Varcoe: US senator heads for tar sands amid energy security concerns

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Look who’s coming to dinner.

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For Alberta’s energy sector, US Senator Joe Manchin will travel to the province on Monday and Tuesday to visit oil sands operations near Fort McMurray.

He is also expected to attend a North American Energy Roundtable in Calgary with leaders from some of the country’s largest oil producers and pipeline operators.

As global energy security concerns continue to boil over, the chairman of the powerful U.S. Senate Committee on Energy and Natural Resources — and a key vote in the Senate — will tour an oil sands mine and thermal oil sands facility with Premier Jason Kenney and Minister of Energy Sonya Sauvage.

The visit came after the three politicians spoke by phone last month and discussed energy security and the need for a continental strategy.

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“He mentioned that he would like to come see the oil sands, see how they do things here, take a tour, understand the processes and understand the potential,” Savage said in an interview Friday.

“It’s huge. It’s the United States paying attention to energy security, it’s the United States looking north for a solution at the high price at the pump.

Manchin will arrive as natural gas and oil prices rise, with benchmark U.S. crude rates up 30% this year.

Over the past month, the US and Canadian governments have asked domestic oil producers to increase production following Russia’s invasion of Ukraine, while the US releases crude from its reserve oil strategy.

South of the border, conversations that had been dormant for years about security of supply are being rekindled, said Ben Cahill, senior energy security fellow at the Center for Strategic and International Studies, a Washington-based think tank. Washington.

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Manchin’s trip is “a symbol that we need to think about oil and gas as part of energy security and economic security,” Cahill said Friday.

“Going to our closest neighbor and trading partner is a sign that Canada can be part of the solution for the United States”

Industry leaders in Canada say bringing Manchin to visit the oil sands, with the fourth-largest proven oil reserves in the world, is important after the United States banned imports of Russian oil and is seeking to obtain additional supplies.

“We are in uncharted waters today and we are looking at the dynamics in the United States. They have record gasoline prices,” said Tim McMillan, CEO of the Canadian Association of Petroleum Producers.

“They sent emissaries (from) the administration to the Middle East and Venezuela to see how they could increase production. Joe Manchin’s visit to Alberta begins to reinforce what is probably the most logical, economical and safe form of oil for American drivers.

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Officials from Manchin’s office declined to comment on the trip.

Kenney, Savage and Manchin are expected to discuss North American energy integration issues. Alberta’s energy minister also hopes to talk about critical minerals and the potential to develop them in the province and become a key supplier in North America.

Inevitably, they will also discuss the failure of the cross-border Keystone XL pipeline, which was canceled by US President Joe Biden last year.

The Kenney government invested directly in the project, led by TC Energy of Calgary, and has since assessed its financial losses at $1.3 billion.

The Democratic senator from West Virginia backed Keystone XL, putting him at odds with the progressive wing of his own party and the president.

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“We should have built this pipeline,” Manchin told Fox TV last month. “I still think we should build that pipeline and bring that product in from Canada, our best and friendliest neighbor.”

It’s a message that resonates with Kenney.

The likelihood of resurrecting KXL seems miniscule, however, given the political polarization surrounding the project and Biden’s cancellation of its permits due to climate concerns and greenhouse gas emissions from the tar sands.

And TC Energy CEO Francois Poirier seems to have as much interest in resurrecting the pipeline – first proposed in 2008 – as getting poison ivy.

“On Keystone XL, we’ve moved on and we’re not interested in reviving that,” Poirier said Wednesday at an investment forum.

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“And I don’t think President Biden is interested in reviving that either, based on recent comments he’s made publicly. We have evolved.

However, Keystone XL need not dominate the discussion.

There are other pipelines, smaller projects and other infrastructure that can enhance energy trade between countries. The battles around the Ligne 3 and Ligne 5 projects are also continuing.

In January, Canada shipped nearly 4.6 million barrels per day of petroleum and other petroleum products to the United States, or about 56% of all imports. And the United States provided two-thirds of Canada’s oil imports last year.

Industry expert Greg Stringham, former CAPP oil sands vice president, has met with the veteran senator several times and noted that Canadian officials have been trying for years to bring Manchin north to see the oil sands.

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“It’s a very strong signal that he’s trying to accelerate the understanding of Canada-US energy relations from his perception within his own party,” Stringham said.

The challenge for Canada is to ensure that additional oil exports come from low-emission barrels, Cahill said, noting that in the United States, Canadian producers have little awareness of what Canadian producers are doing to reduce the carbon intensity of the oil sands.

On the other hand, there is a new opportunity to talk about the increase in oil and gas shipments from Alberta.

“The whole of the United States has been pushed to rethink energy security,” Cahill said.

“This has created a greater opening to import more volumes from Canada. It kind of opened up new possibilities.

Chris Varcoe is a columnist for the Calgary Herald.

cvarcoe@postmedia.com