Thomas Mulcair offers Alberta an updated version of a bad idea – by John Ivison (National Post – November 15, 2012)

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Tom Mulcair cast himself as a latter-day Sir John A. Macdonald when he talked in Calgary about his vision of Western Canada oil being shipped by pipeline to central and eastern provinces to be processed and then sold domestically.

It would be a nation-building project on a par with railway construction in the 1800s, “a win-win situation,” he said.

But the net effect of supplying Eastern consumers with cheaper Western oil would be closer to a less celebrated federal initiative — Pierre Trudeau’s late and unlamented National Energy Program.

Mr. Mulcair was not specific and it’s not clear how much government intervention in the process he is proposing. But if he is talking about landlocking Canadian oil and supporting the domestic refining industry with discounted Western crude, it starts to look very much like a back-door transfer from one group of Canadians to another.

The New Democratic Party leader said he is not opposed to exporting Canadian oil, as long as the country’s own energy needs are taken care of first. Ottawa’s command and control of the oil industry didn’t end so well last time out: Albertans still blame the federal government for a 40% drop in house prices in Calgary and Edmonton, and a bankruptcy rate that rose 150%.

Given the entrenched opposition to the Northern Gateway pipeline, which would export oil sands’ crude from British Columbia’s Pacific coast, the idea of a west-east pipeline has gained currency.

Some of the infrastructure already exists and there are proposals to pipe Western crude as far east as Saint John, N.B. Enbridge Inc. has applied to reverse the flow of its pipeline between Ontario and Montreal to facilitate the movement of Alberta crude to the East.

This is an entirely viable Plan B, if the Northern Gateway fails to win the necessary support. From Saint John, the oil could be exported to refineries on the Texas Gulf coast or even processed locally.

The Irving Oil refinery there already processes imported oil, which costs $22 a barrel more than the price producers get in the West. Lower input costs would make the refinery industry in central and eastern Canada more competitive, according to industry exports like Roger McKnight, senior petroleum analyst at En-Pro International.

For the rest of this article, please go to the National Post website: http://fullcomment.nationalpost.com/2012/11/14/john-ivison-thomas-mulcair-offers-alberta-an-updated-version-of-a-bad-idea/

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