dayani says he and some friends intended to throw a birthday bash for one of their pals until they realized it would overlap with the concerts.

“Something as simple as getting together and having dinner is now thrown out the window,” he said.

Dayani says the group rescheduled the gathering for after Swift leaves town. In the meantime, he plans to hunker down at his Toronto residence.

“Her coming into town has kind of changed up my social life,” he added.

“We’re pretty much just not doing anything.”

Max Sinclair, chief executive and founder of A.I. technology firm Ecomtent, suggested his employees avoid the company’s downtown offices on concert days, saying he doesn’t see the point in forcing people to endure potential traffic jams.

“It’s going to be less productive for us, and it’s going to be just a pain for everyone, so it’s easier to avoid it,” Sinclair said.

“We’re a hybrid company, so we can be flexible. It just makes sense.”

Swift’s concerts are the latest pop culture moment to draw attention to Toronto’s notoriously disastrous daily commute.

In June, One Direction singer Niall Horan uploaded a social media video of himself walking through traffic to reach the venue for his concert.

“Traffic’s too bad in Toronto, so we’re walking to the venue,” he wrote in the post.

Toronto Transit Commission spokesperson Stuart Green says the public agency has been working for more than a year on plans to ease the pressure of so many Swifties in one confined area.

“We are preparing for something that would be akin to maybe the Beatles coming in the ‘60s,” he said.

Dozens of buses and streetcars have been added to transit routes around the stadium, and the TTC has consulted the city on potential emergency scenarios.

Green will be part of a command centre operated by the City of Toronto and staffed by Toronto police leaders, emergency services and others who have handled massive gatherings including the Raptors’ NBA championship parade in 2019.

“There may be some who will say we’re over-preparing, and that’s fair,” Green said.

“But we know based on what’s happened in other places, better to be over-prepared than under-prepared.”

Metrolinx, the agency for Ontario’s GO Transit system, has also added extra trips and extended hours in some regions to accommodate fans looking to travel home.

A day before Swift’s first performance, the city began clearing out tents belonging to homeless people near the venue. The city said two people were offered space in a shelter.

“As the area around Rogers Centre is expected to receive a high volume of foot traffic in the coming days, this area has been prioritized for outreach work to ensure the safety of individuals in encampments, other residents, businesses and visitors — as is standard for large-scale events,” city spokesperson Russell Baker said in a statement.

Homeless advocate Diana Chan McNally questioned whether money and optics were behind the measure.

“People (in the area) are already in close proximity to concerts, sports games, and other events that generate massive amounts of traffic — that’s nothing new,” she said in a statement.

“If people were offered and willingly accepted a shelter space, free of coercion, I support that fully — that’s how it should happen.”

This report by The Canadian Press was first published Nov. 13, 2024.



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‘It’s literally incredible’: Swifties line up for merch ahead of Toronto concerts

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TORONTO – Hundreds of Taylor Swift fans lined up outside the gates of Toronto’s Rogers Centre Wednesday, with hopes of snagging some of the pop star’s merchandise on the eve of the first of her six sold-out shows in the city.

Swift is slated to perform at the venue from Thursday to Saturday, and the following week from Nov. 21 to Nov. 23, with concert merchandise available for sale on some non-show days.

Swifties were all smiles as they left the merch shop, their arms full of sweaters and posters bearing pictures of the star and her Eras Tour logo.

Among them was Zoe Haronitis, 22, who said she waited in line for about two hours to get $300 worth of merchandise, including some apparel for her friends.

Haronitis endured the autumn cold and the hefty price tag even though she hasn’t secured a concert ticket. She said she’s hunting down a resale ticket and plans to spend up to $600.

“I haven’t really budgeted anything,” Haronitis said. “I don’t care how much money I spent. That was kind of my mindset.”

The megastar’s merchandise costs up to $115 for a sweater, and $30 for tote bags and other accessories.

Rachel Renwick, 28, also waited a couple of hours in line for merchandise, but only spent about $70 after learning that a coveted blue sweater and a crewneck had been snatched up by other eager fans before she got to the shop. She had been prepared to spend much more, she said.

“The two prized items sold out. I think a lot more damage would have been done,” Renwick said, adding she’s still determined to buy a sweater at a later date.

Renwick estimated she’s spent about $500 in total on “all-things Eras Tour,” including her concert outfit and merchandise.

The long queue for Swift merch is just a snapshot of what the city will see in the coming days. It’s estimated that up to 500,000 visitors from outside Toronto will be in town during the concert period.

Tens of thousands more are also expected to attend Taylgate’24, an unofficial Swiftie fan event scheduled to be held at the nearby Metro Toronto Convention Centre.

Meanwhile, Destination Toronto has said it anticipates the economic impact of the Eras Tour could grow to $282 million as the money continues to circulate.

But for fans like Haronitis, the experience in Toronto comes down to the Swiftie community. Knowing that Swift is going to be in the city for six shows and seeing hundreds gather just for merchandise is “awesome,” she said.

Even though Haronitis hasn’t officially bought her ticket yet, she said she’s excited to see the megastar.

“It’s literally incredible.”

This report by The Canadian Press was first published Nov. 13, 2024.

The Canadian Press. All rights reserved.



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Via Rail seeks judicial review on CN’s speed restrictions

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OTTAWA – Via Rail is asking for a judicial review on the reasons why Canadian National Railway Co. has imposed speed restrictions on its new passenger trains.

The Crown corporation says it is seeking the review from the Federal Court after many attempts at dialogue with the company did not yield valid reasoning for the change.

It says the restrictions imposed last month are causing daily delays on Via Rail’s Québec City-Windsor corridor, affecting thousands of passengers and damaging Via Rail’s reputation with travellers.

CN says in a statement that it imposed the restrictions at rail crossings given the industry’s experience and known risks associated with similar trains.

The company says Via has asked the courts to weigh in even though Via has agreed to buy the equipment needed to permanently fix the issues.

Via said in October that no incidents at level crossings have been reported in the two years since it put 16 Siemens Venture trains into operation.

This report by The Canadian Press was first published Nov. 13, 2024.

Companies in this story: (TSX:CN)

The Canadian Press. All rights reserved.



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