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



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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NDP says Alberta premier’s prosecutor review flawed, calls for outside investigation



Alberta premier's prosecutor

Alberta’s Opposition leader says Premier Danielle Smith’s assurance of a thorough investigation into allegations of interference with Crown prosecutors is “an empty talking point” given new details on the search itself.

NDP Leader Rachel Notley said that while the Smith-directed email search covered the four-month period in question, any deleted message was erased from the system after just a month, meaning the relevant time period for those emails was likely missed.

“It is outrageous that Danielle Smith is really naive enough to think that Albertans would trust an internal investigation that has not been transparently conducted, that has been conducted by people who answer to her, and that only considered deleted emails that go back 30 days,” Notley said Thursday in Calgary.

“This is an empty talking point and nothing else,” she added, renewing a call for an independent, judge-led inquiry into whether Smith and her office interfered in the administration of justice.


Smith ordered an email review last weekend after CBC News reported allegations that a staffer in the premier’s office sent a series of emails last fall to Crown prosecutors questioning their assessment and direction in cases related to the blockade at the Coutts, Alta., U.S. border crossing in early 2022.

The CBC did not specify precisely when the emails were sent and said it has not viewed the emails in question.

RCMP laid charges against several people involved in the three-week blockade at Coutts to protest COVID-19 restrictions. The charges range from mischief to conspiracy to commit murder.

On Monday, the Justice Department reported that a review of almost a million emails — incoming, outgoing and deleted — sent over a four-month period last fall turned up no evidence of any communications between prosecutors and the premier’s office.

However, Alberta Justice, in a statement to media outlets Wednesday, stated that deleted emails are only kept for 30 days, meaning the search for deleted emails would only capture those from around Dec. 22 onward and perhaps not capture deleted emails during the time frame in question.

Alberta Justice, along with Ethan Lecavalier-Kidney, who speaks for Justice Minister Tyler Shandro, declined to respond to requests Thursday for that statement or explain why the statement was now being withheld.

Notley’s comments came a day after Smith faced a second CBC story, quoting unnamed sources alleging she pressured Shandro and his office to intervene in COVID-related cases.

Smith reiterated in a statement: “All communications between the premier, her staff, the minister of justice, and ministry of justice public servants have been appropriate and made through the proper channels.”

In the statement, Smith also accused the CBC of publishing “a defamatory article containing baseless allegations” referring to the original email story.

Chuck Thompson, the CBC head of public affairs, said in a statement Wednesday: “We stand by the story which transparently attributes the allegations to trusted sources and provides context to the allegations.

“As is our practice, we gave the premier and her office an opportunity to react and we included that response prominently in the story, including the sub-headline.”

Smith has given multiple versions in recent weeks of what she has said to justice officials about COVID-19 cases.

She has not taken questions in a general news conference with reporters since the affair took off two weeks ago when Smith announced that she was talking to prosecutors about the COVID-19 cases.

Smith has said she talked to prosecutors directly and did not talk to prosecutors directly. She has said she reminded justice officials of general prosecution guidelines, but at other times said she reminded them to consider factors unique to the COVID-19 cases. She has also suggested the conversations are ongoing and that they have ended.

She has attributed the confusion to “imprecise” word choices.

In her statement Wednesday, Smith delivered a sixth version, now saying she met not only with Shandro and the deputy attorney general, but also with other unnamed “ministry officials” to discuss the possibility of legal amnesty to those charged with “non-violent, non-firearms pandemic-related violations.”

The statement added: “The premier and her staff had several discussions with the minister of justice and ministry officials, requesting an explanation of what policy options were available for this purpose.

“After receiving a detailed legal opinion from the minister to not proceed with pursuing options for granting amnesty, the premier followed that legal advice.”

This report by The Canadian Press was first published Jan. 26, 2023.

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B.C. to install earthquake warning sensors to give life-saving notice



B.C. to install earthquake warning

Up to 50 earthquake early warning sensors are being installed around British Columbia as part of a larger plan to protect people and infrastructure in a big quake.

The sensors will be connected to the national Earthquake Early Warning system that’s expected to be in operation by 2024.

A joint federal and provincial government announcement today says the sensors will give seconds, or perhaps tens of seconds, of warning before the strongest shaking arrives, helping to reduce injuries, deaths and property loss.

Bowinn Ma, B.C.’s minister of emergency management, says in a statement that an early warning system is critical to helping those in the province mitigate the impacts of a seismic event.


When the full system is operational next year, more than 10 million Canadians living in the most earthquake-prone areas of the country will get early warning alerts, giving them precious seconds to take cover.

There are over 5,000 earthquakes in Canada every year, most of them along B.C.’s coast, although about 20 per cent of the quakes are along the St. Lawrence River and Ottawa River valleys.

On Jan. 26, 1700, a magnitude-9 megathrust earthquake hit North America’s west coast, creating a tsunami that carried across the Pacific Ocean and slammed into Japan.

The statement says if a similar quake happens when the early warning system is operating, it could give up to four minutes’ warning before the strongest shaking starts in coastal B.C. communities.

It says the system could also be used to automatically trigger trains to slow down, stop traffic from driving over bridges or into tunnels, divert air traffic, automatically close gas valves, and open firehall and ambulance bay doors.

This report by The Canadian Press was first published Jan. 26, 2023.

This is a corrected story. A previous version said the earthquake warning system is expected to be operational in 2023. In fact, it is expected to be operational in 2024.

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Renters in Canada are facing the toughest market since 2001: CMHC report – Global News



Renters in Canada are facing the toughest market in decades with low vacancies, higher prices and surging demand, according to the Canada Mortgage and Housing Corporation (CMHC).

The housing agency released its annual rental market report Thursday, which showed that the national vacancy rate for purpose-built rental apartments declined to 1.9 per cent last year — the lowest level since 2001.


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Meanwhile, the demand for rentals outstripped supply due to higher net migration, the return of students to on-campus learning and a rise in homeownership costs.

“Higher mortgage rates, which drove up already-elevated costs of homeownership, made it harder and less attractive for renters to transition to homeownership,” CMHC said in a statement.

CMHC data also showed that the average rent for two-bedroom units that were occupied by a new tenant rose by 18.3 per cent — well above the average rent growth for units without turnover. This made it difficult for Canadians trying to enter the rental market or find new housing to rent, the agency said.

“Lower vacancy rates and rising rents were a common theme across Canada in 2022,” Bob Dugan, CMHC’s chief economist, said in a statement.

“This caused affordability challenges for renters, especially those in the lower income ranges, with very few units in the market available in their price range.”

Click to play video: 'How will housing market look in the next year?'

How will housing market look in the next year?

The average rent for a two-bedroom rental condominium apartment saw a significant increase to $1,930 from $1,771, about nine per cent year over year, according to CMHC.

Canada is also facing a housing crunch with a shortage of both homes and construction workers to build new units.

Another CMHC report released last week found that the annual rate of new home building had slowed by five per cent in December 2022 compared with November.

Last month, in a bid to help tackle skyrocketing rents across the country, the government of Canada opened applications for a one-time top-up as part of the Canada Housing Benefit (CHB) program — an initiative that would put $500 in the pockets of low-income renters.

&copy 2023 Global News, a division of Corus Entertainment Inc.

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